1998 Minnesota Statutes

     465.715 Political subdivisions; lease purchase 
  agreements; corporations. 

    Subdivision 1.    Statutory authorization required.  A 
 county, home rule charter city, statutory city, town, school 
 district, or other political subdivision may not create a 
 corporation, whether for profit or not for profit, unless 
 explicitly authorized to do so by law.  

    Subd. 1a.    Application.  Except as provided by 
 subdivision 2, subdivision 1 only applies to a corporation for 
 which a certificate of incorporation is issued by the secretary 
 of state on or after June 1, 1997.  A corporation that had been 
 issued a certificate of incorporation before June 1, 1997, may 
 continue to operate as if it had been created in compliance with 
 subdivision 1.  This subdivision expires July 1, 1999. 

    Subd. 2.    Pre-December 1, 1996, lease purchase 
 agreements.  The validity of any lease purchase agreement 
 entered into prior to December 1, 1996, and subsequent 
 refinancings are not affected by either the amount of 
 consideration paid by a lessor for an interest in real property 
 or, in the case of lessors organized by or on behalf of the 
 city, county, town, or school district, any defect in or lack of 
 authority to organize such entity.  A nonprofit corporation 
 organized by or on behalf of a city, county, town, or school 
 district, for the purpose of a lease purchase agreement, may 
 continue in existence until the end of any lease agreement in 
 effect on December 1, 1996, but thereafter is dissolved.  During 
 its existence, the nonprofit corporation shall conduct only 
 business that is necessary and directly related to the lease 
 agreement.  The nonprofit corporation is a public corporation 
 for purposes of section 465.035 and is subject to all laws as if 
 it were a part of the city, county, town, or school district. 

    Subd. 3.    Information.  (a) By June 30, 1998, the 
 office of the state auditor shall request from all counties, 
 home rule charter cities, statutory cities, urban towns, and 
 school districts information regarding all corporations, 
 including limited liability companies or limited liability 
 partnerships, whether for profit or not for profit, created by 
 the political subdivision.  The information requested must 
 include information regarding the corporation's incorporation 
 date, organizational structure, purpose, a brief summary of the 
 extent to which the corporation receives or expends public 
 funds, potential public liabilities for conduct of the 
 corporation, public oversight, and public laws applicable to the 
 corporation.  This information must be received by the state 
 auditor on or before October 15, 1998. 

    (b) The office of the state auditor shall compile and 
 summarize the information received and report to the senate 
 local and metropolitan government committee and the house of 
 representatives local government and metropolitan affairs 
 committee or their successor committees by January 30, 1999.  
 The report may include recommendations for any changes in laws 
 governing the operation of existing and future corporate 
 entities created by such political subdivisions, and changes in 
 laws needed to clarify the legal status of these corporate 
 entities.  Any corporate entity created by a political 
 subdivision before September 1, 1998, for which a report is not 
 received by the state auditor is not authorized to receive 
 public funds or contract with public entities after July 1, 1999.

    HIST: 1997 c 219 s 7; 1997 c 231 art 16 s 19; 1998 c 360 s 1; 
 1998 c 389 art 16 s 20,21