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Minnesota Legislature

Office of the Revisor of Statutes

473.6671 REVENUE BONDS.
    Subdivision 1. Authorization. (a) The commission may issue revenue bonds for the purpose
of:
(1) acquiring by purchase real and personal properties located within the metropolitan area
that are related to airline operations to be leased to airline corporations, or to other corporations
affiliated by common ownership with airline corporations, for use in connection with their airline
operations, including real and personal properties for use as flight training facilities; and
(2) financing or refinancing real and personal properties owned by the commission to
be leased to airline corporations and used in connection with the operations of the airline
corporations at airports under the commission's jurisdiction.
Prior to the issuance of the revenue bonds, the commission shall enter into a lease with the
airline corporations, or with other corporations affiliated by common ownership with airline
corporations, for the use of such acquired real and personal properties referenced in clause
(1), and shall enter into a revenue agreement with the airline corporation for the use of the
properties financed or refinanced referenced in clause (2). The commission shall seek to obtain
the best available terms and security for the lease and agreement. The terms and security must be
reasonably determined by the commission to be adequate and of the kind and degree which would
be required by an investment banking or other financial institution.
(b) In addition to the covenants and agreements otherwise required or negotiated by the
commission, the leases and revenue agreements for the properties must contain covenants and
agreements by the airline corporation, and if the user is not the airline corporation, also by the
airline corporation, satisfactory to the commission providing for:
(1) the payment of rents in amounts and at times adequate to pay the principal and interest as
due on the revenue bonds issued to acquire, finance, or refinance the properties and to pay the
commission's costs and expenses of issuing the bonds and acquiring and owning the properties,
and otherwise satisfying the requirements of section 469.155, subdivision 5;
(2) the retention and location of operations and facilities, including headquarters, of the
airline corporation in the metropolitan area and the state for the term of the lease;
(3) aircraft noise abatement; and
(4) early repayment, or the establishment of a defeasance account to provide for timely
repayment, of the general obligation revenue bonds upon the occurrence of events and upon
terms and conditions as are satisfactory to the commission, together with financial requirements
and covenants satisfactory to the commission.
(c) The sum of the original principal amounts of the revenue bonds issued under this
subdivision, and the general obligation revenue bonds issued under section 473.667, subdivision
11
, shall not exceed $390,000,000. Except as provided in this section, the revenue bonds must
be issued in the manner and are subject to the requirements of chapter 475. Compliance with
the requirements of section 475.60 is at the discretion of the commission. For purposes of this
subdivision, the commission may exercise any powers vested in a redevelopment agency under
sections 469.152 to 469.165.
    Subd. 2. Security and source of payment. The revenue bonds described in subdivision 1
are payable solely from and secured by the revenues derived by the commission from the leases
upon the properties described in subdivision 1, paragraph (a), clause (1), the revenue agreements
upon the properties described in subdivision 1, paragraph (a), clause (2), and other revenues as the
commission may designate and pledge which are derived from the ownership and operation of
its airports, air navigation facilities and other facilities; provided that the pledge and application
of all revenues to the payment and security of the revenue bonds are subject and subordinate
to the first and prior charge thereon for the payment and security of the commission's general
obligation revenue bonds as provided in section 473.667. The revenue bonds shall not be payable
from or charged upon any funds or assets of the commission other than the commission revenues
expressly pledged to their payment. An owner of the revenue bonds may not compel any exercise
of the taxing power of the commission, the state, or any other taxing jurisdiction. Each bond must
state in substance the limited nature of the obligations. The revenue bonds may be further secured
by an assignment of leases with respect to the properties acquired, financed, or refinanced by the
revenue bonds, and (i) with respect to the properties described in subdivision 1, paragraph (a),
clause (1), by a mortgage and security agreement upon the properties and by other collateral as is
pledged to secure the obligations of the airline corporation or other lessee under the leases on the
properties, and (ii) with respect to the properties described in subdivision 1, paragraph (a), clause
(2), by other collateral as is pledged to secure the obligations of the airline corporation under the
revenue agreements. Any deed granted or received by the commission and any mortgage granted
by the commission in connection with the issuance of the revenue bonds is exempt from deed
tax and mortgage registry tax imposed under chapter 287. In the resolution, trust indenture, or
other instrument providing for the issuance of the revenue bonds, the commission may provide
for or require the creation of accounts from sources specified by the commission for the payment
and security of the revenue bonds, including a debt service reserve account, separate from the
accounts maintained for payment of the general obligation revenue bonds. The sources specified
by the commission may include a portion of the proceeds of revenue bonds or payment by the
airline corporation. The leases described in subdivision 1, paragraph (a), clause (1), and the
revenue agreements described in subdivision 1, paragraph (a), clause (2), must provide that if
the commission determines to pledge any of its revenues to secure the revenue bonds, including
revenues deposited into a debt service reserve account for the revenue bonds, the airline
corporation concurrently shall pledge assets to the commission as security for repayment of the
pledged revenues so that the net unencumbered values of the pledged assets, as independently
appraised at the time of issuance and periodically to the satisfaction of the commission during the
term of the revenue bonds, is a percentage of the amount of commission revenues so pledged as
determined by the commission; provided that the percentage shall not be less than 125 percent.
    Subd. 3. Due diligence conditions. (a) Before the commission may issue the revenue bonds
described in subdivision 1, the commission must receive, in form and substance satisfactory to
the commission:
(1) a report of audit of the commission's financial records for the fiscal year most recently
ended or, if this is not yet available, a report for the preceding year, prepared by a nationally
recognized firm of certified public accountants, showing that the net revenues received that year,
computed as the gross receipts less any refunds of rates, fees, charges, and rentals for airport and
air navigation facilities and service, and less the aggregate amount of current expenses, paid or
accrued, of operation and maintenance of property and carrying on the commission's business
and activities, equaled or exceeded the maximum amount of then outstanding bonds of the
commission and interest thereon to become due in any future fiscal year;
(2) a written report, prepared by an independent, nationally recognized consultant on
airport management and financing engaged by the commission, on the financial condition of the
airline corporation, and any corporations selected by the commission and affiliated with the
corporation by common ownership, projecting available revenues of the airline corporation at
least sufficient during each year of the term of the proposed revenue bonds to pay when due all
financial obligations of the airline corporation under the revenue agreements and leases described
in subdivision 1 and stating the factors on which the projection is based; and
(3) a written report prepared by a nationally recognized consultant on airport management
and financing, projecting available revenues of the commission at least sufficient during each
year of the term of the proposed revenue bonds to pay all principal and interest when due on the
revenue bonds, and stating the estimates of air traffic, rate increases, inflation, and other factors
on which the projection is based.
(b) Business plans, financial statements, customer lists, and market and feasibility studies
provided to the consultant or the commission by the airline company or a related company under
paragraph (a), are nonpublic data as defined in section 13.02, subdivision 9.
History: 1991 c 350 art 2 s 4