1999 Minnesota Statutes

CHAPTER 446A. Public facilities authority

     446A.01 Minnesota public facilities authority act. 

    This chapter may be cited as the "Minnesota Public 
 Facilities Authority Act." 

    HIST: 1987 c 386 art 3 s 18; 1999 c 86 art 1 s 69 

     446A.02 Definitions. 

    Subdivision 1.    Applicability.  For the purposes of 
 this chapter, the terms in this section have the meanings given 
 them. 

    Subd. 1a.    Agency.  "Agency" means the Minnesota 
 pollution control agency. 

    Subd. 2.    Authority.  "Authority" means the Minnesota 
 public facilities authority. 

    Subd. 3.    Commissioner.  "Commissioner" means the 
 commissioner of trade and economic development. 

    Subd. 4.    Federal Water Pollution Control Act.  
 "Federal Water Pollution Control Act" means the Federal Water 
 Pollution Control Act, as amended, United States Code, title 33, 
 sections 1251 et seq. 

    Subd. 5.    Governmental unit.  "Governmental unit" 
 means a state agency, home rule charter or statutory city, 
 county, sanitary district, or other governmental subdivision. 

    Subd. 6.    Project.  "Project" means the acquisition, 
 construction, improvement, expansion, repair, or rehabilitation 
 of all or part of any structure, facility, or equipment 
 necessary for a wastewater treatment system or water supply 
 system. 

    HIST: 1987 c 312 art 1 s 26 subd 2; 1987 c 386 art 3 s 19; 
 1989 c 354 s 3; 1994 c 632 art 2 s 40,41 

     446A.03 Minnesota public facilities authority. 

    Subdivision 1.    Membership.  The Minnesota public 
 facilities authority consists of the commissioner of trade and 
 economic development, the commissioner of finance, the 
 commissioner of the pollution control agency, the commissioner 
 of agriculture, the commissioner of health, and the commissioner 
 of transportation. 

    Subd. 2.    Chair; other officers.  The commissioner of 
 trade and economic development shall serve as the chair and 
 chief executive officer of the authority.  The authority may 
 elect other officers as necessary from its members. 

    Subd. 3. Repealed, 1994 c 632 art 2 s 67 

    Subd. 3a.    Delegation.  In addition to any powers to 
 delegate that members of the authority have as commissioners, 
 they may delegate to the commissioner of trade and economic 
 development their responsibilities as members of the authority 
 for reviewing and approving financing of eligible projects that 
 have been certified to the authority. 

    Subd. 4.    Board actions.  (a) A majority of the 
 authority, excluding vacancies, constitutes a quorum to conduct 
 its business, to exercise its powers, and for all other purposes.

    (b) The board may conduct its business by any technological 
 means available, including teleconference calls or interactive 
 video, that allows for an interaction between members.  If a 
 meeting is conducted under this paragraph, a specific location 
 must be available for the public to attend the meeting and at 
 least one member must be present at that location. 

    Subd. 5.    Executive director.  The commissioner shall 
 employ, with the concurrence of the authority, an executive 
 director.  The director shall perform duties that the authority 
 may require in carrying out its responsibilities.  

    Subd. 6.    Administrative services.  The commissioner 
 shall provide administrative services to the authority.  

    Subd. 7.    Personal liability.  Members and officers of 
 the authority are not liable personally for any debt or 
 obligation of the authority.  

    HIST: 1987 c 186 s 15; 1987 c 312 art 1 s 26 subd 2; 1987 c 
 386 art 3 s 20; 1991 c 238 art 1 s 16; 1993 c 163 art 1 s 30; 
 1993 c 327 s 17; 1994 c 632 art 2 s 42,43; 1995 c 232 s 8; 1997 
 c 141 s 8 

     446A.04 Powers; duties. 

    Subdivision 1.    Bylaws; rules.  The authority shall 
 adopt bylaws for its organization and internal management.  The 
 commissioner may adopt rules covering the authority's 
 operations, properties, and facilities. 

    Subd. 2.    Power to sue; enter contracts.  The 
 authority may sue and be sued.  The authority may make and enter 
 into contracts, leases, and agreements necessary to perform its 
 duties and exercise its powers. 

    Subd. 3.    Gifts; grants.  The authority may apply for, 
 accept, and disburse gifts, grants, loans, or other property 
 from the United States, the state, private sources, or any other 
 source for any of its purposes.  Money received by the authority 
 under this subdivision must be deposited in the state treasury 
 and is appropriated to the authority to carry out its duties. 

    Subd. 4.    Contract for services.  The authority may 
 retain or contract for the services of accountants, financial 
 advisors, and other consultants or agents needed to perform its 
 duties and exercise its powers. 

    Subd. 5.    Fees.  (a) The authority may set and collect 
 fees for costs incurred by the authority for audits, arbitrage 
 accounting, and payment of fees charged by the state board of 
 investment.  The authority may also set and collect fees for 
 costs incurred by the commissioner, the department of health, 
 the pollution control agency, and the department of 
 transportation, including costs for personnel and administrative 
 services, for financings and the establishment and maintenance 
 of reserve funds.  Fees charged directly to borrowers upon 
 executing a loan agreement must not exceed one-half of one 
 percent of the loan amount.  Servicing fees assessed to loan 
 repayments must not exceed two percent of the loan repayment.  
 The disposition of fees collected for costs incurred by the 
 authority is governed by section 446A.11, subdivision 13.  The 
 authority shall enter into interagency agreements to transfer 
 funds into appropriate administrative accounts established for 
 fees collected under this subdivision for costs incurred by the 
 commissioner, the department of health, or the pollution control 
 agency.  Fees collected under this subdivision for costs 
 incurred by the commissioner of transportation must be credited 
 to the fund or account which is the source of the loan to which 
 the fees are related. 

    (b) The authority shall annually report to the chairs of 
 the finance and appropriations committees of the legislature on: 

    (1) the amount of fees collected under this subdivision for 
 costs incurred by the authority; 

    (2) the purposes for which the fee proceeds have been 
 spent; and 

    (3) the amount of any remaining balance of fee proceeds. 

    Subd. 6.    Property.  The authority may acquire, 
 encumber, hold, and convey through lease, purchase, gift, or 
 otherwise, any real or personal property. 

    Subd. 7.    In general.  The authority has all the 
 powers necessary and convenient to carry out its duties under 
 this chapter. 

    HIST: 1987 c 386 art 3 s 21; 1988 c 546 s 1,2; 1992 c 601 s 
 11; 1997 c 141 s 9; 1997 c 200 art 5 s 2; 1999 c 86 art 1 s 70 

     446A.05 Project loans. 

    Subdivision 1.    Loans and loan purchases.  The 
 authority may make and contract to make loans to governmental 
 units to finance projects that the governmental unit may 
 construct or acquire or may acquire or contract to acquire notes 
 and bonds issued by governmental units to finance those 
 projects.  A loan may not be used to pay current expenses or 
 obligations, except for temporary financing.  A loan made by the 
 authority must be secured by notes or bonds of the borrowing 
 governmental unit. 

    Subd. 2.    Rules.  The commissioner may adopt rules 
 governing loans awarded under this section. 

    HIST: 1987 c 386 art 3 s 22; 1988 c 546 s 3 

     446A.051 Project financial assistance. 

    The authority shall assist eligible governmental units in 
 determining what grants or loans under sections 446A.06 and 
 446A.07 to apply for to finance projects and the manner in which 
 the governmental unit will pay for its portion of the project 
 cost.  The authority shall review the proposed financing for 
 each project certified by the agency to ascertain whether or 
 not:  (1) total financing of a project is assured; and (2) the 
 governmental unit's financial plan to pay for its portion of the 
 project cost is feasible.  

    HIST: 1988 c 546 s 4 

     446A.06 Independent wastewater treatment grants. 

    Subdivision 1.    Award of grants.  The authority shall 
 award independent state grants to municipalities selected by the 
 pollution control agency upon certification by the agency that 
 the municipalities' projects and applications have been reviewed 
 and approved by the agency in accordance with sections 116.16 to 
 116.18 and agency rules. 

    Subd. 2.    Rules.  The commissioner shall adopt rules 
 containing procedures for the administration of the authority's 
 duties as provided in subdivision 1. 

    HIST: 1987 c 386 art 3 s 23 

     446A.07 Water pollution control revolving fund. 

    Subdivision 1.    Establishment of fund.  The authority 
 shall establish a water pollution control revolving fund to 
 provide loans for the purposes and eligible costs authorized 
 under title VI of the Federal Water Pollution Control Act.  The 
 fund must be credited with repayments. 

    Subd. 2.    State funds.  A state matching fund is 
 established to be used in compliance with federal matching 
 requirements specified in the Federal Water Pollution Control 
 Act.  A state grant and loan fund is established to provide 
 grants and loans to governmental units for the planning and 
 construction of treatment works as specified in section 116.16, 
 subdivision 2, paragraphs (6) and (7). 

    Subd 3.    Capitalization grant agreement.  The 
 authority shall enter an agreement with the administrator of the 
 United States Environmental Protection Agency to receive 
 capitalization grants for the revolving fund.  The authority may 
 exercise powers necessary to comply with the requirements 
 specified in the agreement, which must be in compliance with the 
 Federal Water Pollution Control Act. 

    Subd. 4.    Intended use plan.  The pollution control 
 agency shall annually prepare and submit to the United States 
 Environmental Protection Agency an intended use plan.  The plan 
 must identify the intended uses of the amounts available to the 
 water pollution control revolving fund, including a list of 
 wastewater treatment and storm water projects and all other 
 eligible activities to be funded during the fiscal year.  
 Information regarding eligible activities must be submitted to 
 the pollution control agency by the appropriate state agency or 
 department within 30 days of written notification by the 
 pollution control agency.  The pollution control agency may not 
 submit the plan until it has received the review and comment of 
 the authority or until 30 days have elapsed since the plan was 
 submitted to the authority, whichever occurs first. 

    Subd. 5.    Applications.  Applications by 
 municipalities and other entities identified in the annual 
 intended use plan for loans from the water pollution control 
 revolving fund must be made to the authority on forms requiring 
 information prescribed by the rules of the agency adopted under 
 this section.  The authority shall send the applications to the 
 agency within ten days of receipt.  The director shall certify 
 to the authority those applications that appear to meet the 
 criteria set forth in the Federal Water Pollution Control Act, 
 this section, and rules of the agency. 

    Subd. 6.    Award and terms of loans.  The authority 
 shall award loans to those municipalities and other entities 
 certified by the pollution control agency or shall provide 
 funding for the appropriate state agency or department to make 
 loans for eligible activities certified by the pollution control 
 agency provided the use of funds and the terms and conditions of 
 the loans are in conformance with the federal Water Pollution 
 Control Act, this section, and rules of the pollution control 
 agency and the authority adopted under this section. 

    Subd. 7.    Loan conditions.  When making loans from the 
 revolving fund, the authority shall comply with the conditions 
 of the Federal Water Pollution Control Act, including: 

    (a) Loans must be made at or below market interest rates, 
 including interest-free loans, at terms not to exceed 20 years. 

    (b) The annual principal and interest payments must begin 
 no later than one year after completion of a project.  Loans 
 must be fully amortized no later than 20 years after project 
 completion. 

    (c) A loan recipient shall establish a dedicated source of 
 revenue for repayment of the loan.  

    (d) The fund must be credited with all payments of 
 principal and interest on all loans. 

    Subd. 8.    Other uses of revolving fund.  The water 
 pollution control revolving fund may be used as provided in 
 title VI of the Federal Water Pollution Control Act, including 
 the following uses: 

    (1) to buy or refinance the debt obligation of governmental 
 units for treatment works where debt was incurred and 
 construction begun after March 7, 1985, at or below market 
 rates; 

    (2) to guarantee or purchase insurance for local 
 obligations to improve credit market access or reduce interest 
 rates; 

    (3) to provide a source of revenue or security for the 
 payment of principal and interest on revenue or general 
 obligation bonds issued by the authority if the bond proceeds 
 are deposited in the fund; 

    (4) to provide loan guarantees, loans, or set-aside for 
 similar revolving funds established by a governmental unit other 
 than state agencies, or state agencies under sections 17.117, 
 103F.725, subdivision 1a, 116J.403, and 116J.617; provided that 
 no more than $4,000,000 of the balance in the fund may be used 
 for the small cities block grant program under section 116J.403 
 and the tourism loan program under section 116J.617, taken 
 together; 

    (5) to earn interest on fund accounts; and 

    (6) to pay the reasonable costs incurred by the authority 
 and the agency of administering the fund and conducting 
 activities required under the federal Water Pollution Control 
 Act, including water quality management planning under section 
 205(j) of the act and water quality standards continuing 
 planning under section 303(e) of the act. 

    Amounts spent under clause (6) may not exceed the amount 
 allowed under the Federal Water Pollution Control Act.  

    Subd. 9.    Payments.  Payments from the fund must be 
 made in accordance with the applicable state and federal law 
 governing the payments, except that for projects other than 
 those funded under section 17.117, 103F.725, subdivision 1a, 
 116J.403, 116J.617, or 462A.05, no payment for a project may be 
 made to a governmental unit until and unless the authority has 
 determined the total estimated cost of the project and 
 ascertained that financing of the project is assured by: 

    (1) a loan authorized by state law or the appropriation of 
 proceeds of bonds or other money of the governmental unit to a 
 fund for the construction of the project; and 

    (2) an irrevocable undertaking, by resolution of the 
 governing body of the governmental unit, to use all money made 
 available for the project exclusively for the project, and to 
 pay any additional amount by which the cost of the project 
 exceeds the estimate by the appropriation to the construction 
 fund of additional money or the proceeds of additional bonds to 
 be issued by the governmental unit. 

    Subd. 10.    Rules of authority.  The commissioner shall 
 adopt rules containing procedures for the administration of the 
 authority's duties as provided in this section, including loan 
 interest rates, the amounts of loans, and municipal financial 
 need. 

    Subd. 11.    Rules of agency.  The agency shall adopt 
 rules relating to the procedure for preparation of the annual 
 intended use plan and other matters that the agency considers 
 necessary for proper loan administration.  Eligible activities 
 are those required under the federal Water Pollution Control Act 
 of 1987, as amended. 

    HIST: 1987 c 386 art 3 s 24; 1989 c 354 s 4; 1990 c 564 s 4; 
 1992 c 601 s 12; 1994 c 465 art 1 s 51; 1994 c 632 art 2 s 
 44-48; 1995 c 220 s 122; 1996 c 407 s 47 

    446A.071 Subdivision 1.  Repealed, 1996 c 463 s 61 

    Subd. 2.  Repealed, 1996 c 463 s 61 

    Subd. 3.  Repealed, 1996 c 463 s 61 

    Subd. 4.  Repealed, 1996 c 463 s 61 

    Subd. 5.  Repealed, 1996 c 463 s 61 

    Subd. 6.  Repealed, 1996 c 463 s 61 

    Subd. 7.  Repealed, 1995 c 220 s 141; 1996 c 463 s 
 61 

    Subd. 8.  Repealed, 1996 c 463 s 61 

     446A.072 Wastewater infrastructure funding program. 

    Subdivision 1.    Establishment of program.  The 
 authority will establish a wastewater infrastructure funding 
 program to provide supplemental assistance to municipalities 
 applying for funding under the water pollution control revolving 
 loan program or the United States Department of Agriculture 
 Rural Economic and Community Development's (USDA/RECD) Water and 
 Waste Disposal Loans and Grants program for the design and 
 planning, improvements to, and construction of municipal 
 wastewater treatment systems. 

    Subd. 2.    Type of supplemental assistance.  
 Supplemental assistance shall be in the form of grants.  If one 
 year after the initiation of operation of the project, the 
 project does not meet the operational performance standards 
 established by the agency, the grant must be repaid.  Grant 
 repayments shall be deferred upon request from the commissioner 
 of the agency for six-month periods, provided the commissioner 
 has determined that satisfactory progress is being made to 
 achieve project performance or is developing or implementing a 
 corrective action plan. 

    Subd. 3.    Program administration.  The authority shall 
 provide supplemental assistance, as provided in subdivision 2, 
 to municipalities demonstrating financial need, as provided in 
 subdivision 4, whose projects have been certified to the 
 authority by the commissioner of the agency.  The authority 
 shall reserve supplemental assistance for projects in order of 
 their priority ranking established by the agency. 

    Subd. 4.    Funding level.  (a) The authority shall 
 provide supplemental assistance for essential project component 
 costs as certified by the commissioner of the pollution control 
 agency under section 116.182, subdivision 4.  

    (b) Except as provided in paragraph (c), a municipality may 
 not receive more than $4,000,000 under this section unless 
 specifically approved by law.  If a project would be eligible 
 for more than $4,000,000 under paragraph (e), the authority 
 shall include a description of the project and the financing 
 plan in its report on needs in subdivision 11. 

    (c) A sanitary district or multijurisdictional wastewater 
 treatment district may receive an additional $1,000,000 for each 
 municipality participating up to a maximum grant of $8,000,000, 
 unless a higher amount is specifically approved by law.  If a 
 project would be eligible for more than $8,000,000 under 
 paragraph (e), the authority shall include a description of the 
 project and the financing plan in its report on needs in 
 subdivision 11. 

    (d) The authority shall provide supplemental assistance for 
 up to one-half of the eligible grant funding level determined by 
 the United States Department of Agriculture Rural Development 
 funding for projects listed on the agency's project priority 
 list, in priority order.  For municipalities that are not 
 eligible for United States Department of Agriculture Rural 
 Development funding for wastewater, the authority shall provide 
 supplemental assistance for:  (1) essential project component 
 costs calculated by first determining the amount needed to 
 reduce a municipality's annual residential sewer costs to 1.4 
 percent of the municipality's median household income or $25 per 
 month per household, whichever is greater, and then multiplying 
 that amount by 80 percent to determine the actual award amount 
 to supplement loans under section 446A.07; and (2) up to 50 
 percent of the incremental costs specifically identified by the 
 agency as being attributable to more stringent wastewater 
 standards required to protect outstanding resource value waters 
 or outstanding international resource value waters. 

    (e) Notwithstanding paragraph (b), in the event that a 
 municipality's monthly residential sewer service charges average 
 above $50, the authority will provide 90 percent of the grant 
 amount needed to reduce the average monthly sewer service charge 
 to $50, provided the project is ranked in the top 50 percentile 
 of the agency's intended use plan. 

    (f) The authority shall provide supplemental assistance to 
 a municipality that would not otherwise qualify for supplemental 
 assistance if: 

    (1) the municipality voluntarily accepts a sewer connection 
 from another governmental unit to serve residential, industrial, 
 or commercial developments that were completed before March 1, 
 1996, or are on lots whose plats were recorded before that date; 
 and 

    (2) fees charged by the municipality for the connection 
 must take into account state and federal grants used by the 
 municipality for the construction of the treatment plant. 

 The amount of supplemental assistance under this paragraph must 
 be sufficient to reduce debt service payments under section 
 446A.07 to an extent equivalent to a zero percent loan in an 
 amount up to the other governmental unit's project costs 
 necessary for connection.  Eligibility for supplemental 
 assistance under this paragraph ends three years after the 
 agency certifies that the connection has met the operational 
 performance standards established by the agency. 

    Subd. 4a. Repealed, 1998 c 404 s 84 

    Subd. 5.    Applications.  Applications for the 
 wastewater infrastructure funding program must be made to the 
 authority on forms prescribed by the authority and the agency 
 for the water pollution control revolving loan program.  The 
 commissioner of the pollution control agency shall determine if 
 the project meets the criteria in section 116.182.  The 
 commissioner of the pollution control agency shall certify 
 projects to the authority under section 116.182, and shall rank 
 the certified applications in accordance with section 116.182, 
 and determine the essential project component percentage for 
 each certified application. 

    Subd. 6.    Disbursements.  Disbursements made by the 
 authority to recipients must be made for eligible project costs 
 as incurred by the recipients, and must be made by the authority 
 in accordance with the project financing agreement and 
 applicable state and federal laws and rules governing the 
 payments. 

    Subd. 7.    Loan repayments.  All loan repayments 
 received by the authority under subdivision 2 must be used to 
 provide additional assistance under this section. 

    Subd. 8.    Eligibility.  A municipality is eligible 
 only after grant funding from other sources has been applied 
 for, obtained, rejected, or the authority has determined that 
 the potential funding is unlikely. 

    Subd. 9.    Loan limitation.  Supplemental assistance 
 may not be used to reduce the sewer service charges of a 
 significant wastewater contributor, or a single user that has 
 caused the need for the project or whose current or projected 
 flow and load exceed one-half of the current wastewater 
 treatment plant's capacity, unless the applicant can demonstrate 
 to the authority that the significant wastewater contributor 
 cannot pay its fair share.  Funding will not be provided for 
 projects that are not qualified for assistance or that would 
 violate the state's constitution or laws regarding the use of 
 funds appropriated for the program. 

    Subd. 10.    High cost projects.  The authority shall 
 not award supplemental assistance for projects in excess of 
 $10,000 per household unless the agency has ranked the project 
 in the top half of the project priority list.  

    Subd. 11.    Report on needs.  By October 15 of each 
 odd-numbered year, the authority, in conjunction with the 
 pollution control agency, shall prepare a report to the finance 
 division of the senate environment and natural resources 
 committee and the house environment and natural resources 
 finance committee on wastewater funding assistance needs of 
 municipalities under this section. 

    Subd. 12.    System replacement fund.  Each recipient of 
 assistance under this section shall establish a system 
 replacement fund setting aside a minimum of $.10 per 1,000 
 gallons of flow for major rehabilitation, expansion, or 
 replacement of the treatment plant at the end of its useful 
 life.  Money must remain in the account, for the life of the 
 loan associated with the supplemental assistance under this 
 section, unless use of the fund is approved by the authority for 
 major rehabilitation, expansion, or replacement of the treatment 
 plant.  Failure to maintain the fund will cancel the loan 
 forgiveness provided under subdivision 2. 

    Subd. 13.    Planning grants.  In order to determine the 
 feasibility of providing wastewater treatment in unsewered areas 
 and encourage multijurisdictional coordination, the authority 
 may provide grants to local governments to prepare preliminary 
 engineering plans and develop, as appropriate, intermunicipal 
 agreements, joint powers boards, or sanitary sewer districts.  
 Planning grants shall be equal to one-half of the eligible 
 engineering, legal, and administrative costs as determined by 
 the authority, up to a maximum of $50,000.  The authority shall 
 award planning grants based on the severity of the environmental 
 need and the potential for cooperation among local governments. 

    HIST: 1996 c 463 s 45; 1997 c 246 s 18; 1998 c 404 s 50-52; 
 1999 c 223 art 2 s 48 

*   NOTE:  The amendment to subdivision 4 by Laws 1999, chapter 
*223, article 2, section 48, is effective March 1, 2000.  Laws 
*1999, chapter 223, article 2, section 81.

  446A.08 Repealed, 1994 c 632 art 2 s 67 

     446A.081 Drinking water revolving fund. 

    Subdivision 1.    Definitions.  (a) For the purposes of 
 this section, the terms in this subdivision have the meanings 
 given them.  

    (b) "Act" means the Safe Drinking Water Act Amendments of 
 1996, Public Law Number 104-182. 

    (c) "Department" means the department of health.  

    Subd. 2.    Establishment of fund.  The authority shall 
 establish a drinking water revolving fund to provide loans and 
 other forms of financial assistance authorized by the act, as 
 determined by the authority under the rules adopted under this 
 section for the purposes and eligible costs authorized under the 
 act.  The fund must be credited with repayments.  The act 
 requires that the fund corpus must be managed so as to be 
 available in perpetuity for the financing of drinking water 
 systems in the state.  At a minimum, 15 percent of the funds 
 received each federal fiscal year shall be available solely for 
 providing loans to public water systems which regularly serve 
 fewer than 10,000 individuals.  

    Subd. 3.    State funds.  A state matching fund is 
 established to be used in compliance with federal matching 
 requirements specified in the act.  

    Subd. 4.    Capitalization grant agreement.  The 
 authority shall enter into an agreement with the administrator 
 of the United States Environmental Protection Agency to receive 
 capitalization grants for the fund.  The authority and the 
 department shall enter into an operating agreement with the 
 administrator of the United States Environmental Protection 
 Agency to satisfy the criteria in the act to operate the fund.  
 The authority and the department may exercise the powers 
 necessary to comply with the requirements specified in the 
 agreements and to ensure that loan recipients comply with all 
 applicable federal and state requirements.  

    Subd. 5.    Intended use plan.  The authority shall 
 annually prepare and submit to the United States Environmental 
 Protection Agency an intended use plan.  The plan must identify 
 the intended uses of the amounts available to the drinking water 
 revolving loan fund.  The department shall provide a prioritized 
 list of drinking water projects and other eligible activities to 
 be considered for funding by the authority.  The plan may be 
 amended by the authority and include additional eligible 
 projects proposed by the department. 

    Subd. 6.    Applications.  Applications by 
 municipalities, privately owned public water systems, and 
 eligible entities identified in the annual intended use plan for 
 loans from the fund must be made to the authority on the forms 
 prescribed by the rules of the authority and the rules of the 
 department adopted under this section.  The authority shall 
 forward the application to the department within ten days of 
 receipt.  The department shall approve those applications that 
 appear to meet the criteria in the act, this section, and the 
 rules of the department or the authority.  

    Subd. 7.    Award and terms of loans.  The authority 
 shall award loans to those municipalities, privately owned 
 public water systems, and other eligible entities approved by 
 the department, provided that the applicant is able to comply 
 with the terms and conditions of the authority loan, which must 
 be in conformance with the act, this section, and the rules of 
 the authority adopted under this section.  

    Subd. 8.    Loan conditions.  (a) When making loans from 
 the drinking water revolving fund, the authority shall comply 
 with the conditions of the act, including the criteria in 
 paragraphs (b) to (e).  

    (b) Loans must be made at or below market interest rates, 
 including zero interest loans, for terms not to exceed 20 years. 

    (c) The annual principal and interest payments must begin 
 no later than one year after completion of the project.  Loans 
 must be amortized no later than 20 years after project 
 completion.  

    (d) A loan recipient must identify and establish a 
 dedicated source of revenue for repayment of the loan, and 
 provide for a source of revenue to properly operate, maintain, 
 and repair the water system.  

    (e) The fund must be credited with all payments of 
 principal and interest on all loans, except the costs as 
 permitted under section 446A.04, subdivision 5, paragraph (a). 

    Subd. 9.    Other uses of fund.  The drinking water 
 revolving loan fund may be used as provided in the act, 
 including the following uses: 

    (1) to buy or refinance the debt obligations, at or below 
 market rates, of public water systems for drinking water 
 systems, where such debt was incurred after the date of 
 enactment of the act, for the purposes of construction of the 
 necessary improvements to comply with the national primary 
 drinking water regulations under the federal Safe Drinking Water 
 Act; 

    (2) to purchase or guarantee insurance for local 
 obligations to improve credit market access or reduce interest 
 rates; 

    (3) to provide a source of revenue or security for the 
 payment of principal and interest on revenue or general 
 obligation bonds issued by the authority if the bond proceeds 
 are deposited in the fund; 

    (4) to provide loans or loan guarantees for similar 
 revolving funds established by a governmental unit or state 
 agency; 

    (5) to earn interest on fund accounts; 

    (6) to pay the reasonable costs incurred by the authority, 
 the department of trade and economic development, and the 
 department for conducting activities as authorized and required 
 under the act up to the limits authorized under the act; and 

    (7) to develop and administer programs for water system 
 supervision, source water protection, and related programs 
 required under the act. 

    Subd. 10.    Payments.  Payments from the fund to 
 borrowers must be in accordance with the applicable state and 
 federal laws governing such payments, except no payment for a 
 project may be made to a borrower until and unless the authority 
 has determined that the total estimated cost of the project and 
 the financing of the project are assured by:  

    (1) a loan authorized by state law or appropriation of 
 proceeds of bonds or other money of the borrower to a fund for 
 the construction of the project; and 

    (2) an irrevocable undertaking, by resolution of the 
 governing body of the borrower, to use all money made available 
 for the project exclusively for the project, and to pay any 
 additional amount by which the cost of the project exceeds the 
 estimate by the appropriation to the construction fund of 
 additional money or proceeds of additional bonds to be issued by 
 the borrower.  

    Subd. 11.    Rules of the authority.  The commissioner 
 of trade and economic development shall adopt rules containing 
 the procedures for the administration of the authority's duties 
 as provided by this section that include:  setting of interest 
 rates, which shall take into account the financial need of the 
 applicant; the amount of project financing to be provided; the 
 collateral required for public drinking water systems and for 
 privately owned public water systems; dedicated sources of 
 revenue or income streams to ensure repayment of loans; and the 
 requirements to ensure proper operation, maintenance, and repair 
 of the water systems financed by the authority.  

    Subd. 12.    Rules of the department.  The department 
 shall adopt rules relating to the procedures for administration 
 of the department's duties under the act and this section.  The 
 department and the commissioner of the department of trade and 
 economic development may adopt a single set of rules for the 
 program. 

    HIST: 1994 c 632 art 2 s 50; 1997 c 200 art 5 s 3-5 

     446A.085 Transportation revolving loan fund. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them. 

    (a)    Act.  "Act" means the National Highway System 
 Designation Act of 1995, Public Law Number 104-59, as amended. 

    (b)    Borrower.  "Borrower" means the state, counties, 
 cities, and other governmental entities eligible under the act 
 and state law to apply for and receive loans from the 
 transportation revolving loan fund, the trunk highway revolving 
 loan account, the county state-aid highway revolving loan 
 account, and the municipal state-aid street revolving loan 
 account. 

    (c)    Department.  "Department" means the department of 
 transportation. 

    (d)    Loan.  "Loan" means financial assistance provided 
 for all or part of the cost of a project including money 
 disbursed in anticipation of reimbursement or repayment, loan 
 guarantees, lines of credit, credit enhancements, equipment 
 financing leases, bond insurance, or other forms of financial 
 assistance. 

    (e)    Transportation committee.  "Transportation 
 committee" means a committee of the Minnesota public facilities 
 authority, acting on behalf of the Minnesota public facilities 
 authority, consisting of the commissioner of the department of 
 trade and economic development, the commissioner of finance, and 
 the commissioner of transportation. 

    Subd. 2.    Purpose.  The purpose of the transportation 
 revolving loan fund, the trunk highway revolving loan account, 
 the county state-aid highway revolving loan account, and the 
 municipal state-aid street revolving loan account is to provide 
 loans and matching money for public transportation projects 
 eligible for financing or aid under any federal act or program, 
 including, without limitation, the study of the feasibility of 
 construction, reconstruction, resurfacing, restoring, 
 rehabilitation, or replacement of transportation facilities; 
 acquisition of right-of-way; and maintenance, repair, 
 improvement, or construction of city, town, county, or state 
 highways, roads, streets, rights-of-way, bridges, tunnels, 
 railroad-highway crossings, drainage structures, signs, 
 guardrails, and protective structures used in connection with 
 highways or transit projects.  Enhancement items, including 
 without limitation bicycle paths, ornamental lighting, and 
 landscaping, are eligible for financing provided they are an 
 integral part of overall project design and construction of a 
 federal-aid highway.  Money in the fund may not be used for any 
 toll facilities project or congestion-pricing project. 

    Subd. 3.    Establishment of fund.  A transportation 
 revolving loan fund is established to make loans for the 
 purposes described in subdivision 2.  A highway account is 
 established in the fund for highway projects.  A transit account 
 is established in the fund for transit capital projects.  The 
 transportation revolving loan fund shall receive federal money 
 under the act and money from any source.  Money received under 
 this section must be paid to the state treasurer and credited to 
 the transportation revolving loan fund.  Money in the fund is 
 annually appropriated to the commissioner and does not lapse.  
 The fund must be credited with investment income, and with 
 repayments of principal and interest, except for servicing fees 
 assessed under sections 446A.04, subdivision 5, and 446A.11, 
 subdivision 8. 

    Subd. 4.    Management of fund and accounts.  The 
 authority shall manage and administer the transportation 
 revolving loan fund, the trunk highway revolving loan account, 
 the county state-aid highway revolving loan account, and the 
 municipal state-aid street revolving loan account.  For those 
 purposes, the authority may exercise all powers provided in this 
 chapter. 

    Subd. 5.    Transfer of money.  With the consent of the 
 transportation committee, the commissioner of transportation may 
 transfer money from the trunk highway revolving loan account to 
 the trunk highway fund, from the county state-aid highway 
 revolving loan account to the county state-aid highway fund, and 
 from the municipal state-aid street revolving loan account to 
 the municipal state-aid street fund. 

    Subd. 6.    Transportation committee.  The 
 transportation committee may authorize the making of loans to 
 borrowers by the authority for transportation purposes 
 authorized by the act, without further action by the authority.  
 The authority may not make loans for transportation purposes 
 without the approval of the transportation committee.  Each 
 project must be certified by the commissioner of transportation 
 before its consideration by the transportation committee. 

    Subd. 7.    Applications.  Applicants for loans must 
 submit an application to the transportation committee on forms 
 prescribed by the transportation committee.  The applicant must 
 provide the following information: 

    (1) the estimated cost of the project and the amount of the 
 loan sought; 

    (2) other possible sources of funding in addition to loans 
 sought from the transportation revolving loan fund, the trunk 
 highway revolving loan account, the county state-aid highway 
 revolving loan account, or the municipal state-aid street 
 revolving loan account; 

    (3) the proposed methods and sources of funds to be used 
 for repayment of loans received; and 

    (4) information showing the financial status and ability of 
 the borrower to repay loans. 

    Subd. 8.    Certification of projects.  The commissioner 
 of transportation shall consider the following information when 
 evaluating projects to certify for funding to the transportation 
 committee: 

    (1) a description of the nature and purpose of the proposed 
 transportation project including an explanation of the need for 
 the project and the reasons why it is in the public interest; 

    (2) the relationship of the project to the area 
 transportation improvement program, the approved statewide 
 transportation improvement program, and to any other 
 transportation plans required under state or federal law; 

    (3) the estimated cost of the project and the amount of 
 loans sought; 

    (4) proposed sources of funding in addition to loans sought 
 from the transportation revolving loan fund, the trunk highway 
 revolving loan account, the county state-aid highway revolving 
 loan account, or municipal state-aid street revolving loan 
 account; 

    (5) the need for the project as part of the overall 
 transportation system; 

    (6) the overall economic impact of the project; and 

    (7) the extent to which completion of the project will 
 improve the movement of people and freight. 

    Subd. 9.    Loan conditions.  When making loans from the 
 transportation revolving loan fund, the trunk highway revolving 
 loan account, the county state-aid highway revolving loan 
 account, or the municipal state-aid street revolving loan 
 account, the transportation committee shall comply with the 
 conditions of the act.  In addition, a loan made under this 
 section must: 

    (1) bear interest at or below market rates or as otherwise 
 specified in federal law; 

    (2) have a repayment term not longer than 30 years; 

    (3) be fully amortized no later than 30 years after project 
 completion; 

    (4) be subject to repayment of principal and interest 
 beginning not later than five years after the facility financed 
 with a loan has been completed, or in the case of a highway 
 project, five years after the facility has opened to traffic; 
 and 

    (5) be made only after all federal environmental 
 requirements applicable to the project have been complied with 
 and all federal environmental requirements have been met. 

    Subd. 10.    Loans in anticipation of future 
 apportionments.  A loan may be made to a county, or to a 
 statutory or home rule charter city having a population of 5,000 
 or more, in anticipation of repayment of the loan from sums that 
 will be apportioned to a county from the county state-aid 
 highway fund under section 162.07 or to a city from the 
 municipal state-aid street fund under section 162.14. 

    Subd. 11.    Payment by county or city.  Notwithstanding 
 the allocation provisions of section 162.08 for counties, and 
 the apportionment provisions of section 162.14 for cities, sums 
 apportioned under section 162.13 to a statutory or home rule 
 charter city, or under section 162.07 to a county, that has loan 
 repayments due to the transportation revolving loan fund, the 
 trunk highway revolving loan account, the county state-aid 
 highway revolving loan account, or the municipal state-aid 
 street revolving loan account shall be paid by the commissioner 
 of transportation to the appropriate loan fund or account to 
 offset the loan repayments that are due. 

    Subd. 12.    Rules of transportation committee and 
 authority.  The commissioner of the department of trade and 
 economic development shall adopt administrative rules specifying 
 the procedures that will be used for the administration of the 
 duties of the transportation committee and authority.  The rules 
 must include criteria, standards, and procedures that will be 
 used for making loans, determining interest rates to be charged 
 on loans, the amount of project financing to be provided, the 
 collateral that will be required, the requirements for dedicated 
 sources of revenue or income streams to ensure repayment of 
 loans, and the length of repayment terms.  

    Subd. 13.    Authority and rules of department.  The 
 commissioner of transportation shall establish, adopt rules for, 
 and implement a program to identify, assist with the development 
 of, and certify projects eligible for loans under the act to the 
 transportation committee.  Until rules are adopted by the 
 commissioner of transportation, the commissioner of 
 transportation may certify to the transportation committee any 
 project that has been reviewed through an approved planning 
 process that qualifies the project to be included in the 
 statewide transportation program or amended into the statewide 
 transportation improvement program. 

    Subd. 14.    Joint rules.  The commissioner of the 
 department of trade and economic development and the 
 commissioner of transportation may adopt a single set of rules. 

    HIST: 1997 c 141 s 10; 1998 c 389 art 16 s 17; 1999 c 230 s 
 34,35 

     446A.09 Report; audit. 

    The authority shall report to the legislature and the 
 governor by January 1 of each year.  The report must include a 
 complete operating and financial statement covering the 
 authority's operations during the year, including amounts of 
 income from all sources.  Books and records of the authority are 
 subject to audit by the legislative auditor in the manner 
 prescribed for state agencies.  

    HIST: 1987 c 386 art 3 s 26 

  446A.10 Repealed, 1996 c 310 s 1 

     446A.11 Program administration. 

    Subdivision 1.    Powers.  In implementing the purposes 
 and the programs described in this chapter, the authority has 
 the powers in this section.  

    Subd. 2.    Rules.  It may adopt, amend, and repeal 
 rules necessary to effectuate its purposes. 

    Subd. 3.    Personal property.  It may acquire, hold, 
 and dispose of personal property for its corporate purposes. 

    Subd. 4.    Real property.  It may acquire real 
 property, or an interest in real property, in its own name, by 
 purchase or foreclosure, where the acquisition is necessary or 
 appropriate to protect a loan in which the authority has an 
 interest and may sell, transfer, and convey the property to a 
 buyer and, in the event the sale, transfer, or conveyance cannot 
 be effected with reasonable promptness or at a reasonable price, 
 may lease the property to a tenant. 

    Subd. 5.    Notes; mortgages; obligations; sale of.  It 
 may sell, at public or private sale, any note, mortgage or other 
 instrument or obligation evidencing or securing a loan. 

    Subd. 6.    Insurance.  It may procure insurance against 
 a loss in connection with its property in the amounts, and from 
 the insurers, as may be necessary or desirable.  

    Subd. 7.    Loan terms; modification.  It may consent, 
 whenever it considers it necessary or desirable in the 
 fulfillment of its purpose, to the modification of the rate of 
 interest, time of payment, installment of principal or interest, 
 or other term, of a contract or agreement to which the authority 
 is a party. 

    Subd. 8.    Loan payments; interest and amortization.  
 It may establish and collect reasonable interest and 
 amortization payments on loans, and in connection with them may 
 establish and collect or authorize the collection of reasonable 
 fees and charges or require money to be placed in escrow, 
 sufficient to provide for the payment and security of its bonds, 
 notes, commitments and other obligations and for their 
 servicing, to provide reasonable allowances for or insurance 
 against losses which may be incurred and to cover the cost of 
 issuance of obligations and technical, consultative, and project 
 assistance services.  

    Subd. 9.    Investments.  (a) It may cause any money not 
 required for immediate disbursement, including the general 
 reserve account, to be invested in direct obligations of or 
 obligations guaranteed as to principal and interest by the 
 United States, or in insured savings accounts, up to the amount 
 of the insurance, in any institution the accounts of which are 
 insured by the Federal Savings and Loan Insurance Corporation or 
 to be deposited in a savings or other account in a bank insured 
 by the federal deposit insurance corporation or to be invested 
 in time certificates of deposit issued by a bank insured by the 
 Federal Deposit Insurance Corporation and maturing within one 
 year or less and in the investments described in section 11A.24, 
 subdivision 4, except clause (d).  It may deposit money in 
 excess of the amount insured with security as provided in 
 chapter 118.  

    (b) Notwithstanding paragraph (a), it may invest and 
 deposit money into accounts established pursuant to resolutions 
 or indentures securing its bonds or notes in investments and 
 deposit accounts or certificates, and with security, agreed upon 
 with the holders or a trustee for the holders. 

    Subd. 10.    Consultative and technical services.  It 
 may provide general consultative and technical services to 
 assist in financing the entities to which loans may be made.  It 
 may enter into agreements or other transactions concerning the 
 receipt or provision of those services.  

    Subd. 11.    Financial information.  Financial 
 information, including credit reports, financial statements and 
 net worth calculations, received or prepared by the authority 
 regarding an authority loan, financial assistance, or insurance 
 is private data with regard to data on individuals as defined in 
 section 13.02, subdivision 12 and nonpublic data with regard to 
 data not on individuals as defined in section 13.02, subdivision 
 9.  

    Subd. 12.    Appropriations; gifts; grants.  The 
 authority may accept appropriations, gifts, grants, bequests, 
 and devises and use or dispose of them for its purposes.  All 
 gifts, grants, bequests, and revenues from those sources are 
 appropriated to the authority. 

    Subd. 13.    Proceeds appropriated to authority.  
 Proceeds of the authority's bonds, notes, and other obligations; 
 amounts granted or appropriated to the authority for the making 
 or purchase or the insurance or guaranty of loans or for bond 
 reserves; income from investment; money in the funds; and all 
 revenues from loans, fees, and charges of the authority 
 including rentals, royalties, dividends, or other proceeds in 
 connection with technology-related products, energy conservation 
 products, or other equipment are annually appropriated to the 
 authority for the accomplishment of its corporate purposes and 
 must be spent, administered, and accounted for in accordance 
 with the applicable provisions of all bond and note resolutions, 
 indentures, and other instruments, contracts, and agreements of 
 the agency.  Notwithstanding section 16A.28, these 
 appropriations are available until expended.  

    Subd. 14.    General purpose.  The authority may do all 
 things necessary and proper to fulfill its purpose. 

    HIST: 1987 c 386 art 3 s 29; 1994 c 632 art 2 s 51; 1995 c 233 
 art 2 s 56 

     446A.12 Issuance of bonds. 

    Subdivision 1.    Bonding authority.  The authority may 
 issue negotiable bonds in a principal amount that the authority 
 determines necessary to provide sufficient funds for achieving 
 its purposes, including the making of loans and purchase of 
 securities, the payment of interest on bonds of the authority, 
 the establishment of reserves to secure its bonds, the payment 
 of fees to a third party providing credit enhancement, and the 
 payment of all other expenditures of the authority incident to 
 and necessary or convenient to carry out its corporate purposes 
 and powers, but not including the making of grants.  Bonds of 
 the authority may be issued as bonds or notes or in any other 
 form authorized by law.  The principal amount of bonds issued 
 and outstanding under this section at any time may not exceed 
 $850,000,000, excluding bonds for which refunding bonds or 
 crossover refunding bonds have been issued. 

    Subd. 2.    Refunding of bonds.  The authority may issue 
 bonds to refund outstanding bonds of the authority, to pay any 
 redemption premiums on those bonds, and to pay interest accrued 
 or to accrue to the redemption date next succeeding the date of 
 delivery of the refunding bonds.  The authority may apply the 
 proceeds of any refunding bonds to the purchase or payment at 
 maturity of the bonds to be refunded, or to the redemption of 
 outstanding bonds on the redemption date next succeeding the 
 date of delivery of the refunding bonds and may, pending the 
 application, place the proceeds in escrow to be applied to the 
 purchase, retirement, or redemption.  Pending use, escrowed 
 proceeds may be invested and reinvested in obligations issued or 
 guaranteed by the state or the United States or by any agency or 
 instrumentality of the state or the United States, or in 
 certificates of deposit or time deposits secured in a manner 
 determined by the authority, maturing at a time appropriate to 
 assure the prompt payment of the principal and interest and 
 redemption premiums, if any, on the bonds to be refunded.  The 
 income realized on any investment may also be applied to the 
 payment of the bonds to be refunded.  After the terms of the 
 escrow have been fully satisfied, any balance of the proceeds 
 and any investment income may be returned to the authority for 
 use by it in any lawful manner.  All refunding bonds issued 
 under this subdivision must be issued and secured in the manner 
 provided by resolution of the authority. 

    Subd. 3.    Kind of bonds.  Bonds issued under this 
 section must be negotiable investment securities within the 
 meaning and for all purposes of the Uniform Commercial Code, 
 subject only to the provisions of the bonds for registration.  
 The bonds issued may be either general obligations of the 
 authority, secured by its full faith and credit and payable out 
 of any money, assets, or revenues of the authority, subject to 
 the provisions of resolutions or indenture pledging and 
 appropriating particular money, assets, or revenues to 
 particular bonds, or limited obligations of the authority not 
 secured by its full faith and credit and payable solely from 
 specified sources or assets.  

    Subd. 4.    Resolution and terms of sale.  The bonds of 
 the authority must be authorized by a resolution or resolutions 
 adopted by the authority.  The bonds must bear the date or 
 dates, mature at the time or times, bear interest at a fixed or 
 variable rate, including a rate varying periodically at the time 
 or times and on the terms determined by the authority, or any 
 combination of fixed and variable rates, be in the 
 denominations, be in the form, carry the registration 
 privileges, be executed in the manner, be payable in lawful 
 money of the United States, at the place or places within or 
 without the state, and be subject to the terms of redemption or 
 purchase before maturity as the resolutions or certificates 
 provide.  If, for any reason existing at the date of issue of 
 the bonds or existing at the date of making or purchasing any 
 loan or securities from the proceeds or after that date, the 
 interest on the bonds is or becomes subject to federal income 
 taxation, this fact does not affect the validity or the 
 provisions made for the security of the bonds.  The authority 
 may make covenants and take or have taken actions that are in 
 its judgment necessary or desirable to comply with conditions 
 established by federal law or regulations for the exemption of 
 interest on its obligations.  The authority may refrain from 
 compliance with those conditions if in its judgment this would 
 serve the purposes and policies set forth in this chapter with 
 respect to any particular issue of bonds, unless this would 
 violate covenants made by the authority.  The maximum maturity 
 of a bond, whether or not issued for the purpose of refunding, 
 must be 30 years from its date.  The bonds of the authority may 
 be sold at public or private sale, at a price or prices 
 determined by the authority; provided that (i) the aggregate 
 price at which an issue of bonds is initially offered by 
 underwriters to investors, as stated in the authority's official 
 statement with respect to the offering, must not exceed by more 
 than three percent the aggregate price paid by the underwriters 
 to the authority at the time of delivery; (ii) the commission 
 paid by the authority to an underwriter for placing an issue of 
 bonds with investors must not exceed three percent of the 
 aggregate price at which the issue is offered to investors as 
 stated in the authority's offering statement; and (iii) the 
 spread or commission must be an amount determined by the 
 authority to be reasonable in the light of the risk assumed and 
 the expenses of issuance, if any, required to be paid by the 
 underwriters.  

    Subd. 5.    Exemption.  The notes and bonds of the 
 authority are not subject to sections 16C.03, subdivision 4, and 
 16C.05. 

    HIST: 1988 c 546 s 5; 1989 c 354 s 5; 1990 c 564 s 5; 1991 c 
 354 art 10 s 10; 1994 c 632 art 2 s 52; 1Sp1995 c 2 art 1 s 39; 
 1997 c 200 art 5 s 6; 1998 c 386 art 2 s 91 

     446A.13 Tender option. 

    An obligation may be issued giving its owner the right to 
 tender or the authority to demand tender of the obligation to 
 the authority or another person designated by it, for purchase 
 at a specified time or times, if the authority has first entered 
 into an agreement with a suitable financial institution 
 obligating the financial institution to provide funds on a 
 timely basis for purchase of bonds tendered.  The obligation is 
 not considered to mature on any tender date and the purchase of 
 a tendered obligation is not considered a payment or discharge 
 of the obligation by the authority.  Obligations tendered for 
 purchase may be remarketed by or on behalf of the authority or 
 another purchaser.  The authority may enter into agreements it 
 considers appropriate to provide for the purchase and 
 remarketing of tendered obligations, including: 

    (1) provisions under which undelivered obligations may be 
 considered tendered for purchase and new obligations may be 
 substituted for them; 

    (2) provisions for the payment of charges of tender agents, 
 remarketing agents, and financial institutions extending lines 
 of credit or letters of credit assuring repurchase; and 

    (3) provisions for reimbursement of advances under letters 
 of credit that may be paid from the proceeds of the obligations 
 or from tax and other revenues appropriated for the payment and 
 security of the obligations and similar or related provisions. 

    HIST: 1988 c 546 s 6 

     446A.14 Interest exchanges. 

    The authority may enter into an agreement with a third 
 party for an exchange of interest rates under this subdivision.  
 With respect to outstanding obligations bearing interest at a 
 variable rate, the authority may agree to pay sums equal to 
 interest at a fixed rate or at a different variable rate 
 determined in accordance with a formula set out in the agreement 
 on an amount not exceeding the outstanding principal amount of 
 the obligations, in exchange for an agreement by the third party 
 to pay sums equal to interest on a similar amount at a variable 
 rate determined according to a formula set out in the agreement. 
 With respect to outstanding obligations bearing interest at a 
 fixed rate or rates, the authority may agree to pay sums equal 
 to interest at a variable rate determined according to a formula 
 set out in the agreement on an amount not exceeding the 
 outstanding principal amount of the obligations in exchange for 
 an agreement by the third party to pay sums equal to interest on 
 a similar amount at a fixed rate or rates set out in the 
 agreement.  Subject to any applicable bonds covenants, payments 
 required to be made by the municipality under the swap agreement 
 may be made from amounts secured to pay debt service on the 
 obligations with respect to which the swap agreement was made 
 from any other available source of the authority. 

    HIST: 1988 c 546 s 7 

     446A.15 Bond fund. 

    Subdivision 1.    Creation and contents.  The authority 
 may establish a special fund or funds for the security of one or 
 more or all series of its bonds.  The funds must be known as 
 debt service reserve funds.  The authority may pay into each 
 debt service reserve fund: 

    (1) any money appropriated by the state only for the 
 purposes of the fund; 

    (2) the proceeds of sale of bonds to the extent provided in 
 the resolution or indenture authorizing the issuance of them; 

    (3) funds directed to be transferred by the authority to 
 the debt service reserve fund; and 

    (4) other money made available to the authority from any 
 other source only for the purpose of the fund. 

    Subd. 2.    Use of funds.  Except as provided in this 
 section, the money credited to each debt service reserve fund 
 must be used only for the payment of the principal of bonds of 
 the authority as they mature, the purchase of the bonds, the 
 payment of interest on them, or the payment of any premium 
 required when the bonds are redeemed before maturity.  Money in 
 a debt service reserve fund must not be withdrawn at a time and 
 in an amount that reduces the amount of the fund to less than 
 the amount the authority determines to be reasonably necessary 
 for the purposes of the fund.  However, money may be withdrawn 
 to pay principal or interest due on bonds secured by the fund if 
 other money of the authority is not available. 

    Subd. 3.    Investment.  Money in a debt service reserve 
 fund not required for immediate use may be invested in 
 accordance with section 446A.11, subdivision 9, paragraph (b). 

    Subd. 4.    Minimum amount of reserve at issuance.  If 
 the authority establishes a debt service reserve fund for the 
 security of any series of bonds, it shall not issue additional 
 bonds that are similarly secured if the amount of any of the 
 debt service reserve funds at the time of issuance does not 
 equal or exceed the minimum amount required by the resolution 
 creating the fund, unless the authority deposits in each fund at 
 the time of issuance, from the proceeds of the bonds, or 
 otherwise, an amount that when added together with the amount 
 then in the fund will be at least the minimum amount required. 

    Subd. 5.    Transfer of excess.  To the extent 
 consistent with the resolutions and indentures securing 
 outstanding bonds, the authority may at the close of a fiscal 
 year transfer to any other fund or account from any debt service 
 reserve fund any excess in that reserve fund over the amount 
 determined by the authority to be reasonably necessary for the 
 purpose of the reserve fund. 

    Subd. 6.    Certification and budget request.  To assure 
 the payment of the principal of and interest on bonds of the 
 authority issued prior to January 1, 1994, and the continued 
 maintenance of all debt service reserve funds created and 
 established for that payment, the authority shall annually 
 determine and certify to the governor, on or before December 1, 
 the following amounts: 

    (1) the amount then needed to restore each debt service 
 reserve fund securing in whole or in part the payment of 
 principal of and interest on bonds of the authority issued prior 
 to January 1, 1994, to the minimum amount required by the 
 resolution or indenture establishing the fund, but not exceeding 
 the maximum amount of principal and interest to become due and 
 payable in any later year on all bonds issued prior to January 
 1, 1994, that are then outstanding and secured by the fund; and 

    (2) the amount determined by the authority to be needed in 
 the immediately ensuing fiscal year, with other funds pledged 
 and estimated to be received during that year, for the payment 
 of the principal and interest due and payable in that year on 
 all then outstanding bonds secured by a debt service reserve 
 fund securing in whole or in part the payment of principal of 
 and interest on bonds of the authority issued prior to January 
 1, 1994, the amount of which is then less than the minimum 
 amount agreed, but not exceeding the maximum amount of principal 
 and interest to become due and payable in the immediately 
 ensuing fiscal year on bonds prior to January 1, 1994. 

    The governor shall include in the proposed biennial budget 
 for the following fiscal year, or in a supplemental budget if 
 the biennial budget has previously been approved, the amounts 
 certified by the authority in accordance with this subdivision. 

    HIST: 1988 c 546 s 8; 1994 c 632 art 2 s 53 

     446A.16 Money of the authority. 

    Subdivision 1.    Functions of state treasurer.  Except 
 as otherwise provided in this section, money of the authority 
 must be paid to the state treasurer as agent of the authority 
 and the treasurer shall not commingle the money with other 
 money.  The money in the accounts of the authority must be paid 
 out only on warrants drawn by the commissioner of finance on 
 requisition of the chair of the authority or of another officer 
 or employee as the authority authorizes.  Deposits of the 
 authority's money must, if required by the state treasurer or 
 the authority, be secured by obligations of the United States or 
 of the state of a market value equal at all times to the amount 
 of the deposit and all banks and trust companies are authorized 
 to give security for the deposits. 

    Subd. 2.    Contracts and security.  Notwithstanding the 
 provisions of this section, the authority may, with the approval 
 of the state treasurer, contract with the holders of any of its 
 bonds as to the custody, collection, securing, investment, and 
 payment of money of the authority or money held in trust or 
 otherwise for the payment of bonds, and to carry out the 
 contract.  Money held in trust or otherwise for the payment of 
 bonds or in any way to secure bonds and deposits of the money 
 may be secured in the same manner as money of the authority, and 
 all banks and trust companies are authorized to give security 
 for the deposits.  All money paid to the state treasurer as 
 agent of the authority is appropriated to the authority. 

    Subd. 3.    System of accounts.  Subject to agreements 
 with bondholders, the commissioner of finance shall prescribe a 
 system of accounts. 

    HIST: 1988 c 546 s 9 

     446A.17 Nonliability. 

    Subdivision 1.    Nonliability of individuals.  No 
 member of the authority or other person executing the bonds is 
 liable personally on the bonds or is subject to any personal 
 liability or accountability by reason of their issuance.  

    Subd. 2.    Nonliability of state.  The state is not 
 liable on bonds of the authority issued under this chapter and 
 those bonds are not a debt of the state.  The bonds must contain 
 on their face a statement to that effect. 

    HIST: 1988 c 546 s 10 

     446A.18 Purchase and cancellation by authority. 

    Subject to agreements with bondholders that may then exist, 
 the authority may purchase out of funds available for the 
 purpose, bonds of the authority which shall then be canceled, at 
 a price not exceeding the following amounts: 

    (1) if the bonds are then redeemable, the redemption price 
 then applicable plus accrued interest to the next interest 
 payment date of the bonds; or 

    (2) if the bonds are not redeemable, the redemption price 
 applicable on the first date after the purchase upon which the 
 bonds become subject to redemption plus accrued interest to that 
 date. 

    HIST: 1988 c 546 s 11 

     446A.19 State pledge against impairment of contracts. 

    The state pledges and agrees with the holders of bonds 
 issued under sections 446A.051, and 446A.12 to 446A.20 that the 
 state will not limit or alter the rights vested in the authority 
 to fulfill the terms of any agreements made with the bondholders 
 or in any way impair the rights and remedies of the holders 
 until the bonds, together with interest on them, with interest 
 on any unpaid installments of interest, and all costs and 
 expenses in connection with any action or proceeding by or on 
 behalf of the bondholders, are fully met and discharged.  The 
 authority may include this pledge and agreement of the state in 
 any agreement with the holders of bonds issued under sections 
 446A.051, and 446A.12 to 446A.20. 

    HIST: 1988 c 546 s 12 

     446A.20 Reserves; funds; accounts. 

    The authority may establish reserves, funds, or accounts 
 necessary to carry out the purposes of the authority or to 
 comply with any agreement made by or any resolution passed by 
 the authority. 

    HIST: 1988 c 546 s 13 

  446A.21 Repealed, 1999 c 231 s 207