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Key: (1) language to be deleted (2) new language

                            CHAPTER 256-S.F.No. 1393 
                  An act relating to public finance; providing 
                  conditions and requirements for the issuance of debt 
                  and use of the proceeds; authorizing use of capital 
                  improvement bonds for indoor ice arenas; exempting 
                  issuance of certain debt from election requirements; 
                  modifying loans to political subdivisions for fire or 
                  rescue purposes; authorizing operation of certain 
                  recreational facilities; authorizing continuing 
                  disclosure agreements; providing for funding of 
                  self-insurance by political subdivisions; providing 
                  for the issuance of temporary obligations and 
                  modifying issuance and lease procedures; renaming and 
                  modifying technical provisions relating to incentives 
                  in enterprise zones; amending Minnesota Statutes 1994, 
                  sections 373.40, subdivision 1; 447.46; 462C.05, 
                  subdivision 1; 465.73; 469.041; 469.060, subdivision 
                  1; 469.102, subdivision 1; 469.305, subdivisions 1 and 
                  3; 469.306; 469.307; 469.309; 469.31; 471.16, 
                  subdivision 1; 471.191, subdivisions 1 and 2; 471.98, 
                  subdivision 3; 471.981, subdivisions 2, 4a, 4b, and 
                  4c; 475.51, subdivision 4; 475.52, subdivision 6; 
                  475.58, subdivision 1, and by adding a subdivision; 
                  475.60, by adding a subdivision; 475.61, by adding a 
                  subdivision; 475.63; and 475.79; Laws 1994, chapter 
                  643, section 14, subdivision 6; proposing coding for 
                  new law in Minnesota Statutes, chapter 373; repealing 
                  Minnesota Statutes 1994, section 469.305, subdivision 
                  2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 373.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given. 
           (a) "Bonds" means an obligation as defined under section 
        475.51. 
           (b) "Capital improvement" means acquisition or betterment 
        of public lands, buildings, or other improvements within the 
        county for the purpose of a county courthouse, administrative 
        building, health or social service facility, correctional 
        facility, jail, law enforcement center, hospital, morgue, 
        library, park, qualified indoor ice arena, and roads and 
        bridges.  An improvement must have an expected useful life of 
        five years or more to qualify. "Capital improvement" does not 
        include light rail transit or any activity related to it or a 
        recreation or sports facility building (such as, but not limited 
        to, a gymnasium, ice arena, racquet sports facility, swimming 
        pool, exercise room or health spa), unless the building is part 
        of an outdoor park facility and is incidental to the primary 
        purpose of outdoor recreation. 
           (c) "Commissioner" means the commissioner of trade and 
        economic development. 
           (d) "Metropolitan county" means a county located in the 
        seven-county metropolitan area as defined in section 473.121 or 
        a county with a population of 90,000 or more. 
           (e) "Population" means the population established by the 
        most recent of the following (determined as of the date the 
        resolution authorizing the bonds was adopted): 
           (1) the federal decennial census, 
           (2) a special census conducted under contract by the United 
        States Bureau of the Census, or 
           (3) a population estimate made either by the metropolitan 
        council or by the state demographer under section 4A.02. 
           (f) "Qualified indoor ice arena" means a facility that 
        meets the requirements of section 2. 
           (g) "Tax capacity" means total taxable market value, but 
        does not include captured market value. 
           Sec. 2.  [373.43] [FINANCING AUTHORITY; ICE FACILITIES.] 
           A county may issue and sell its general obligations under 
        chapter 475 to finance acquisition and construction of an indoor 
        ice arena intended to be used predominantly for youth athletic 
        activities if all the following conditions are met. 
           (a) The obligations are secured by a pledge of revenues 
        from the facility. 
           (b) The county has entered into a qualified agreement.  A 
        qualified agreement means: 
           (1) a joint powers agreement with the school district or 
        the city in which the facility is located that governs 
        ownership, operation, and maintenance of the facility; or 
           (2) an agreement with a nonprofit corporation, qualifying 
        under section 501(c)(3) of the Internal Revenue Code of 1986, 
        that provides that the corporation will operate, manage, and 
        maintain the facility; or 
           (3) any combination of agreements under clauses (1) and (2).
           (c) The agreements under paragraph (b) provide that all 
        parties must pay the principal and interest on obligations, if 
        the revenues for the facility are insufficient to pay the 
        obligations in full. 
           (d) The county board finds, based on analysis provided by a 
        professional experienced in finance, that the facility's 
        revenues and other available money will be sufficient to pay the 
        obligations, without reliance on a property tax levy or the 
        general purpose state aid of the county or any party to a joint 
        powers agreement. 
           Sec. 3.  [373.44] [REVENUE FINANCING AUTHORITY; ICE 
        FACILITIES.] 
           For the purpose of acquiring, leasing, equipping, or 
        maintaining land or buildings for use as an indoor ice arena as 
        defined in section 2, a county has the same authority and powers 
        granted to a city by section 471.191. 
           Sec. 4.  Minnesota Statutes 1994, section 447.46, is 
        amended to read: 
           447.46 [REVENUE PLEDGED.] 
           The county, city, or hospital district may pledge and 
        appropriate the revenues to be derived from its operation of the 
        facilities, except related medical facilities, to pay the 
        principal and interest on the bonds when due and to create and 
        maintain reserves for that purpose, as a first and prior lien on 
        the revenues or, if so provided in the bond resolution, as a 
        lien on the revenues subordinate to the current payment of a 
        fixed amount or percentage or all of the costs of running the 
        facilities.  
           Sec. 5.  Minnesota Statutes 1994, section 462C.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  A city may also include in the housing 
        plan, a program or programs to administer, and make or purchase 
        a loan or loans to finance one or more multifamily housing 
        developments within its boundaries, of the kind described in 
        subdivision 2, 3, 4 or 7, and upon the conditions set forth in 
        this section.  A loan may be made or purchased for 
           (a) the acquisition and preparation of a site and the 
        construction of a new development, 
           (b) the rehabilitation of an existing building and site and 
        the discharge of any lien or other interest in the building and 
        site, 
           (c) for the acquisition of an existing building and site 
        and the rehabilitation thereof, 
           (d) for the acquisition of an existing building and site 
        for purposes of conversion to limited equity cooperative 
        ownership by low or moderate income families, or 
           (e) for the acquisition, or acquisition and improvement, of 
        an existing building and site by a nonprofit corporation which 
        will operate the building as a multifamily housing development 
        for rental primarily to elderly or handicapped persons, or 
           (f) the taking out of accumulated equity in connection with 
        a program of federal insurance for the preservation of 
        low-income housing. 
           With respect to loans made or purchased pursuant to clause 
        (b) or (c), the cost of rehabilitation of an existing building 
        must be estimated to equal at least $1,000 per dwelling unit or 
        20 percent of the appraised value of the original building and 
        site whichever is less, except that with respect to 
        rehabilitation which consists primarily of improvement of the 
        property with facilities or improvements to conserve energy or 
        convert or retrofit for use of alternative energy sources, 
        rehabilitation loans may be made without regard to cost; and at 
        least a substantial portion of such rehabilitation cost must be 
        estimated to be incurred for compliance with building codes or 
        conservation of energy. 
           Each development upon completion shall comply with all 
        applicable code requirements.  A loan or loans may be made or 
        purchased for either the construction or the long-term financing 
        of a development, or both, including the financing of the 
        acquisition of dwelling units and interests in common facilities 
        provided therein, by persons to whom such units and facilities 
        may be sold as contemplated in chapter 515 or 515A or any 
        supplemental or amendatory law thereof or as contemplated for a 
        development consisting of cooperative housing.  
           Substantially all of the proceeds of each loan shall be 
        used to pay the cost of a multifamily housing development, 
        including property functionally related and subordinate to it; 
        but nothing herein prevents the construction or acquisition of 
        the development over, under, or adjacent to, and in conjunction 
        with facilities to be used for purposes other than housing. 
           Sec. 6.  Minnesota Statutes 1994, section 465.73, is 
        amended to read: 
           465.73 [TOWN HALLS; FIRE HALLS OR RESCUE EQUIPMENT; LOANS 
        TO POLITICAL SUBDIVISIONS.] 
           For purposes of constructing, repairing, or acquiring town 
        halls, fire halls or fire or rescue equipment any city, county, 
        or town may borrow up to $250,000 from funds granted to a rural 
        electric cooperative organized under chapter 308A by, directly 
        from or guaranteed by the Farmers Home Administration or other 
        agency of the United States Department of Agriculture on a note 
        secured by a mortgage on the property purchased with the 
        borrowed funds.  The city, county, or town may assign or pledge 
        revenues from the town halls, fire or rescue department, or fire 
        hall or any other available funds, including taxes levied 
        pursuant to section 475.61 to the Farmers Home Administration or 
        other agency of the United States Department of Agriculture or 
        its guaranteed lender or a rural electric cooperative organized 
        under chapter 308A as its grantee to repay the loan.  The amount 
        of the obligation shall not be included when computing the net 
        debt of the city, county, or town.  An election shall not be 
        required to authorize the note and mortgage or assignment of 
        revenues. 
           Sec. 7.  Minnesota Statutes 1994, section 469.041, is 
        amended to read: 
           469.041 [STATE PUBLIC BODIES, POWERS AS TO PROJECTS.] 
           For the purpose of aiding and cooperating in the planning, 
        undertaking, construction, or operation of projects, any state 
        public body may upon the terms, with or without consideration, 
        as it may determine: 
           (1) Dedicate, sell, convey, or lease any of its interests 
        in any property, or grant easements, licenses, or any other 
        rights or privileges therein to an authority.  Except in cities 
        of the first class having a population of less than 200,000, the 
        public body may pay the bonds of or make loans or contributions 
        for redevelopment projects, and the receipt or expenditure of 
        any money expended hereunder by the state public body shall not 
        be included within the definition of any limitation imposed on 
        per capita taxing or spending in the charter of the state public 
        body.  No state public body may use any revenues or money of 
        that state public body to pay the bonds of or make any loans or 
        contributions to any public housing project, except to a public 
        low-rent housing project (i) for which financial assistance is 
        provided by the federal government which requires a municipality 
        or other local public body to use its revenues or money for a 
        direct loan or grant to the project as a condition for federal 
        financial assistance and (ii) where the local financial 
        assistance for the project is authorized by resolution of the 
        governing body of the municipality; 
           (2) Cause parks, playgrounds, recreational, community, 
        education, water, sewer or drainage facilities, or any other 
        works which it may undertake, to be furnished adjacent to or in 
        connection with such projects; 
           (3) Approve, through its governing body or through an 
        agency designated by it for the purpose, redevelopment plans, 
        plan or replan, zone or rezone its parks; in the case of a city 
        or town, make changes in its map; the governing body of any city 
        may waive any building code requirements in connection with the 
        development of projects; 
           (4) Cause services to be furnished to the authority of the 
        character which it may otherwise furnish; 
           (5) Enter into agreements with respect to the exercise by 
        it of its powers relating to the repair, closing, or demolition 
        of unsafe, unsanitary, or unfit buildings; 
           (6) Do any and all things necessary or convenient to aid 
        and cooperate in the planning, undertaking, construction, or 
        operation of the projects; 
           (7) Incur the entire expense of any public improvements 
        made by it in exercising the powers granted in sections 469.001 
        to 469.047; 
           (8) Enter into agreements with an authority respecting 
        action to be taken by the state public body pursuant to any of 
        the powers granted by sections 469.001 to 469.047; the 
        agreements may extend over any period, notwithstanding any law 
        to the contrary; and 
           (9) Furnish funds available to it from any source, 
        including the proceeds of bonds, to an authority to pay all or 
        any part of the cost to the authority of the activities 
        authorized by section 469.012, subdivision 1, clause (7); and 
           (10) With respect to a housing development project and 
        bonds which an authority has issued for the project, exercise 
        the powers available to a city under section 471.191, 
        subdivision 2, as though the project were a recreational 
        program; provided that this power may only be exercised by a 
        city or county in which the project is located or in accordance 
        with a joint powers agreement with other cities or counties that 
        have authorized the exercise of the powers for other projects as 
        part of a common financing plan. 
           Sec. 8.  Minnesota Statutes 1994, section 469.060, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POWER; PROCEDURE.] A port authority may 
        issue bonds in the principal amount authorized by its city's 
        council.  The bonds may be issued in anticipation of income from 
        any source.  The bonds may be issued:  (1) to secure funds 
        needed by the authority to pay for acquired property or (2) for 
        other purposes in sections 469.049, 469.050, and 469.058 to 
        469.068.  The bonds must be in the amount and form and bear 
        interest at the rate set by the city council.  The authority 
        shall sell the bonds to the highest bidder.  The authority shall 
        publish notice of the time and the place for receiving bids once 
        at least two weeks before the bid deadline.  Except as otherwise 
        provided in sections 469.048 to 469.068, the issuance of the 
        bonds is governed by chapter 475.  The port authority when 
        issuing the bonds is a municipal corporation under chapter 475.  
        Notwithstanding any contrary city charter provision or any 
        general or special law, the bonds may be issued and sold without 
        submission of the question to the electors of the city, provided 
        that the ordinance of the governing body of the city authorizing 
        issuance of the bonds by the port authority shall be subject to 
        any provisions in the city charter pertaining to the procedure 
        for referendum on ordinances enacted by the governing body. 
           Sec. 9.  Minnesota Statutes 1994, section 469.102, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY; PROCEDURE.] An economic 
        development authority may issue general obligation bonds in the 
        principal amount authorized by two-thirds majority vote of its 
        city's council.  The bonds may be issued in anticipation of 
        income from any source.  The bonds may be issued:  (1) to secure 
        funds needed by the authority to pay for acquired property or 
        (2) for other purposes in sections 469.090 to 469.108.  The 
        bonds must be in the amount and form and bear interest at the 
        rate set by the city council.  The authority shall sell the 
        bonds to the highest bidder.  The authority shall publish notice 
        of the time and the place for receiving bids, once at least two 
        weeks before the bid deadline.  Except as otherwise provided in 
        sections 469.090 to 469.108, the issuance of the bonds is 
        governed by chapter 475.  The authority when issuing the bonds 
        is a municipal corporation under chapter 475.  
           Sec. 10.  Minnesota Statutes 1994, section 469.305, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INCOME OR FRANCHISE TAX CREDIT INCENTIVE 
        GRANTS.] An income or corporate franchise tax credit incentive 
        grant is available to businesses located in an enterprise zone 
        that meet the conditions of this section.  Each city designated 
        as an enterprise zone is allocated $3,000,000 to be used to 
        provide credits grants under this section for the duration of 
        the program.  Each city of the second class designated as an 
        economically depressed area by the United States Department of 
        Commerce is allocated $300,000 to be used to provide credits 
        grants under this section for the duration of the program.  For 
        fiscal year 1998 and subsequent years, the proration in section 
        469.31 shall continue to apply until the amount designated in 
        this subdivision is expended. 
           The credit incentive grant is in an amount equal to 20 
        percent of the wages paid to an employee, not to exceed $5,000 
        per employee per taxable calendar year.  The credit incentive 
        grant is available to an employer for a zone resident employed 
        in the zone at full-time wage levels of not less than 170 
        percent of minimum wage.  The credit incentive grant is not 
        available to workers employed in construction or employees of 
        financial institutions, gambling enterprises, public utilities, 
        sports, fitness, and health facilities, or racetracks.  The 
        employee must be employed at that rate at the time the business 
        applies for a tax credit grant, and must have been employed for 
        at least one year at the business.  The credit applies to A 
        grant may be provided only for new jobs; for purposes of this 
        section, a "new job" is a job that did not exist in Minnesota 
        before May 6, 1994.  The credit is applicable to The incentive 
        grant authority is available for the five taxable calendar years 
        after the application has been approved to the extent the 
        allocation to the city remains available to fund the credit 
        grants, and provided that if the city certifies to the 
        commissioner on an annual basis that the business is in 
        compliance with the plan to recruit, hire, train, and retain 
        zone residents. 
           Sec. 11.  Minnesota Statutes 1994, section 469.305, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REVIEW AND ANALYSIS.] The city must submit 
        the proposed tax credit incentive grant proposal to the 
        commissioner for approval.  The proposal shall include a plan to 
        recruit, hire, train, and retain zone residents.  The tax credit 
        proposal shall be approved unless the commissioner finds that 
        the proposal is not in conformity with the provisions of 
        sections 469.301 to 469.308. 
           If the city submits the tax credit incentive grant proposal 
        to the commissioner before the expiration of the zone 
        designation under section 469.302, subdivision 2, the authority 
        of the commissioner to approve the tax credit proposal continues 
        until the commissioner acts on the proposal. 
           Sec. 12.  Minnesota Statutes 1994, section 469.306, is 
        amended to read: 
           469.306 [REVOCATION.] 
           The commissioner may revoke a business' tax credit 
        incentive grant if the applicant has not proceeded in good faith 
        with its operations in a manner which is consistent with the 
        purpose of sections 469.301 to 469.308 and is possible under 
        circumstances reasonably within the control of the applicant. 
           The commissioner may reconsider the revocation of the tax 
        credit incentive grant if the business provides evidence that 
        circumstances of its failure to proceed were beyond its control 
        or that it did not act in bad faith. 
           Sec. 13.  Minnesota Statutes 1994, section 469.307, is 
        amended to read: 
           469.307 [RECAPTURE.] 
           Subdivision 1.  [TERMINATION OF OPERATIONS; OTHER 
        VIOLATIONS.] Any business that receives a tax credit authorized 
        by an incentive grant under section 469.305 and ceases to 
        operate or otherwise violates the criteria for obtaining 
        the credit grant for its facility located within the enterprise 
        zone within seven years after the first receipt of a credit 
        grant by the business shall repay the portion of the tax credit 
        grant received as provided in the following schedule: 
             Termination of Operations           Repayment of Portion
                 or Other Violations
             Less than two years                      100 percent
             Between two years and four years         75 percent
             Between four years and seven years       50 percent
             More than seven years                    0 percent
           Subd. 2.  [REPAYMENT.] The repayment must be paid to the 
        state.  The amount repaid must be credited to the amount 
        certified as available for tax credits incentive grants in the 
        zone under section 469.305. 
           Subd. 3.  [LIEN.] If an event occurs that creates an 
        obligation under subdivision 1 to repay all or part of the tax 
        credit incentive grant, the repayment obligation immediately 
        becomes a lien against the business' real and personal property 
        located in Minnesota, including the property of subsidiaries, 
        parents, and related corporations.  A lien against real property 
        under this subdivision has the same legal effect and must be 
        collected in the same manner as unpaid real property taxes.  
           Sec. 14.  Minnesota Statutes 1994, section 469.309, is 
        amended to read: 
           469.309 [RURAL JOB CREATION CREDIT GRANTS.] 
           Subdivision 1.  [CREDIT FOR JOB CREATION GRANTS.] The 
        commissioner of trade and economic development may approve a 
        credit against the tax due under chapter 290 an incentive grant 
        for an eligible business beginning with the first taxable year 
        after December 31, 1994 calendar year 1995.  The maximum credit 
        available grant is $5,000 per eligible employee.  The 
        actual credit grant is based on the following schedule: 
           $2,000 for each eligible employee with wages greater than 
        or equal to 170 percent and less than 200 percent of the minimum 
        wage; 
           $3,000 for each eligible employee with wages greater than 
        or equal to 200 percent and less than 250 percent of the minimum 
        wage; 
           $4,000 for each eligible employee with wages greater than 
        or equal to 250 percent and less than 300 percent of the minimum 
        wage; and 
           $5,000 for each eligible employee with wages greater than 
        or equal to 300 percent of the minimum wage. 
           The total credit grant for an employer is equal to the 
        actual credit grant multiplied by the number of employees 
        eligible for that credit grant.  For purposes of this section 
        "minimum wage" means the minimum wage that is required by 
        federal law.  An eligible business may apply for a rural job 
        creation credit grant only once for each new job.  The credit is 
        refundable. 
           Subd. 2.  [ELIGIBLE BUSINESS.] An employer eligible for a 
        job credit creation incentive grant under this section must (1) 
        be located outside the metropolitan area as defined under 
        section 473.121 (2) create at least ten qualifying new jobs in a 
        two-year period, and (3) consist of a for-profit business.  For 
        the purposes of this section, a "qualifying new job" is a job 
        that did not exist in Minnesota before May 6, 1994. 
           Subd. 3.  [ELIGIBLE EMPLOYEE.] To be eligible for a 
        credit grant, the employee must be employed full time by an 
        eligible business at a wage level of not less than 170 percent 
        of the minimum wage at the time the eligible business applies 
        for the credit grant and must have been employed there at that 
        wage level for a minimum of 12 months.  The credit grant applies 
        only to new jobs created at the eligible business after May 6, 
        1994. 
           Subd. 4.  [RESTRICTIONS.] The tax credits incentive grants 
        provided by this section do not apply to racetracks, financial 
        institutions, gambling enterprises, public utilities, or sports, 
        fitness, and health facilities.  An employer is not eligible for 
        a tax credit an incentive grant if the commissioner determines 
        that the position held by the employee for which the business is 
        seeking a credit grant was transferred from an enterprise 
        conducted by substantially the same business enterprise at 
        another site in the state. 
           Sec. 15.  Minnesota Statutes 1994, section 469.31, is 
        amended to read: 
           469.31 [LIMIT ON TAX CREDITS GRANTS; APPROPRIATION.] 
           The maximum amount of tax credits allowable incentive 
        grants payable under sections 469.305 and 469.309 is $900,000 
        for fiscal year 1997.  Of that amount, one-third must be 
        allocated to the city of Minneapolis, one-third to the city of 
        St. Paul, and one-third to the remaining cities.  Of the amounts 
        allocated to the cities of Minneapolis and St. Paul, $25,000 
        must be subtracted from each city's allocation and is 
        appropriated to the commissioner of economic security for 
        administration of this program, provided that $25,000 of the 
        appropriation is for fiscal year 1996 and $25,000 is for fiscal 
        year 1997.  Of the amount allocated to the remaining cities, a 
        minimum of $60,000 must be allocated to the city of South St. 
        Paul.  No tax credits are allowable incentive grants may be paid 
        before fiscal year 1997.  If the commissioner of revenue 
        economic security estimates by March 1, 1996, that tax credits 
        incentive grants for fiscal year 1997 will exceed $900,000, the 
        commissioner shall proportionately reduce each city's allocation 
        to remain within the limit.  The amount necessary to pay the 
        allocations for grants under this section are appropriated to 
        the commissioner of trade and economic development and the 
        commissioner of economic security. 
           Sec. 16.  Minnesota Statutes 1994, section 471.16, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any city, however organized, or any town, 
        county, school district, or any board thereof, or any 
        incorporated post of the American Legion or any other 
        incorporated veterans' organization, may operate such a program 
        independently, or they may cooperate among themselves or with 
        any nonprofit organization in its conduct and in any manner in 
        which they may mutually agree; or they may delegate the 
        operation of the program to a recreation board created by one or 
        more of them, and appropriate money voted for this purpose to 
        such board which may in turn support or cooperate with a 
        nonprofit organization.  In the case of school districts after 
        May 15, 1978, the right to enter into such agreements with any 
        other corporation, board or body hereinbefore designated where 
        bonds are issued by the other party and revenue pledged for 
        bonds issued pursuant to section 471.191, shall be authorized 
        only upon obtaining the approval of a majority of the electors 
        voting on the question at a regular or special school election. 
           Sec. 17.  Minnesota Statutes 1994, section 471.191, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any city operating a program of public 
        recreation and playgrounds pursuant to sections 471.15 to 471.19 
        may acquire or lease, equip, and maintain land, buildings, and 
        other recreational facilities, including, but without 
        limitation, outdoor or indoor swimming pools, skating rinks and 
        arenas, athletic fields, golf courses, marinas, concert halls, 
        museums, and facilities for other kinds of athletic or cultural 
        participation, contests, and exhibitions, together with related 
        automobile parking facilities as defined in section 459.14, and 
        may expend funds for the operation of such program and borrow 
        and expend funds for capital costs thereof pursuant to the 
        provisions of this section.  A school district operating a 
        program of public recreation and playgrounds has the rights 
        provided in this section.  Any facilities to be operated by a 
        nonprofit corporation, as contemplated in section 471.16, may be 
        leased to the corporation upon such rentals and for such term, 
        not exceeding 30 years, and subject to such other provisions as 
        may be agreed; including but not limited to provisions (a) 
        permitting the lessee, subject to whatever conditions are 
        stated, to provide for the construction and equipment of the 
        facilities by any means available to it and in the manner 
        determined by it, without advertisement for bids as required for 
        other municipal facilities, and (b) granting the lessee the 
        option to renew the lease upon such conditions and rentals, or 
        to purchase the facilities at such price, as may be agreed; 
        provided that (c) any such lease shall require the lessee to pay 
        net rentals sufficient to pay the principal, interest, 
        redemption premiums, and other expenses when due with respect to 
        all city bonds issued for the acquisition or betterment of the 
        facilities, less such amount of taxes and special assessments, 
        if any, as may become payable in any year of the term of the 
        lease, on the land, building, or other facilities leased, and 
        (d) no option shall be granted to purchase the facilities at any 
        time at a price less than the amount required to pay all 
        principal and interest to become due on such bonds to the 
        earliest date or dates on which they may be paid and redeemed, 
        and all redemption premiums and other expenses of such payment 
        and redemption.  
           Sec. 18.  Minnesota Statutes 1994, section 471.191, 
        subdivision 2, is amended to read: 
           Subd. 2.  Any such city may issue bonds pursuant to chapter 
        475, for the acquisition and betterment of land, buildings, and 
        facilities for the purpose of carrying out the powers granted by 
        this section.  Such bonds, unless authorized as general 
        obligations of the issuer pursuant to approval of the electors 
        or pursuant to another law or charter provision permitting such 
        issuance without an election, shall be payable solely from the 
        income of land, buildings, and facilities used or useful for the 
        operation of the program, but may be secured by a pledge to the 
        bondholders, or to a trustee, of all income and revenues of 
        whatsoever nature derived from any such land, buildings, and 
        facilities, as a first charge on the gross revenues thereof to 
        the extent necessary to pay the bonds and interest thereon when 
        due and to accumulate and maintain an additional reserve for 
        that purpose in an amount equal to the total amount of payments 
        to become due in any fiscal year.  In this event the governing 
        body of the issuer may by resolution or trust indenture define 
        the land, buildings, or facilities, the revenues of which are 
        pledged, and establish covenants and agreements to be made by 
        the issuer for the security of the bonds, including a covenant 
        that the issuer will establish, maintain, revise when necessary, 
        and collect charges for all services, products, use, and 
        occupancy of the land, buildings, and facilities, in the amounts 
        and at the times required to produce the revenues pledged, and 
        also sufficient, with any other funds appropriated by the 
        governing body from time to time, to provide adequately for the 
        operation and maintenance of the land, buildings, and 
        facilities.  After the issuance of any bonds for which revenues 
        are so pledged, the governing body of the issuer shall provide 
        in its budget each year for any anticipated deficiency in the 
        revenues available for such operation and maintenance.  For this 
        purpose any issuer may levy a tax on the taxable property within 
        its boundaries, in excess of taxes which may otherwise be levied 
        within charter limitations, provided the excess levy for a city 
        subject to a charter limitation is approved by a majority of its 
        electors voting on the question at a regular or special 
        election.  The authority to levy additional taxes granted herein 
        shall not apply to cities or towns in which the net tax capacity 
        consists in part of iron ore or lands containing taconite or 
        semitaconite.  
           Sec. 19.  Minnesota Statutes 1994, section 471.98, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POOL.] "Pool" means any self-insurance fund or 
        agreement for the reciprocal assumption of risk established by 
        or among two or more political subdivisions for coverage of 
        their respective risks including, but not limited to, the pools 
        described in section 471.982, subdivision 3.  
           Sec. 20.  Minnesota Statutes 1994, section 471.981, 
        subdivision 2, is amended to read: 
           Subd. 2.  A political subdivision may establish a self 
        insurance revolving fund.  The initial amount of the fund shall 
        be determined by the governing body.  The governing body may 
        appropriate the amounts necessary to maintain the fund at the 
        level specified in the ordinance or resolution establishing it.  
        Expenditures from the fund may be made for:  
           (a) Payment of losses; 
           (b) Costs of defense and investigation; 
           (c) Premiums and deductible amounts when commercial 
        insurance is purchased for a risk; 
           (d) Debt service and debt service related expenses for 
        bonds issued under this section; 
           (e) Cost of loss control activities; and 
           (e) (f) Any other costs customarily borne by commercial 
        insurers under conventional insurance policies.  
           Sec. 21.  Minnesota Statutes 1994, section 471.981, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [INSURANCE INSTALLMENT PURCHASE AGREEMENT.] 
        A county political subdivision may, by resolution of its 
        governing body, and without advertisement for bids, enter into 
        an insurance installment purchase agreement with a 
        self-insurance pool created under subdivision 3.  Such a 
        self-insurance pool may purchase insurance on behalf of the 
        participating counties political subdivisions and may use 
        insurance installment purchase agreements or other obligations 
        of the participating counties political subdivisions to provide 
        the participating counties political subdivisions with coverage 
        against all or any part of the risks enumerated in subdivision 1 
        and against any risk which the county political subdivision is 
        authorized to insure under section 176.181, subdivision 1.  The 
        Notwithstanding any limitations set forth under section 475.52, 
        a political subdivision which has established a self-insurance 
        revolving fund under subdivision 2 or self-insurance pool may 
        fund insurance claims and reserves and finance insurance 
        installment purchase agreements for the political subdivision, 
        self-insurance pool, or a mutual insurance company established 
        pursuant to subdivision 4 and fund other costs set forth in 
        subdivision 2 by issuing revenue bonds, bonds which are general 
        obligations of the self-insurance pool or mutual insurance 
        company, as applicable, or other obligations secured by payments 
        made or to be made by the participating counties political 
        subdivisions or pool.  An insurance installment purchase 
        agreement of a participating county political subdivision may 
        require that the county political subdivision make payments 
        sufficient to produce revenue for the prompt payment of the 
        bonds or other obligations, including all interest and premiums, 
        if any, accruing on them.  The insurance installment purchase 
        agreements may provide for additional contributions or premiums 
        if it is actuarially determined that the assets of the insurance 
        installment purchase agreements available to pay claims are 
        insufficient.  The insurance installment purchase agreements may 
        be multiyear contracts and shall not be subject to any 
        referendum, public bidding, or net debt limitation requirement 
        of chapter 475.  
           Sec. 22.  Minnesota Statutes 1994, section 471.981, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [BOND ISSUE FOR INSURANCE PROCUREMENT OR 
        SELF-INSURANCE.] A self-insurance pool of counties may issue 
        bonds which are general obligations of the self-insurance pool 
        or revenue bonds secured by insurance installment purchase 
        agreements of the participating counties political subdivisions 
        issued pursuant to subdivision 4a.  The self-insurance pool, 
        with the approval of the governing body of each 
        participating county political subdivision, shall fix the total 
        amount needed for the procurement of insurance and shall 
        apportion to each participating county political subdivision the 
        county's political subdivision's share of that amount and of the 
        costs of operation, or of annual debt service or payments 
        required to pay such amount with interest.  Notwithstanding any 
        limitations set forth under section 475.52, or any other general 
        or special law or charter to the contrary, a political 
        subdivision may issue revenue bonds or other obligations to 
        provide funds for the purposes, including self-insurance, 
        authorized by this section.  Any other law notwithstanding, 
        bonds or other obligations issued under this subdivision may be 
        sold at public or private sale upon the terms and conditions the 
        issuer determines.  No election shall be required to authorize 
        the issuance of the obligations, and the obligations shall not 
        be subject to any limitation on net debt.  Notwithstanding any 
        limitation imposed by section 475.54, the obligations shall 
        mature in the years the issuer determines.  In addition to 
        permitted uses described above, proceeds of obligations issued 
        pursuant to this subdivision may be used to establish a debt 
        service reserve for the obligations, pay costs of issuing the 
        bonds or to refund obligations previously issued pursuant to 
        this subdivision.  Any debt service reserve fund established 
        under this subdivision shall not be subject to investment 
        guidelines set forth in chapters 118 and 475.  A self-insurance 
        pool An issuer of bonds authorized under this subdivision may 
        designate a bank or trust company authorized to exercise trust 
        powers in this state as trustee for the holders of obligations 
        issued pursuant to this subdivision and may create funds and 
        accounts necessary to secure payment of the obligations.  Sales 
        proceeds of bonds issued under this subdivision, except for 
        sales proceeds used to pay costs of issuing the bonds shall be 
        invested so that the average life of the investments exceeds the 
        average life of the bonds.  The proceeds from bonds issued under 
        this subdivision must be held in trust and may only be paid to 
        the self-insurer according to the schedule of payments set forth 
        in the trust instruments. 
           A qualified actuary shall certify that the amount of the 
        scheduled payment does not exceed the amount necessary to meet 
        the obligation of the self-insurer at the time payment is 
        scheduled to be made. 
           Notwithstanding the investment limitations imposed in 
        chapters 118 and 475, proceeds of bonds issued pursuant to this 
        subdivision, and debt service funds and reserves held in 
        connection with them shall be invested solely in governmental 
        bonds, notes, bills, and other securities, which are direct 
        obligations or are guaranteed or insured issues of the United 
        States, its agencies, its instrumentalities, or organizations 
        created by act of Congress, excluding mortgage-backed securities.
           If required by the resolution authorizing the issuance of 
        obligations pursuant to this subdivision, the governing body of 
        each participating county political subdivision shall annually 
        levy a tax sufficient to repay the costs of retirement of any 
        bonds or to make payments under insurance installment purchase 
        agreements.  Taxes may be levied pursuant to this subdivision 
        without limitation as to rate or amount.  
           Sec. 23.  Minnesota Statutes 1994, section 471.981, 
        subdivision 4c, is amended to read: 
           Subd. 4c.  [INSURANCE INSTALLMENT PURCHASE; INTEREST RATE.] 
        Participating counties political subdivisions may delegate to a 
        self-insurance pool of counties political subdivisions the power 
        to determine the interest rate on insurance installment purchase 
        agreements provided that the rate is uniform and does not exceed 
        the net effective rate on revenue bonds or other obligations 
        sold by or on behalf of the pool by more than one-fourth of one 
        percent. 
           Sec. 24.  Minnesota Statutes 1994, section 475.51, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NET DEBT.] "Net debt" means the amount remaining 
        after deducting from its gross debt the amount of current 
        revenues which are applicable within the current fiscal year to 
        the payment of any debt and the aggregate of the principal of 
        the following: 
           (1) Obligations issued for improvements which are payable 
        wholly or partly from the proceeds of special assessments levied 
        upon property specially benefited thereby, including those which 
        are general obligations of the municipality issuing them, if the 
        municipality is entitled to reimbursement in whole or in part 
        from the proceeds of the special assessments. 
           (2) Warrants or orders having no definite or fixed maturity.
           (3) Obligations payable wholly from the income from revenue 
        producing conveniences. 
           (4) Obligations issued to create or maintain a permanent 
        improvement revolving fund. 
           (5) Obligations issued for the acquisition, and betterment 
        of public waterworks systems, and public lighting, heating or 
        power systems, and of any combination thereof or for any other 
        public convenience from which a revenue is or may be derived. 
           (6) Debt service loans and capital loans made to a school 
        district under the provisions of sections 124.42 and 124.431. 
           (7) Amount of all money and the face value of all 
        securities held as a debt service fund for the extinguishment of 
        obligations other than those deductible under this subdivision. 
           (8) Obligations to repay loans made under section 216C.37.  
           (9) Obligations to repay loans made from money received 
        from litigation or settlement of alleged violations of federal 
        petroleum pricing regulations. 
           (10) Obligations issued to pay pension fund liabilities 
        under section 475.52, subdivision 6, or any charter authority. 
           (11) All other obligations which under the provisions of 
        law authorizing their issuance are not to be included in 
        computing the net debt of the municipality. 
           Sec. 25.  Minnesota Statutes 1994, section 475.52, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CERTAIN PURPOSES.] Any municipality may issue 
        bonds for paying judgments against it; for refunding outstanding 
        bonds; for funding floating indebtedness; or for funding all or 
        part of the municipality's current and future unfunded liability 
        for a pension or retirement fund or plan referred to in section 
        356.20, subdivision 2, as those liabilities are most recently 
        computed pursuant to sections 356.215 and 356.216 by purchasing 
        one or more insurance policies or annuity contracts to pay all 
        or a specified part of the liability within the period required 
        by law.  The board of trustees or directors of a pension fund or 
        relief association referred to in section 69.77 or chapter 422A 
        must consent and must be a party to any contract made under this 
        section with respect to the fund held by it for the benefit of 
        and in trust for its members. 
           Sec. 26.  Minnesota Statutes 1994, section 475.58, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPROVAL BY MAJORITY OF ELECTORS; 
        EXCEPTIONS.] Obligations authorized by law or charter may be 
        issued by any municipality upon obtaining the approval of a 
        majority of the electors voting on the question of issuing the 
        obligations, but an election shall not be required to authorize 
        obligations issued: 
           (1) to pay any unpaid judgment against the municipality; 
           (2) for refunding obligations; 
           (3) for an improvement or improvement program, which 
        obligation is payable wholly or partly from the proceeds of 
        special assessments levied upon property specially benefited by 
        the improvement or by an improvement within the improvement 
        program, or of taxes levied upon the increased value of property 
        within a district for the development of which the improvement 
        is undertaken, including obligations which are the general 
        obligations of the municipality, if the municipality is entitled 
        to reimbursement in whole or in part from the proceeds of such 
        special assessments or taxes and not less than 20 percent of the 
        cost of the improvement or the improvement program is to be 
        assessed against benefited property or is to be paid from the 
        proceeds of federal grant funds or a combination thereof, or is 
        estimated to be received from such taxes within the district; 
           (4) payable wholly from the income of revenue producing 
        conveniences; 
           (5) under the provisions of a home rule charter which 
        permits the issuance of obligations of the municipality without 
        election; 
           (6) under the provisions of a law which permits the 
        issuance of obligations of a municipality without an election; 
           (7) to fund pension or retirement fund liabilities pursuant 
        to section 475.52, subdivision 6; and 
           (8) under a capital improvement plan under section 373.40; 
        and 
           (9) to fund facilities as provided in subdivision 3. 
           Sec. 27.  Minnesota Statutes 1994, section 475.58, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [YOUTH ICE FACILITIES.] (a) A municipality may, 
        without regard to the election requirement under subdivision 1 
        or under any other provision of law or a home rule charter, 
        issue and sell obligations to finance acquisition, improvement, 
        or construction of an indoor ice arena intended to be used 
        predominantly for youth athletic activities if all the following 
        conditions are met: 
           (1) the obligations are secured by a pledge of revenues 
        from the facility; 
           (2) the facility and its financing are approved by 
        resolutions of at least two of the following governing bodies of 
        (i) the city in which the facility is located, (ii) the school 
        district in which the facility is located, or (iii) the county 
        in which the facility is located; 
           (3) the governing body of the municipality finds, based on 
        analysis provided by a professional experienced in finance, that 
        the facility's revenues and other available money will be 
        sufficient to pay the obligations, without reliance on a 
        property tax levy or the municipality's general purpose state 
        aid; and 
           (4) no petition for an election has been timely filed under 
        paragraph (b). 
           (b) At least 30 days before issuing obligations under this 
        subdivision, the municipality must hold a public hearing on the 
        issue.  The municipality must publish or provide notice of the 
        hearing in the same manner provided for its regular meetings.  
        The obligations are not exempt from the election requirement 
        under this subdivision, if: 
           (1) registered voters equal to ten percent of the votes 
        cast in the last general election in the municipality sign a 
        petition requesting a vote on the issue; and 
           (2) the petition is filed with the municipality within 20 
        days after the public hearing. 
           (c) This subdivision expires December 31, 1997. 
           Sec. 28.  Minnesota Statutes 1994, section 475.60, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [CONTINUING DISCLOSURE AGREEMENTS.] Any officer 
        of a municipality charged with the responsibility of issuing 
        bonds for or on behalf of the municipality is authorized to 
        enter into written agreements or contracts relating to the 
        continuing disclosure of information necessary to comply with, 
        or facilitate the issuance of bonds in accordance with, federal 
        securities laws, rules and regulations, including securities and 
        exchange commission rules and regulations, section 240.15c2-12.  
        An agreement may comprise covenants with purchasers and holders 
        of bonds set forth in the resolution authorizing the issuance of 
        the bonds, or a separate document authorized by resolution. 
           Sec. 29.  Minnesota Statutes 1994, section 475.61, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [OTHER TEMPORARY OBLIGATIONS.] When all 
        conditions exist precedent to the offering for sale of 
        obligations of any municipality in any amount for any purpose 
        authorized by law, the governing body may issue and sell 
        temporary obligations not exceeding the total amount authorized, 
        maturing in not more than three years from the date the 
        obligations are issued, in anticipation of the issuance of the 
        permanent obligations.  To the extent that the principal of and 
        interest on the temporary obligations cannot be paid when due 
        from other sources pledged or appropriated for the purpose, they 
        shall be paid from the proceeds of permanent bonds or additional 
        temporary bonds which the governing body shall offer for sale in 
        advance of their maturity but the indebtedness funded by an 
        issue of temporary bonds shall not be extended by the issue of 
        additional temporary bonds for more than six years from the date 
        of the first issue.  The holders of any temporary bonds shall 
        have and may enforce, by mandamus or other appropriate 
        proceedings, all rights respecting the levy and collection of 
        taxes that are granted by law to holders of permanent bonds, 
        except the right to require the levies to be collected prior to 
        the maturity of the temporary bonds.  If any temporary bonds are 
        not paid in full at maturity, the holders may require the 
        issuance in exchange for them, at par, of new temporary bonds 
        maturing within one year from their date of issue but not 
        subject to any other maturity limitation, and bearing interest 
        at the maximum rate permitted by law.  The governing body may by 
        resolution adopted prior to the sale of any temporary bonds 
        pledge the full faith, credit, and taxing power of the 
        municipality for the payment of the principal and interest, in 
        addition to all provisions made for their security in the 
        authorizing resolution.  If it does so, the bonds will be 
        designated as general obligation temporary bonds, and the 
        governing body shall levy taxes for their payment in accordance 
        with this section.  Proceeds of permanent bonds or temporary 
        bonds not yet sold may be treated as pledged revenues, in 
        reduction of the tax otherwise required by this section to be 
        levied prior to delivery of the obligations.  Funds of a 
        municipality may be invested in its temporary bonds in 
        accordance with section 471.56, and may be purchased upon their 
        initial issue, but shall be purchased only from funds which the 
        municipality determines will not be required for other purposes 
        before the maturity date, and shall be resold before maturity 
        only in the case of an emergency. 
           Sec. 30.  Minnesota Statutes 1994, section 475.63, is 
        amended to read: 
           475.63 [CERTIFICATE AS TO REGISTRATION.] 
           Before any obligations payable in whole or in part from 
        taxes shall be delivered to the purchaser, the municipality 
        shall obtain and deliver to the purchaser a certificate of the 
        county auditor that the issue has been entered on the register.  
        If a tax levy is required by law, such certificate shall also 
        recite that such tax has been levied as required by law.  
           Sec. 31.  Minnesota Statutes 1994, section 475.79, is 
        amended to read: 
           475.79 [POWERS AVAILABLE TO OTHER POLITICAL SUBDIVISIONS.] 
           Any powers granted to a municipality under this chapter, 
        other than the power to issue general obligation bonds and levy 
        taxes, may be exercised by any other governmental unit.  This 
        grant of authority does not limit the powers granted to an 
        entity under any other law.  In connection with the issuance of 
        bonds authorized to be issued by any law or charter provision 
        other than this chapter, a governmental unit determining to 
        exercise any power under any of sections 475.54, 475.55, 
        475.553, 475.56, 475.561, 475.60, 475.61, 475.65, 475.66, 
        475.67, 475.69, 475.70, and 475.78 may do so notwithstanding any 
        contrary provision in the authorizing law or charter unless the 
        authorizing law or charter provides that this chapter or the 
        specific section does not apply.  This section is, in part, 
        remedial in nature.  Obligations issued prior to the effective 
        date of this section are not invalid or unenforceable for 
        providing terms, consequences, or remedies that are authorized 
        by this section and chapter 475. 
           Sec. 32.  Laws 1994, chapter 643, section 14, subdivision 
        6, is amended to read: 
        Subd. 6.  Community Service Centers                   1,200,000
        For a grant to independent school 
        district No. 432, Mahnomen, to 
        construct a community service center at 
        Nay-Tay-Waush in Mahnomen county on the 
        White Earth Indian reservation.  The 
        center must be constructed on land 
        leased to the school district by the 
        White Earth Band of Chippewa Indians 
        under a ground lease having an initial 
        term of at least 20 years and a total 
        term of at least 40 years, including 
        renewal options.  The school district 
        must contract with the White Earth Band 
        to operate the center on behalf of the 
        school district for the term of the 
        lease and any renewal options, and 
        otherwise subject to new Minnesota 
        Statutes, section 16A.695.  The center 
        and all the services provided by the 
        center must be open to the public.  
        This grant is contingent on a match of 
        $1,300,000 from the White Earth Band of 
        Chippewa Indians. 
           Sec. 33.  [REPEALER.] 
           Minnesota Statutes 1994, section 469.305, subdivision 2, is 
        repealed. 
           Sec. 34.  [EFFECTIVE DATE.] 
           This act is effective the day following final enactment. 
           Presented to the governor May 30, 1995 
           Signed by the governor June 1, 1995, 11:42 a.m.

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