2007 Minnesota Statutes

469.1765 GUARANTY FUND.
    Subdivision 1. Authority to establish. An authority may establish and maintain a guaranty
fund or funds. Money in the guaranty fund is available, under the terms and conditions that the
development authority establishes, to indemnify or hold harmless a person from liability for
remediation costs under a state or federal environmental law, regulation, ruling, order, or decision.
    Subd. 2. Eligible person. The authority may agree to pledge money in the guaranty fund
to indemnify a person whose liability arises out of use, ownership, occupancy, or financing of a
property in the subdistrict or district.
    Subd. 3. Terms of indemnity. The authority shall determine by resolution or by agreement
with the person the terms and conditions under which money in the guaranty fund will be used
to indemnify or hold harmless the person. The authority may not agree to indemnify a person
from liability for contamination caused by the person. The maximum amount that may be paid
from the guaranty fund with respect to properties within a subdistrict or district is one-half of
the remediation and removal costs. The maximum duration of an indemnification agreement is
25 years. An indemnification agreement is subject to any other restrictions provided by this
section or other law.
    Subd. 4. Funding. (a) Revenues derived from tax increments and any other money available
to the authority may be deposited in the guaranty fund. The municipality may appropriate money
to the authority to be deposited in the guaranty fund.
(b) If a guaranty fund is established that applies to property located in more than one tax
increment financing district or subdistrict, the authority shall establish separate accounts for each
subdistrict and district. The authority shall deposit all revenues derived from tax increments
from a subdistrict or district in the account for that subdistrict or district, except the following
amounts may be deposited in a general or other account: (1) the portion of revenue derived
increments from a district, subject to section 469.1763, that may be spent on activities outside of
the district, or (2) up to 25 percent of the revenues derived from increments from districts that
are not subject to section 469.1763 and which may be deposited in the guaranty fund under the
applicable tax increment financing plans. Investment earnings of money in an account must
be credited to that account.
(c) The only money which may be pledged to indemnify or hold harmless a person from
liability are amounts either in the account for the subdistrict or district in which the property out of
which the liability arose is located or in an account not dedicated to a specific subdistrict or district.
    Subd. 5. Liability limited. The authority and municipality is liable under a guaranty fund
agreement only to the extent funds are available in the guaranty fund account or accounts
available for the property.
    Subd. 6. Depository. The authority shall provide for the guaranty fund to be held by or
maintained with a financial institution or corporate fiduciary eligible for the deposit of public
money or eligible to act as a trustee or fiduciary for obligations issued under chapter 475.
    Subd. 7. Final disposition of funds. At the end of the period of the indemnification, all
unencumbered money in the guaranty fund for the subdistrict or district must be treated as an
excess increment and distributed under the provisions of section 469.176, subdivision 2, paragraph
(a), clause (4). If the municipality contributed money to the account, other than revenues derived
from increments, the authority may deduct and pay to the municipality a proportionate share of
the unencumbered money in the account before the money is distributed as an excess increment.
The proportionate share is determined based on the amount of contributions of nonincrements to
the account relative to total contributions, including increments, to the account.
History: 1993 c 375 art 14 s 15