HF 855

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:42am

A bill for an act
relating to capital improvements; authorizing spending to acquire and better
public land and buildings and other improvements of a capital nature with
certain conditions; establishing new programs and modifying existing
programs; authorizing the sale of state bonds; repealing and modifying previous
appropriations; appropriating money; amending Minnesota Statutes 2008,
sections 16A.641, subdivisions 4, 7; 16A.66, subdivision 2; 16A.86, subdivision
2, by adding a subdivision; 85.015, by adding a subdivision; 134.45, by adding
a subdivision; 135A.046, subdivision 2; 174.03, subdivision 1b; 174.88,
subdivision 2; Laws 2005, chapter 20, article 1, section 23, subdivision 16, as
amended; Laws 2006, chapter 258, sections 20, subdivision 7; 21, subdivisions
5, 6, as amended; 23, subdivision 3, as amended; Laws 2008, chapter 179,
section 3, subdivisions 12, as amended, 21, 25; proposing coding for new law in
Minnesota Statutes, chapters 16A; 84; 174; 473; repealing Minnesota Statutes
2008, sections 16A.86, subdivision 3; 116.156; 473.399, subdivision 4; Laws
2008, chapter 179, section 8, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.

The sums shown in the column under "Appropriations" are appropriated from the
bond proceeds fund, or another named fund, to the state agencies or officials indicated,
to be spent for public purposes. Appropriations of bond proceeds must be spent as
authorized by the Minnesota Constitution, article XI, section 5, paragraph (a), to acquire
and better public land and buildings and other public improvements of a capital nature, or
as authorized by the Minnesota Constitution, article XI, section 5, paragraphs (b) to (j), or
article XIV. Unless otherwise specified, the appropriations in this act are available until
the project is completed or abandoned subject to Minnesota Statutes, section 16A.642.

SUMMARY
University of Minnesota	$	23,000,000
Minnesota State Colleges and Universities		67,905,000
Education		5,780,000
Natural Resources		13,700,000
Board of Water and Soil Resources		1,000,000
Rural Finance Authority		35,000,000
Zoological Garden		4,000,000
Military Affairs		3,602,000
Transportation		29,500,000
Metropolitan Council		21,000,000
Human Services		24,000,000
Veterans Affairs		7,138,000
Corrections		5,000,000
Employment and Economic Development		700,000
Housing Finance Agency		4,000,000
Minnesota Historical Society		2,065,000
Bond Sale Expenses		245,000
TOTAL	$	247,635,000
Bond Proceeds Fund (General Fund Debt Service)		183,220,000
Bond Proceeds Fund (User Financed Debt Service)		47,635,000
Maximum Effort School Loan Fund		5,780,000
State Transportation Fund		11,000,000

APPROPRIATIONS

Sec. 2. UNIVERSITY OF MINNESOTA

Subdivision 1. Total Appropriation

$

23,000,000

To the Board of Regents of the University
of Minnesota for the purposes specified in
this section.

Subd. 2. Higher Education Asset Preservation and Replacement (HEAPR)

20,000,000

To be spent in accordance with Minnesota
Statutes, section 135A.046.

Subd. 3. Morris

National Solar Testing and Certification Laboratory

3,000,000

For the initiative for renewable energy
and the environment to design, construct,
furnish, and equip a national solar testing
and certification laboratory to test, rate, and
certify the performance of equipment and
devices that utilize solar energy for heating
and cooling air and water and for generating
electricity.

Sec. 3. MINNESOTA STATE COLLEGES AND UNIVERSITIES

Subdivision 1. Total Appropriation

$

67,905,000

To the Board of Trustees of the Minnesota
State Colleges and Universities for the
purposes specified in this section.

Subd. 2. Higher Education Asset Preservation And Replacement (HEAPR)

30,000,000

For the purposes specified in Minnesota
Statutes, section 135A.046, including safety
and statutory compliance, building envelope
integrity, mechanical systems, and space
restoration.

Subd. 3. Lake Superior Community and Technical College

Health and Science Center Addition

11,000,000

To complete design of and to construct,
furnish, and equip an addition to the Health
and Science Center and to renovate existing
spaces.

Subd. 4. Mesabi Range Community and Technical College, Eveleth

Carpentry and Industrial Mechanical Technology and Shops

5,000,000

To construct, furnish, and equip shop space
for the industrial mechanical technology
and carpentry programs. This appropriation
includes funding for renovation of existing
space for ADA compliance.

Subd. 5. Metropolitan State University

Smart Classroom Center

4,980,000

To construct, furnish, and equip renovation
of two floors of technology-enhanced
classrooms and academic offices in the power
plant building. This appropriation includes
money to demolish the power plant annex to
enable the new construction.

Subd. 6. Minnesota State College, Southeast Technical - Aviation Training Center

Notwithstanding Minnesota Statutes, section
136F.60, subdivision 5, the net proceeds
of the sale or disposition of the Aviation
Training Center in Winona operated by
Minnesota State College - Southeast
Technical, after paying all expenses incurred
in selling the property and retiring any
remaining debt attributable to the project,
are appropriated to the board of trustees
of the Minnesota State Colleges and
Universities for use in a capital project at the
Winona campus and need not be paid to the
commissioner of finance, as would otherwise
be required by Minnesota Statutes, section
16A.695, subdivision 3.

When the sale is complete and the sale
proceeds have been applied as provided in
this subdivision, Minnesota Statutes, section
16A.695, no longer applies to the property
and the property is no longer state bond
financed property.

Subd. 7. North Hennepin Community College

Center for Business and Technology

13,300,000

To construct, furnish, and equip an addition
to the Center for Business and Technology
and to renovate the center for classrooms and
related space.

Subd. 8. Systemwide Initiatives

Classroom Renovation

3,625,000

To design, construct, furnish, and equip
renovation of classroom and academic
space. Campuses may use nonstate money
to increase the size of the projects. This
appropriation may be used only at the
following campuses: Central Lakes College,
Brainerd; Minnesota State Community
Technical College, Moorhead and Wadena;
Minnesota West Community Technical
College, Pipestone; Northland Community
Technical College, Thief River Falls; Pine
Technical College, Pine City; and Rochester
Community Technical College, Rochester.

Subd. 9. Debt Service

(a) The board shall pay the debt service on
one-third of the principal amount of state
bonds sold to finance projects authorized by
this section, except for higher education asset
preservation and replacement, and except
that, where a nonstate match is required, the
debt service is due on a principal amount
equal to one-third of the total project cost,
less the match committed before the bonds
are sold. After each sale of general obligation
bonds, the commissioner of finance shall
notify the board of the amounts assessed for
each year for the life of the bonds.

(b) The commissioner shall reduce the
board's assessment each year by one-third of
the net income from investment of general
obligation bond proceeds in proportion to the
amount of principal and interest otherwise
required to be paid by the board. The board
shall pay its resulting net assessment to the
commissioner of finance by December 1 each
year. If the board fails to make a payment
when due, the commissioner of finance
shall reduce allotments for appropriations
from the general fund otherwise available
to the board and apply the amount of the
reduction to cover the missed debt service
payment. The commissioner of finance
shall credit the payments received from the
board to the bond debt service account in
the state bond fund each December 1 before
money is transferred from the general fund
under Minnesota Statutes, section 16A.641,
subdivision 10.

Subd. 10. Unspent Appropriations

(a) Upon substantial completion of a project
authorized in this section and after written
notice to the commissioner of finance, the
Board of Trustees must use any money
remaining in the appropriation for that
project for HEAPR under Minnesota
Statutes, section 135A.046. The Board
of Trustees must report by February 1 of
each even-numbered year to the chairs
of the house and senate committees with
jurisdiction over capital investment and
higher education finance, and to the chairs of
the house Ways and Means Committee and
the senate Finance Committee, on how the
remaining money has been allocated or spent.

(b) The unspent portion of an appropriation
for a project in this section that is complete,
is available for higher education asset
preservation and replacement under this
subdivision, at the same campus as the
project for which the original appropriation
was made, and the debt service requirement
under subdivision 8 is reduced accordingly.
Minnesota Statutes, section 16A.642, applies
from the date of the original appropriation to
the unspent amount transferred.

Sec. 4. EDUCATION

Independent School District No. 38, Red Lake

$

5,780,000

From the maximum effort school loan fund to
the commissioner of education for a capital
loan to Independent School District No. 38,
Red Lake, as provided in Minnesota Statutes,
sections 126C.60 to 126C.72, to design,
construct, furnish, and equip renovation of
existing facilities and construction of new
facilities.

The project paid for with this appropriation
includes a portion of the renovation and
construction identified as Phase 4 in the
review and comment performed by the
commissioner of education under the capital
loan provisions of Minnesota Statutes,
section 126C.69. This portion includes
renovation and construction of a single
kitchen and cafeteria to serve the high school
and middle school, a receiving area and dock,
and adjacent drives, utilities, and grading.

Before any capital loan contract is approved
under this authorization, the district must
provide documentation acceptable to the
commissioner on how the capital loan will
be used.

Sec. 5. NATURAL RESOURCES

Subdivision 1. Total Appropriation

$

13,700,000

To the commissioner of natural resources
for the purposes specified in this section.
The commissioner must allocate money
appropriated in this section so as to maximize
the use of all available federal money from
the American Recovery and Reinvestment
Act of 2009, Public Law 111-5, and any other
federal funding.

The appropriations in this section are
subject to the requirements of the natural
resources capital improvement program
under Minnesota Statutes, section 86A.12,
unless this section or the statutes referred
to in this section provide more specific
standards, criteria, or priorities for projects
than Minnesota Statutes, section 86A.12.

To the extent possible, any prairie restoration
conducted with money appropriated in this
section must plant vegetation or sow seed
only of ecotypes native to Minnesota, and
preferably of the local ecotype, using a high
diversity of species originating from as
close to the restoration site as possible, and
protect existing native prairies from genetic
contamination.

Subd. 2. Statewide Asset Preservation

1,000,000

For the renovation of state-owned facilities
operated by the commissioner of natural
resources that can be substantially completed
in calendar year 2009, as determined by
the commissioner of natural resources,
including renovation of buildings for energy
efficiency, roof replacements, replacement
of well and water treatment systems, road
resurfacing, major culvert replacement and
erosion control, water access rehabilitation,
trail resurfacing and widening, and bridge
replacement and rehabilitation.

Subd. 3. Flood Hazard Mitigation Grants

12,700,000

For the state share of flood hazard
mitigation grants for publicly owned capital
improvements to prevent or alleviate flood
damage under Minnesota Statutes, section
103F.161.

This appropriation includes money to
maximize federal funds for projects in Ada,
Breckenridge, and Roseau. Any remaining
money from this appropriation is for the
following projects as prioritized by the
commissioner based on need:

(a) Agassiz Valley

(b) Albert Lea

(c) Austin

(d) Bois de Sioux Watershed District, North
Ottawa project

(e) Crookston

(f) Granite Falls

(g) Hay Creek-Norland

(h) Inver Grove Heights

(i) Manston Slough

(j) Oakport Township

(k) Shell Rock River Watershed

(l) Spring Brook

(m) St. Vincent

(n) Two Rivers

For any project listed in this subdivision
that the commissioner determines is not
ready to proceed or does not expend all the
money allocated to it, the commissioner may
allocate that project's money to a project on
the commissioner's priority list.

To the extent that the cost of a project in
Ada, Breckenridge, Crookston, Granite Falls,
Oakport Township, St. Vincent, or Roseau
exceeds two percent of the median household
income in the municipality multiplied by the
number of households in the municipality,
this appropriation is also for the local share
of the project.

Sec. 6. BOARD OF WATER AND SOIL RESOURCES

RIM Conservation Reserve

$

1,000,000

To the Board of Water and Soil Resources
to acquire conservation easements from
landowners to preserve, restore, create,
and enhance wetlands, restore and enhance
rivers and streams, riparian lands, and
associated uplands in order to protect
soil and water quality, support fish and
wildlife habitat, reduce flood damages,
and other public benefits. The board must
allocate money appropriated in this section
so as to maximize the use of available
federal funds. The provisions of Minnesota
Statutes, section 103F.515, apply to this
appropriation, except that the board may
establish alternative payment rates for
easements and practices to establish restored
native prairies and to protect uplands. To
the extent possible, prairie restorations
conducted with money appropriated in this
section must plant vegetation or sow seed
only of ecotypes native to Minnesota, and
preferably of the local ecotype, using a high
diversity of species originating from as
close to the restoration site as possible, and
protect existing native prairies from genetic
contamination. Of this appropriation, up to
ten percent may be used to implement the
program.

Sec. 7. RURAL FINANCE AUTHORITY.

$

35,000,000

For the purposes set forth in the Minnesota
Constitution, article XI, section 5, paragraph
(h). To the Rural Finance Authority to
purchase participation interests in or to
make direct agricultural loans to farmers
under Minnesota Statutes, chapter 41B.
This appropriation is for the beginning
farmer program under Minnesota Statutes,
section 41B.039; the loan restructuring
program under Minnesota Statutes, section
41B.04; the seller-sponsored program under
Minnesota Statutes, section 41B.042; the
agricultural improvement loan program
under Minnesota Statutes, section 41B.043;
and the livestock expansion loan program
under Minnesota Statutes, section 41B.045.
All debt service on bond proceeds used to
finance this appropriation must be repaid
by the Rural Finance Authority under
Minnesota Statutes, section 16A.643. Loan
participations must be priced to provide full
interest and principal coverage and a reserve
for potential losses. Priority for loans must
be given first to basic beginning farmer loans,
second to seller-sponsored loans, and third to
agricultural improvement loans.

Sec. 8. MINNESOTA ZOOLOGICAL GARDEN

Asset Preservation and Improvement

$

4,000,000

To the Minnesota Zoological Garden
to design and construct capital asset
preservation improvements and betterments
to infrastructure and exhibits at the Minnesota
Zoo.

Sec. 9. MILITARY AFFAIRS

Asset Preservation

$

3,602,000

To the adjutant general for asset preservation
improvements and betterments of a capital
nature at military affairs facilities, to be
spent in accordance with Minnesota Statutes,
section 16B.307. The adjutant general must
allocate money appropriated in this section
so as to maximize the use of all available
federal funding.

This appropriation may be used for life safety
improvements, to correct code deficiencies,
for Americans with Disabilities Act
alterations, and to improve energy efficiency
at existing National Guard Training and
Community Centers at Hastings, Hutchinson,
Red Wing, and Winona; and to match
federal stimulus money for backup heating
and electricity improvements at Bemidji,
Brainerd, Duluth, Inver Grove Heights,
Jackson, Northeast Minneapolis, Rosemount,
and St. Peter.

Sec. 10. TRANSPORTATION

Subdivision 1. Total Appropriation

$

29,500,000

To the commissioner of transportation
for the purposes specified in this section.
The commissioner must allocate money
appropriated in this section so as to maximize
the use of all available federal money from
the American Recovery and Reinvestment
Act of 2009, Public Law 111-5, and any other
federal funding.

Subd. 2. Local Bridge Replacement and Rehabilitation

11,000,000

This appropriation is from the bond proceeds
account in the state transportation fund
to match federal money and to replace
or rehabilitate local deficient bridges as
provided in Minnesota Statutes, section
174.50.

Political subdivisions may use grants made
under this subdivision to construct or
reconstruct bridges, including:

(1) matching federal-aid grants to construct
or reconstruct key bridges;

(2) paying the costs of preliminary
engineering and environmental studies
authorized under Minnesota Statutes, section
174.50, subdivision 6a;

(3) paying the costs to abandon an existing
bridge that is deficient and in need of
replacement, but where no replacement will
be made; and

(4) paying the costs to construct a road
or street to facilitate the abandonment
of an existing bridge determined by
the commissioner to be deficient, if the
commissioner determines that construction
of the road or street is more economical than
replacement of the existing bridge.

Subd. 3. Rail Service Improvement

3,000,000

For the rail service improvement program
to be spent for the purposes set forth
in Minnesota Statutes, section 222.50,
subdivision 7.

Subd. 4. Commuter and Passenger Rail Corridor Projects

7,500,000

To implement capital improvements and
betterments for commuter and passenger rail
projects identified in the statewide freight
and passenger rail plan, under Minnesota
Statutes, section 174.03, subdivision 1b.

Subd. 5. Minnesota Valley Railroad Track Rehabilitation

5,000,000

For a grant to the Minnesota Valley Regional
Railroad Authority to rehabilitate up to 95
miles of railroad track from Norwood-Young
America to Hanley Falls. A grant under this
subdivision is in addition to any grant, loan,
or loan guarantee for this project made by
the commissioner under Minnesota Statutes,
sections 222.46 to 222.62.

Subd. 6. Port Development Assistance

3,000,000

For grants under Minnesota Statutes, chapter
457A. Any improvements made with the
proceeds of these grants must be publicly
owned.

Sec. 11. METROPOLITAN COUNCIL

Transit Capital Improvement Program

$

21,000,000

To the Metropolitan Council:

(a) to implement capital improvements
and betterments identified in the council's
transit capital improvement program
under Minnesota Statutes, section
473.3992, including acquisition of land
and right-of-way, design, preliminary
engineering, environmental analysis and
mitigation, engineering, and construction;
and

(b) for capital improvements to facilities for
which federal funding is available.

The council must allocate money
appropriated in this section so as to maximize
the use of all available federal money from
the American Recovery and Reinvestment
Act of 2009, Public Law 111-5, and any other
available federal funds.

Sec. 12. HUMAN SERVICES

Subdivision 1. Total Appropriation

$

24,000,000

To the commissioner of administration, or
another named agency, for the purposes
specified in this section. The commissioner
must allocate money appropriated in this
section so as to maximize the use of all
available federal funding.

Subd. 2. Asset Preservation

2,000,000

For asset preservation improvements and
betterments of a capital nature at Department
of Human Services facilities statewide, in
accordance with Minnesota Statutes, section
16B.307.

Subd. 3. Minnesota Sex Offender Program Moose Lake Expansion

20,000,000

For infrastructure for phase 2 of the
expansion of the Moose Lake Sex Offender
Treatment Facility.

Subd. 4. Early Childhood Learning and Child Protection Facilities

2,000,000

To the commissioner of human services for
grants to construct and rehabilitate facilities
for programs under Minnesota Statutes,
section 256E.37.

Sec. 13. VETERANS AFFAIRS

Subdivision 1. Total Appropriation

$

7,138,000

To the commissioner of administration
for the purposes specified in this section.
The commissioner must allocate money
appropriated in this section so as to maximize
the use of all available federal funding.

Subd. 2. Asset Preservation

2,138,000

For asset preservation improvements and
betterments of a capital nature at veterans
homes statewide, to be spent in accordance
with Minnesota Statutes, section 16B.307.
Of this, $600,000 is for HVAC replacement
and foundation waterproofing in building
4 at the Minneapolis Veterans Home, and
$350,000 is for roof replacement projects at
the Hastings Veterans Home.

Subd. 3. Veterans Residential Mental Health Nursing Facility, Kandiyohi County

5,000,000

To design, construct, furnish, and equip
a 90-bed facility in Kandiyohi County to
provide residential mental health nursing
services to veterans, as described in section
47. This appropriation is not available until
the commissioner determines that sufficient
funds to complete the project have been
committed from nonstate sources.

Sec. 14. CORRECTIONS

$

5,000,000

To the commissioner of administration for
improvements and betterments of a capital
nature at Minnesota correctional facilities
statewide, in accordance with Minnesota
Statutes, section 16B.307.

Sec. 15. EMPLOYMENT AND ECONOMIC DEVELOPMENT

Redevelopment Account

$

700,000

To the commissioner of employment and
economic development for the purposes of
the redevelopment account under Minnesota
Statutes, section 116J.571.

Sec. 16. HOUSING FINANCE AGENCY

$

4,000,000

To the Housing Finance Agency for the
purposes of financing the rehabilitation costs
to preserve public housing. For purposes of
this section, "public housing" is housing for
low-income persons and households financed
by the federal government and owned and
operated by public housing authorities and
agencies. Eligible public housing authorities
must have a public housing assessment
system rating of standard or above. Priority
must be given to proposals that maximize
federal or local resources to finance the
capital costs.

Sec. 17. MINNESOTA HISTORICAL SOCIETY

Historic Sites Asset Preservation

$

2,065,000

To the Minnesota Historical Society for
capital improvements and betterments at
state historic sites, buildings, landscaping
at historic buildings, exhibits, markers,
and monuments, to be spent in accordance
with Minnesota Statutes, section 16B.307.
Notwithstanding that section, up to $527,000
may be used to design projects eligible for
future funding. The society shall determine
project priorities as appropriate based on
need.

Sec. 18. BOND SALE EXPENSES

$

245,000

To the commissioner of finance for bond sale
expenses under Minnesota Statutes, section
16A.641, subdivision 8.

Sec. 19. BOND SALE SCHEDULE.

The commissioner of finance shall schedule the sale of state general obligation
bonds so that, during the biennium ending June 30, 2011, no more than $1,074,985,000
will need to be transferred from the general fund to the state bond fund to pay principal
and interest due and to become due on outstanding state general obligation bonds. During
the biennium, before each sale of state general obligation bonds, the commissioner of
finance shall calculate the amount of debt service payments needed on bonds previously
issued and shall estimate the amount of debt service payments that will be needed on the
bonds scheduled to be sold. The commissioner shall adjust the amount of bonds scheduled
to be sold so as to remain within the limit set by this section. The amount needed to make
the debt service payments is appropriated from the general fund as provided in Minnesota
Statutes, section 16A.641.

Sec. 20. BOND SALE AUTHORIZATION.

Subdivision 1.

Bond proceeds fund.

To provide the money appropriated in this act
from the bond proceeds fund, the commissioner of finance shall sell and issue bonds of the
state in an amount up to $230,855,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.

Subd. 2.

Maximum effort school loan fund.

To provide the money appropriated in
this act from the maximum effort school loan fund, the commissioner of finance shall sell
and issue bonds of the state in an amount up to $5,780,000 in the manner, upon the terms,
and with the effect prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by
the Minnesota Constitution, article XI, sections 4 to 7. The proceeds of the bonds, except
accrued interest and any premium received on the sale of the bonds, must be credited to a
bond proceeds account in the maximum effort school loan fund.

Subd. 3.

Transportation fund bond proceeds account.

To provide the money
appropriated in this act from the state transportation fund, the commissioner of finance
shall sell and issue bonds of the state in an amount up to $11,000,000 in the manner, upon
the terms, and with the effect prescribed by Minnesota Statutes, sections 16A.631 to
16A.675, and by the Minnesota Constitution, article XI, sections 4 to 7. The proceeds of
the bonds, except accrued interest and any premium received on the sale of the bonds,
must be credited to a bond proceeds account in the state transportation fund.

Sec. 21.

Minnesota Statutes 2008, section 16A.641, subdivision 4, is amended to read:

Subd. 4.

Sale and issuance.

State bonds must may be sold and issued upon
competitive bids at public or negotiated sale in the manner and on the terms and conditions
determined by the commissioner in accordance with the laws authorizing them and
subject to the approval of the attorney general, but not subject to chapter 14, including
section 14.386. For each series, in addition to provisions required by subdivision 3, the
commissioner may determine:

(1) the time, place, and form of notice of sale and for competitive bids and requests
for proposals for negotiated sales;

(2) method of comparing bids;

(2) (3) the price, not less than par for highway bonds;

(3) (4) the principal amount and date of issue;

(4) (5) the interest rates and payment dates;

(5) (6) the maturity amounts and dates, not more than 20 years from the date of
issue, subject to subdivision 5;

(6) (7) the terms, if any, on which the bonds may or must be redeemed before
maturity, including notice, times, and redemption prices; and

(7) (8) the form of the bonds and the method of execution, delivery, payment,
registration, conversion, and exchange, in accordance with section 16A.672.

Sec. 22.

Minnesota Statutes 2008, section 16A.641, subdivision 7, is amended to read:

Subd. 7.

Credit of proceeds.

(a) Proceeds of bonds issued under each law must be
credited by the commissioner to a special fund, as provided in this subdivision.

(b) Accrued interest and any premium received on sale of the bonds must be credited
to the state bond fund created by the Constitution, article XI, section 7. Premium received
on the sale of the bonds must be credited either to the state bond fund or to the bond
proceeds fund where it is used to reduce the par amount of the bonds issued. Premium
may only be credited to the bond proceeds fund and used to reduce the par amount if it
does not cause an increase in the general fund debt service transfer for the biennium
during which the bonds are sold, as estimated by the commissioner.

(c) Except as otherwise provided by law, proceeds of state bonds issued under the
Constitution, article XI, section 5, clause (a), must be credited to the bond proceeds fund
established by section 16A.631.

(d) Proceeds of state highway bonds must be credited to the trunk highway fund
under the Constitution, article XIV, section 6.

(e) Proceeds of bonds issued for programs of grants or loans to political subdivisions
must be credited to special accounts in the bond proceeds fund or to special funds
established by laws stating the purposes of the grants or loans, and the standards and
criteria under which an executive agency is authorized to make them.

(f) Proceeds of refunding bonds must be credited to the state bond fund as provided
in section 16A.66, subdivision 1.

(g) Proceeds of other bonds must be credited as provided in the law authorizing
their issuance.

Sec. 23.

[16A.6455] MINNESOTA FIRST BONDS.

Subdivision 1.

Program established.

The commissioner of finance may establish
the Minnesota first bond program to encourage individuals to invest in state general
obligation bonds. The program consists of:

(1) issuing a portion of the state general obligation bonds in denominations and
maturities that will be attractive to individuals; and

(2) developing a program for marketing the bonds to investors.

Subd. 2.

Denominations.

The commissioner shall determine the appropriate
denominations and maturities for the Minnesota first bonds. It is the intent of the
legislature to make bonds available in as small denominations as is feasible given the
costs of marketing and administering the bond issue. Minimum denominations of $1,000
must be made available. The minimum denomination bonds need not be made available
for bonds of all maturities. If a zero coupon bond is sold, "denomination" means the
compounded maturity amount of the bond.

Subd. 3.

Direct sale permitted.

The commissioner may sell any series of savings
bonds directly to the public or to financial institutions for prompt resale to the public
upon the terms and conditions and the restrictions the commissioner prescribes. The
commissioner may enter into all contracts deemed necessary or desirable to accomplish
the sale in a cost-effective manner including a private or negotiated sale, but the
commissioner may contract for investment banking and banking services only after
receiving competitive proposals for the services.

Subd. 4.

Marketing plan.

The commissioner shall develop a plan for marketing
Minnesota first bonds. The plan must include strategies to:

(1) inform the public about the availability of the bonds;

(2) take orders for the bonds;

(3) target the sale of the bonds to Minnesota residents; and

(4) market the bonds at the lowest cost to the state.

Sec. 24.

Minnesota Statutes 2008, section 16A.66, subdivision 2, is amended to read:

Subd. 2.

Special provisions for sale and issuance.

Refunding bonds may be sold
publicly at public or negotiated sale, or directly to the State Board of Investment without
bids, or may be exchanged for bonds refunded by agreement with their holders. The
refunding bonds must be prepared, executed, delivered, and secured in the same way as
the refunded bonds. The proceeds of refunding bonds may be deposited, invested, and
applied to accomplish the refunding as provided in section 475.67, subdivisions 5 to
10 and 13. The interest rate on refunding bonds may exceed that on the refunded bonds
if the purpose of refunding is to extend the maturities and to reduce the amount needed
annually to pay and to secure the debt.

Sec. 25.

Minnesota Statutes 2008, section 16A.86, subdivision 2, is amended to read:

Subd. 2.

Budget request.

A political subdivision that requests an appropriation of
state money for a local capital improvement project is encouraged to submit the request
to the commissioner of finance by July 15 of an odd-numbered year to ensure its full
consideration. The requests must be submitted in the form and with the supporting
documentation required by the commissioner of finance. All requests timely received by
the commissioner must be forwarded submitted to the legislature, along with agency
requests the governor's recommendations, whether or not the governor recommends that a
request be funded, by the deadline established in section 16A.11, subdivision 1.

Sec. 26.

Minnesota Statutes 2008, section 16A.86, is amended by adding a subdivision
to read:

Subd. 3a.

Information provided.

All requests for state assistance under this section
must include the following information:

(1) the name of the political subdivision that will own the capital project for which
state assistance is being requested;

(2) the public purpose of the project;

(3) the extent to which the political subdivision has or expects to provide local,
private, user financing, or other nonstate funding for the project;

(4) a list of the bondable activities that the project encompasses; examples of
bondable activities are public improvements of a capital nature for land acquisition,
predesign, design, construction, and furnishing and equipping for occupancy;

(5) whether the project will require new or additional state operating subsidies;

(6) whether the governing body of the political subdivision requesting the project
has passed a resolution in support of the project and has established priorities for all
projects within its jurisdiction for which bonding appropriations are requested when
submitting multiple requests; and

(7) if the project requires a predesign under section 16B.335, whether the predesign
has been completed at the time the capital project request is submitted, and whether
the political subdivision has submitted the project predesign to the commissioner of
administration for review and approval.

Sec. 27.

[84.946] NATURAL RESOURCES ASSET PRESERVATION AND
REPLACEMENT (NRAPR).

Subdivision 1.

Purpose.

The legislature recognizes that the Department of Natural
Resources owns and operates capital assets that in number, size, and programmatic use
differ significantly from the capital assets owned and operated by other state departments
and agencies. However, the legislature recognizes the need for standards to aid in
categorizing and funding capital projects. The purpose of this section is to provide
standards for those natural resource projects that are intended to preserve and replace
existing facilities.

Subd. 2.

Standards.

(a) An appropriation for asset preservation may be used only
for a capital expenditure on a capital asset previously owned by the state, within the
meaning of generally accepted accounting principles as applied to public expenditures.
The commissioner of natural resources will consult with the commissioner of finance to
the extent necessary to ensure this and will furnish the commissioner of finance a list
of projects to be financed from the account in order of their priority. The legislature
assumes that many projects for preservation and replacement of portions of existing
capital assets will constitute betterments and capital improvements within the meaning of
the Constitution and capital expenditures under generally accepted accounting principles,
and will be financed more efficiently and economically under this section than by direct
appropriations for specific projects.

(b) An appropriation for asset preservation must not be used to acquire land or to
acquire or construct buildings or other facilities.

(c) Capital budget expenditures for natural resource asset preservation and
replacement projects must be for one or more of the following types of capital projects that
support the existing programmatic mission of the department: code compliance including
health and safety, Americans with Disabilities Act requirements, hazardous material
abatement, access improvement, or air quality improvement; building energy efficiency
improvements using current best practices; building or infrastructure repairs necessary
to preserve the interior and exterior of existing buildings; or renovation of other existing
improvements to land, including but not limited to trails and bridges.

(d) Up to ten percent of an appropriation awarded under this section may be used
for design costs for projects eligible to be funded from this account in anticipation of
future funding from the account.

Subd. 3.

Reporting priorities.

The commissioner of natural resources must
establish priorities within its natural resource asset preservation and replacement projects.
By January 15 of each year, the commissioner must submit to the commissioner of
finance and to the chairs of the house and senate committees with jurisdiction over
environment and natural resources finance and capital investment a list of the projects that
have been paid for with money from a natural resource asset preservation and replacement
appropriation during the preceding calendar year as well as a list of those priority projects
for which natural resource asset preservation and replacement appropriations will be
sought in that year's legislative session.

Sec. 28.

Minnesota Statutes 2008, section 85.015, is amended by adding a subdivision
to read:

Subd. 26.

Great River Ridge Trail, Wabasha and Olmsted Counties.

The trail
shall originate in the city of Plainview in Wabasha County and extend southwesterly
through the city of Elgin in Wabasha County and the town of Viola in Olmsted County to
the Chester Woods Trail in Olmsted County.

EFFECTIVE DATE.

This section is effective retroactively from June 2, 2006.

Sec. 29.

Minnesota Statutes 2008, section 134.45, is amended by adding a subdivision
to read:

Subd. 8.

Sale of public library funded with state bond proceeds.

If the
commissioner of education and the local or regional governmental entity that owns
a public library that has been improved with state bond proceeds under this section
determines that the library is no longer usable or needed for the purposes for which the
grant of state bond funds was made, the owner of the public library may sell the property
in the manner authorized by law for the sale of other property owned by that jurisdiction
for its fair market value. The sale must be approved by the commissioner of finance.
Notwithstanding section 16A.695, subdivision 3, clause (2), the net proceeds must be
applied as follows: first, to pay the state the amount of state bond proceeds used to acquire
or better the property; and second, any remaining amount must be paid to the local or
regional governmental owner of the property sold. When the sale is complete and the sale
proceeds have been applied as provided in this subdivision, section 16A.695 no longer
applies to the property and the property is no longer state bond financed property.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to the sale of public library property on or after that date.

Sec. 30.

Minnesota Statutes 2008, section 135A.046, subdivision 2, is amended to read:

Subd. 2.

Standards.

Capital budget expenditures for Higher Education Asset
Preservation and Replacement (HEAPR) projects must be for one or more of the
following: code compliance including health and safety, Americans with Disabilities
Act requirements, hazardous material abatement, access improvement, or air quality
improvement; building energy efficiency improvements using current best practices; or
building or infrastructure repairs necessary to preserve the interior and exterior of existing
buildings; or renewal to support the existing programmatic mission of the campuses. Up
to ten percent of an appropriation awarded under this section may be used for design
costs for projects eligible to be funded from this account in anticipation of future funding
from the account.

Sec. 31.

Minnesota Statutes 2008, section 174.03, subdivision 1b, is amended to read:

Subd. 1b.

Statewide freight and passenger rail plan.

(a) The commissioner
shall develop a comprehensive statewide freight and passenger rail plan to be included
and revised as a part of the statewide transportation plan.

(b) Before the initial version of the plan is adopted, the commissioner shall provide a
copy for review and comment to the chairs and ranking minority members of the senate
and house of representatives committees with jurisdiction over transportation policy and
finance. Notwithstanding paragraph (a), the commissioner may adopt the next revision
of the statewide transportation plan, scheduled to be completed in calendar year 2009,
prior to completion of the initial version of the comprehensive statewide freight and
passenger rail plan.

(c) The plan must identify the corridors and the capital improvements and
betterments to be made. Capital improvements and betterments include preliminary
engineering, design, engineering, environmental analysis and mitigation, acquisition
of land and right-of-way, and construction. Capital improvements and betterments do
not include planning, feasibility studies, or alternatives analysis. The plan must specify
criteria for determining the priority for allocation of funds among the projects and routes.

Sec. 32.

[174.632] COMMISSIONER'S DUTIES.

The planning, design, development, construction, operation, and maintenance
of passenger rail track, facilities, and services are governmental functions, serve a
public purpose, and are a matter of public necessity. The commissioner is responsible
for all aspects of planning, designing, developing, constructing, equipping, operating,
and maintaining passenger rail, including system planning, alternatives analysis,
environmental studies, preliminary engineering, final design, construction, negotiating
with railroads, and developing financial and operating plans. The commissioner may
enter into a memorandum of understanding or agreement with a public or private entity,
including a regional railroad authority, a joint powers board, and a railroad, to carry out
these activities.

Sec. 33.

[174.634] PASSENGER RAIL FUNDING.

The commissioner may apply for funding from federal, state, regional, local, and
private sources to carry out the commissioner's duties in section 174.632.

Sec. 34.

[174.636] EXERCISE OF POWER; PASSENGER RAIL.

(a) The commissioner has all powers necessary to carry out the duties specified
in section 174.632. In the exercise of those powers, the commissioner may acquire by
purchase, gift, or by eminent domain proceedings as provided by law, all land and property
necessary to preserve future passenger rail corridors or to construct, maintain, and improve
passenger rail corridors, to let all necessary contracts as provided by law, and to make
agreements with and cooperate with any governmental authority or private entity to carry
out statutory duties related to passenger rail.

(b) The commissioner shall consult with metropolitan planning organizations and
regional rail authorities in areas where passenger rail corridors are under consideration
to ensure that passenger rail services are integrated with existing rail and transit services
and other transportation facilities to provide as nearly as possible connected, efficient,
and integrated services.

Sec. 35.

[174.638] FUNDING.

Section 174.88 does not apply to the commissioner's performance of duties and
exercise of powers under sections 174.632 to 174.636.

Sec. 36.

Minnesota Statutes 2008, section 174.88, subdivision 2, is amended to read:

Subd. 2.

Expenditure of state funds.

The commissioner shall not spend any state
funds for construction or equipment of commuter rail facilities unless the funds have been
appropriated by law specifically for those purposes. The commissioner shall not spend
state funds to study commuter rail unless the funds are appropriated in legislation that
identifies the route, including origin and destination.

Sec. 37.

[473.3992] TRANSIT CAPITAL IMPROVEMENT PROGRAM.

Subdivision 1.

Establishment.

A transit capital improvement program is established
to prioritize among eligible public projects to be funded from state bond proceeds
appropriated to the council that are distinctly specified for transit capital improvements
throughout the metropolitan area through the acquisition and betterment of public land
and buildings and other public improvements and the construction, improvement, and
maintenance of transit capital improvements, which may include the state trunk highway
system.

Subd. 2.

Definition.

For purposes of this section, "transit capital improvement"
means a busway corridor, express bus corridor with transit advantages, bus rapid transit,
light rail transit, or commuter rail.

Subd. 3.

Program standards; criteria.

Article XI, section 5, clause (a), of the
Constitution provides that state general obligation bonds may be issued to finance the
acquisition and betterment of public land and buildings and other public improvements
of a capital nature. Article XI, section 5, clause (e), and article XIV, sections 1, 2, 6,
and 11, of the Constitution provide that state general obligation trunk highway bonds
may be issued to finance capital projects that are part of, or functionally related to,
the construction, improvement, or maintenance of the state trunk highway system. In
interpreting these provisions and applying them to the purpose of the program established
in this section, the following standards are adopted for determining the priority among
eligible transit capital improvement projects to be funded under the program, provided
such funding is otherwise consistent with the appropriation of state bond proceeds and all
other laws, regulations, and orders applicable to the expenditure of state bond proceeds as
determined by the commissioner of finance.

(a) A cost will be an eligible expenditure under this program only when it is a capital
expenditure on a capital asset, owned or to be owned by the state, an agency of the state, or
a political subdivision of the state, within the meaning of accepted accounting principles as
applied to public expenditures. Eligible expenditures may include acquisition, predesign,
design, environmental testing and mitigation, utility relocation, traffic mitigation,
construction, demolition, furnishing, equipping, and renovating of projects as authorized
by law. Notwithstanding any law to the contrary, a portion or a phase of a transit capital
improvement project may be accomplished with one or more state appropriations, and a
transit capital improvement project need not be completed with any one appropriation.

(b) The council will review eligible transit capital improvement projects and must
make allocations of state bond proceeds among such projects based upon the program
standards of this subdivision and the following specific criteria:

(1) the ability to use nonstate funds to match state funds, including use of all
available federal funds for a project;

(2) expansion of transit capital improvements and use by the public;

(3) urgency in providing for the transit capital improvement;

(4) necessity in ensuring transportation options;

(5) consistency with the council's transportation policy plan; and

(6) additional criteria for priorities otherwise specified in state law, statute, rule, or
regulation applicable to a transit capital improvement, including the state law authorizing
the state bond fund appropriation for the transit capital improvement.

(c) Criteria can be stated only in general terms, since it is a purpose of the program
to improve the allocation of limited amounts of available funds by enlisting the knowledge
and experience of the council in determining relative needs as they develop.

(d) The criteria in paragraph (b) are not listed in a rank order of priority.

(e) The council may enter into a memorandum of understanding or agreement with a
county or county regional rail authority to carry out the activities of this program.

Subd. 4.

Report.

By January 15 of each year, the council shall submit to the
commissioner of finance, the chairs of the legislative committees or divisions that
oversee appropriations to the council, and to the chairs of the senate and the house of
representatives capital investment committees, a list of the projects that have been funded
with state general obligation bond proceeds under this program during the preceding
calendar year, as well as a list of those projects for which state general obligation bond
proceeds appropriations are anticipated to be sought under this program during that year's
legislative session.

EFFECTIVE DATE; APPLICATION.

This section applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 38.

Laws 2005, chapter 20, article 1, section 23, subdivision 16, as amended by
Laws 2008, chapter 179, section 58, is amended to read:

Subd. 16. Minneapolis

(a) Minnesota Planetarium

22,000,000

For a grant to Hennepin County to complete
design and to construct, furnish, and
equip a new Minnesota planetarium and
space discovery center in conjunction
with the Minneapolis downtown library.
Notwithstanding Minnesota Statutes,
section 16A.642, the bond authorization
and appropriation of bond proceeds for this
project are available until December 31,
2012.

(b) Heritage Park

Any unspent balance remaining on December
31, 2004, in the appropriation made by
Laws 2000, chapter 492, article 1, section
22, subdivision 10, for a grant to the city of
Minneapolis, may be used by the city for
improvements to the Heritage Park project.

(c) Minnesota Shubert Center

1,000,000

For a grant to the city of Minneapolis to
predesign and design and provide for related
capital costs for an associated atrium to
create the Minnesota Shubert Center.

Sec. 39.

Laws 2006, chapter 258, section 20, subdivision 7, is amended to read:

Subd. 7. Minnesota correctional facility - Stillwater

Segregation Unit

19,580,000

To complete design and to construct, furnish,
and equip a new 150-bed segregation unit
and reconstruct the old segregation unit.

Sec. 40.

Laws 2006, chapter 258, section 21, subdivision 5, is amended to read:

Subd. 5. Greater Minnesota Business Development Infrastructure Grant Program

7,750,000

For grants under Minnesota Statutes, section
116J.431.

$250,000 is for a grant to Polk County to
build approximately one mile of ten-ton road
to provide access to a new proposed ethanol
plant outside of the city of Erskine.

$1,400,000 is for a grant to the city of
LaCrescent for public infrastructure made
necessary by the reconstruction of a highway
and a bridge.

Sec. 41.

Laws 2006, chapter 258, section 21, subdivision 6, as amended by Laws 2008,
chapter 179, section 65, is amended to read:

Subd. 6. Redevelopment Account

9,000,000

For purposes of the redevelopment account
under Minnesota Statutes, section 116J.571.

$800,000 is for a grant to the city of
Worthington to remediate contaminated soil
and redevelop the site of the former Campbell
Soup factory. This grant is exempt from the
requirements of Minnesota Statutes, sections
116J.572 to 116J.575. Notwithstanding
Minnesota Statutes, section 16A.642, the
bond authorization and appropriation of the
bond proceeds for this project are available
until December 31, 2012.

$250,000 is for a grant to the city of Winona
to predesign facilities for a multipurpose
events center and arena to be used for the
Shakespeare Festival, Beethoven Festival,
and Winona State University events. This
grant is exempt from the requirements of
Minnesota Statutes, sections 116J.572 to
116J.575.

Sec. 42.

Laws 2006, chapter 258, section 23, subdivision 3, as amended by Laws 2008,
chapter 179, section 68, is amended to read:

Subd. 3. Historic Fort Snelling Museum and Visitor Center

1,100,000

To predesign and design the historic Fort
Snelling Museum and Visitor Center and
other site improvements to revitalize historic
Fort Snelling.

Sec. 43.

Laws 2008, chapter 179, section 3, subdivision 12, as amended by Laws 2008,
chapter 365, section 17, is amended to read:

Subd. 12. Metropolitan State University

(a) Smart Classroom Center

4,980,000

To construct, furnish, and equip renovation
of two floors of technology-enhanced
classrooms and academic offices in the
power plant building. This appropriation
includes money to demolish the power plant
annex to enable the new construction. *
(The preceding text beginning "(a) Smart
Classroom Center" was indicated as
vetoed by the governor.)

(b) Law Enforcement Training Center

13,900,000

To compete design of and to construct,
furnish, and equip, in cooperation with
Minneapolis Community and Technical
College, a colocated Law Enforcement
Training Center on the campus of Hennepin
Technical College in Brooklyn Park. The
board may use up to $2,000,000 of funds
from each college or university, or other
nonstate money for the remainder of the cost
of design and construction of this project.

Sec. 44.

Laws 2008, chapter 179, section 3, subdivision 21, is amended to read:

Subd. 21. Owatonna College and University Center

Property Acquisition

3,500,000

To acquire the Owatonna College and
University Center Building in Steele County,
including the purchase of adjacent vacant
land and for minor capital improvements to
the property.

Sec. 45.

Laws 2008, chapter 179, section 3, subdivision 25, is amended to read:

Subd. 25. St. Cloud State University

(a) Brown Science Hall Renovation

14,800,000

To complete design of and to construct,
furnish, and equip a renovation of Brown
Hall for classrooms, science laboratories, and
other instructional and ancillary spaces. This
appropriation includes funding to reglaze the
existing skyway from the building and to
construct a new skyway to Centennial Hall.

This appropriation may also be used to
complete design and construction drawings
for the Science and Engineering Lab
authorized in paragraph (b) and to demolish
building number 801.

(b) Science and Engineering Lab

900,000

To design an integrated science and
engineering laboratory and student and
academic support building.

Sec. 46. PASSENGER RAIL REPORT.

By February 1, 2010, the commissioner of transportation shall report to the chairs
and ranking minority members of the legislative committees with jurisdiction over
transportation policy and finance concerning the status of passenger rail in this state.
The report must be made electronically and made available in print only upon request.
The report must include a summary of the current status of passenger rail projects and
recommend:

(1) a public participation process for intercity passenger rail planning;

(2) appropriate participation and levels of review by local units of government;

(3) future sources of funding for capital costs and operations;

(4) definitions to distinguish passenger rail from commuter rail;

(5) legislative changes to facilitate and improve the passenger rail planning processes
and operation; and

(6) state operating subsidy mechanisms designed to create local tax equity between
communities served by passenger rail and communities served by commuter rail.

Sec. 47. VETERANS RESIDENTIAL MENTAL HEALTH NURSING
FACILITY, KANDIYOHI COUNTY.

(a) Services provided by the veterans residential mental health nursing facility in
Kandiyohi County must include, but are not limited to:

(1) geriatric care for mentally ill veterans who have severe behavior problems;

(2) inpatient treatment, including long-term and domiciliary care, for veterans with
traumatic brain injury;

(3) inpatient treatment services, including long-term and domiciliary care, for
veterans with post-traumatic stress disorder;

(4) inpatient treatment for veterans with a dual diagnosis of mental illness and
chemical dependency;

(5) long-term and domiciliary care for any veteran; and

(6) standard long-term care.

(b) The facility shall accept referrals from veterans homes in the state.

(c) The commissioner of veterans affairs shall seek private funding to develop a
public-private partnership to provide services for veterans with traumatic brain injury and
with post-traumatic stress disorder, and for veterans who have a dual diagnosis of mental
illness and chemical dependency.

(d) The commissioner of veterans affairs shall seek all sources of federal funding
available for long-term and domiciliary care and for treatment of post-traumatic stress
disorder and traumatic brain injury.

(e) The commissioner shall seek funding from state and federal sources to fund
traumatic brain injury research at this facility.

Sec. 48. REPEALER.

Minnesota Statutes 2008, sections 16A.86, subdivision 3; 116.156; and 473.399,
subdivision 4, and Laws 2008, chapter 179, section 8, subdivision 3, are repealed.

Sec. 49. EFFECTIVE DATE.

Except as otherwise provided, this act is effective the day following final enactment.