Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 493-S.F.No. 3730
An act relating to public finance; authorizing certain
investments by joint powers investment trusts;
exempting certain airport obligations from the public
sale requirement; providing for state payment of
certain county debt obligations upon potential default
and authorizing means for repayment by the county;
extending sunset for self-executing special service
district laws; authorizing special assessments for
communications facilities; modifying authority to
issue variable rate bonds; providing for replacement
heating systems and related energy conservation
measures in cities discontinuing district heating
systems; making technical changes to description of
area served by nonmetropolitan county economic
development authorities; increasing authority for debt
obligations for the financing of the metropolitan
council's transit capital improvement program;
altering qualifications for residential rental bonds;
providing that the Uniform Commercial Code does not
apply to certain government security interests;
allowing certain cities to be eligible for replacement
transit service; regulating 800 megahertz radio
contract requirements; eliminating a limitation on the
amount of certain grants; funding administration of
Laws 2000, chapter 490, articles 4, 5, and 10;
appropriating money and extending the availability of
an appropriation; amending Minnesota Statutes 1998,
sections 118A.05, subdivision 4; 360.036, subdivision
2; 428A.101; 429.021, subdivision 1; 474A.047,
subdivision 1; and 475.78; Minnesota Statutes 1999
Supplement, sections 473.39, subdivision 1g; and
475.56; Laws 2000, chapter 484, article 1, section 4,
subdivisions 3 and 5; proposing coding for new law in
Minnesota Statutes, chapters 373; and 451; repealing
Minnesota Statutes 1998, section 473.867, subdivision
4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 118A.05,
subdivision 4, is amended to read:
Subd. 4. [MINNESOTA JOINT POWERS INVESTMENT TRUST.]
Government entities may enter into agreements or contracts for:
(1) shares of a Minnesota joint powers investment trust
whose investments are restricted to securities described in this
subdivision, subdivision 2, section and section 118A.04;
(2) units of a short-term investment fund established and
administered pursuant to regulation 9 of the Office of the
Comptroller of the Currency, in which investments are restricted
to securities described in this section and section 118A.04;
(3) shares of an investment company which is registered
under the Federal Investment Company Act of 1940 and which holds
itself out as a money market fund meeting the conditions of rule
2a-7 of the Securities and Exchange Commission and is rated in
one of the two highest rating categories for money market funds
by at least one nationally recognized statistical rating
organization; or
(4) shares of an investment company which is registered
under the Federal Investment Company Act of 1940, and whose
shares are registered under the Federal Securities Act of 1933,
as long as the investment company's fund receives the highest
credit rating and is rated in one of the two highest risk rating
categories by at least one nationally recognized statistical
rating organization and is invested in financial instruments
with a final maturity no longer than 13 months.
Sec. 2. Minnesota Statutes 1998, section 360.036,
subdivision 2, is amended to read:
Subd. 2. [ISSUANCE OF BONDS.] (a) Bonds to be issued by a
municipality under sections 360.011 to 360.076, shall be
authorized and issued in the manner and within the limitation
prescribed by laws or the charter of the municipality for the
issuance and authorization of bonds for public purposes
generally, except as provided in paragraphs (b) and (c).
(b) No election is required to authorize the issuance of
the bonds if:
(1) a board organized under section 360.042 recommends by a
resolution adopted by a vote of not less than 60 percent of its
members the issuance of bonds, and (2) the bonds are authorized
by a resolution of the governing body of each of the
municipalities acting jointly pursuant to section 360.042,
adopted by a vote of not less than 60 percent of its members; or
(2) the bonds are being issued for the purpose of financing
the costs of constructing, enlarging, or improving airports and
other air navigation facilities; and
(i) the governing body estimates that passenger facility
charges and other revenues pledged to the payment thereof will
be at least 20 percent of the debt service payable on the bonds
in any year;
(ii) the project will be funded in part by a federal grant
for airport development; and
(iii) the principal amount of the bonds issued under this
clause does not exceed 25 percent of the amount of the federal
grant.
(c) If the bonds are general obligations of the
municipality, the levy of taxes required by section 475.61 to
pay principal and interest on the bonds is not included in
computing or applying any levy limitation applicable to the
municipality.
Sec. 3. [373.45] [STATE PAYMENT OF DEBT OBLIGATION UPON
POTENTIAL DEFAULT; REPAYMENT; STATE OBLIGATION NOT DEBT.]
Subdivision 1. [DEFINITIONS.] (a) As used in this section,
the following terms have the meanings given.
(b) "Authority" means the Minnesota public facilities
authority.
(c) "Commissioner" means the commissioner of finance.
(d) "Debt obligation" means a general obligation bond
issued by a county to provide funds for the construction of:
(1) jails;
(2) correctional facilities;
(3) law enforcement facilities;
(4) social services and human services facilities; or
(5) solid waste facilities.
Subd. 2. [APPLICATION.] (a) This section provides a state
guarantee of the payment of principal and interest on debt
obligations if:
(1) the obligations are issued after June 30, 2000;
(2) application to the public facilities authority is made
before issuance; and
(3) the obligations are covered by an agreement meeting the
requirements of subdivision 3.
(b) Applications to be covered by the provisions of this
section must be made in a form and contain the information
prescribed by the authority. Applications are subject to a fee
of $500 for the first bond issue requested by the county and
$250 for each bond issue thereafter.
(c) Application fees paid under this section must be
deposited in a separate county bond guarantee account in the
general fund. Money in the county bond guarantee account is
appropriated to the authority for purposes of administering this
section.
(d) Neither the authority nor the commissioner is required
to promulgate administrative rules under this section and the
procedures and requirements established by the authority or
commissioner under this section are not subject to chapter 14.
Subd. 3. [AGREEMENT.] (a) In order for specified debt
obligations of a county to be covered by the provisions of this
section, the county must enter an agreement with the authority
obligating the county to be bound by the provisions of this
section. This agreement must be in a form prescribed by the
authority and contain any provisions required by the authority,
including at least an obligation to:
(1) deposit with the paying agent three days before the
date on which the payment is due an amount sufficient to make
that payment;
(2) notify the authority, if the county will be unable to
make all or a portion of the payment; and
(3) include a provision in the bond resolution and county's
agreement with the paying agent for the debt obligation that
requires the paying agent to inform the commissioner if it
becomes aware of a default or potential default in the payment
of principal or interest on that issue or if, on the day two
business days before the date a payment is due on that issue,
there are insufficient funds to make the payment on deposit with
the paying agent. Funds invested in a refunding escrow account
established under section 475.67 that are to become available to
the paying agent on a principal or interest payment date are
deemed to be on deposit with the paying agent three business
days before the payment date.
(b) The provisions of an agreement under this subdivision
are binding as to an issue as long as any debt obligation of the
issue remains outstanding.
(c) This section is a contract with bondholders and may not
be amended or repealed for the covered bonds so long as the
covered bonds are outstanding.
Subd. 4. [NOTIFICATIONS; PAYMENT; APPROPRIATION.] (a)
After receipt of a notice of a default or potential default in
payment of principal or interest in debt obligations covered by
this section or an agreement under this section, and after
consultation with the county, the paying agent, and after
verification of the accuracy of the information provided, the
authority shall notify the commissioner of the potential
default. The notice must include a final figure as to the
amount due that the county will be unable to repay on the date
due.
(b) Upon receipt of this notice from the authority, the
commissioner shall issue a warrant and authorize the authority
to pay to the paying agent for the debt obligation the specified
amount on or before the date due. The amounts needed for the
purposes of this subdivision are annually appropriated to the
authority from the general fund.
Subd. 5. [INTEREST ON STATE PAID AMOUNT.] If the state has
paid part or all of the principal or interest due on a county's
debt obligation, the amount paid bears interest from the date
paid by the state until the date of repayment. The interest
rate is the state treasurer's invested cash rate as it is
certified by the commissioner. Interest only accrues on the
amounts paid and outstanding less the reduction in aid under
subdivision 7 and other payments received from the county.
Subd. 6. [PLEDGE OF COUNTY'S FULL FAITH AND CREDIT.] If
the state has paid part or all of the principal or interest due
on a county's debt obligation, the county's pledge of its full
faith and credit and unlimited taxing powers to repay the
principal and interest due on those debt obligations becomes,
without an election or the requirement of a further
authorization, a pledge of the full faith and credit and
unlimited taxing powers of the county to repay to the state the
amount paid, with interest. Amounts paid by the state must be
repaid in the order in which the state payments were made.
Subd. 7. [AID REDUCTION FOR REPAYMENT.] (a) Except as
provided in paragraph (b), the commissioner may reduce, by the
amount paid by the state under this section on behalf of the
county, plus the interest due on the state payments, the
following aids payable to the county:
(1) homestead and agricultural credit aid and disparity
reduction aid payable under section 273.1398;
(2) county criminal justice aid payable under section
477A.0121; and
(3) family preservation aid payable under section 477A.0122.
The amount of any aid reduction reverts from the appropriate
account to the state general fund.
(b) If, after review of the financial situation of the
county, the authority advises the commissioner that a total
reduction of the aids would cause an undue hardship on the
county, the authority, with the approval of the commissioner,
may establish a different schedule for reduction of aids to
repay the state. The amount of aids to be reduced are decreased
by any amounts repaid to the state by the county from other
revenue sources.
Subd. 8. [TAX LEVY FOR REPAYMENT.] (a) With the approval
of the authority, a county may levy in the year the state makes
a payment under this section an amount up to the amount
necessary to provide funds for the repayment of the amount paid
by the state plus interest through the date of estimated
repayment by the county. The proceeds of this levy may be used
only for this purpose unless they exceed the amount actually
due. Any excess must be used to repay other state payments made
under this section or must be deposited in the debt redemption
fund of the county. The amount of aids to be reduced to repay
the state are decreased by the amount levied.
(b) If the state is not repaid in full for a payment made
under this section by November 30 of the calendar year following
the year in which the state makes the payment, the authority
shall require the county to certify a property tax levy in an
amount up to the amount necessary to provide funds for repayment
of the amount paid by the state plus interest through the date
of estimated repayment by the county. To prevent undue
hardship, the authority may allow the county to certify the levy
over a five-year period. The proceeds of the levy may be used
only for this purpose unless they are in excess of the amount
actually due, in which case the excess must be used to repay
other state payments made under this section or must be
deposited in the debt redemption fund of the county. If the
authority orders the county to levy, the amount of aids reduced
to repay the state are decreased by the amount levied.
(c) A levy under this subdivision is an increase in the
levy limits of the county for purposes of section 275.065,
subdivision 6, and must be explained as a specific increase at
the meeting required under that provision.
Subd. 9. [MANDATORY PLAN; TECHNICAL ASSISTANCE.] If the
state makes payments on behalf of a county under this section or
the county defaults in the payment of principal or interest on
an outstanding debt obligation, it must submit a plan to the
authority for approval specifying the measures it intends to
implement to resolve the issues which led to its inability to
make the payment and to prevent further defaults. If the
authority determines that a county's plan is not adequate, the
authority shall notify the county that the plan has been
disapproved, the reasons for the disapproval, and that the state
will not make future payments under this section for debt
obligations of the affected county issued after the date
specified in that notice until its plan is approved. The
authority may also notify the county that until its plan is
approved, aids due the county will be withheld after a date
specified in the notice.
Subd. 10. [CONTINUING DISCLOSURE AGREEMENTS.] The
authority may enter into written agreements or contracts
relating to the continuing disclosure of information needed to
facilitate the ability of counties to issue debt obligations
according to federal securities laws, rules, and regulations,
including securities and exchange commission rules and
regulations, section 240.15c2-12. The agreements or contracts
may be in any form the authority deems reasonable and in the
state's best interests.
Sec. 4. Minnesota Statutes 1998, section 428A.101, is
amended to read:
428A.101 [SPECIAL SERVICE DISTRICT; SUNSET OF
SELF-EXECUTING PROVISIONS.]
The establishment of a new special service district after
June 30, 2001, must be made pursuant to enabling legislation
under Minnesota Statutes 1994, sections 428A.01 to 428A.10 2005,
requires enactment of a special law authorizing the
establishment.
Sec. 5. Minnesota Statutes 1998, section 429.021,
subdivision 1, is amended to read:
Subdivision 1. [IMPROVEMENTS AUTHORIZED.] The council of a
municipality shall have power to make the following improvements:
(1) To acquire, open, and widen any street, and to improve
the same by constructing, reconstructing, and maintaining
sidewalks, pavement, gutters, curbs, and vehicle parking strips
of any material, or by grading, graveling, oiling, or otherwise
improving the same, including the beautification thereof and
including storm sewers or other street drainage and connections
from sewer, water, or similar mains to curb lines.
(2) To acquire, develop, construct, reconstruct, extend,
and maintain storm and sanitary sewers and systems, including
outlets, holding areas and ponds, treatment plants, pumps, lift
stations, service connections, and other appurtenances of a
sewer system, within and without the corporate limits.
(3) To construct, reconstruct, extend, and maintain steam
heating mains.
(4) To install, replace, extend, and maintain street lights
and street lighting systems and special lighting systems.
(5) To acquire, improve, construct, reconstruct, extend,
and maintain water works systems, including mains, valves,
hydrants, service connections, wells, pumps, reservoirs, tanks,
treatment plants, and other appurtenances of a water works
system, within and without the corporate limits.
(6) To acquire, improve and equip parks, open space areas,
playgrounds, and recreational facilities within or without the
corporate limits.
(7) To plant trees on streets and provide for their
trimming, care, and removal.
(8) To abate nuisances and to drain swamps, marshes, and
ponds on public or private property and to fill the same.
(9) To construct, reconstruct, extend, and maintain dikes
and other flood control works.
(10) To construct, reconstruct, extend, and maintain
retaining walls and area walls.
(11) To acquire, construct, reconstruct, improve, alter,
extend, operate, maintain, and promote a pedestrian skyway
system. Such improvement may be made upon a petition pursuant
to section 429.031, subdivision 3.
(12) To acquire, construct, reconstruct, extend, operate,
maintain, and promote underground pedestrian concourses.
(13) To acquire, construct, improve, alter, extend,
operate, maintain, and promote public malls, plazas or
courtyards.
(14) To construct, reconstruct, extend, and maintain
district heating systems.
(15) To construct, reconstruct, alter, extend, operate,
maintain, and promote fire protection systems in existing
buildings, but only upon a petition pursuant to section 429.031,
subdivision 3.
(16) To acquire, construct, reconstruct, improve, alter,
extend, and maintain highway sound barriers.
(17) To improve, construct, reconstruct, extend, and
maintain gas and electric distribution facilities owned by a
municipal gas or electric utility.
(18) To improve, construct, extend, and maintain facilities
for Internet access and other communications purposes, if the
council finds that:
(i) the facilities are necessary to make available Internet
access or other communications services that are not and will
not be available through other providers or the private market
in the reasonably foreseeable future; and
(ii) the service to be provided by the facilities will not
compete with service provided by private entities.
Sec. 6. [451.10] [DISTRICT HEATING SYSTEM.]
Subdivision 1. [APPLICATION.] Sections 451.10 to 451.17
apply to a city that:
(1) owns and operates a district heating system either
directly by the city council or by a utility board or utility
commission of the city; and
(2) has taken action under law or charter to discontinue
the operation of the district heating system in whole or in part.
Subd. 2. [SUPERSEDES OTHER LAW.] Sections 451.10 to 451.17
apply to the cities described in subdivision 1 notwithstanding a
contrary provision in a city charter or in any other law
including section 451.09.
Subd. 3. [SUPPLEMENTAL TO OTHER LAW.] The powers granted
by sections 451.10 to 451.17 are supplemental and additional to
other powers granted by law or charter.
Sec. 7. [451.11] [POLICY; PURPOSE.]
Subdivision 1. [FINDINGS.] The legislature finds that it
is in the public interest that cities owning and operating a
district heating system that have determined to discontinue the
system in whole or in part be authorized to establish and
conduct a program to provide replacement heating and related
equipment to the owners of property whose district heating
service is discontinued. The legislature also finds that the
cities should be authorized to adopt and implement programs to
provide for the installation of energy conservation equipment
and measures to enhance the efficient and economical use of
energy in buildings and structures served by a district heating
system and in which replacement heating systems are installed
under sections 451.10 to 451.17.
Subd. 2. [PUBLIC PURPOSE.] The legislature further finds
that expenditures made by cities for a purpose in sections
451.10 to 451.17 are expenditures for a public purpose.
Sec. 8. [451.12] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] In sections 451.10 to 451.17
the definitions in this section apply.
Subd. 2. [CITY.] "City" means a city, however organized,
acting through its city council or through a public utilities
commission duly created by law or charter.
Subd. 3. [REPLACEMENT HEATING SYSTEM IMPROVEMENT.]
"Replacement heating system improvement" means and includes
furnaces, boilers, and similar heat generating and exchanging
equipment together with related equipment, duct work, and
control mechanisms that are installed to provide heating,
ventilating, and air conditioning services in a building or
structure whose district heating service has been discontinued
by a city.
Subd. 4. [ENERGY CONSERVATION IMPROVEMENT.] (a) "Energy
conservation improvement" means and includes, but is not limited
to, the following devices, methods, and materials, if
recommended by an energy audit approved in a program and having
a maximum cost of $20,000, that increase the efficiency of the
use of energy in a building or structure:
(1) insulation and ventilation;
(2) storm windows, thermal windows, and storm doors;
(3) caulking and weatherstripping;
(4) heating system modifications; and
(5) thermostats or lighting controls.
(b) The term does not include a device or method that
creates, converts, or actively uses energy from renewable
resources such as wind, solar, or biomass.
Subd. 5. [PROGRAM.] "Program" means a statement of goals,
procedures, standards of eligibility, and methods of financing
for the installation of heating replacement system improvements
and energy conservation improvements.
Subd. 6. [IMPROVEMENT.] "Improvement" includes replacement
heating system improvements and energy conservation improvements.
Sec. 9. [451.13] [PROGRAM.]
Subdivision 1. [AFTER NOTICE AND HEARING.] A program may
be adopted by resolution of the city council of a city after
reasonable notice and hearing provided for by the city council.
Subd. 2. [ELEMENTS.] The program must contain at least the
following elements:
(1) a description of the kinds of property eligible for
assistance with heating replacement improvements and energy
conservation improvements;
(2) procedures for accomplishing the improvements by the
city or private contractors;
(3) methods of financing the installation of the heating
replacement and energy conservation improvements; and
(4) the administrative agency of the city responsible for
conducting the program.
Subd. 3. [DELEGATION.] The city council may by resolution
delegate the responsibility for the conduct of the program to a
public utilities commission or public utilities board of the
city.
Sec. 10. [451.14] [INSTALLING THE IMPROVEMENTS.]
Subdivision 1. [METHODS.] The program may provide for the
methods of installing the improvements set out in this
subdivision.
(a) The city may contract with one or more contractors to
perform work and furnish materials for the improvements.
(b) The owner of a building or structure eligible for an
improvement may contract for the installation of the
improvement, subject to approval by the city as provided in the
program.
(c) The city may contract with a property owner for the
installation of an improvement by the property owner, but no
payment under section 451.15 may be made for the property
owner's labor.
Subd. 2. [INSPECTION AND CERTIFICATION.] The program must
provide a method by which a city official or employee may
inspect and is to certify the completed installation of the
improvement to ensure compliance with city codes and ordinances
and other standards specified in the program.
Subd. 3. [COMPETITIVE BIDS.] Contracts entered into under
subdivision 1, paragraph (a), are subject to competitive bidding
requirements of law.
Sec. 11. [451.15] [PAYMENTS; FINANCING.]
Subdivision 1. [FINANCING.] The program may include one or
more of the methods described in this section for financing the
cost of the installation of improvements.
Subd. 2. [CASH.] The city may contract with a property
owner for the payment in cash of the cost of the installation of
the improvements upon completion of the installation of the
improvements. The payment must be secured by:
(1) a deposit with the city of 90 percent of the contract
price; or
(2) a written commitment from a bank or other financial
institution approved in the program to lend the property owner
the full amount of the contract price for payment to the city.
Subd. 3. [PROMISSORY NOTE.] The city may accept payment of
the contract price by a promissory note from the property owner
delivered at the time of entering into the contract payable at
such times, not exceeding ten years, and in the amounts and at
the interest rate specified in the program.
Subd. 4. [LIEN AS SECURITY.] The balance of payments due
under subdivision 2 and the entire principal of and interest on
a promissory note delivered under subdivision 3 are secured by a
lien created by this subdivision on the real property on which
the improvements are made. If payment is not made according to
the terms of the program, or the note, the chief financial
officer of the city may certify the entire amount so due to the
county auditor for collection as other taxes are collected.
Subd. 5. [SPECIAL ASSESSMENTS.] The program may provide
that at the request of the property owner the unpaid cost of the
installation of an improvement is to be specially assessed
against the real property on which the improvement is installed
in the manner provided by section 429.101, except that:
(1) the adoption of an ordinance is not required; and
(2) obligations issued to finance the improvements must
mature not later than ten years from the date of their issuance.
Sec. 12. [451.16] [FINANCING; OBLIGATIONS.]
Subdivision 1. [BONDS; OTHER OBLIGATIONS.] In addition to
the authority to issue obligations under section 429.101, a city
may issue its bonds or other obligations to finance the cost of
the installation of improvements as provided in this section.
Subd. 2. [REVENUE OBLIGATIONS.] A city may issue and sell
its revenue obligations payable solely from the revenues derived
or to be derived from assessments and payments from property
owners under section 451.15, which revenues must be pledged to
the payment of the obligations. Obligations issued under this
subdivision are considered to be payable wholly from the income
of a revenue producing convenience within the meaning of
sections 475.51 and 475.58.
Subd. 3. [GENERAL OBLIGATIONS.] A city may issue and sell
its general obligations under chapter 475, payable from the
revenues and assessments derived or to be derived from property
owners under section 451.15, which revenues must be pledged to
the payment of the obligations. General obligations must not be
issued unless the pledged revenues are estimated to equal at
least 105 percent of the amount necessary to pay when due the
principal of and interest on the obligations. Obligations
issued under this subdivision are considered to be payable
wholly from the income of a revenue producing convenience within
the meaning of sections 475.51 and 475.58.
Sec. 13. [451.17] [CITY OF VIRGINIA.]
The city of Virginia is considered to have complied with
section 451.09, notwithstanding section 451.09, subdivision 4.
Sec. 14. Minnesota Statutes 1999 Supplement, section
473.39, subdivision 1g, is amended to read:
Subd. 1g. [OBLIGATIONS; 2000-2002.] In addition to the
authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council
may issue certificates of indebtedness, bonds, or other
obligations under this section in an amount not exceeding
$36,000,000 $55,400,000, which may be used for capital
expenditures, other than for construction, maintenance, or
operation of light rail transit, as prescribed in the council's
transit capital improvement program and for related costs,
including the costs of issuance and sale of the obligations.
The funds must be proportionally spent on capital improvement
projects as recommended by the regional transit capital
evaluation committee.
Sec. 15. Minnesota Statutes 1998, section 474A.047,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY.] (a) An issuer may only use
the proceeds from residential rental bonds if the proposed
project meets one of the following:
(1) the proposed project is a single room occupancy project
and all the units of the project will be occupied by individuals
whose incomes at the time of their initial residency in the
project are 50 percent or less of the greater of the statewide
or county median income adjusted for household size as
determined by the federal Department of Housing and Urban
Development;
(2) the proposed project is a multifamily project where at
least 75 percent of the units have two or more bedrooms and at
least one-third of the 75 percent have three or more bedrooms;
or
(3) the proposed project is a multifamily project that
meets the following requirements:
(i) the proposed project is the rehabilitation of an
existing multifamily building which meets the requirements for
minimum rehabilitation expenditures in sections 42(e)(2) and
42(e)(3)(A) of the Internal Revenue Code;
(ii) the proposed project involves participation by the
Minnesota housing finance agency or a local unit of government
in the financing of the acquisition or rehabilitation of the
project. For purposes of this subdivision, "participation"
means an activity other than the issuance of the bonds; and
(iii) the proposed project must be occupied by individuals
or families whose incomes at the time of their initial residency
in the project meet the requirements of section 42(g) of the
Internal Revenue Code.
(b) The maximum rent for a proposed single room occupancy
unit under paragraph (a), clause (1), is 30 percent of the
amount equal to 30 percent of the greater of the statewide or
county median income for a one-member household as determined by
the federal Department of Housing and Urban Development. The
maximum rent for at least 75 percent of the units of a
multifamily project under paragraph (a), clause (2), is 30
percent of the amount equal to 50 percent of the greater of the
statewide or county median income as determined by the federal
Department of Housing and Urban Development based on a household
size with 1.5 persons per bedroom.
(c) The proceeds from residential rental bonds may be used
for a project for which project-based federal rental assistance
payments are made only if:
(1) the owner of the project enters into a binding
agreement with the Minnesota housing finance agency under which
the owner is obligated to extend any existing low-income
affordability restrictions and any contract or agreement for
rental assistance payments for the maximum term permitted,
including any renewals thereof; and
(2) the Minnesota housing finance agency certifies that
project reserves will be maintained at closing of the bond issue
and budgeted in future years at the lesser of:
(i) the level described in Minnesota Rules, part 4900.0010,
subpart 7, item A, subitem (2), effective May 1, 1997; or
(ii) the level of project reserves available prior to the
bond issue, provided that additional money is available to
accomplish repairs and replacements needed at the time of bond
issue.
Sec. 16. Minnesota Statutes 1999 Supplement, section
475.56, is amended to read:
475.56 [INTEREST RATE.]
(a) Any municipality issuing obligations under any law may
issue obligations bearing interest at a single rate or at rates
varying from year to year which may be lower or higher in later
years than in earlier years. Such higher rate for any period
prior to maturity may be represented in part by separate coupons
designated as additional coupons, extra coupons, or B coupons,
but the highest aggregate rate of interest contracted to be so
paid for any period shall not exceed the maximum rate authorized
by law. Such higher rate may also be represented in part by the
issuance of additional obligations of the same series, over and
above but not exceeding two percent of the amount otherwise
authorized to be issued, and the amount of such additional
obligations shall not be included in the amount required by
section 475.59 to be stated in any bond resolution, notice, or
ballot, or in the sale price required by section 475.60 or any
other law to be paid; but if the principal amount of the entire
series exceeds its cash sale price, such excess shall not, when
added to the total amount of interest payable on all obligations
of the series to their stated maturity dates, cause the average
annual rate of such interest to exceed the maximum rate
authorized by law. This section does not authorize a provision
in any such obligations for the payment of a higher rate of
interest after maturity than before.
(b) Any municipality issuing obligations under any law may
sell original issue discount obligations having a stated
principal amount in excess of the authorized amount and the sale
price, provided that:
(1) the sale price does not exceed by more than two percent
the amount of obligations otherwise authorized to be issued;
(2) the underwriting fee, discount, or other sales or
underwriting commission does not exceed two percent of the sale
price; and
(3) the discount rate necessary to present value total
principal and interest payments over the term of the issue to
the sale price does not exceed the lesser of the maximum rate
permitted by law for municipal obligations or ten percent.
(c) Any obligation of an issue of obligations otherwise
subject to section 475.55, subdivision 1, may bear interest at a
rate varying periodically at the time or times and on the terms,
including convertibility to a fixed rate of interest, determined
by the governing body of the municipality, but the rate of
interest for any period shall not exceed the any maximum rate of
interest for the obligations determined in accordance with
section 475.55, subdivision 1 established by law. For purposes
of section 475.61, subdivisions 1 and 3, the interest payable on
variable rate obligations for their term shall be determined as
if their rate of interest is the maximum rate permitted for the
obligations under section 475.55, subdivision 1, or the lesser
of the maximum rate of interest payable on the obligations in
accordance with their terms or the rate estimated for such
purpose by the governing body, but if the interest rate is
subsequently converted to a fixed rate the levy may be modified
to provide at least five percent in excess of amounts necessary
to pay principal of and interest at the fixed rate on the
obligations when due. For purposes of computing debt service or
interest pursuant to section 475.67, subdivision 12, interest
throughout the term of bonds issued pursuant to this subdivision
is deemed to accrue at the rate of interest first borne by the
bonds. The provisions of this paragraph do not apply to general
obligations issued by a statutory or home rule charter city with
a population of less than 7,500, as defined in section 477A.011,
subdivision 3, or to general obligations that are not rated A or
better, or an equivalent subsequently established rating, by
Standard and Poor's Corporation, Moody's Investors Service or
other similar nationally recognized rating agency, except that
any statutory or home rule charter city, regardless of
population or bond rating, may issue variable rate obligations
as a participant in a bond pooling program established by the
league of Minnesota cities that meets this bond rating
requirement.
Sec. 17. Minnesota Statutes 1998, section 475.78, is
amended to read:
475.78 [PERFECTION OF PLEDGE; SECURITY INTERESTS.]
Neither filing nor possession is required to perfect the
security interest created by any pledge or appropriation of
revenues or funds of the municipality, including any of its
investments, to the payment of bonds issued by the municipality.
Notwithstanding any contrary provision of law, article 9 of the
Uniform Commercial Code does not apply to security interests
created by a municipality or the state, except security
interests in equipment and fixtures.
Sec. 18. Laws 2000, chapter 484, article 1, section 4,
subdivision 3, is amended to read:
Subd. 3. [COMMITTEE REPORT.] The committee shall issue its
report within 90 days of its initial meeting. The committee may
request one 60-day extension from the county board. The report
must contain the committee's recommendation for the preferred
organizational option for a county economic development service
provider, including the distance of the radius of the
extraterritorial parcel from the boundary of the city that may
be controlled by each affected city in subdivision 5. This
extraterritorial parcel The distance may not exceed two miles
from the city boundary. The report must contain written
findings on issues considered by the committee including, but
not limited to, the following:
(1) identification of the current level of economic
development, housing, and community development programs and
services provided by existing agencies, any existing gaps in
programs and services, and the capacity and ability of those
agencies to expand their activities; and
(2) the recommended organizational option for providing
needed economic development, housing, and community development
services in the most efficient, effective manner.
Sec. 19. Laws 2000, chapter 484, article 1, section 4,
subdivision 5, is amended to read:
Subd. 5. [AREA OF OPERATION.] The area of operation of a
county economic development service provider created under this
section shall include all cities within a county that have
adopted resolutions electing to participate. A city may adopt a
resolution electing to withdraw participation. The withdrawal
election may be made every fifth year following adoption of the
resolution electing participation. The withdrawal election is
effective on the anniversary date of the original resolution
provided notice is given to the county economic development
authority not less than 90 nor more than 180 days prior to that
anniversary date. The city electing to withdraw retains any
rights, obligations, and liabilities it obtained or incurred
during its participation. Any city within the county shall have
the option to adopt a resolution to prohibit the county economic
development service provider created under this section from
operating within its boundaries and (1) within an agreed upon
urban service area, or (2) within the boundary distance approved
in the committee report referenced in subdivision 3. If a city
prohibits a county economic development service provider created
under this section from operating within its boundaries, the
city's property taxpayers shall not be subject to the property
tax levied for the county economic development service provider.
Sec. 20. [APPROPRIATION AVAILABILITY EXTENDED.]
The appropriation in Laws 1995, chapter 220, section 19,
subdivision 4, paragraph (g), clause (2), as amended by Laws
1996, chapter 407, section 50, is available until June 30, 2001.
Sec. 21. [REPLACEMENT TRANSIT SERVICE; ELIGIBILITY.]
(a) Notwithstanding the eligibility requirements in
Minnesota Statutes, section 473.388, subdivision 2, the city of
Minnetonka is eligible for the replacement service program under
Minnesota Statutes, section 473.388, if the city first applies
for assistance or exercises the local levy option under
Minnesota Statutes, section 473.388, before June 30, 2003.
(b) Notwithstanding the eligibility requirements in
Minnesota Statutes, section 473.388, subdivision 2, the city of
Shorewood is eligible for the replacement service program under
Minnesota Statutes, section 473.388, if the city first applies
for assistance or exercises the local levy option under
Minnesota Statutes, section 473.388, before June 30, 2003.
Sec. 22. [PUBLIC SAFETY RADIO SYSTEM CONTRACTS.]
Any contracts relating to an 800 megahertz trunked radio
network for service shall be let for bid only on a competitive
basis.
The trunked backbone network and 800 megahertz radios used
on it must include at a minimum features that meet open
standards of interoperability. The contracting government
authority may not accept any feature enhancement that would
interfere with or impede the interoperability of the network as
a whole or with any radios regardless of manufacturer.
Sec. 23. [NO LOCAL APPROVAL; EFFECTIVE DATE.]
Sections 6 to 13 do not require local approval as they fit
within the exception in Minnesota Statutes, section 645.023,
subdivision 1, clause (a). Sections 6 to 13 are effective the
day after final enactment.
Sec. 24. [APPLICATION.]
Sections 14 and 25 apply in the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 25. [REPEALER.]
Minnesota Statutes 1998, section 473.867, subdivision 4, is
repealed.
Sec. 26. [APPROPRIATION.]
$354,000 is appropriated from the general fund to the
commissioner of revenue for fiscal year 2001 to administer the
provisions of Laws 2000, chapter 490, articles 4, 5, and 10.
Sec. 27. [EFFECTIVE DATE.]
Sections 1, 22, and 25 are effective the day following
final enactment. Section 3 is effective the day following final
enactment and applies to bonds issued after a rating has been
obtained for the program from a national rating agency. Section
20 is effective retroactively from December 31, 1999.
Presented to the governor May 19, 2000
Signed by the governor May 30, 2000, 2:11 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes