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1988 Minnesota Session Laws

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                         Laws of Minnesota 1988 

                        CHAPTER 690-H.F.No. 2182 
           An act relating to public administration; proposing 
          amendments to the Minnesota Constitution:  adding a 
          section to article XI establishing an environmental 
          and natural resources trust fund and article XIII, 
          section 5 permitting state-run lotteries; providing 
          for the distribution of lottery proceeds; providing 
          implementing legislation for the trust fund; creating 
          a legislative commission, an advisory committee, and a 
          resources congress; providing for trust fund 
          expenditures; providing for water system improvement 
          loans; creating a Minnesota future resources account; 
          transferring certain functions; requiring a biennial 
          report; changing the distribution of general fund 
          balances; returning certain transferred money to the 
          state treasury; amending Minnesota Statutes 1986, 
          sections 88.80, subdivision 2; Minnesota Statutes 1987 
          Supplement, sections 16A.1541; 116C.69, subdivision 3; 
          116O.012; and 297.13, subdivision 1; proposing coding 
          for new law as Minnesota Statutes, chapter 116P; 
          repealing Minnesota Statutes 1986, sections 86.01; 
          86.02; 86.03; 86.06; 86.07; 86.08; 86.10; 86.11; 
          86.12; 86.31; 86.32; 86.33, subdivision 1; 86.34; 
          86.35; 86.41; 86.42; 86.51; 86.53; 86.61; and 86.75. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1 
    Section 1.  [CONSTITUTIONAL AMENDMENT PROPOSED; 
ENVIRONMENTAL AND NATURAL RESOURCES TRUST FUND.] 
    Subdivision 1.  [AMENDMENT.] The following amendment to the 
Minnesota Constitution, adding a section to article XI, is 
proposed to the people.  If the amendment is adopted, the 
section will read as follows: 
    Sec. 14.  A permanent Minnesota environment and natural 
resources trust fund is established in the state treasury.  The 
principal of the environment and natural resources trust fund 
must be perpetual and inviolate forever, except appropriations 
may be made from up to 25 percent of the annual revenues 
deposited in the fund until fiscal year 1997 and loans may be 
made of up to five percent of the principal of the fund for 
water system improvements as provided by law.  This restriction 
does not prevent the sale of investments at less than the cost 
to the fund, however, all losses not offset by gains shall be 
repaid to the fund from the earnings of the fund.  The net 
earnings from the fund shall be appropriated in a manner 
prescribed by law for the public purpose of protection, 
conservation, preservation, and enhancement of the state's air, 
water, land, fish, wildlife, and other natural resources. 
    Subd. 2.  [SUBMISSION TO VOTERS.] The proposed amendment 
must be submitted to the people at the 1988 general election.  
The question submitted shall be: 
    "Shall the Minnesota Constitution be amended to establish a 
Minnesota environment and natural resources trust fund for 
environmental, natural resource, and wildlife purposes? 
                         Yes .........
                         No  ........."
    Sec. 2.  [CONSTITUTIONAL AMENDMENT; PROPOSED LOTTERY.] 
    Subdivision 1.  [AMENDMENT.] The following amendment to the 
Minnesota Constitution is proposed to the people.  If the 
amendment is adopted, article XIII, section 5, will read as 
follows:  
    Sec. 5.  The legislature shall not authorize any lottery or 
the sale of lottery tickets, other than authorizing a lottery 
and sale of lottery tickets for a lottery operated by the state. 
    Subd. 2.  [SUBMISSION TO VOTERS.] The proposed amendment 
shall be submitted to the people at the 1988 general election.  
The question submitted shall be:  
    "Shall the Minnesota Constitution be amended to permit the 
legislature to authorize a lottery operated by the state? 
                                   Yes .......
                                   No ........" 
    Sec. 3.  Minnesota Statutes 1986, section 88.80, 
subdivision 2, is amended to read:  
    Subd. 2.  [PILOT PROJECT.] The commissioner shall establish 
an aspen recycling program pilot project in the highest priority 
area on state lands in order to develop effective program 
procedures and practices.  With respect to the pilot project, 
the commissioner may restrict bidding on contracts for the 
cutting, removal, and disposal of aspens, and for related 
activities, to loggers and others residing in the pilot project 
area designated under the program that are financially 
distressed.  The commissioner may establish standards and 
procedures for awarding logging contracts under section 86.35, 
notwithstanding chapter 14, relating to eligibility for 
employment for conservation work projects. 
    Sec. 4.  Minnesota Statutes 1987 Supplement, section 
116C.69, subdivision 3, is amended to read:  
    Subd. 3.  [FUNDING; ASSESSMENT.] The board shall finance 
its base line studies, general environmental studies, 
development of criteria, inventory preparation, monitoring of 
conditions placed on site certificates and construction permits, 
and all other work, other than specific site and route 
designation, from an assessment made quarterly, at least 30 days 
before the start of each quarter, by the board against all 
utilities with annual retail kilowatt-hour sales greater than 
4,000,000 kilowatt-hours in the previous calendar year.  
    Until June 30, 1992, the assessment shall also include an 
amount sufficient to cover 60 percent of the costs to the 
pollution control agency of achieving, maintaining, and 
monitoring compliance with the acid deposition control standard 
adopted under sections 116.42 to 116.45, reprinting 
informational booklets on acid rain, and costs for additional 
research on the impacts of acid deposition on sensitive areas 
published under section 116.44, subdivision 1.  The director of 
the pollution control agency must prepare a work plan and budget 
and submit them annually by June 30 to the pollution control 
agency board.  The agency board must take public testimony on 
the budget and work plan.  After the agency board approves the 
work plan and budget they must be submitted annually to the 
legislative commission on Minnesota resources waste management 
for review and recommendation before an assessment is levied.  
Each share shall be determined as follows:  (1) the ratio that 
the annual retail kilowatt-hour sales in the state of each 
utility bears to the annual total retail kilowatt-hour sales in 
the state of all these utilities, multiplied by 0.667, plus (2) 
the ratio that the annual gross revenue from retail 
kilowatt-hour sales in the state of each utility bears to the 
annual total gross revenues from retail kilowatt-hour sales in 
the state of all these utilities, multiplied by 0.333, as 
determined by the board.  The assessment shall be credited to 
the special revenue fund and shall be paid to the state treasury 
within 30 days after receipt of the bill, which shall constitute 
notice of said assessment and demand of payment thereof.  The 
total amount which may be assessed to the several utilities 
under authority of this subdivision shall not exceed the sum of 
the annual budget of the board for carrying out the purposes of 
this subdivision plus 60 percent of the annual budget of the 
pollution control agency for achieving, maintaining, and 
monitoring compliance with the acid deposition control standard 
adopted under sections 116.42 to 116.45, for reprinting 
informational booklets on acid rain, and for costs for 
additional research on the impacts of acid deposition on 
sensitive areas published under section 116.44, subdivision 1.  
The assessment for the second quarter of each fiscal year shall 
be adjusted to compensate for the amount by which actual 
expenditures by the board and the pollution control agency for 
the preceding fiscal year were more or less than the estimated 
expenditures previously assessed. 
<$USE F1 FORMAT>
    Sec. 5.  [116P.01] [FINDINGS.] 
    The legislature finds that all Minnesotans share the 
responsibility to ensure wise stewardship of the state's 
environment and natural resources for the benefit of current 
citizens and future generations.  Proper management of the 
state's environment and natural resources includes and requires 
foresight, planning, and long-term activities that allow the 
state to preserve its high quality environment and provides for 
wise use of its natural resources.  The legislature also finds 
that to undertake such activities properly, a long-term, 
consistent, and stable source of funding must be provided. 
    Sec. 6.  [116P.02] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 5 to 17. 
    Subd. 2.  [ADVISORY COMMITTEE.] "Advisory committee" means 
the advisory committee created in section 10. 
    Subd. 3.  [BOARD.] "Board" means the state board of 
investment. 
    Subd. 4.  [COMMISSION.] "Commission" means the Minnesota 
future resources commission.  
    Subd. 5.  [NATURAL RESOURCES.] "Natural resources" includes 
the outdoor recreation system under section 86A.04 and regional 
recreation open space systems as defined under section 473.351, 
subdivision 1. 
    Subd. 6.  [TRUST FUND.] "Trust fund" means the Minnesota 
environment and natural resources trust fund established under 
Minnesota Constitution, article XI, section 14. 
    Sec. 7.  [116P.03] [TRUST FUND NOT TO SUPPLANT EXISTING 
FUNDING.] 
    (a) The trust fund may not be used as a substitute for 
traditional sources of funding environmental and natural 
resources activities, but the trust fund shall supplement the 
traditional sources, including those sources used to support the 
criteria in section 12, subdivision 1.  The trust fund must be 
used primarily to support activities whose benefits become 
available only over an extended period of time. 
    (b) The commission must determine the amount of the state 
budget spent from traditional sources to fund environmental and 
natural resources activities before and after the trust fund is 
established and include a comparison of the amount in the report 
under section 13, subdivision 7. 
    Sec. 8.  [116P.04] [TRUST FUND ACCOUNT.] 
    Subdivision 1.  [ESTABLISHMENT OF ACCOUNT AND INVESTMENT.] 
A Minnesota environment and natural resources trust fund, under 
article XI, section 14, of the Minnesota Constitution, is 
established as an account in the state treasury.  The 
commissioner of finance shall credit to the trust fund the 
amounts authorized under this section and section 14.  The state 
board of investment shall ensure that trust fund money is 
invested under section 11A.24.  All money earned by the trust 
fund must be credited to the trust fund.  The principal of the 
trust fund and any unexpended earnings must be invested and 
reinvested by the state board of investment.  
    Subd. 2.  [LOTTERY PROCEEDS.] Through the first five full 
fiscal years, during which proceeds from the lottery are 
received, the commissioner of finance shall credit one-half of 
the net lottery proceeds from the state-operated lottery to the 
trust fund.  Thereafter, the commissioner shall credit up to 
one-half, as determined by law each biennium, of the net 
proceeds from the state-operated lottery to the trust fund.  
    Subd. 3.  [REVENUE.] Revenue collected in accordance with 
subdivision 2 must be deposited monthly in the trust fund 
account.  Nothing in sections 5 to 16 limits the source of 
contributions to the trust fund. 
    Subd. 4.  [GIFTS AND DONATIONS.] Gifts and donations, 
including land or interests in land, may be made to the trust 
fund.  Noncash gifts and donations must be disposed of for cash 
as soon as the board prudently can maximize the value of the 
gift or donation.  Gifts and donations of marketable securities 
may be held or be disposed of for cash at the option of the 
board.  The cash receipts of gifts and donations of cash or 
capital assets and marketable securities disposed of for cash 
must be credited immediately to the principal of the trust 
fund.  The value of marketable securities at the time the gift 
or donation is made must be credited to the principal of the 
trust fund and any earnings from the marketable securities are 
earnings of the trust fund. 
    Subd. 5.  [AUDITS REQUIRED.] (a) The commission shall 
select a certified public accountant annually to audit the trust 
fund.  The audit must be given to the governor and the 
legislature and be available to the public. 
    (b) The legislative auditor shall audit trust fund 
expenditures to ensure that the money is spent for the purposes 
provided in the commission's budget plan. 
    Sec. 9.  [116P.05] [MINNESOTA FUTURE RESOURCES COMMISSION.] 
    (a) A Minnesota future resources commission of 16 members 
is created, consisting of the chairs of the house and senate 
committees on environment and natural resources, the chairs of 
the house appropriations and senate finance committees, six 
members of the senate appointed by the subcommittee on 
committees of the committee on rules and administration, and six 
members of the house appointed by the speaker.  The commission 
shall develop a budget plan for expenditures from the trust fund 
and shall adopt a strategic plan as provided in section 12.  
    (b) The commission shall recommend expenditures to the 
legislature from the Minnesota future resources account under 
section 17.  At least two members from the senate and two 
members from the house must be from the minority caucus.  
Members are entitled to reimbursement for per diem expenses plus 
travel expenses incurred in the services of the commission.  
    (c) Members shall appoint a chair who shall preside and 
convene meetings as often as necessary to conduct duties 
prescribed by this chapter. 
    (d) Members shall serve on the commission until their 
successors are appointed. 
    (e) Vacancies occurring on the commission shall not affect 
the authority of the remaining members of the commission to 
carry out their duties, and vacancies shall be filled in the 
same manner under paragraph (a). 
    (f) The commission may adopt bylaws and operating 
procedures to fulfill their duties under sections 5 to 17.  
    Sec. 10.  [116P.06] [ADVISORY COMMITTEE.] 
    (a) An advisory committee of 11 citizen members shall be 
appointed by the governor to advise the Minnesota future 
resources commission on project proposals to receive funding 
from the trust fund and the development of budget and strategic 
plans.  The governor shall appoint at least one member from each 
congressional district.  The governor shall appoint the chair. 
    (b) The governor's appointees must be confirmed with the 
advice and consent of the senate.  The membership terms, 
compensation, removal, and filling of vacancies for citizen 
members of the advisory committee are governed by section 
15.0575. 
    Sec. 11.  [116P.07] [RESOURCES CONGRESS.] 
    The commission must convene a resources congress at least 
once every biennium.  The congress must be open to all 
interested individuals.  The purpose of the congress is to 
collect public input necessary to allow the commission, with the 
advice of the advisory committee, to develop a strategic plan to 
guide expenditures from the trust fund.  The congress also may 
be convened to receive and review reports on trust fund projects.
    Sec. 12.  [116P.08] [TRUST FUND EXPENDITURES; EXCEPTIONS; 
PLANS.] 
    Subdivision 1.  [EXPENDITURES.] Money in the trust fund may 
be spent only for: 
    (1) the reinvest in Minnesota program as provided in 
section 84.95, subdivision 2; 
    (2) research that contributes to increasing the 
effectiveness of protecting or managing the state's environment 
or natural resources; 
    (3) collection and analysis of information that assists in 
developing the state's environmental and natural resources 
policies; 
    (4) enhancement of public education, awareness, and 
understanding necessary for the protection, conservation, 
restoration, and enhancement of air, land, water, forests, fish, 
wildlife, and other natural resources; 
    (5) capital projects for the preservation and protection of 
unique natural resources; 
    (6) activities that preserve or enhance fish, wildlife, and 
other natural resources that otherwise may be substantially 
impaired or destroyed in any area of the state; 
    (7) administrative and investment expenses incurred by the 
state board of investment in investing deposits to the trust 
fund; and 
    (8) administrative expenses subject to the limits in 
section 13. 
    Subd. 2.  [EXCEPTIONS.] Money from the trust fund may not 
be spent for: 
    (1) purposes of environmental compensation and liability 
under chapter 115B and response actions under chapter 115C; 
    (2) purposes of municipal water pollution control under the 
authority of chapters 115 and 116, including combined sewer 
overflow under section 116.162; 
    (3) costs associated with the decommissioning of nuclear 
power plants; 
    (4) hazardous waste disposal facilities; 
    (5) solid waste disposal facilities; or 
    (6) projects or purposes inconsistent with the strategic 
plan. 
    Subd. 3.  [STRATEGIC PLAN REQUIRED.] (a) The commission 
shall adopt a strategic plan for making expenditures from the 
trust fund, including identifying the priority areas for funding 
for the next six years.  The reinvest in Minnesota program must 
be reviewed by the advisory committee, resources congress and 
commission during the development of the strategic plan.  The 
strategic plan must be updated every two years.  The plan is 
advisory only.  The commission shall submit the plan, as a 
recommendation, to the house of representatives appropriations 
and senate finance committees by January 1 of each odd-numbered 
year. 
    (b) The advisory committee shall work with the resources 
congress to develop a draft strategic plan to be submitted to 
the commission for approval.  The commission shall develop the 
procedures for the resources congress. 
    (c) The commission may accept or modify the draft of the 
strategic plan submitted to it by the advisory committee before 
voting on the plan's adoption. 
    Subd. 4.  [BUDGET PLAN.] (a) Funding may be provided only 
for those projects that meet the categories established in 
subdivision 1. 
    (b) Projects submitted to the commission for funding may be 
referred to the advisory committee for recommendation, except 
that research proposals first must be reviewed by the peer 
review panel.  The advisory committee may review all project 
proposals for funding and may make recommendations to the 
commission on whether: 
    (1) the projects meet the standards and funding categories 
set forth in sections 5 to 16; 
    (2) the projects duplicate existing federal, state, or 
local projects being conducted within the state; and 
    (3) the projects are consistent with the most recent 
strategic plan adopted by the commission. 
    (c) The commission must adopt a budget plan to make 
expenditures from the trust fund for the purposes provided in 
subdivision 1.  The budget plan must be submitted to the 
governor for inclusion in the biennial budget and supplemental 
budget submitted to the legislature. 
    (d) Money in the trust fund may not be spent except under 
an appropriation by law.  
    Subd. 5.  [PUBLIC MEETINGS.] All advisory committee and 
commission meetings must be open to the public.  The commission 
shall attempt to meet at least once in each of the state's 
congressional districts during each biennium.  
    Subd. 6.  [PEER REVIEW.] (a) Research proposals must 
include a stated purpose, timeline, potential outcomes and an 
explanation of the need for the research.  All research 
proposals must be reviewed by a peer review panel before 
receiving an appropriation from the trust fund. 
    (b) In conducting research proposal reviews, the peer 
review panel shall: 
    (1) comment on the methodology proposed and whether it can 
be expected to yield appropriate and useful information and data;
    (2) comment on the need for the research and about similar 
existing information available, if any; 
    (3) comment on whether the research proposed meets the 
categories of subdivision 1; and 
    (4) report to the commission and advisory committee on 
clauses (1) to (3). 
    (c) The peer review panel also must review completed 
research proposals that have received an appropriation from the 
trust fund and comment and report upon whether the project 
reached the intended goals. 
    Subd. 7.  [PEER REVIEW PANEL MEMBERSHIP.] (a) The peer 
review panel must consist of at least five but not more than 11 
members who are knowledgeable in general research methods, 
including but not limited to the areas of air quality research, 
water research, forest research, fish and wildlife management 
research, environmental health research, and soil conservation 
research.  Not more than two members of the panel may be 
employees of state agencies. 
    (b) Members of the peer review panel shall be selected by 
the commission and serve four-year staggered terms according to 
section 15.059.  The commission may select additional temporary 
members for any research proposal deemed to be too technical for 
adequate peer review by the panel in paragraph (a).  Members of 
the peer review panel shall elect a chair every two years who 
shall be responsible for convening meetings of the panel as 
often as is necessary to fulfill its duties as prescribed in 
this section.  Compensation of panel members is governed by 
section 15.059, subdivision 3. 
    Sec. 13.  [116P.09] [ADMINISTRATION.] 
    Subdivision 1.  [ADMINISTRATIVE AUTHORITY.] The commission 
may appoint legal and other personnel and consultants necessary 
to carry out functions and duties of the commission.  Permanent 
employees shall be in the unclassified service.  In addition, 
the commission may request staff assistance and data from any 
other agency of state government as needed for the execution of 
the responsibilities of the commission and advisory committee 
and an agency must promptly furnish it. 
    Subd. 2.  [LIAISON OFFICERS.] The commission shall request 
each department or agency head of all state agencies with a 
direct interest and responsibility in any phase of environment 
and natural resources to appoint, and the latter shall appoint 
for the agency, a liaison officer who shall work closely with 
the commission and its staff.  The designated liaison officer 
shall attend all meetings of the advisory committee to provide 
assistance and information to committee members when necessary. 
    Subd. 3.  [APPRAISAL AND EVALUATION.] The commission shall 
obtain and appraise information available through private 
organizations and groups, utilizing to the fullest extent 
possible studies, data and reports previously prepared or 
currently in progress by public agencies, private organizations, 
groups, and others, concerning future trends in the protection, 
conservation, preservation, and enhancement of the state's air, 
water, land, forests, fish, wildlife, native vegetation, and 
other natural resources.  Any data compiled by the commission 
shall be made available to any standing or interim committee of 
the legislature upon the request of the chair of the respective 
committee. 
    Subd. 4.  [PERSONNEL.] Persons who are employed by a state 
agency to work on a project and are paid by an appropriation 
from the trust fund or Minnesota future resources account are in 
the unclassified civil service, and their continued employment 
is contingent upon the availability of money from the 
appropriation.  When the appropriation has been spent, their 
positions must be canceled and the approved complement of the 
agency reduced accordingly.  Part-time employment of persons for 
a project is authorized.  
    Subd. 5.  [ADMINISTRATIVE EXPENSE.] (a) The administrative 
expenses of the commission and advisory committee shall be paid 
from the Minnesota future resources account until June 30, 1995. 
    (b) After June 30, 1995, the expenses of the commission and 
advisory committee combined may not exceed an amount equal to 
two percent of the total earnings of the trust fund in the 
preceding fiscal year. 
    (c) The commission and the advisory committee must include 
a reasonable amount for their administrative expense in the 
budget plan for the trust fund. 
    Subd. 6.  [CONFLICT OF INTEREST.] A commission member, 
advisory committee member, peer review panelist, or an employee 
of the commission, may not participate in or vote on a decision 
of the commission, advisory committee, or peer review panel 
relating to an organization in which the member, panelist, or 
employee has either a direct or indirect personal financial 
interest.  While serving on the legislative commission, advisory 
committee, or peer review panel, or being an employee of the 
commission, a person shall avoid any potential conflict of 
interest. 
    Subd. 7.  [REPORT REQUIRED.] The commission shall, by July 
1 of each even-numbered year, submit a report to the governor, 
the chairs of the house appropriations and senate finance 
committees and the chairs of the house and senate committees on 
environment and natural resources.  Copies of the report must be 
available to the public.  The report must include: 
    (1) a copy of the current strategic plan; 
    (2) a description of each project receiving money from the 
trust fund and Minnesota future resources account during the 
preceding two years; 
    (3) a summary of any research project completed in the 
preceding two years; 
    (4) recommendations to implement successful projects and 
programs into a state agency's standard operations; 
    (5) to the extent known by the commission, descriptions of 
the projects anticipated to be supported by the trust fund and 
Minnesota future resources account during the next two years; 
    (6) the source and amount of all revenues collected and 
distributed by the commission, including all administrative and 
other expenses; 
    (7) a description of the trust fund's assets and 
liabilities; 
    (8) any findings or recommendations that are deemed proper 
to assist the legislature in formulating legislation; 
    (9) a list of all gifts and donations with a value over 
$1,000; 
     (10) a comparison of the amounts spent by the state for 
environment and natural resources activities through the most 
recent fiscal year; and 
    (11) a copy of the most recent certified financial and 
compliance audit. 
    Sec. 14.  [116P.10] [ROYALTIES, COPYRIGHTS, PATENTS.] 
    The trust fund owns and shall take title to the percentage 
of a royalty, copyright, or patent resulting from a project 
supported by the trust fund equal to the percentage of the 
project's total funding provided by the trust fund.  Cash 
receipts resulting from a royalty, copyright, or patent, or the 
sale of the trust fund's rights to a royalty, copyright, or 
patent, must be credited immediately to the principal of the 
trust fund.  Before a project is included in the budget plan, 
the commission may vote to relinquish the ownership or rights to 
a royalty, copyright, or patent resulting from a project 
supported by the trust fund to the project's proposer when the 
amount of the original grant or loan, plus interest, has been 
repaid to the trust fund. 
    Sec. 15.  [116P.11] [AVAILABILITY OF FUNDS FOR 
DISBURSEMENT.] 
    (a) The amount biennially available from the trust fund for 
the budget plan developed by the commission consists of the 
interest earnings from the trust fund generated in the preceding 
two fiscal years ending on the even-numbered year.  
    (b) For funding projects through fiscal year 1997, the 
following additional amounts are available from the trust fund 
for the budget plans developed by the commission:  
    (1) for the 1991-1993 biennium, up to 25 percent of the 
revenue deposited in the trust fund in fiscal years 1989 and 
1990; 
    (2) for the 1993-1995 biennium, up to 20 percent of the 
revenue deposited in the trust fund in fiscal year 1991 and up 
to 15 percent of the revenue deposited in the fund in fiscal 
year 1992; and 
    (3) for the 1995-1997 biennium, up to ten percent of the 
revenue deposited in the fund in fiscal year 1993 and up to five 
percent of the revenue deposited in the fund in fiscal year 1994.
    (c) Any appropriated funds not encumbered in the biennium 
in which they are appropriated cancel and must be credited to 
the principal of the trust fund. 
    Sec. 16.  [116P.12] [WATER SYSTEM IMPROVEMENT LOAN 
PROGRAM.] 
    Subdivision 1.  [LOANS AUTHORIZED.] (a) If the principal of 
the trust fund equals or exceeds $200,000,000, the commission 
may vote to set aside up to five percent of the principal of the 
trust fund for water system improvement loans.  The purpose of 
water system improvement loans is to offer below market rate 
interest loans to local units of government for the purposes of 
water system improvements. 
    (b) The interest on a loan shall be calculated on the 
declining balance at a rate four percentage points below the 
secondary market yield of one-year United States treasury bills 
calculated according to section 549.09, subdivision 1, paragraph 
(c).  
    (c) An eligible project must prove that existing federal or 
state loans or grants have not been adequate.  
    (d) Payments on the principal and interest of loans under 
this section must be credited to the trust fund.  
    (e) Repayment of loans made under this section must be 
completed within 20 years.  
    (f) The Minnesota public facilities authority must report 
to the commission each year on the loan program under this 
section.  
    Subd. 2.  [APPLICATION AND ADMINISTRATION.] (a) The 
commission must adopt a procedure for the issuance of the water 
system improvement loans by the public facilities authority.  
    (b) The commission also must ensure that the loans are 
administered according to its fiduciary standards and 
requirements. 
    Sec. 17.  [116P.13] [MINNESOTA FUTURE RESOURCES ACCOUNT.] 
    Subdivision 1.  [REVENUE SOURCES.] The money in the 
Minnesota future resources account consists of revenue credited 
under section 297.13, subdivision 1, clause (1). 
    Subd. 2.  [INTEREST.] The interest attributable to the 
investment of the Minnesota future resources account must be 
credited to the account. 
    Subd. 3.  [REVENUE PURPOSES.] Revenue in the Minnesota 
future resources account may be spent for purposes of natural 
resources acceleration and outdoor recreation, including but not 
limited to the development, maintenance and operation of the 
state outdoor recreation system under chapter 86A and regional 
recreation open space systems as defined under section 473.351, 
subdivision 1. 
    Sec. 18.  Minnesota Statutes 1987 Supplement, section 
297.13, subdivision 1, is amended to read:  
    Subdivision 1.  [CIGARETTE TAX APPORTIONMENT.] Revenues 
received from taxes, penalties, and interest under sections 
297.01 to 297.13 and from license fees and miscellaneous sources 
of revenue shall be deposited by the commissioner of revenue in 
a separate and special fund, designated as the tobacco tax 
revenue fund, in the state treasury and credited as follows:  
    (a) first to the general obligation special tax bond debt 
service account in each fiscal year the amount required to 
increase the balance on hand in the account on each December 1 
to an amount equal to the full amount of principal and interest 
to come due on all outstanding bonds whose debt service is 
payable primarily from the proceeds of the tax to and including 
the second following July 1; and 
    (b) after the requirements of paragraph (a) have been met: 
    (1) the revenue produced by one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and 
two mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to a the Minnesota future 
resources fund account for purposes of natural resources 
acceleration as provided in chapter 86; 
    (2) the revenue produced by two mills of the tax on 
cigarettes weighing not more than three pounds a thousand and 
four mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to the Minnesota state water 
pollution control fund created in section 116.16, provided that, 
if the tax on cigarettes imposed by United States Code, title 
26, section 5701, as amended, is reduced after June 1, 1985, an 
additional one mill of the tax on cigarettes weighing not more 
than three pounds a thousand and two mills of the tax on 
cigarettes weighing more than three pounds a thousand must be 
credited to the Minnesota state water pollution control fund 
created in section 116.16 less any amount credited to the 
general obligation special tax debt service account under 
paragraph (a), with respect to bonds issued for the prevention, 
control, and abatement of water pollution; 
    (3) the revenue produced by one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and 
two mills of the tax on cigarettes weighing more than three 
pounds a thousand must be credited to a public health fund, 
provided that if the tax on cigarettes imposed by United States 
Code, title 26, section 5701, as amended, is reduced after June 
1, 1985, an additional two-tenths of one mill of the tax on 
cigarettes weighing not more than three pounds a thousand and an 
additional four-tenths of one mill of the tax on cigarettes 
weighing more than three pounds a thousand must be credited to 
the public health fund; 
    (4) the balance of the revenues derived from taxes, 
penalties, and interest under sections 297.01 to 297.13 and from 
license fees and miscellaneous sources of revenue shall be 
credited to the general fund.  
    Sec. 19.  [PERSONNEL TRANSFER.] 
    All unclassified positions associated with the 
responsibilities of the legislative commission on Minnesota 
resources are transferred with their incumbents to the Minnesota 
future resources commission. 
    Sec. 20.  [TRANSFER OF RIGHTS AND OBLIGATIONS.] 
    The Minnesota future resources commission is the legal 
successor in all respects to the legislative commission on 
Minnesota resources.  The rights and obligations under all 
existing contracts and any right of action to which the 
legislative commission on Minnesota resources is a party or 
beneficiary are transferred to the Minnesota future resources 
commission upon creation. 
    Sec. 21.  [INSTRUCTION TO REVISOR.] 
    (a) The revisor shall change references to "legislative 
commission on Minnesota resources" to "Minnesota future 
resources commission" wherever it appears in the 1988 edition of 
Minnesota Statutes.  
    (b) The revisor shall renumber sections 86.33, subdivision 
2, as 84.965, subdivision 1; 86.33, subdivision 3, as 84.965, 
subdivision 2; and 86.78 as 84.966 in the next edition of 
Minnesota Statutes. 
    Sec. 22.  [REPEALER.] 
    Minnesota Statutes 1986, sections 86.01; 86.02; 86.03; 
86.06; 86.07; 86.08; 86.10; 86.11; 86.12; 86.31; 86.32; 86.33, 
subdivision 1; 86.34; 86.35; 86.41; 86.42; 86.51; 86.53; 86.61; 
and 86.75 are repealed. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective the day after final 
enactment.  Sections 3 to 22 are effective the day following 
adoption by the voters of the constitutional amendment proposed 
by section 1. 

                               ARTICLE 2

                     GREATER MINNESOTA CORPORATION
    Section 1.  Minnesota Statutes 1987 Supplement, section 
16A.1541, is amended to read:  
    16A.1541 [ADDITIONAL REVENUES; PRIORITY.] 
    If on the basis of a forecast of general fund revenues and 
expenditures the commissioner of finance determines that there 
will be a positive unrestricted budgetary general fund balance 
at the close of the biennium, the commissioner of finance must 
allocate money in the following order of priority:  
    (1) the amount necessary to reduce the property tax levy 
recognition percent under section 121.904, subdivision 4c, to 24 
percent; 
    (2) the remainder (i) one-half to the greater Minnesota 
fund, but not to exceed $120,000,000 and (ii) one-half to the 
budget and cash flow reserve account until the total amount in 
the account equals $550,000,000. 
    The amounts necessary to meet the requirements of clauses 
(1) and (2) are appropriated from the general fund. 
    Sec. 2.  [TRANSFER RETURNED.] 
    The Greater Minnesota Corporation shall return to the state 
treasury $80,500,000 of the money transferred to it under 
Minnesota Statutes 1987 Supplement, section 16A.1541.  The 
return must be made to the commissioner of finance, who shall 
credit the receipt to the general fund.  The return must be made 
as soon as is practical, while minimizing any investment losses 
that might result from early redemption. 
    Sec. 3.  Minnesota Statutes 1987 Supplement, section 
116O.12, is amended to read:  
    116O.12 [GREATER MINNESOTA FUND.] 
    (a) The Greater Minnesota fund is created in the state 
treasury.  The board may require the commissioner of finance to 
create separate accounts within the fund for use in accordance 
with the fund's purposes.  Money in the fund not needed for the 
immediate purposes of the corporation may be invested by the 
corporation in any way authorized by section 11A.24.  Money in 
the fund is appropriated to the corporation to be used as 
provided in this chapter.  
    (b) The fund consists of:  
    (1) money appropriated and transferred from other state 
funds; 
    (2) fees and charges collected by the corporation;  
    (3) income from investments and purchases;  
    (4) revenue from loans, rentals, royalties, dividends, and 
other proceeds collected in connection with lawful corporate 
purposes; and 
    (5) gifts, donations, and bequests made to the corporation; 
and 
    (6) through the first five full fiscal years, during which 
proceeds from the lottery are received, one-half of the net 
proceeds of the state-operated lottery must be credited to the 
greater Minnesota corporation fund.  Thereafter, up to one-half, 
as determined by law each biennium, of the net proceeds from the 
state-operated lottery must be credited to the greater Minnesota 
corporation fund. 
    Sec. 4.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective the day following final 
enactment.  Section 3 is effective the day following adoption by 
the voters of the constitutional amendment proposed by article 
1, section 2. 
    Approved April 28, 1988

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569