Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 455-S.F.No. 2521
An act relating to local government; establishing
standards for the creation of corporations by
political subdivisions; providing for the continuation
of existing corporations created by political
subdivisions; clarifying the application of chapter
238 to municipalities; providing for the number and
requirements for appointment of certain housing and
redevelopment authority members; amending Minnesota
Statutes 1998, sections 238.08, subdivision 3;
469.003, subdivision 5; 469.006, subdivisions 1 and 2;
and 469.011, subdivision 4; proposing coding for new
law in Minnesota Statutes, chapter 465; repealing
Minnesota Statutes 1998, section 465.715, subdivisions
1, 2, and 3; Minnesota Statutes 1999 Supplement,
section 465.715, subdivision 1a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
CORPORATIONS CREATED BY POLITICAL SUBDIVISIONS
Section 1. [465.717] [CREATION OF CORPORATIONS BY
POLITICAL SUBDIVISIONS.]
Subdivision 1. [STATUTORY AUTHORIZATION REQUIRED.] A
county, home rule charter city, statutory city, town, school
district, or other political subdivision, including a joint
powers entity operating under section 471.59, may not create a
corporation, whether for profit or not for profit, unless
explicitly authorized to do so by law.
Subd. 2. [AUTHORITY TO INCORPORATE A JOINT POWERS ENTITY.]
A joint powers entity created under section 471.59 may
incorporate itself as a nonprofit under chapter 317A. A
corporation created under this subdivision shall comply with
every law that applies to the participating political
subdivisions and shall possess no greater authority or power
than that held by the joint powers entity itself.
Sec. 2. [465.719] [EXISTING CORPORATIONS CREATED BY
POLITICAL SUBDIVISIONS.]
Subdivision 1. [DEFINITIONS.] The following definitions
apply to this section:
(a) "Political subdivision" means a county, a statutory or
home rule charter city, a town, a school district, or other
political subdivision of the state. Political subdivision
includes a political subdivision acting individually or jointly
as provided under section 471.59.
(b) "Corporation" means a corporation created by a
political subdivision before May 31, 1997, in which (1) the
corporation's articles of incorporation or bylaws provide for
the governing body of the political subdivision to serve as a
corporation's governing board; (2) the articles of incorporation
or bylaws provide for appointed officials of the political
subdivision or members of the governing body of the political
subdivision or both to be automatically appointed to the board
solely by virtue of their appointment or election to office and
they constitute a majority of the corporation's board members;
or (3) the governing body of the political subdivision approves
the budget or expenditures of the corporation for purposes other
than those related to oversight of public grants or loans made
to the corporation under a competitive process for which other
entities are eligible. Corporation does not include:
(1) a corporation established under chapters 453, 453A, or
sections 119A.374 to 119A.376; 245.62 to 245.66;
(2) a nonprofit corporation created to raise funds for use
by a political subdivision if less than a majority of the board
of directors of the corporation are members of the governing
body of the political subdivision appointed to the board of
directors by virtue of their election to office; or
(3) a corporation created by a political subdivision
pursuant to state statute or special law or federal law.
Subd. 2. [RESOLUTION REQUIRED.] In order to provide for
the continued existence of a corporation created by a political
subdivision, the political subdivision, or its successor, that
created the corporation must adopt a resolution at a regularly
scheduled meeting of the governing body of the political
subdivision. The resolution must include the information
required in subdivisions 4 to 9. A certified copy of the
resolution must be filed with the secretary of state. If a
resolution is not adopted within three years of the effective
date of this section, the board of directors of the corporation
shall direct and authorize an officer or designee of the
corporation to file with the secretary of state immediately a
notice of intent to dissolve the corporation and then as soon as
possible, complete dissolution of the corporation as provided in
the corporation's articles of incorporation and bylaws, and the
law under which the corporation was formed.
Subd. 3. [AMENDED ARTICLES OF INCORPORATION, BYLAWS.] If
the political subdivision adopts a resolution under subdivision
2, the board of directors of the corporation shall direct and
authorize an officer or designee of the corporation to file
amended articles of incorporation, if necessary, as soon as
practicable after adoption of the resolution to make the
articles of incorporation consistent with the resolution and to
provide for the application of the laws under subdivision 9.
Thereafter, the corporation may not amend its articles of
incorporation unless the political subdivision adopts a
resolution in support of the change as provided in subdivision 2
for ratifying existing corporations and a certified copy of the
resolution is attached to the amended articles of incorporation
filed with the secretary of state.
Subd. 4. [EXISTING CONTRACTS.] If on the effective date of
this section the corporation has contracts or other obligations
that are inconsistent with any requirement of this section, the
resolution may provide for the delayed application of that
requirement for the time necessary to avoid a breach or
impairment of the contract or obligation.
Subd. 5. [NEED FOR CORPORATION.] The resolution must make
a detailed and specific finding regarding the purpose of the
corporation, and why the corporation is the best alternative for
accomplishing the purpose.
Subd. 6. [AUTHORITIES AND POWERS OF CORPORATION
LIMITED.] The resolution must specify what authorities and
powers the corporation possesses. The authorities and powers of
the corporation must not exceed the authorities and powers of
the political subdivision that created it, except as otherwise
authorized in this section.
Subd. 7. [BOARD MEMBERSHIP.] If a majority of the
corporation's governing board includes elected or appointed
officials of the political subdivision creating the corporation,
the resolution must make a detailed and specific finding
regarding the purpose of those officials serving on the board,
and why the corporation cannot accomplish its purpose unless
those officials serve on the board. Alternatively, the
resolution may provide for other board membership and the
articles of incorporation amended to be consistent with the
resolution.
Subd. 8. [ALLOCATION OF ASSETS AND LIABILITIES.] If the
political subdivision that created the corporation is a joint
powers board, the joint powers agreement and the resolution must
specify how the assets and liabilities of the corporation are
allocated or attributed to each member of the joint powers
board, including, but not limited to, for the purposes of any
applicable levy or debt limits. If a corporation is created by
more than one political subdivision, each political subdivision
that ratifies creation of the corporation must adopt a
resolution required by this section and, among other
requirements, each resolution must specify and agree with the
resolution of the other political subdivisions as to how the
assets and liabilities of the corporation are allocated or
attributed to each political subdivision, including, but not
limited to, for the purposes of any applicable levy or debt
limits.
Subd. 9. [APPLICATION OF OTHER LAWS.] A corporation
created by a political subdivision under this section must
comply with every law that applies to the political subdivision,
as if the corporation is a part of the political subdivision,
unless the resolution ratifying creation of the corporation
specifically exempts the corporation from part or all of a law.
If the resolution exempts the corporation from part or all of a
law, the resolution must make a detailed and specific finding as
to why the corporation cannot fulfill its purpose if the
corporation is subject to that law. A corporation may not be
exempted from section 471.705, the Minnesota Open Meeting Law,
sections 138.163 to 138.25, governing records management, or
chapter 13, the Minnesota Government Data Practices Act. Any
affected or interested person may bring an action in district
court to void the resolution on the grounds that the findings
are not sufficiently detailed and specific, or that the
corporation can fulfill its purpose if it is subject to the law
from which the resolution exempts the corporation. Laws that
apply to a political subdivision that also apply to a
corporation created by a political subdivision under this
subdivision include, but are not limited to:
(1) section 471.705, the Minnesota Open Meeting Law;
(2) chapter 13, the Minnesota Government Data Practices
Act;
(3) section 471.345, the Uniform Municipal Contracting Law;
(4) sections 43A.17, limiting the compensation of employees
based on the governor's salary; 471.991 to 471.999, providing
for equitable pay; and 465.72 and 465.722, governing severance
pay;
(5) section 275.065, providing for truth-in-taxation
hearings. If any tax revenues of the political subdivision will
be appropriated to the corporation, the corporation's annual
operating and capital budgets must be included in the
truth-in-taxation hearing of the political subdivision that
created the corporation;
(6) if the corporation issues debt, its debt is included in
the political subdivision's debt limit if it would be included
if issued by the political subdivision, and issuance of the debt
is subject to the election and other requirements of chapter 475
and section 471.69;
(7) section 471.895, prohibiting acceptance of gifts from
interested parties, and sections 471.87 to 471.89, relating to
interests in contracts;
(8) chapter 466, relating to municipal tort liability;
(9) chapter 118A, requiring deposit insurance or bond or
pledged collateral for deposits;
(10) chapter 118A, restricting investments;
(11) section 471.346, requiring ownership of vehicles to be
identified;
(12) sections 471.38 to 471.41, requiring claims to be in
writing, itemized, and approved by the governing board before
payment can be made; and
(13) the corporation cannot make advances of pay, make or
guarantee loans to employees, or provide in-kind benefits unless
authorized by law.
Subd. 10. [THREE-YEAR REVIEW OF APPLICABILITY OF OTHER
LAWS.] At least every three years after adoption of a resolution
that exempts a corporation from part or all of a law under
subdivision 9, the political subdivision must review the
activities of the corporation and whether the exemption should
continue to apply to the corporation. The political subdivision
must conduct the review at a regularly scheduled meeting of its
governing body. The political subdivision must adopt a
resolution to continue any exemption and a certified copy of the
resolution must be filed with the secretary of state. The
political subdivision cannot exempt the corporation from a law
for the first time under the review process of this subdivision.
Subd. 11. [TAXES USED FOR PUBLIC PURPOSE.] If the
political subdivision has authority under other law to
appropriate tax revenues for use by the corporation, those funds
must be appropriated and used only for public purposes.
Subd. 12. [AUDIT.] A corporation created by a political
subdivision that receives public money from the political
subdivision, other than grants or loans made under a competitive
process for which other entities are eligible, must be audited
annually by either a certified public accountant or the state
auditor. Except as provided below, the audit report must be
presented at a regularly scheduled meeting of the governing body
of the political subdivision that created the corporation. The
audit report must be made available to individuals after
presentation of the audit report to the governing body of the
political subdivision. The data classification of an audit
performed by the office of the state auditor is governed by
chapter 6.
Subd. 13. [STATE AUDITOR POWERS.] The state auditor has
the same powers with regard to a corporation created by a
political subdivision as the state auditor has with regard to
the political subdivision that created the corporation.
Subd. 14. [DATA CLASSIFICATION.] The following data
created, collected, or maintained by a corporation subject to
this section are classified as private data under section 13.02,
subdivision 12, or as nonpublic data under section 13.02,
subdivision 9: (1) data relating either (i) to private
businesses consisting of financial statements, credit reports,
audits, business plans, income and expense projections, customer
lists, balance sheets, income tax returns, and design, market,
and feasibility studies not paid for with public funds, or (ii)
to enterprises operated by the corporation that are in
competition with entities offering similar goods and services,
so long as the data are not generally known or readily
ascertainable by proper means and disclosure of specific data
would cause harm to the competitive position of the enterprise
or private business, provided that the goods or services do not
require a tax levy; and (2) any data identified in section
13.491 collected or received by a transit organization.
Sec. 3. [CLARIFICATION.]
Existing corporations that reported to the state auditor
under Minnesota Statutes 1998, section 465.715, subdivision 3,
but do not meet the definition of a corporation under section 2,
subdivision 1, paragraph (b), remain as established and are not
affected by this act or by Minnesota Statutes, section 465.715.
Sec. 4. [REPEALER.]
Minnesota Statutes 1998, section 465.715, subdivisions 1,
2, and 3; and Minnesota Statutes 1999 Supplement, section
465.715, subdivision 1a, are repealed.
ARTICLE 2
MISCELLANEOUS
Section 1. Minnesota Statutes 1998, section 238.08,
subdivision 3, is amended to read:
Subd. 3. [MUNICIPAL OPERATION.] Nothing in this chapter
shall be construed to limit any municipality from the right to
construct, purchase, and operate a cable communications
system systems, or, to operate facilities and channels for
community television, including, but not limited to, public,
educational, and governmental access and local origination
programming. Any municipal system, including the operation of
community television by a municipality, shall be subject to this
chapter to the same extent as would any nonpublic cable
communications system.
Sec. 2. Minnesota Statutes 1998, section 469.003,
subdivision 5, is amended to read:
Subd. 5. [COMMISSIONERS.] An authority shall consist
of five up to seven commissioners, who shall be residents of the
area of operation of the authority, who shall be appointed after
the resolution becomes finally effective. If any additional
commissioners are appointed, one of the commissioners must be
appointed in accordance with the requirements of Code of Federal
Regulations, title 24, part 964.
Sec. 3. Minnesota Statutes 1998, section 469.006,
subdivision 1, is amended to read:
Subdivision 1. [COUNTY COMMISSIONERS.] When the governing
body of a county adopts a resolution under section 469.004, the
governing body shall appoint five persons or the number of
commissioners for the governing body, plus up to two additional
commissioners, as commissioners of the county authority. If any
additional commissioners are appointed, one of the commissioners
must be appointed in accordance with the requirements of Code of
Federal Regulations, title 24, part 964. The membership of the
commission will reflect an areawide distribution on a
representative basis. The commissioners who are first appointed
shall be designated to serve for terms of one, two, three, four,
and five years respectively, from the date of their
appointment. Thereafter commissioners shall be appointed for a
term of office of five years except that all vacancies shall be
filled for the unexpired term. Persons may be appointed as
commissioners if they reside within the boundaries or area, and
are otherwise eligible for the appointments under sections
469.001 to 469.047.
Sec. 4. Minnesota Statutes 1998, section 469.006,
subdivision 2, is amended to read:
Subd. 2. [MULTICOUNTY COMMISSIONERS.] The governing body
in the case of a county, and the mayor with the approval of the
governing body in the case of a city, of each political
subdivision included in a multicounty authority shall appoint
one person as a commissioner of the authority at or after the
time of the adoption of the resolution establishing the
authority.
In the case of a multicounty authority comprising only two
or three political subdivisions, the appointing authorities of
the participating political subdivisions shall each appoint one
additional commissioner whose term of office shall be as
provided for a commissioner of a multicounty authority. If any
additional commissioners are appointed, one of the commissioners
must be appointed in accordance with the requirements of Code of
Federal Regulations, title 24, part 964.
In the case of a multicounty authority comprising more than
three political subdivisions, the appointing authorities of the
participating political subdivisions may each appoint one
additional commissioner whose term of office shall be as
provided for a commissioner of a multicounty authority. The
housing and redevelopment authority board of commissioners of a
multicounty authority may appoint one or two additional
commissioners in order to comply with the requirements of Code
of Federal Regulations, title 24, part 964. The appointment
must be approved by a majority of the commissioners of each of
the political subdivisions comprising the multicounty authority.
When the area of operation of a multicounty authority is
increased to include an additional political subdivision, the
appointing authority of each additional political subdivision
shall appoint one or, if appropriate, two commissioners of the
multicounty authority.
The appointing authority of each political subdivision
shall appoint the successors of the commissioner appointed by
it. The commissioners of a multicounty authority shall be
appointed for terms of five years except that all vacancies
shall be filled for the unexpired terms.
Sec. 5. Minnesota Statutes 1998, section 469.011,
subdivision 4, is amended to read:
Subd. 4. [EXPENSES; COMPENSATION.] Each commissioner may
receive necessary expenses, including traveling expenses,
incurred in the performance of duties. Each commissioner may be
paid up to $55 $75 for attending each regular and special
meeting of the authority. Commissioners who are full-time state
employees or full-time employees of the political subdivisions
of the state may not receive the daily payment, but they may
suffer no loss in compensation or benefits from the state or a
political subdivision as a result of their service on the board.
Commissioners who are elected officials may receive the daily
payment for a particular day only if they do not receive any
other daily payment for public service on that day.
Commissioners who are full-time state employees or full-time
employees of the political subdivisions of the state may receive
the expenses provided for in this subdivision unless the
expenses are reimbursed by another source.
Sec. 6. [WASHINGTON COUNTY HRA INCREASED TO SEVEN.]
Notwithstanding Minnesota Statutes, section 469.006,
subdivision 1, the Washington county housing and redevelopment
authority has seven members. The county board must appoint one
member from each county commissioner district after receiving a
recommendation for the position from the district's county
commissioner. One housing and redevelopment commissioner must
be appointed by the county board to represent the county at
large. One authority member must be appointed by the county
board from among county residents who are directly assisted by
the public housing agency as defined in Code of Federal
Regulations, title 24, part 964. The first appointee to an
at-large position serves for two years; thereafter the term is
three years. The first appointee to the position requiring one
directly assisted by the public housing agency serves for one
year; thereafter the term is three years.
Sec. 7. [EFFECTIVE DATE; LOCAL APPROVAL.]
Section 6 is effective the day after the governing body of
Washington county and its chief clerical officer timely complete
their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
Presented to the governor May 2, 2000
Signed by the governor May 5, 2000, 10:50 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes