2006 Minnesota Statutes

469.034 BOND ISSUE FOR CORPORATE PURPOSES.
    Subdivision 1. Authority and revenue obligations. An authority may issue bonds for any
of its corporate purposes. The bonds may be the type the authority determines, including bonds
on which the principal and interest are payable exclusively from the income and revenues of the
project financed with the proceeds of the bonds, or exclusively from the income and revenues of
certain designated projects, whether or not they are financed in whole or in part with the proceeds
of the bonds. The bonds may be additionally secured by (1) a pledge of any grant or contributions
from the federal government or other source, (2) a pledge of any income or revenues of the
authority from the project for which the proceeds of the bonds are to be used, or (3) a mortgage of
any project or other property of the authority.
    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the general
obligation of the general jurisdiction governmental unit as additional security for bonds payable
from income or revenues of the project or the authority. The authority must find that the pledged
revenues will equal or exceed 110 percent of the principal and interest due on the bonds for each
year. The proceeds of the bonds must be used for a qualified housing development project or
projects. The obligations must be issued and sold in the manner and following the procedures
provided by chapter 475, except the obligations are not subject to approval by the electors, and
the maturities may extend to not more than 35 years for obligations sold to finance housing for
the elderly and 40 years for other obligations issued under this subdivision. The authority is
the municipality for purposes of chapter 475.
(b) The principal amount of the issue must be approved by the governing body of the general
jurisdiction governmental unit whose general obligation is pledged. Public hearings must be held
on issuance of the obligations by both the authority and the general jurisdiction governmental
unit. The hearings must be held at least 15 days, but not more than 120 days, before the sale of
the obligations.
(c) The maximum amount of general obligation bonds that may be issued and outstanding
under this section equals the greater of (1) one-half of one percent of the taxable market value of
the general jurisdiction governmental unit whose general obligation is pledged, or (2) $3,000,000.
In the case of county or multicounty general obligation bonds, the outstanding general obligation
bonds of all cities in the county or counties issued under this subdivision must be added in
calculating the limit under clause (1).
(d) "General jurisdiction governmental unit" means the city in which the housing
development project is located. In the case of a county or multicounty authority, the county or
counties may act as the general jurisdiction governmental unit. In the case of a multicounty
authority, the pledge of the general obligation is a pledge of a tax on the taxable property in
each of the counties.
(e) "Qualified housing development project" means a housing development project providing
housing either for the elderly or for individuals and families with incomes not greater than 80
percent of the median family income as estimated by the United States Department of Housing
and Urban Development for the standard metropolitan statistical area or the nonmetropolitan
county in which the project is located. The project must be owned for the term of the bonds either
by the authority or by a limited partnership or other entity in which the authority or another
entity under the sole control of the authority is the sole general partner and the partnership or
other entity must receive (1) an allocation from the Department of Finance or an entitlement
issuer of tax-exempt bonding authority for the project and a preliminary determination by the
Minnesota Housing Finance Agency or the applicable suballocator of tax credits that the project
will qualify for four percent low-income housing tax credits or (2) a reservation of nine percent
low-income housing tax credits from the Minnesota Housing Finance Agency or a suballocator
of tax credits for the project. A qualified housing development project may admit nonelderly
individuals and families with higher incomes if:
(1) three years have passed since initial occupancy;
(2) the authority finds the project is experiencing unanticipated vacancies resulting in
insufficient revenues, because of changes in population or other unforeseen circumstances that
occurred after the initial finding of adequate revenues; and
(3) the authority finds a tax levy or payment from general assets of the general jurisdiction
governmental unit will be necessary to pay debt service on the bonds if higher income individuals
or families are not admitted.
    Subd. 3. Revenue from other projects. No proceeds of bonds issued for or revenue
authorized for or derived from any redevelopment project or area shall be used to pay the bonds
or costs of, or make contributions or loans to, any public housing project. The proceeds of bonds
issued for or revenues authorized for or derived from any one public housing project shall not
be used to pay the bonds or costs of, or make contributions or loans to any other public housing
project until the bonds and costs of the public housing project for which those bonds were issued
or from which those revenues were derived or for which they were authorized shall be fully paid.
    Subd. 4. Bond terms. Neither the commissioners of an authority nor any person executing
the bonds shall be liable personally on the bonds by reason of the issuance thereof. Except as
provided in subdivision 2, the bonds of an authority shall not be a debt of the city, the state, or any
political subdivision, and neither the city nor the state or any political subdivision shall be liable
on them, nor shall the bonds be payable out of any funds or properties other than those of the
authority; the bonds shall state this on their face. The bonds shall not constitute an indebtedness
within the meaning of any constitutional or statutory debt limitation or restriction, except as
provided in subdivision 2. Bonds of an authority are declared to be issued for an essential public
and governmental purpose and to be public instrumentalities.
    Subd. 5. Tax exemption. The provisions of sections 469.001 to 469.047 exempting from
taxation authorities, their properties and income, shall be considered additional security for the
repayment of bonds and shall constitute, by virtue of sections 469.001 to 469.047 and without
the same being restated in the bonds, a contract between the (1) bondholders and each of them,
including all transferees of the bonds, and (2) the respective authorities issuing the bonds and
the state. An authority may by covenant confer upon the holder of the bonds the rights and
remedies it deems necessary or advisable, including the right in the event of default to have a
receiver appointed to take possession of and operate the project. When the obligations issued by
an authority to assist in financing the development of a project have been retired and federal
contributions have been discontinued, the exemptions from taxes and special assessments for
that project shall terminate.
History: 1987 c 291 s 34; 1992 c 511 art 9 s 18; 1993 c 320 s 6; 2002 c 390 s 7; 2005 c
152 art 1 s 15