1.1                          A bill for an act 
  1.2             relating to public finance; changing certain 
  1.3             definitions and authorizations; changing certain 
  1.4             election requirements; amending Minnesota Statutes 
  1.5             2000, sections 373.01, subdivision 3; 410.32; 412.301; 
  1.6             444.075, subdivision 1a; 465.73; 469.034, subdivision 
  1.7             2; 469.102, subdivision 2; 469.153, by adding a 
  1.8             subdivision; 469.155, subdivisions 3, 4, 8; 469.157; 
  1.9             641.23; Minnesota Statutes 2001 Supplement, section 
  1.10            475.58, subdivision 1. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 2000, section 373.01, 
  1.13  subdivision 3, is amended to read: 
  1.14     Subd. 3.  [CAPITAL NOTES.] A county board may, by 
  1.15  resolution and without referendum, issue capital notes subject 
  1.16  to the county debt limit to purchase capital equipment useful 
  1.17  for county purposes that has an expected useful life at least 
  1.18  equal to the term of the notes.  The notes shall be payable in 
  1.19  not more than five years and shall be issued on terms and in a 
  1.20  manner the board determines.  A tax levy shall be made for 
  1.21  payment of the principal and interest on the notes, in 
  1.22  accordance with section 475.61, as in the case of bonds.  For 
  1.23  purposes of this subdivision, "capital equipment" means public 
  1.24  safety, ambulance, road construction or maintenance, medical, 
  1.25  and data processing equipment and computer hardware and software.
  1.26     Sec. 2.  Minnesota Statutes 2000, section 410.32, is 
  1.27  amended to read: 
  1.28     410.32 [CITIES AUTHORIZED TO ISSUE CAPITAL NOTES FOR 
  2.1   CERTAIN EQUIPMENT ACQUISITIONS.] 
  2.2      Notwithstanding any contrary provision of other law or 
  2.3   charter, a home rule charter city may, by resolution and without 
  2.4   public referendum, issue capital notes subject to the city debt 
  2.5   limit to purchase public safety equipment, ambulance and other 
  2.6   medical equipment, road construction and maintenance equipment, 
  2.7   and other capital equipment ~~having~~ and computer software, 
  2.8   provided such equipment or software has an expected useful life 
  2.9   at least as long as the term of the notes.  The notes shall be 
  2.10  payable in not more than five years and be issued on terms and 
  2.11  in the manner the city determines.  The total principal amount 
  2.12  of the capital notes issued in a fiscal year shall not exceed 
  2.13  0.03 percent of the market value of taxable property in the city 
  2.14  for that year.  A tax levy shall be made for the payment of the 
  2.15  principal and interest on the notes, in accordance with section 
  2.16  475.61, as in the case of bonds.  Notes issued under this 
  2.17  section shall require an affirmative vote of two-thirds of the 
  2.18  governing body of the city.  Notwithstanding a contrary 
  2.19  provision of other law or charter, a home rule charter city may 
  2.20  also issue capital notes subject to its debt limit in the manner 
  2.21  and subject to the limitations applicable to statutory cities 
  2.22  pursuant to section 412.301. 
  2.23     Sec. 3.  Minnesota Statutes 2000, section 412.301, is 
  2.24  amended to read: 
  2.25     412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
  2.26     The council may issue certificates of indebtedness or 
  2.27  capital notes subject to the city debt limits to purchase public 
  2.28  safety equipment, ambulance equipment, road construction or 
  2.29  maintenance equipment, and other capital equipment ~~having~~ and 
  2.30  computer software, provided such equipment or software has an 
  2.31  expected useful life at least as long as the terms of the 
  2.32  certificates or notes.  Such certificates or notes shall be 
  2.33  payable in not more than five years and shall be issued on such 
  2.34  terms and in such manner as the council may determine.  If the 
  2.35  amount of the certificates or notes to be issued to finance any 
  2.36  such purchase exceeds 0.25 percent of the market value of 
  3.1   taxable property in the city, they shall not be issued for at 
  3.2   least ten days after publication in the official newspaper of a 
  3.3   council resolution determining to issue them; and if before the 
  3.4   end of that time, a petition asking for an election on the 
  3.5   proposition signed by voters equal to ten percent of the number 
  3.6   of voters at the last regular municipal election is filed with 
  3.7   the clerk, such certificates or notes shall not be issued until 
  3.8   the proposition of their issuance has been approved by a 
  3.9   majority of the votes cast on the question at a regular or 
  3.10  special election.  A tax levy shall be made for the payment of 
  3.11  the principal and interest on such certificates or notes, in 
  3.12  accordance with section 475.61, as in the case of bonds.  
  3.13     Sec. 4.  Minnesota Statutes 2000, section 444.075, 
  3.14  subdivision 1a, is amended to read: 
  3.15     Subd. 1a.  [AUTHORIZATION.] Any municipality may build, 
  3.16  construct, reconstruct, repair, enlarge, improve, or in any 
  3.17  other manner obtain 
  3.18     (i) waterworks systems, including mains, valves, hydrants, 
  3.19  service connections, wells, pumps, reservoirs, tanks, treatment 
  3.20  plants, and other appurtenances of a waterworks system, 
  3.21     (ii) sewer systems, sewage treatment works, disposal 
  3.22  systems, and other facilities for disposing of sewage, 
  3.23  industrial waste, or other wastes, ~~and~~ 
  3.24     (iii) storm sewer systems, including mains, holding areas 
  3.25  and ponds, and other appurtenances and related facilities for 
  3.26  the collection and disposal of storm water, and 
  3.27     (iv) gas and electric systems, including facilities for the 
  3.28  generation, transmission, and distribution of gas and electric 
  3.29  energy, all hereinafter called facilities, and maintain and 
  3.30  operate the facilities inside or outside its corporate limits, 
  3.31  and acquire by gift, purchase, lease, condemnation, or otherwise 
  3.32  any and all land and easements required for that purpose.  The 
  3.33  authority hereby granted is in addition to all other powers with 
  3.34  reference to the facilities otherwise granted by the laws of 
  3.35  this state or by the charter of any municipality.  The authority 
  3.36  granted in clause (iii) to municipalities which have territory 
  4.1   within a watershed which has adopted a watershed plan pursuant 
  4.2   to section 103B.231 shall be exercised, with respect to 
  4.3   facilities acquired following the adoption of the watershed 
  4.4   plan, only for facilities which are not inconsistent with the 
  4.5   watershed plan.  The authority granted in clause (iii) to 
  4.6   municipalities which have adopted local water management plans 
  4.7   pursuant to section 103B.235 shall be exercised, with respect to 
  4.8   facilities acquired following the adoption of a local plan, only 
  4.9   for facilities which are not inconsistent with the local plan.  
  4.10  Counties, except counties in the seven-county metropolitan area, 
  4.11  shall have the same authority granted to municipalities by this 
  4.12  subdivision except for areas of the county organized into cities 
  4.13  and areas of the county incorporated within a sanitary district 
  4.14  established by special act of the legislature. 
  4.15     Sec. 5.  Minnesota Statutes 2000, section 465.73, is 
  4.16  amended to read: 
  4.17     465.73 [TOWN HALLS; FIRE HALLS OR RESCUE EQUIPMENT; LOANS 
  4.18  TO POLITICAL SUBDIVISIONS.] 
  4.19     For purposes of constructing, repairing, or acquiring city 
  4.20  halls, town halls, fire halls or fire or rescue equipment ~~any~~, 
  4.21  or libraries or child care facilities if otherwise authorized by 
  4.22  law, a city, county, or town may borrow ~~up~~ not to 
  4.23  ~~$250,000~~ exceed $450,000 from (i) funds granted to a rural 
  4.24  electric cooperative organized under chapter 308A by~~,~~ the United 
  4.25  States Department of Agriculture Rural Business-Cooperative 
  4.26  Service or (ii) directly from or in the form of funds guaranteed 
  4.27  by the ~~Farmers Home Administration~~ Rural Housing Service or 
  4.28  other agency of the United States Department of Agriculture ~~on~~ 
  4.29  by a note secured by a mortgage or other security agreement on 
  4.30  the property purchased with the borrowed funds.  The city, 
  4.31  county, or town may pledge its full faith and credit and assign 
  4.32  or pledge the revenues, if any, from the ~~town halls, fire or~~ 
  4.33  ~~rescue department, or fire hall or~~ facilities or equipment so 
  4.34  financed together with any other properly available funds~~,~~ 
  4.35  ~~including taxes levied pursuant to section 475.61 to the Farmers~~ 
  4.36  ~~Home Administration or other agency of the United States~~ 
  5.1   ~~Department of Agriculture or its guaranteed lender or a rural~~ 
  5.2   ~~electric cooperative organized under chapter 308A as its grantee~~ 
  5.3   ~~to repay~~ to secure the loan.  The ~~amount of the obligation shall~~ 
  5.4   ~~not be~~ obligation of the note is not to be included when 
  5.5   computing the net debt of the city, county, or town~~.  An~~ 
  5.6   ~~election shall not be required to authorize the note and~~ 
  5.7   ~~mortgage or assignment of revenues~~, nor is the approval of the 
  5.8   voters required for the issuance of the note. 
  5.9      Sec. 6.  Minnesota Statutes 2000, section 469.034, 
  5.10  subdivision 2, is amended to read: 
  5.11     Subd. 2.  [GENERAL OBLIGATION REVENUE BONDS.] (a) An 
  5.12  authority may pledge the general obligation of the general 
  5.13  jurisdiction governmental unit as additional security for bonds 
  5.14  payable from income or revenues of the project or the 
  5.15  authority.  The authority must find that the pledged revenues 
  5.16  will equal or exceed 110 percent of the principal and interest 
  5.17  due on the bonds for each year.  The proceeds of the bonds must 
  5.18  be used for a qualified housing development project or 
  5.19  projects.  The obligations must be issued and sold in the manner 
  5.20  and following the procedures provided by chapter 475, except the 
  5.21  obligations are not subject to approval by the electors and the 
  5.22  maturities may extend to not more than 40 years.  The authority 
  5.23  is the municipality for purposes of chapter 475.  
  5.24     (b) The principal amount of the issue must be approved by 
  5.25  the governing body of the general jurisdiction governmental unit 
  5.26  whose general obligation is pledged.  Public hearings must be 
  5.27  held on issuance of the obligations by both the authority and 
  5.28  the general jurisdiction governmental unit.  The hearings must 
  5.29  be held at least 15 days, but not more than 120 days, before the 
  5.30  sale of the obligations. 
  5.31     (c) The maximum amount of general obligation bonds that may 
  5.32  be issued and outstanding under this section equals the greater 
  5.33  of (1) one-half of one percent of the taxable market value of 
  5.34  the general jurisdiction governmental unit whose general 
  5.35  obligation which includes a tax on property is pledged, or (2) 
  5.36  $3,000,000.  In the case of county or multicounty general 
  6.1   obligation bonds, the outstanding general obligation bonds of 
  6.2   all cities in the county or counties issued under this 
  6.3   subdivision must be added in calculating the limit under clause 
  6.4   (1). 
  6.5      (d) "General jurisdiction governmental unit" means the city 
  6.6   in which the housing development project is located.  In the 
  6.7   case of a county or multicounty authority, the county or 
  6.8   counties may act as the general jurisdiction governmental unit.  
  6.9   In the case of a multicounty authority, the pledge of the 
  6.10  general obligation is a pledge of a tax on the taxable property 
  6.11  in each of the counties. 
  6.12     (e) "Qualified housing development project" means a housing 
  6.13  development project providing housing either for the elderly or 
  6.14  for individuals and families with incomes not greater than 80 
  6.15  percent of the median family income as estimated by the United 
  6.16  States Department of Housing and Urban Development for the 
  6.17  standard metropolitan statistical area or the nonmetropolitan 
  6.18  county in which the project is located, and will be owned by the 
  6.19  authority for the term of the bonds.  A qualified housing 
  6.20  development project may admit nonelderly individuals and 
  6.21  families with higher incomes if: 
  6.22     (1) three years have passed since initial occupancy; 
  6.23     (2) the authority finds the project is experiencing 
  6.24  unanticipated vacancies resulting in insufficient revenues, 
  6.25  because of changes in population or other unforeseen 
  6.26  circumstances that occurred after the initial finding of 
  6.27  adequate revenues; and 
  6.28     (3) the authority finds a tax levy or payment from general 
  6.29  assets of the general jurisdiction governmental unit will be 
  6.30  necessary to pay debt service on the bonds if higher income 
  6.31  individuals or families are not admitted. 
  6.32     Sec. 7.  Minnesota Statutes 2000, section 469.102, 
  6.33  subdivision 2, is amended to read: 
  6.34     Subd. 2.  [DETAIL; MATURITY.] The authority with the 
  6.35  consent of its city's council shall set the date, denominations, 
  6.36  place of payment, form, and details of the bonds.  The bonds 
  7.1   must mature serially.  The first installment is due in not more 
  7.2   than three years and the last in not more than ~~20~~ 30 years from 
  7.3   the date of issuance.  
  7.4      Sec. 8.  Minnesota Statutes 2000, section 469.153, is 
  7.5   amended by adding a subdivision to read: 
  7.6      Subd. 13.  [RELATED PUBLIC IMPROVEMENTS.] "Related public 
  7.7   improvements" means any public improvements described in section 
  7.8   429.021, that are acquired and constructed in connection with 
  7.9   the project and are financed by the contracting party under the 
  7.10  revenue agreement. 
  7.11     Sec. 9.  Minnesota Statutes 2000, section 469.155, 
  7.12  subdivision 3, is amended to read: 
  7.13     Subd. 3.  [REVENUE BONDS.] (a) It may issue revenue bonds, 
  7.14  in anticipation of the collection of revenues of a project to be 
  7.15  situated within the state, to finance, in whole or in part, the 
  7.16  cost of the acquisition, construction, reconstruction, 
  7.17  improvement, betterment, or extension thereof and of any related 
  7.18  public improvements.  
  7.19     (b) It may issue revenue bonds to purchase the obligations 
  7.20  of local government units located in whole or in part within the 
  7.21  boundaries of the municipality.  The proceeds of bonds issued to 
  7.22  purchase obligations as provided under this paragraph may be 
  7.23  disbursed or otherwise used to pay underwriter's or placement 
  7.24  fees, expenses, or other costs of issuance and sale for the 
  7.25  bonds only on a pro rata basis determined with respect to the 
  7.26  portion of the proceeds that are used to purchase the 
  7.27  obligations.  The municipality may not pay the underwriter's or 
  7.28  placement fees, expenses, or other costs of issuance and sale 
  7.29  out of other money. 
  7.30     Sec. 10.  Minnesota Statutes 2000, section 469.155, 
  7.31  subdivision 4, is amended to read: 
  7.32     Subd. 4.  [REFINANCING NONPROFIT FACILITIES.] It may issue 
  7.33  revenue bonds to pay, purchase, or discharge all or any part of 
  7.34  the outstanding indebtedness of a contracting party that is an 
  7.35  organization described in section 501(c)(3) of the Internal 
  7.36  Revenue Code ~~primarily engaged in health care-related activities~~ 
  8.1   ~~or in activities for mentally or physically disabled persons or~~ 
  8.2   ~~that is engaged primarily in the operation of one or more~~ 
  8.3   ~~nonprofit hospitals or nursing homes~~ previously incurred in the 
  8.4   acquisition or betterment of its existing facilities to the 
  8.5   extent deemed necessary by the governing body of the 
  8.6   municipality or redevelopment agency; this may include any 
  8.7   unpaid interest on the indebtedness accrued or to accrue to the 
  8.8   date on which the indebtedness is finally paid, and any premium 
  8.9   the governing body of the municipality or redevelopment agency 
  8.10  determines to be necessary to be paid to pay, purchase, or 
  8.11  defease the outstanding indebtedness.  If revenue bonds are 
  8.12  issued for this purpose, the refinancing and the existing 
  8.13  properties of the contracting party shall be deemed to 
  8.14  constitute a project under section 469.153, subdivision 2, 
  8.15  clause (b), (c), or (d).  
  8.16     Sec. 11.  Minnesota Statutes 2000, section 469.155, 
  8.17  subdivision 8, is amended to read: 
  8.18     Subd. 8.  [IMPLEMENTATION OF POWERS AND COVENANTS; 
  8.19  CONSTRUCTION AND ACQUISITION BY CONTRACTING PARTY.] It may make 
  8.20  all contracts, execute all instruments, and do all things 
  8.21  necessary or convenient in the exercise of the powers granted in 
  8.22  sections 469.152 to 469.165, or in the performance of its 
  8.23  covenants or duties, or in order to secure the payment of its 
  8.24  bonds.  It may enter into a revenue agreement authorizing the 
  8.25  contracting party, subject to any terms and conditions the 
  8.26  municipality or redevelopment agency finds necessary or 
  8.27  desirable and proper, to provide for the construction, 
  8.28  acquisition, and installation of the buildings, improvements, 
  8.29  and equipment to be included in the project and any related 
  8.30  public improvements by any means legally available to the 
  8.31  contracting party and in the manner determined by the 
  8.32  contracting party and without advertisement for bids unless 
  8.33  advertisement by the contracting party is otherwise required by 
  8.34  law.  
  8.35     Sec. 12.  Minnesota Statutes 2000, section 469.157, is 
  8.36  amended to read: 
  9.1      469.157 [DETERMINATION OF COST OF PROJECT.] 
  9.2      In determining the cost of a project, the governing body 
  9.3   may include all cost and estimated cost of the acquisition, 
  9.4   construction, reconstruction, improvement, betterment, and 
  9.5   extension of the project and any related public improvements, 
  9.6   all engineering, inspection, fiscal, legal, administrative, and 
  9.7   printing expense, the interest which it is estimated will accrue 
  9.8   during the construction period and for six months thereafter on 
  9.9   money borrowed or which it is estimated will be borrowed 
  9.10  pursuant to sections 469.152 to 469.165, working capital for the 
  9.11  project not to exceed five percent of bond proceeds, and bond 
  9.12  reserves and premiums for insurance of lease rentals pledged to 
  9.13  pay the bonds.  
  9.14     Sec. 13.  Minnesota Statutes 2001 Supplement, section 
  9.15  475.58, subdivision 1, is amended to read: 
  9.16     Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
  9.17  Obligations authorized by law or charter may be issued by any 
  9.18  municipality upon obtaining the approval of a majority of the 
  9.19  electors voting on the question of issuing the obligations, but 
  9.20  an election shall not be required to authorize obligations 
  9.21  issued: 
  9.22     (1) to pay any unpaid judgment against the municipality; 
  9.23     (2) for refunding obligations; 
  9.24     (3) for an improvement or improvement program, which 
  9.25  obligation is payable wholly or partly from the proceeds of 
  9.26  special assessments levied upon property specially benefited by 
  9.27  the improvement or by an improvement within the improvement 
  9.28  program, or of taxes levied upon the increased value of property 
  9.29  within a district for the development of which the improvement 
  9.30  is undertaken, including obligations which are the general 
  9.31  obligations of the municipality, if the municipality is entitled 
  9.32  to reimbursement in whole or in part from the proceeds of such 
  9.33  special assessments or taxes and not less than 20 percent of the 
  9.34  cost of the improvement or the improvement program is to be 
  9.35  assessed against benefited property or is to be paid from the 
  9.36  proceeds of federal grant funds or a combination thereof, or is 
 10.1   estimated to be received from such taxes within the district; 
 10.2      (4) payable wholly from the income of revenue producing 
 10.3   conveniences; 
 10.4      (5) under the provisions of a home rule charter which 
 10.5   permits the issuance of obligations of the municipality without 
 10.6   election; 
 10.7      (6) under the provisions of a law which permits the 
 10.8   issuance of obligations of a municipality without an election; 
 10.9      (7) to fund pension or retirement fund liabilities pursuant 
 10.10  to section 475.52, subdivision 6; 
 10.11     (8) under a capital improvement plan under section 373.40; 
 10.12  ~~and~~ 
 10.13     (9) under sections 469.1813 to 469.1815 (property tax 
 10.14  abatement authority bonds)~~, if the proceeds of the bonds are not~~ 
 10.15  ~~used for a purpose prohibited under section 469.176, subdivision~~ 
 10.16  ~~4g, paragraph (b)~~; and 
 10.17     (10) to pay for reconstruction of streets if special 
 10.18  assessments were levied to pay all or a portion of the initial 
 10.19  costs of such streets. 
 10.20     Sec. 14.  Minnesota Statutes 2000, section 641.23, is 
 10.21  amended to read: 
 10.22     641.23 [FUNDS, HOW PROVIDED.] 
 10.23     Before any contract is made for the erection of a county 
 10.24  jail, sheriff's residence, or both, the county board shall 
 10.25  either levy a sufficient tax to provide the necessary funds, or 
 10.26  issue county bonds therefor in accordance with the provisions of 
 10.27  chapter 475, provided that~~, unless the issuance of the bonds is~~ 
 10.28  ~~approved by the majority of voters voting on the question of~~ 
 10.29  ~~their issuance,~~ no election is required if the amount of all 
 10.30  bonds issued for this purpose and interest on them which are due 
 10.31  and payable in any year ~~shall~~ does not exceed an amount equal to 
 10.32  0.09671 percent of market value of taxable property within the 
 10.33  county, as last determined before the bonds are issued.  
 10.34     Sec. 15.  [EFFECTIVE DATE.] 
 10.35     Sections 1 to 14 are effective the day following final 
 10.36  enactment.