Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1986, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1986
CHAPTER 465-H.F.No. 2287
An act relating to local government financing;
allocating issuance authority for obligations subject
to a federal volume limitation act; authorizing
issuance of bonds; giving local governments certain
powers; prescribing pollution control agency
procedures; providing for wastewater treatment
control; amending Minnesota Statutes 1984, sections
115.07, subdivision 1; 115A.14, subdivision 4;
124.214, by adding a subdivision; 273.1314, by adding
a subdivision; 273.73, subdivision 10; 273.75,
subdivision 2; 273.77; 298.2211, subdivision 1;
412.301; 429.091, subdivision 8; 430.12; 459.35;
462.556; 462A.03, subdivision 13; 462C.02, subdivision
6; 462C.06; 462C.07, subdivision 1; 471.59,
subdivision 11; 472.09, subdivision 8; 474.01,
subdivisions 6 and 7b; 474.02, by adding a
subdivision; 475.55, subdivision 1, and by adding a
subdivision; 475.77; Minnesota Statutes 1985
Supplement, sections 273.1314, subdivision 16a;
273.75, subdivision 4; 458.1941; 462.445, subdivision
13; 475.56; 475.60, subdivision 2; proposing coding
for new law in Minnesota Statutes, chapters 115, 116,
297A, 340A, and 475; proposing coding for new law as
Minnesota Statutes, chapters 471A, 474A; repealing
Minnesota Statutes 1984, sections 462C.09, subdivision
4; 474.16, subdivisions 1, 2, and 5; 474.21; 474.25;
Minnesota Statutes 1985 Supplement, sections 116J.58,
subdivision 4; 462C.09, subdivisions 1, 2a, 3, 5, and
6; 474.16, subdivisions 3, 6, 7, 8, 9, 10, 11, 12, 13,
14, and 15; 474.17; 474.19; 474.20; 474.23; and 474.26.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1984, section 273.77, is
amended to read:
273.77 [TAX INCREMENT BONDING.]
Any other law, general or special, notwithstanding, after
August 1, 1979 no bonds, payment for which tax increment is
pledged, shall be issued in connection with any project for
which tax increment financing has been undertaken other than as
is authorized hereby and the proceeds therefrom shall be used
only in accordance with section 273.75, subdivision 4 as if said
proceeds were tax increment, except that a tax increment
financing plan need not be adopted for any project for which tax
increment financing has been undertaken prior to August 1, 1979,
pursuant to statutes not requiring a tax increment financing
plan. Such bonds shall not be included for purposes of
computing the net debt of any municipality.
(a) A municipality may issue general obligation bonds to
finance any expenditure by the municipality or an authority the
jurisdiction of which is wholly or partially within that
municipality, pursuant to section 273.75, subdivision 4 in the
same manner and subject only to the same conditions as those
provided in chapter 475 for bonds financing improvement costs
reimbursable from special assessments. Any pledge of tax
increment, assessments or other revenues for the payment of the
principal of and interest on general obligation bonds issued
under this subdivision, except when the authority and the
municipality are the same, shall be made by written agreement by
and between the authority and the municipality and filed with
the county auditor. When the authority and the municipality are
the same, the municipality may by covenant pledge tax increment,
assessments or other revenues for the payment of the principal
of and interest on general obligation bonds issued under this
subdivision and thereupon shall file the resolution containing
such covenant with the county auditor. When tax increment,
assessments and other revenues are pledged, the estimated
collections of said tax increment, assessments and any other
revenues so pledged may be deducted from the taxes otherwise
required to be levied before the issuance of the bonds under
section 475.61, subdivision 1, or the collections thereof may be
certified annually to reduce or cancel the initial tax levies in
accordance with section 475.61, subdivision 1 or 3.
(b) When the authority and the municipality are not the
same, an authority may, by resolution, authorize, issue and sell
its general obligation bonds to finance any expenditure which
that authority is authorized to make by section 273.75,
subdivision 4. Said bonds of the authority shall be authorized
by its resolution, shall mature as determined by resolution of
the authority in accordance with Laws 1979, Chapter 322, and may
be issued in one or more series and shall bear such date or
dates, bear interest at such rate or rates, be in such
denomination or denominations, be in such form either coupon or
registered, carry such conversion or registration privileges,
have such rank or priority, be executed in such manner, be
payable in medium of payment at such place or places, and be
subject to such terms of redemption, with or without premium, as
such resolution, its trust indenture or mortgage may provide.
The bonds may be sold at public or private sale at the price or
prices as the authority by resolution shall determine, and any
provision of any law to the contrary notwithstanding, the bonds
shall be fully negotiable. In any suit, actions, or proceedings
involving the validity of enforceability of any bonds of the
authority or the security therefor, any bond reciting in
substance that it has been issued by the authority to aid in
financing a project shall be conclusively deemed to have been
issued for such purpose, and the tax increment financing
district within the project shall be conclusively deemed to have
been planned, located, and carried out in accordance with the
purposes and provisions of Laws 1979, Chapter 322. Neither the
authority, nor any director, commissioner, council member, board
member, officer, employee or agent of the authority nor any
person executing the bonds shall be liable personally on the
bonds by reason of the issuance thereof. The bonds of the
authority, and such bonds shall so state on their face, shall
not be a debt of any municipality, the state or any political
subdivision thereof, and neither the municipality nor the state
or any political subdivision thereof shall be liable thereon,
nor in any event shall such bonds be payable out of any funds or
properties other than those of the authority and any tax
increment and revenues of a tax increment financing district
pledged therefor.
(c) Notwithstanding any other law general or special, an
authority may, by resolution, authorize, issue and sell revenue
bonds payable solely from all or a portion of revenues,
including but not limited to tax increment revenues and
assessments, derived from a tax increment financing district
located wholly or partially within the municipality to finance
any expenditure which the authority is authorized to make by
section 273.75, subdivision 4. The bonds shall mature as
determined by resolution of the authority in accordance with
Laws 1979, Chapter 322 and may be issued in one or more series
and shall bear such date or dates, bear interest at such rate or
rates, be in such denomination or denominations, be in such form
either coupon or registered, carry such conversion or
registration privileges, have such rank or priority, be executed
in such manner, be payable in medium of payment at such place or
places, and be subject to such terms of redemption, with or
without premium, as such resolution, its trust indenture or
mortgage may provide. The bonds may be sold at public or
private sale at the price or prices as the authority by
resolution shall determine, and any provision of any law to the
contrary notwithstanding, shall be fully negotiable. In any
suit, action, or proceedings involving the validity or
enforceability of any bonds of the authority or the security
therefor, any bond reciting in substance that it has been issued
by the authority to aid in financing a project shall be
conclusively deemed to have been issued for such purpose, and
the tax increment financing district within the project shall be
conclusively deemed to have been planned, located, and carried
out in accordance with the purposes and provisions of Laws 1979,
Chapter 322. Neither the authority, nor any director,
commissioner, council member, board member, officer, employee or
agent of the authority nor any person executing the bonds shall
be liable personally on the bonds by reason of the issuance
thereof. The bonds may be further secured by a pledge and
mortgage of all or any portion of the district in aid of which
the bonds are issued and such convenants as the authority shall
deem by such resolution to be necessary and proper to secure
payment of the bonds. The bonds, and the bonds shall so state
on their face, shall not be payable from nor charged upon any
funds other than the revenues and property pledged or mortgaged
to the payment thereof, nor shall the issuing authority be
subject to any liability thereon or have the powers to obligate
itself to pay or pay the bonds from funds other than the
revenues and properties pledged and mortgaged and no holder or
holders of the bonds shall ever have the right to compel any
exercise of any taxing power of the issuing authority or any
other public body, other than as is permitted or required under
Laws 1979, Chapter 322 and pledged therefor hereunder, to pay
the principal of or interest on any such bonds, nor to enforce
payment thereof against any property of the authority or other
public body other than that expressly pledged or mortgaged for
the payment thereof.
(d) (1) In anticipation of the issuance of bonds pursuant
to either paragraph (a), (b) or (c) of this section, the
authority or municipality may by resolution issue and sell
temporary bonds pursuant to paragraph (a), (b) or (c), maturing
within not more than three years from their date of issue, to
pay any part or all of the cost of a project. To the extent
that the principal of and interest on the temporary bonds cannot
be paid when due from receipts of tax increment, assessments, or
other funds appropriated for the purpose, they shall be paid
from the proceeds of long-term bonds or additional temporary
bonds which the authority or municipality shall offer for sale
in advance of the maturity date of the temporary bonds, but the
indebtedness funded by an issue of temporary bonds shall not be
extended by the issue of additional temporary bonds for more
than six years from the date of the first issue. Long-term
bonds may be issued pursuant to paragraph (a), (b) or (c)
without regard to whether the temporary bonds were issued
pursuant to paragraph (a), (b) or (c). If general obligation
temporary bonds are issued pursuant to paragraph (a), proceeds
of long-term bonds or additional temporary bonds not yet sold
may be treated as pledged revenues, in reduction of the tax
otherwise required by section 475.61 to be levied prior to
delivery of the obligations. Subject to the six-year maturity
limitation contained above, but without regard to the
requirement of section 475.58, if any temporary bonds are not
paid in full at maturity, in addition to any other remedy
authorized or permitted by law, the holders may demand, in which
case the authority or municipality shall, issue pursuant to
paragraph (a), (b) or (c) as the temporary bonds and in exchange
for the temporary bonds, at par, replacement temporary bonds
dated as of the date of the replaced temporary bonds, maturing
within one year from the date of the replacement temporary bonds
and earning interest at the rate set forth in the resolution
authorizing the issuance of the replaced temporary bonds,
provided that the rate shall not exceed the maximum rate
permitted by law at the date of issue of the replaced temporary
bonds.
(2) Funds of a municipality may be invested in its
temporary bonds in accordance with the provisions of section
471.56, and may be purchased upon their initial issue, but shall
be purchased only from funds which the governing body of the
municipality determines will not be required for other purposes
before the maturity date, and shall be resold before maturity
only in case of emergency. If purchased from a debt service
fund securing other bonds, the holders of those bonds may
enforce the municipality's obligations on the temporary bonds in
the same manner as if they held the temporary bonds.
(e) Sections 474.16 to 474.23 9 to 29 apply to any issuance
of obligations under this section which are subject to
limitation under a federal volume limitation act as defined in
section 474.16 10, subdivision 5 9, or existing federal tax law
as defined in section 10, subdivision 8.
Sec. 2. Minnesota Statutes 1984, section 298.2211,
subdivision 1, is amended to read:
Subdivision 1. [PURPOSE; GRANT OF AUTHORITY.] In order to
accomplish the legislative purposes specified in chapters 362A,
462C, and 474, within tax relief areas as defined in section
273.134, the commissioner of iron range resources and
rehabilitation may exercise the following powers: (1) all
powers conferred upon a rural development financing authority
under sections 362A.01 to 362A.05; (2) all powers conferred upon
a city under chapter 462C, subject to compliance with the
provisions of section 462C.09 15; (3) all powers conferred upon
a municipality or a redevelopment agency under chapter 474; (4)
all powers provided by chapter 362A to further any of the
purposes and objectives of chapters 462C and 474; and (5) all
powers conferred upon a municipality or an authority under
sections 273.73 to 273.76, section 273.77, except paragraph (a)
thereof, and section 273.78, subject to compliance with the
provisions of section 273.74, subdivisions 1, 2, and 3; provided
that any tax increments derived by the commissioner from the
exercise of this authority may be used only to finance or pay
premiums or fees for insurance, letters of credit, or other
contracts guaranteeing the payment when due of net rentals under
a project lease or the payment of principal and interest due on
or repurchase of bonds issued to finance a project or program,
to accumulate and maintain reserves securing the payment when
due on bonds issued to finance a project or program, or to
provide an interest rate reduction program pursuant to section
462.445, subdivision 10. Tax increments and earnings thereon
remaining in any bond reserve account after payment or discharge
of any bonds secured thereby shall be used within one year
thereafter in furtherance of this section or returned to the
county auditor of the county in which the tax increment
financing district is located. If returned to the county
auditor, the county auditor shall immediately allocate the
amount among all government units which would have shared
therein had the amount been received as part of the other ad
valorem taxes on property in the district most recently paid, in
the same proportions as other taxes were distributed, and shall
immediately distribute it to the government units in accordance
with the allocation.
Sec. 3. Minnesota Statutes 1984, section 429.091,
subdivision 8, is amended to read:
Subd. 8. [FEDERAL VOLUME LIMITATION ACT.] Sections 474.16
to 474.23 9 to 29 apply to any issuance of obligations under
this section which are subject to limitation under a
federal volume limitation act as defined in section 474.16 10,
subdivision 5 9, or existing federal tax law as defined in
section 10, subdivision 8.
Sec. 4. Minnesota Statutes 1984, section 430.12, is
amended to read:
430.12 [BONDS FOR IMPROVEMENTS.]
The city council, for the purpose of realizing the funds
for making an improvement and paying damages may, from time to
time as may be needed, issue and sell special certificates of
indebtedness, or special street or parkway improvement bonds, as
they may decide, which shall entitle the holder thereof to all
sums realized upon any assessment or, if deemed advisable, a
series of two or more certificates or bonds against any one
assessment, or against the assessments in two or more different
proceedings, the principal and interest being payable at fixed
dates out of the funds collected from the assessments, including
interest and penalties, and the whole of the fund or funds is
hereby pledged for the pro rata payment of the certificates or
bonds and the interest thereon, as they severally become due.
These certificates or bonds may be made payable to the bearer,
with interest coupons attached, and the city council may bind
the city to make good deficiencies in the collection up to, but
not exceeding, the principal and interest at the rate fixed, as
hereinafter provided, and for the time specified in section
430.06. If the city, because of this guaranty, shall redeem any
certificate or bond, it shall thereupon be subrogated to the
holder's rights. For the purpose of this guaranty, penalties
collected shall be credited upon deficiencies of principal and
interest before the city shall be liable. These certificates or
bonds shall be sold at public sale or by sealed proposals at a
meeting of which at least two weeks' published notice shall be
given, to the purchaser who will pay the par value thereof at
the lowest interest rate, and the certificates or bonds shall be
drawn accordingly, but the rate of interest shall in no case
exceed seven percent per annum, payable annually or
semiannually. The city clerk shall certify to the county
auditor the rate of interest so determined at the first bond
sale held for any such improvement, and interest shall be
computed upon the assessments at this annual rate, in accordance
with the terms of section 430.06. In case the rate of interest
so determined at any subsequent bond sale for the same
improvement is greater than the rate so determined at the first
bond sale therefor, the difference between these rates of
interest shall be a general city charge.
In case the proceeds of any special certificates of
indebtedness or special street or parkway improvement bonds are
in excess of the amount actually necessary to make the
improvements for which the same were issued, or in case the
proceeds are not immediately required for the prosecution or
completion of the improvement, these proceeds may meanwhile be
used by the city council for the making of other improvements
authorized under the provisions of this chapter, and the amount
of the proceeds so used shall be replaced and made good so far
as may be necessary from the proceeds of special certificates of
indebtedness or special bonds issued for the purpose of making
such other improvements.
Sections 474.16 to 474.23 9 to 29 apply to any issuance of
obligations under this section which are subject to limitation
under a federal volume limitation act as defined in section
474.16 10, subdivision 5 9, or existing federal tax law as
defined in section 10, subdivision 8.
Sec. 5. Minnesota Statutes 1985 Supplement, section
458.1941, is amended to read:
458.1941 [SECTIONS THAT APPLY IF FEDERAL LIMIT APPLIES.]
Sections 474.16 to 474.23 9 to 29 apply to obligations
issued under this chapter that are limited by a federal volume
limitation act as defined in section 474.16 10, subdivision 5
9, or existing federal tax law as defined in section 10,
subdivision 8.
Sec. 6. Minnesota Statutes 1984, section 459.35, is
amended to read:
459.35 [FEDERAL VOLUME LIMITATION ACT.]
Sections 474.16 to 474.23 9 to 29 apply to any issuance of
obligations under chapter 459 which are subject to limitation
under a federal volume limitation act as defined in section
474.16 10, subdivision 5 9, or existing federal tax law as
defined in section 10, subdivision 8.
Sec. 7. Minnesota Statutes 1984, section 462.556, is
amended to read:
462.556 [FEDERAL VOLUME LIMITATION ACT.]
Sections 474.16 to 474.23 9 to 29 apply to any issuance of
obligations under chapter 462 which are subject to limitation
under a federal volume limitation act as defined in section
474.16 10, subdivision 5 9, or existing federal tax law as
defined in section 10, subdivision 8.
Sec. 8. Minnesota Statutes 1984, section 472.09,
subdivision 8, is amended to read:
Subd. 8. [FEDERAL VOLUME LIMITATION ACT.] Sections 474.16
to 474.23 9 to 29 apply to any issuance of obligations under
this section which are subject to limitation under a
federal volume limitation act as defined in section 474.16 10,
subdivision 5 9, or existing federal tax law as defined in
section 10, subdivision 8.
Sec. 9. [474A.01] [CITATION.]
Sections 9 to 29 may be cited as the "Minnesota bond
allocation act."
Sec. 10. [474A.02] [DEFINITIONS.]
Subdivision 1. [TERMS DEFINED.] For the purposes of
sections 9 to 29, the terms defined in this section shall have
the following meanings:
Subd. 2. [ANNUAL VOLUME CAP.] "Annual volume cap" means
the aggregate dollar amount of obligations bearing interest
excluded from gross income for purposes of federal income
taxation which, under the provisions of existing federal tax law
or a federal volume limitation act, may be issued in one year by
issuers.
Subd. 3. [CERTIFICATE OF ALLOCATION.] "Certificate of
allocation" means a certificate provided to an issuer by the
department under section 21.
Subd. 4. [CITY.] "City" means a statutory or home rule
charter city.
Subd. 5. [COMMERCIAL REDEVELOPMENT PROJECT.] "Commercial
redevelopment project" means a project as defined in section
474.02, if it is not a manufacturing project or pollution
control project and one of the following conditions is met:
(a) The project site would qualify as a redevelopment
district as defined in section 273.73, subdivision 10. To
qualify the project need not be included in a tax increment
financing district.
(b) At least 75 percent of the proceeds of the obligations
will be used to acquire and rehabilitate or replace an existing
structure which is functionally obsolete or contains structural
or other defects justifying substantial renovation or clearance.
(c) The project will be undertaken and the obligations
issued pursuant to a written program administered by the local
issuer and the financing provides for a substantial commitment
of local public funds.
(d) At least 90 percent of the proceeds of the obligations
will be used to finance facilities with respect to which an
urban development action grant has been made under section 119
of the federal Housing and Community Development Act of 1974.
Subd. 6. [DEPARTMENT; DEPARTMENT OF ENERGY AND ECONOMIC
DEVELOPMENT.] "Department" or "department of energy and economic
development" means the department of energy and economic
development or its successor agency or agencies with respect to
the duties that the department is to perform under sections 9 to
29.
Subd. 7. [ENTITLEMENT ISSUER.] "Entitlement issuer" means
an issuer to which an allocation is made under sections 12, 16,
or 17.
Subd. 8. [EXISTING FEDERAL TAX LAW.] "Existing federal tax
law" means those provisions of the Internal Revenue Code of
1954, as amended through December 31, 1985, that limit the
aggregate amount of obligations of a specified type or types
which may be issued by an issuer during a calendar year whose
interest is exempt from inclusion in gross income for purposes
of federal income taxation.
Subd. 9. [FEDERAL VOLUME LIMITATION ACT.] "Federal Volume
Limitation Act" means Title VII of the bill that was adopted by
the United States House of Representatives on December 17, 1985,
as H.R. 3838, 99th Congress 1st Session (1985), or any law of
the United States that is effective after December 31, 1985, and
that:
(1) imposes an annual volume cap;
(2) allocates the annual volume cap among various uses for
which the proceeds of the obligations may be used or among
various issuers of obligations or both; and
(3) allows the governor during a specified interim period
or the state legislature by law to provide for a different
allocation of the annual volume cap among uses and among issuers.
Subd. 10. [GENERAL OBLIGATION.] "General obligation" means
any obligation that pledges the full faith and credit of an
issuer with general taxing powers, other than a state issuer, to
the payment of the obligation.
Subd. 11. [GOVERNMENTAL VOLUME CAP.] "Governmental volume
cap" means the annual volume cap less the amount, if any, that a
federal volume limitation act requires be set aside or reserved,
without the right to override by state legislation, for
qualified 501(c)(3) bonds or if a federal volume limitation act
does not require an amount to be set aside for qualified
501(c)(3) bonds, the amount set aside pursuant to section 20,
subdivision 9.
Subd. 12. [ISSUER.] "Issuer" means any entitlement issuer
or other issuer.
Subd. 13. [LOCAL PUBLIC FUNDS.] "Local public funds" means
the funds of a governmental unit except the following:
(1) the proceeds of an obligation subject to existing
federal tax law or a federal volume limitation act;
(2) payments or property furnished by a nonexempt person to
repay or secure the loan of proceeds of an obligation subject to
existing federal tax law or a federal volume limitation act or
other payments made in consideration of the issuance of an
obligation subject to existing federal tax law or a federal
volume limitation act;
(3) payments furnished by a nonexempt person for its right
to use in its trade or business a facility financed with the
proceeds of obligations subject to existing federal tax law or a
federal volume limitation act;
(4) tax increments, as defined in section 273.76; or
(5) tax reductions provided pursuant to sections 273.1312
to 273.1314.
Subd. 14. [MANUFACTURING PROJECT.] "Manufacturing project"
means properties, real or personal, used in connection with a
revenue producing enterprise in connection with assembling,
fabricating, manufacturing, mixing, or processing any products
of agriculture, forestry, mining, or manufacture. Properties
used for storing, warehousing, or distributing qualify under
this definition (1) if they are used as part of or in connection
with an assembly, fabricating, manufacturing, mixing, or
processing facility, or (2) if they are used for the storing of
agricultural products and are located outside of the
metropolitan area, as defined in section 473.121, subdivision
2. Manufacturing project includes properties, real or personal,
used in connection with research and development activity to
develop or improve products, production processes, or
materials. For purposes of this subdivision, "a product of
manufacture" includes information and directions which dictate
the functions to be performed by data processing equipment,
commonly called computer software, regardless of whether they
are embodied in or recorded on tangible personal property. A
project qualifies as a manufacturing project only if 75 percent
of the proceeds of the proposed obligations will be used for
construction, acquisition, installation, or addition of
properties described in this subdivision.
Subd. 15. [MORTGAGE CREDIT CERTIFICATE.] "Mortgage credit
certificate" means any certificate which satisfies the
definition of such term as contained in section 25(c)(1) of the
Internal Revenue Code of 1954, as amended through July 18, 1984.
Subd. 16. [MULTIFAMILY HOUSING PROJECT.] "Multifamily
housing project" means a development defined in section 462C.02,
subdivision 5, for which the applicable housing plan and program
approval requirements of chapter 462C have been met.
Subd. 17. [NONEXEMPT PERSON.] "Nonexempt person" means a
person or entity other than an exempt person as defined in
section 103(b)(3) of the Internal Revenue Code of 1954, as
amended through December 31, 1985.
Subd. 18. [NOTICE OF ENTITLEMENT ALLOCATION.] "Notice of
entitlement allocation" means a notice provided to an
entitlement issuer under section 12, subdivision 5, or under
section 16, subdivision 2.
Subd. 19. [OTHER ISSUER.] "Other issuer" means any entity
other than an entitlement issuer which may issue obligations
subject to an annual volume cap, including but not limited to
the University of Minnesota, any city, any town, any federally
recognized American Indian tribe or subdivision thereof located
in Minnesota, any housing and redevelopment authority referred
to in chapter 462, or any body authorized to exercise the powers
of a housing and redevelopment authority, any port authority
referred to in chapter 458, or any body authorized to exercise
the powers of a port authority, any area or municipal
redevelopment agency referred to in chapter 472, any county, or
any other municipal authority or agency established pursuant to
special law, or any entity issuing on behalf of the foregoing.
Subd. 20. [POLLUTION CONTROL PROJECT.] "Pollution control
project" means properties, real or personal, used in the
abatement or control of noise, air, or water pollution, or in
the disposal of solid waste, in connection with a revenue
producing enterprise, engaged in or to be engaged in any
business or industry. A project qualifies as a pollution
control project only:
(1) if at least 75 percent of the proceeds of the
obligations will be used for the construction, acquisition,
installation, or addition of properties described in this
subdivision; or
(2) if it is not a manufacturing project and at least 75
percent of the proceeds of the obligations will be used for the
construction, acquisition, installation, or addition of
properties described in this subdivision and in subdivision 14.
Subd. 21. [PRELIMINARY RESOLUTION.] "Preliminary
resolution" means a resolution adopted by the governing body of
the issuer or in the case of the iron range resources and
rehabilitation board by the commissioner. The resolution must
express a preliminary intention of the issuer to issue
obligations for a specific project and must identify the
proposed project and the proposed amount of the obligations to
be issued.
Subd. 22. [QUALIFIED 501(c)(3) BONDS.] "Qualified
501(c)(3) bonds" mean obligations the proceeds of which are to
be used by, or loaned or otherwise made available to, an
organization described in section 501(c)(3) of the Internal
Revenue Code of 1954, as amended through December 31, 1985, in
activities directly related and essential to the conduct of the
charitable activities of the organization and that are not used
by a nonexempt person in its trade or business or obligations
with a comparable definition in a federal volume limitation act.
Subd. 23. [QUALIFIED MORTGAGE BONDS.] "Qualified mortgage
bonds" mean obligations which are qualified mortgage bonds as
defined by section 103A(c) of existing federal tax law.
Subd. 24. [QUALIFIED MORTGAGE CREDIT CERTIFICATE
PROGRAM.] "Qualified mortgage credit certificate program" means
any program which satisfies the definition of such term as
contained in section 25(c)(2) of the Internal Revenue Code of
1954, as amended through July 18, 1984.
Subd. 25. [QUALIFIED MULTIFAMILY HOUSING
PROJECT.] "Qualified multifamily housing project" means a
multifamily housing project in which at least 50 percent of the
units will be held for occupancy by families or individuals with
adjusted gross income not in excess of 80 percent of the median
family income as estimated by the United States Department of
Housing and Urban Development for the metropolitan statistical
area.
Subd. 26. [STATE ISSUER.] "State issuer" means the state
of Minnesota; the iron range resources and rehabilitation board;
or other agency, department, board, or commission of the state,
which is authorized to issue obligations and has statewide
jurisdiction.
Subd. 27. [SUBSTANTIAL COMMITMENT OF LOCAL PUBLIC
FUNDS.] "Substantial commitment of local public funds" means
that either of the following two conditions is satisfied.
(a) Under the project financing the governmental unit
appropriates, pledges, guarantees, or otherwise provides local
public funds to pay part of the cost of financing the
obligations, including bond issuance, debt service, loan
origination, and carrying expenses, or of the facility financed
with the proceeds of the obligations. This condition is
satisfied only if at the time the obligations are issued, the
issuer reasonably expects that the aggregate value of the local
public funds will exceed the lesser of $1,000,000 or one percent
of the face amount of the obligations. No provision may be made
for a nonexempt person to reimburse the governmental unit for
the local public funds.
(b) The governmental unit appropriates, pledges,
guarantees, or otherwise provides a program contribution of
local public funds or governmental services to the program or a
facility financed with the proceeds of the obligations. This
condition is satisfied only if the issuer reasonably expects at
the time the obligations are issued that the aggregate value of
the local public funds will exceed $5,000,000 or five percent of
the aggregate face amount of the obligations. The issuer must
value the services at the reasonable cost of delivering them.
The program contribution must be used for one or more of the
following purposes:
(i) reducing the cost of financing the obligations, as
described in clause (a);
(ii) securing the payment of debt service on obligations
issued pursuant to the program;
(iii) financing public improvements under a comprehensive
redevelopment or renewal program, if the costs are reasonably
allocable to a facility financed with the proceeds of the
obligations and if the improvements are made no earlier than
three years prior to issuance of the obligations to which the
contribution applies or more than one year after issuance; or
(iv) other costs reasonably related to the program.
If the governmental unit is reimbursed by a nonexempt person for
any part of the program within five years after the contribution
was made, the reimbursement must be applied for one or more of
the purposes described in this paragraph.
For purposes of this subdivision, "governmental unit" means
the issuer that issues the obligations for the project or the
governmental unit that approves the obligations for purposes of
section 103(k)(2) of the Internal Revenue Code of 1954, as
amended through December 31, 1985, or both.
Subd. 28. [WASTE MANAGEMENT PROJECT.] "Waste management
project" means a project which is authorized by chapter 115A or
400, sections 473.801 to 473.834, or by any other law or home
rule charter authorizing substantially the same type of project.
Subd. 29. [WRITTEN DEVELOPMENT PROGRAM.] "Written
development program" or "program" means a written economic
development plan that contains at least substantially all of the
following:
(1) a description of the area subject to the plan, which
may not exceed 20 percent of the total acreage of the issuer;
(2) a statement of the objectives for the development of
the area subject to the plan;
(3) a statement of the development plan for the area
subject to the plan, including the property within the area, if
any, which is to be acquired by a governmental unit;
(4) a description of the type of specific development
reasonably expected to take place within the area subject to the
plan; and
(5) a description of the kind and an estimate of the amount
of public funds, including local public funds, expected to be
spent in connection with the development of the area subject to
the plan.
Sec. 11. [474A.03] [DETERMINATION OF ANNUAL VOLUME CAP.]
Subdivision 1. [ANNUAL VOLUME CAP UNDER EXISTING FEDERAL
TAX LAW.] At the beginning of each calendar year, the department
shall determine the aggregate dollar amount of the annual volume
cap under existing federal tax law for the calendar year, and of
this amount the department shall determine the following amounts:
(1) the amount that is allocated to entitlement issuers
under section 12;
(2) the amount initially available for allocation through
the pool under section 13, which is the annual volume cap
determined under this subdivision less the amount determined
under clause (1); and
(3) the amount available for issuance of qualified mortgage
bonds under section 15.
Subd. 2. [ANNUAL VOLUME CAP UNDER FEDERAL VOLUME
LIMITATION ACT.] At the beginning of each calendar year, the
department shall determine the aggregate dollar amount of the
annual volume cap under a federal volume limitation act during
the calendar year, and of this amount the department shall
determine the following amounts:
(1) the amount, if any, that a federal volume limitation
act requires be reserved for qualified 501(c)(3) bonds or the
amount provided by section 20, subdivision 9;
(2) the amount of the governmental volume cap allocated to
entitlement issuers under section 16, stating separately (i) the
amount available for issuance of "qualified mortgage bonds" or
obligations with a comparable definition in a federal volume
limitation act, and (ii) the amount available for issuance of
any obligations; and
(3) the amount initially available for allocation through
the pool under section 19, which is the amount of the
governmental volume cap less the aggregate of the amounts
determined in clause (2).
Notwithstanding the foregoing, for the period from and
including January 1, 1987, to and including June 30, 1987, the
following limitations shall apply: (i) one-half of the amount
determined pursuant to clause (2)(ii) shall be allocated to
entitlement issuers under section 16; (ii) the entire amount
determined pursuant to clause (2)(i) shall be allocated to
entitlement issuers under section 16; (iii) one-half of the
amount determined pursuant to clause (3) shall be made available
for allocation under section 19; and (iv) one-half of the
amount, if any, determined pursuant to clause (1) shall be made
available for allocation under section 20. The remaining amount
of annual volume cap for calendar year 1987 not so allocated, or
made available for allocation, shall remain unallocated unless
otherwise provided by law.
Subd. 3. [ADJUSTMENTS FOR CHANGES TO VOLUME CAP IN FEDERAL
VOLUME LIMITATION ACT.] If the annual volume cap in a federal
volume limitation act that becomes law is greater than or less
than the annual volume cap that existed in a federal volume
limitation act in the form that existed as of January 1, 1986,
the department shall adjust the calculations made under
subdivision 2, except for clause (1), and section 16, except as
provided in section 27. If the annual volume cap is adjusted,
the commissioner may withdraw any allocation granted before the
adjustment was made pursuant to which obligations have been
issued, only with the written consent of the issuer.
Sec. 12. [474A.04] [ENTITLEMENT ALLOCATIONS UNDER EXISTING
FEDERAL TAX LAW.]
Subdivision 1. [HIGHER EDUCATION COORDINATING BOARD
ALLOCATION.] Of the aggregate annual volume cap under existing
federal tax law, $25,000,000 for each calendar year is allocated
to the higher education coordinating board for the issuance of
obligations pursuant to chapter 136A. On September 1, any
unused portion of the amount allocated to the higher education
coordinating board pursuant to this subdivision cancels and the
authority must be reallocated pursuant to section 13.
Subd. 2. [IRON RANGE RESOURCES AND REHABILITATION
ALLOCATION.] Of the aggregate annual volume cap under existing
federal tax law, $30,000,000 for each calendar year is allocated
to the iron range resources and rehabilitation commissioner.
After September 1 of each year, the iron range resources and
rehabilitation commissioner may retain any unused portion of the
allocation only if the commissioner has submitted to the
department on or before September 1 a preliminary resolution for
a specific project and a letter which states (1) the intent to
issue obligations pursuant to the allocation or a portion of it
before the end of the calendar year or within the time period
permitted under existing federal tax law, and (2) a description
of the specific project or projects for which the obligations
will be issued, together with an application deposit in the
amount of one percent of the amount of the unused allocation or
the portion of it pursuant to which the commissioner intends to
issue obligations. The commissioner may subsequently reallocate
the retained allocation among the projects described in clause
(2). On September 1, any unused portion of the amount allocated
to the iron range resources and rehabilitation commissioner and
not reserved by a preliminary resolution, a letter of intent,
and an application deposit is canceled and must be reallocated
under section 13. If the iron range resources and
rehabilitation commissioner returns for reallocation all or a
part of the allocation on or before October 31, that portion of
the application deposit equal to one percent of the amount
returned shall be refunded within 30 days.
Upon the request of a statutory city located in the
taconite tax relief area which received an entitlement
allocation under Minnesota Statutes 1984, section 474.18, of
$5,000,000 or more for calendar year 1985, the iron range
resources and rehabilitation commissioner shall enter into an
agreement with the city whereby the commissioner issues
obligations, in an amount requested by the city but not to
exceed $5,000,000, on behalf of the city.
Subd. 3. [ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY
ALLOCATION.] Of the aggregate annual volume cap under existing
federal tax law, $60,000,000 for each calendar year is allocated
to the energy and economic development authority. After
September 1 of each year, the energy and economic development
authority or any issuer which receives an allocation from the
energy and economic development authority may retain any unused
portion of its allocation only if it has submitted to the
department, on or before September 1 a preliminary resolution
for a specific project and a letter which states (1) its intent
to issue obligations pursuant to its allocation or a portion of
it before the end of the calendar year or within the time period
permitted under existing federal tax law, and (2) a description
of the specific project or projects for which the obligations
will be issued, together with an application deposit in the
amount of one percent of the amount of its unused allocation or
the portion of it pursuant to which it intends to issue
obligations. The energy and economic development authority may
subsequently reallocate the retained allocation among the
projects described in clause (2). On September 1 any unused
portion of the amount allocated to the energy and economic
development authority and not reserved by a preliminary
resolution, a letter of intent, and an application deposit is
canceled and must be reallocated under section 13. If the
energy and economic development authority or any issuer which
receives an allocation from the authority returns for
reallocation all or any part of its allocation on or before
October 31, that portion of its application deposit equal to one
percent of the amount returned shall be refunded within 30 days.
Subd. 4. [ENTITLEMENT CITIES.] Of the aggregate annual
volume cap under existing federal tax law, for each calendar
year the amount determined pursuant to this subdivision is
allocated to (1) cities of the first class, and (2) the largest
Minnesota city located in a metropolitan statistical area that
does not contain a city of the first class, if the city has a
population of 25,000 or more. The amount allocated to a first
class city shall be an amount equal to $200 multiplied by the
city's population. The amount allocated to each city qualifying
under clause (2) is $5,000,000. After September 1 of each year,
an issuer receiving an allocation under this subdivision may
retain any unused portion of its allocation only if it has
submitted to the department by September 1 a letter stating its
intent to issue obligations pursuant to its allocation before
the end of the calendar year or within the time permitted under
existing federal tax law and an application deposit equal to one
percent of the amount of the unused allocation for which it
intends to issue obligations. Any unused portion of an
allocation for which an application deposit and letter of intent
has not been received by the department by September 1 must be
canceled and reallocated under section 13. If an issuer returns
for reallocation all or part of its allocation under this
subdivision by October 31, the application deposit equal to one
percent of the amount returned must be refunded to the issuer.
For purposes of this subdivision, "population" means the
population determined under section 477A.011, subdivision 3.
Subd. 5. [NOTICE OF ENTITLEMENT ALLOCATION.] As soon as
possible in each calendar year, the department shall provide to
each entitlement issuer a written notice of the amount of its
entitlement allocation under this section.
Subd. 6. [ENTITLEMENT TRANSFERS.] An entitlement issuer
may enter into an agreement with another entitlement issuer
whereby the recipient entitlement issuer issues obligations
pursuant to issuance authority allocated to the original
entitlement issuer under this section.
Sec. 13. [474A.05] [ALLOCATION OF POOL AMOUNT UNDER
EXISTING FEDERAL TAX LAW.]
Subdivision 1. [POOL AMOUNT.] Of the aggregate annual
volume cap under existing federal tax law, the amount determined
pursuant to section 11, subdivision 1, clause (2), shall be
allocated among issuers pursuant to this section for each
calendar year. An entitlement issuer may apply for an
allocation pursuant to this section only after August 20. An
entitlement issuer may apply for an allocation before November 1
only if the entitlement issuer has adopted a final resolution
authorizing the sale of obligations equal to any allocation
received under section 12 or has returned all of its unused
allocation for reallocation under this section.
Notwithstanding the preceding paragraph, the following
entitlement issuers may apply for an allocation under this
section:
(a) A city of the first class may apply for an allocation
for a manufacturing project at any time.
(b) State issuers may apply for and receive allocations
under this section at any time for an aggregate amount not to
exceed that portion of its entitlement allocation returned for
reallocation under section 12.
Subd. 2. [APPLICATION.] An issuer may apply for an
allocation pursuant to this section by submitting to the
department an application on forms provided by the department,
accompanied by (1) a preliminary resolution, and (2) an
application deposit in the amount of one percent of the
requested allocation. An issuer may elect not to submit an
application for an allocation for a project for which the issuer
previously adopted a preliminary resolution.
Subd. 3. [ALLOCATION CRITERIA.] The department shall rank
each application received pursuant to this section on the basis
of the number of points awarded to it, with one point being
awarded for each of the following criteria satisfied:
(a) The current rate of unemployment for the applicant is
at or above 110 percent of the statewide average unemployment
rate for the most recently available reporting period, as
determined by the department of economic security. The
unemployment rate for the applicant shall be the greater of (1)
the most recent estimate available for the smallest jurisdiction
which wholly includes the jurisdiction of the applicant, as
reported by the department of economic security, or (2) another
estimate supplied by the applicant with respect to its
jurisdiction, which is documented by the applicant.
(b) The number of individuals employed in the applicant's
jurisdiction declined from the second calendar year before the
application, to the first calendar year before the application.
The estimate of the number of individuals employed for each year
must be based on the same source, and must be (1) the most
recent estimate available for the smallest jurisdiction which
wholly includes the applicant, as reported by the department of
economic security, or (2) another estimate supplied by the
applicant with respect to its jurisdiction, which is documented
by the applicant.
(c) The project will provide additional general tax revenue
to the taxing jurisdictions in which the project is located
beginning not later than three years after issuance of the
obligations.
(d) The number of jobs to be created by the project is at
least two jobs for each $100,000 of issuance authority requested
for the project.
(e) As of the date of application the total market value of
all taxable property in the applicant's jurisdiction, based on
the most recent certification of assessed value to the
commissioner of revenue, has either (1) declined in relation to
the first calendar year before the certification, or (2)
increased in relation to the first calendar year before the
certification at a rate which is less than 90 percent of the
rate of increase of the state average market value over the same
period.
(f) The total capital expenditures for the project exceed
by ten percent the amount of the proceeds of the obligations to
be issued for the project.
(g) The project is wholly located in an enterprise zone
designated pursuant to section 273.1312.
(h) The project site meets the criteria necessary to
qualify as a tax increment redevelopment district as defined in
section 273.73, subdivision 10. To qualify under this clause
the project need not be included in a tax increment financing
district.
(i) The project meets one of the following energy
conservation criteria: (1) the project is eligible for the
additional federal investment tax credits for energy property,
(2) the project involves construction or expansion of a district
heating system as defined in section 116J.36, or (3) the project
involves construction of an energy source as described in
section 116J.26, clause (a), (b), or (d) or 116M.03,
subdivisions 22, 23 and 26.
(j) The project consists of the renovation, rehabilitation,
or reconstruction of an existing building which is (1) located
in a historic district designated under section 138.73, or on a
site listed in the state registry of historical sites under
sections 138.53 to 138.5819; or (2) designated in the National
Register pursuant to United States Code, title 16, section 470a.
(k) Service connections to sewer and water systems are
available to the project at the time the application is
submitted.
(l) As provided by a binding agreement by the principal
user or users of the project with the applicant, at least ten
percent of the individuals employed by the principal user or
users of the project will be minority or low income individuals.
(m) When the application is submitted either (1) the
anticipated owner of the project, or any party of which the
owner is a controlling partner or shareholder, or which is a
controlling shareholder or partner of the owner, does not own or
operate a substantially similar business within the state or (2)
the project is an expansion of the operations of an existing
business which is not likely to have the effect of transferring
existing employment from one or more other municipalities within
the state to the municipality in which the project is located.
(n) A controlling interest in the project will be owned by
one or more women or minority persons.
(o) Seventy-five percent or more of the proceeds of the
proposed issue will be used to rehabilitate an existing
structure.
Subd. 4. [ALLOCATION PROCEDURE.] (a) The department shall
allocate available issuance authority under this section on
Monday of each week to applications received on or before Monday
of the preceding week in the following order of priority and
available issuance authority may not be allocated to any other
project:
(1) applications for manufacturing projects;
(2) applications for pollution control projects or waste
management projects; and
(3) applications for commercial redevelopment projects.
Within each category of applications available authority
shall be allocated on the basis of the numerical rank determined
pursuant to this section. In the case of an application for
issuance authority that includes more than one project to be
financed by one issue of obligations, the points assigned to the
application shall be computed on the basis of the weighted
average of points for the projects. The projects must all be of
the same category of projects to be submitted as a multiproject
application. If two or more applications have the same
numerical rank, the ranking of the applications must be by lot
unless otherwise agreed by the respective issuers. If an
application is rejected, the department must notify the
applicant and return the application deposit to the applicant
within 30 days unless the applicant requests in writing that the
application be resubmitted.
(b)(1) From January 1 through September 30, no more than 20
percent of the total amount available for allocation during the
calendar year pursuant to this section may be allocated to
pollution control and waste management projects.
(2) From January 1 to September 30, no more than 35 percent
of the total amount available for allocation during the calendar
year pursuant to this section may be allocated to commercial
redevelopment projects. This amount is increased to 50 percent
of the total available authority for the next month's allocation
if the following two conditions occur: (i) on or after June 30
the total amount of issuance authority available under this
section which has not been allocated or has been allocated to
but was returned by an issuer exceeds 45 percent of the total
amount of issuance authority available for allocation under this
section for the calendar year; and (ii) the entire amount of
issuance authority available under this subparagraph for
commercial redevelopment projects has been allocated.
Subd. 5. [LETTER OF INTENT.] After September 1 of each
year, an issuer which has received an allocation pursuant to
this section prior to September 1 may retain any unused portion
of the allocation only if the issuer has submitted to the
department on or before September 1 a letter stating its intent
to issue obligations pursuant to the allocation before the end
of the calendar year or within the time period permitted by
existing federal tax law. If the letter of intent is not
submitted to the department, the one percent application deposit
must be returned to the issuer, the allocation is canceled, and
the issuance authority is available for reallocation pursuant to
this section. If an issuer returns for reallocation all or any
part of its allocation on or before October 31, that portion of
its application deposit equal to one percent of the amount
returned shall be refunded within 30 days.
Subd. 6. [FINAL ALLOCATION.] From October 1 to December 31
of each year, the annual volume cap under existing federal tax
law, which is not both previously allocated and subject to a
preliminary resolution for a specific project, whether or not
committed pursuant to a letter of intent, is available for
allocation or reallocation and shall be allocated among
issuers. The iron range resources and rehabilitation
commissioner, the energy and economic development authority, or
an entitlement city may reallocate after September 30 its
retained allocation among projects identified in preliminary
resolutions filed with the department prior to October 1. An
application for an allocation under this subdivision must
include evidence of passage of a preliminary resolution and
state that it is the intent of the applicant that the
obligations will be issued by the end of the year or within the
time period permitted by existing federal tax law, and must be
accompanied by an application deposit in the amount of one
percent of the requested allocation. Applications must be made
and allocations shall be awarded in accordance with subdivisions
3 and 4.
After September 30, authority may be allocated under this
subdivision to any project, notwithstanding the percentage
limits and other restrictions contained in subdivision 4.
Applications must be ranked and authority allocated first
according to the order of priority and ranking of points under
subdivisions 3 and 4. The remaining authority must be allocated
according to the ranking of points under subdivision 3. If two
or more applications receive an equal number of points,
allocations among them must be made by lot unless otherwise
agreed by the respective applicants.
If issuance authority remains or becomes available
following the last Monday on which allocations are made for any
calendar year, the department must allocate the available
authority to the department of finance. The department of
finance shall allocate the remaining authority between the
Minnesota housing finance agency and the higher education
coordinating board. Amounts allocated to the Minnesota housing
finance agency shall be used for the issuance of mortgage credit
certificates, and amounts allocated to the higher education
coordinating board shall be used for the issuance of obligations
under chapter 136A.
Subd. 7. [RETURN OF ALLOCATION.] If on or after November 1
but prior to December 1 of any year, an issuer determines that
it will not issue obligations pursuant to an allocation received
by it pursuant to this section or section 12 by the end of that
year or within the time period permitted by existing federal tax
law, the issuer must notify the department and the amount will
be available for reallocation pursuant to this subdivision. In
such case, the department shall refund to the issuer within 30
days that portion of any application deposit equal to one-third
of one percent of the amount returned for reallocation. The
amounts available for reallocation must be allocated on or
before December 31 pursuant to subdivision 6.
Sec. 14. [474A.06] [NOTICE OF ISSUE UNDER EXISTING FEDERAL
TAX LAW.]
Issuers that issue obligations subject to existing federal
tax law shall file with the department within five days after
the obligations are issued a written notice of issue stating the
date of issuance of the obligations, the allocation under which
the obligations are issued, and the principal amount of the
obligations. If obligations are to be issued as a series of
obligations, the notice of issue must be filed for each series
of obligations that is issued. If the notice of issue is not
filed within five days after the obligations are issued, the
obligations shall be considered not to have received an
allocation under existing federal tax law. Within 30 days after
receipt of the notice, the department shall refund a portion of
the application deposit required under section 12 or section 13
equal to one percent of the principal amount of the obligations
issued.
Sec. 15. [474A.07] [QUALIFIED MORTGAGE BONDS.]
Subdivision 1. [HOUSING FINANCE AGENCY ALLOCATION.] The
applicable volume limit for qualified mortgage bonds for the
Minnesota housing finance agency, pursuant to existing federal
tax law, for a calendar year is 100 percent of the state ceiling
for qualified mortgage bonds for that year, reduced only by (1)
any amounts of qualified mortgage bonds which have been or may
be allocated by law to specified cities, and (2) any amounts of
qualified mortgage bonds which are allocated to cities pursuant
to subdivisions 2 and 3. The aggregate amount allocated to
cities, under clause (1) or (2), together with the amount of
qualified mortgage bonds reserved for the agency, shall not
exceed the limit for the state under existing federal tax law.
By August 1 of each year, a city which has received by law
an allocation of the state ceiling for qualified mortgage bonds
shall submit its housing programs to the Minnesota housing
finance agency for approval pursuant to section 462C.04,
subdivision 2, in an amount of bonds equal to or less than, the
city's allocation. If the amount of qualified mortgage bonds,
for which program approval is granted on or before September 1
is less than the amount allocated by law to the city, the
applicable limit for the agency shall be increased by the
difference between the amount allocated by law to the city, and
the amount for which program approval has been granted.
Subd. 2. [CITY ALLOCATION.] Unless otherwise authorized by
law, a city that intends to issue during any calendar year
qualified mortgage bonds that are subject to existing federal
tax law, shall by January 2 of that year submit to the Minnesota
housing finance agency a program that will use a portion of the
state qualified mortgage bond ceiling. The total amount of
qualified mortgage bonds included in all programs submitted
pursuant to this subdivision by a city may not exceed
$10,000,000. Each program shall be accompanied by a certificate
from the city that states that the qualified mortgage bond issue
is feasible. By February 1, the Minnesota housing finance
agency shall review each program pursuant to section 462C.04,
subdivision 2. The Minnesota housing finance agency shall
approve all programs that the agency determines are consistent
with chapter 462C, and that meet the following conditions:
(1) all of the loans must be reserved for a period of not
less than six months for persons and families whose adjusted
family income is below 80 percent of the limits on adjusted
gross income provided in section 462C.03, subdivision 2; and
(2) loans must be made only to finance homes that are
serviced by municipal water and sewer utilities; provided that
if the approval of all programs would result in an allocation to
cities in excess of 27-1/2 percent of the state ceiling for the
calendar year 1985, reduced by the amount of qualified mortgage
bonds that are allocated by law to specified cities, the
Minnesota housing finance agency shall approve programs that are
submitted by a city which meets any of the following three
criteria: (i) a city of the first class, (ii) a city that did
not receive an allocation under this subdivision or Minnesota
Statutes 1984, section 462C.09, subdivision 2(a), or Minnesota
Statutes 1985 Supplement, section 462C.09 subdivision 2(a),
during the preceding two calendar years, or (iii) a group of
cities that plan to jointly issue bonds for the program provided
further that if approval of all of the programs submitted by
cities that meet one or more of the criteria in (i), (ii), or
(iii) would result in a total allocation to cities in excess of
the portion of the state ceiling available for allocation, then
from among those programs the agency shall select by lot the
programs to be approved. If a portion of the state ceiling
remains unallocated after the agency has approved all programs
submitted by cities that meet one or more of the criteria in
(i), (ii), or (iii), the Minnesota housing finance agency shall
select by lot from among the remaining programs the programs to
be approved. The Minnesota housing finance agency shall
determine if a program meets the conditions in clauses (1) and
(2) based solely upon the program with accompanying information
submitted to the agency. Approval of a program shall constitute
an allocation of a portion of the state ceiling for qualified
mortgage bonds equal to the proposed bond issue or issues
contained in the program, provided that the allocation for the
last selected program that receives an allocation may be equal
to or less than the amount of the bond issue or issues proposed
in the program.
If a city which received an allocation pursuant to this
subdivision, or which has been allocated a portion of the state
ceiling by law and has received approval of one or more
programs, has not issued bonds by September 1 in an amount equal
to the allocation, and the city intends to issue qualified
mortgage bonds prior to the end of the calendar year, the city
shall by September 1 submit to the Minnesota housing finance
agency for each program a letter that states the city's intent
to issue the qualified mortgage bonds prior to the end of the
calendar year. If the Minnesota housing finance agency does not
receive the letter from the city, then the allocation of the
state ceiling for that program expires on September 1, and the
applicable limit for the Minnesota housing finance agency is
increased by an amount equal to the unused portion of the
allocation to the city. A city referred to in subdivision 1,
clause (1), need not apply under this subdivision with respect
to bonds allocated by law to the city. Nothing in this
subdivision shall prevent any such city from applying for an
additional allocation of bonds under this subdivision.
Subd. 3. [ADDITIONAL CITY ALLOCATION.] On or before
September 1 of each year, the Minnesota housing finance agency
shall identify the amount, if any, of its applicable limit for
qualified mortgage bonds for that calendar year that it does not
intend to issue. A city that intends to issue qualified
mortgage bonds prior to the end of the calendar year for which
it has not received an allocation of the state ceiling may
submit a program for approval on or before September 1 to the
Minnesota housing finance agency for a portion of the amount of
the Minnesota housing finance agency's applicable limit as
provided in subdivision 1 which the agency does not intend to
issue. The total amount of qualified mortgage bonds included in
all programs of any city submitted pursuant to this subdivision
shall not exceed $10,000,000. The program shall be accompanied
by the same certificate required by subdivision 2. The
Minnesota housing finance agency shall allocate the amount of
the state ceiling to be allocated pursuant to this subdivision
using the same factors listed in subdivision 2, provided that a
program for a city receiving an allocation pursuant to
subdivision 2 during the calendar year shall be ranked below all
other programs if the bonds proposed in the program, when added
to the bonds included in programs approved pursuant to
subdivision 2, exceed $10,000,000. A city that submitted a
program pursuant to subdivision 2 but that did not receive an
allocation may renew its application with a letter of intent to
issue. Nothing in this subdivision shall prevent a city
referred to in subdivision 1, clause (1), from applying for an
additional allocation of bonds under this subdivision.
Subd. 4. [AGENCY REVIEW.] The 30-day review requirement in
section 462C.04, subdivision 2, does not apply to programs
submitted to the agency that require an allocation of the state
ceiling pursuant to this section. A failure by the agency to
complete any action by the dates set forth in this section shall
not result in the approval of any program or the allocation of
any portion of the applicable limit of the agency. Approval by
the agency of programs after the dates provided in this section
is effective in allocating a portion of the state ceiling.
Programs approved by the agency may be amended with the approval
of the agency under section 462C.04, subdivision 2, provided
that the dollar amount of bonds for the program may not be
increased.
Subd. 5. [STATE CERTIFICATION.] The executive director of
the Minnesota housing finance agency is designated as the state
official to provide the preissuance certification required by
section 103A(j)(4)(A) of the Internal Revenue Code of 1954, as
amended through December 31, 1985.
Subd. 6. [CORRECTION AMOUNTS FOR MORTGAGE CREDIT
CERTIFICATE PROGRAMS.] A reduction in the state ceiling for
qualified mortgage bonds caused by the failure of a mortgage
credit certificate program to comply with a federal statute or
regulation shall be assessed against the amount of qualified
mortgage bonds allocated by law, other than by way of this
section, to the city which adopted the program. If no such
allocation exists or it is less than the correction amount
determined by the secretary of the treasury, then the amount of
the correction amount in excess of the allocation shall be
assessed against the 27-1/2 percent of the state ceiling
allocated to the cities under subdivision 2.
Subd. 7. [FEDERAL VOLUME LIMITATION ACT.] Any issuance
authority received by the agency under section 17 or by a city
under section 16 or subdivision 3 may be used for the issuance
of "qualified mortgage bonds" or obligations with a comparable
definition in a federal volume limitation act, in the same
manner and subject to the same conditions provided for in this
section for qualified mortgage bonds.
Sec. 16. [474A.08] [DETERMINATION OF ENTITLEMENT
ALLOCATIONS UNDER FEDERAL VOLUME LIMITATION ACT.]
Subdivision 1. [ENTITLEMENT ISSUERS.] The dollar amount of
the governmental volume cap allocated to entitlement issuers
under a federal volume limitation act for each calendar year
must be determined by the department as follows:
(1) to the department of finance 24 percent of the
governmental volume cap to be allocated among state issuers
under section 17;
(2) to each city, a sum equal to 75.6 percent of the amount
of bond issuance authority allocated to the city under section
12, subdivision 4, provided that if there is an adjustment to
the annual volume cap under section 11, subdivision 3, the
amount of issuance authority allocated by this clause must be
adjusted so that each city is allocated a percentage of the
adjusted governmental volume cap that is equal to the percentage
of the governmental volume cap originally allocated to each city;
(3) to each city to which bond issuance authority is
specifically allocated under state law for qualified mortgage
bonds, a sum equal to the full amount of the bond issuance
authority, which amount is to be used solely for the issuance of
"qualified mortgage bonds" or for obligations with a comparable
definition as used in the federal volume limitation act prior to
September 1, and thereafter may also be used for the issuance of
either such mortgage bonds or obligations to finance multifamily
housing projects;
(4) to a city or cities that received an allocation to
issue qualified mortgage bonds during 1986 under Minnesota
Statutes 1985 Supplement, section 462C.09, subdivision 2a, an
amount or amounts for 1986 equal to such allocation, which
amount may be used prior to September 1 for the issuance of
"qualified mortgage bonds" or for obligations with a comparable
definition in a federal volume limitation act, and thereafter
may also be used for the issuance of obligations to finance
multifamily housing projects; and
(5) to a city or cities determined in accordance with the
procedure set forth in section 15, subdivision 2, an allocation
to issue qualified mortgage bonds during 1987, in an amount
determined in accordance with such procedure contained in
section 15, subdivision 2, which amount may be used prior to
September 1 for the issuance of "qualified mortgage bonds" or
for obligations with a comparable definition in a federal volume
limitation act, and thereafter may also be used for the issuance
of obligations to finance multifamily housing projects.
For any entitlement issuer that received an allocation for
a qualified multifamily housing project in 1986 and did not
issue obligations for the project within the time period
specified under section 21, subdivision 3, the amount allocated
to the entitlement issuer under this subdivision for 1987 must
be reduced by the amount of the unused allocation and the amount
of any other allocation retained by that issuer after September
1, 1986, for which obligations have not been issued in 1986.
The amount of any reduction in allocation must be added to the
amounts available for pool allocation under section 19.
For purposes of this subdivision, "population" means the
population determined under section 477A.011, subdivision 3.
Subd. 2. [NOTICE OF OF ENTITLEMENT ALLOCATION.] As soon as
possible in each calendar year, the department shall provide a
notice of entitlement allocation to each entitlement issuer
stating separately the amount that may be issued for "qualified
mortgage bonds" or for obligations with a comparable definition,
a federal volume limitation act and the amount that may be
issued for any obligations.
Sec. 17. [474A.09] [ALLOCATION OF STATE ENTITLEMENTS UNDER
FEDERAL VOLUME LIMITATION ACT.]
The amount allocated to the department of finance under
section 16, subdivision 1, clause (1), may be allocated or
reallocated by the commissioner of the department of finance
internally among state issuers at any one time or from time to
time during the calendar year, provided that 11.5 percent of the
entitlement allocation is allocated to the iron range resources
and rehabilitation commissioner. Upon the request of a
statutory city located in the taconite tax relief area that
received an entitlement allocation under Minnesota Statutes
1984, section 474.18, of $5,000,000 or more for calendar year
1985, the iron range resources and rehabilitation commissioner
shall enter into an agreement with the city whereby the
commissioner issues obligations on behalf of the city, in an
amount requested by the city but not to exceed 17 percent of the
amount allocated to the commissioner under this subdivision.
Sec. 18. [474A.10] [ENTITLEMENT ISSUERS UNDER THE FEDERAL
VOLUME LIMITATION ACT.]
Subdivision 1. [NOTICE OF ISSUE.] Each entitlement issuer
that issues obligations pursuant to an entitlement allocation
received under section 16 shall provide a notice of issue to the
department on forms provided by the department stating (1) the
date of issuance of the obligations; (2) the title of the issue;
(3) the principal amount of the obligations; (4) the type or
types of the obligations that cause them to be subject to the
annual volume cap; and (5) the dollar amount of the obligations
subject to the governmental volume cap of a federal volume
limitation act. For obligations that are issued as a part of a
series of obligations, a notice must be provided for each
series. Any issue of obligations for which a notice of issue is
not provided to the department within five days after issuance
is deemed not to have received an allocation under a federal
volume limitation act. Within 30 days after receipt of the
notice of issue, the department shall refund a portion of any
deposit made pursuant to subdivision 3 equal to one percent of
the principal amount of the allocation authority issued.
Subd. 2. [ENTITLEMENT TRANSFERS.] An entitlement issuer
may enter into an agreement with another entitlement issuer
whereby the recipient entitlement issuer issues obligations
pursuant to issuance authority allocated to the original
entitlement issuer.
Subd. 3. [RESERVATION OR CANCELLATION OF ENTITLEMENT
ALLOCATIONS.] After September 1, 1986, an entitlement issuer may
retain all or a portion of its entitlement allocation under a
federal volume limitation act only if the department has
received by September 1 a letter stating the intent of the
entitlement issuer to issue obligations under its entitlement
allocation before the end of the calendar year or within the
time permitted by a federal volume limitation act and an
application deposit equal to one percent of the unused
allocation for which it intends to issue obligations, provided
that there shall be credited against the required deposit, any
deposit made in accordance with section 12 for a corresponding
allocation under existing federal tax law. Any unused portion
of an allocation for which an application deposit and letter of
intent have not been received by the department by September 1,
1986, is canceled and must be reallocated under section 19.
Notwithstanding the provisions of this subdivision, the
department of finance may retain $15,000,000 of its entitlement
allocation for the issuance of obligations. If any time after
August 31, 1986, the department of finance determines that part
or all of the retained allocation will not be required for
obligations issued by the state, the portion not required shall
be canceled and shall be reallocated under section 19.
If an entitlement issuer returns for reallocation all or
part of its allocation under this subdivision after August 31,
but on or before October 31, the application deposit equal to
one percent of the amount of issuance authority returned must be
refunded to the issuer. If all or part of the entitlement
allocation is returned for reallocation after October 31, but
before December 1, the application deposit equal to one-third of
one percent of the amount of issuance authority returned must be
refunded. The amount of any refund is reduced by the amount of
the deposit refunded under section 12.
Sec. 19. [474A.11] [ALLOCATION OF POOL AMOUNT UNDER THE
FEDERAL VOLUME LIMITATION ACT.]
Subdivision 1. [POOL AMOUNT.] For calendar year 1986 and
from January 1 to June 30 of calendar year 1987, the portion of
the governmental volume cap determined under section 11,
subdivision 2, clause (3), and any allocations canceled or
returned for reallocation under section 18 or section 20,
subdivision 9, shall be allocated to issuers, other than state
issuers, under this section.
An entitlement issuer may apply for an allocation under
this section only after August 20. If an entitlement issuer
applies for an allocation prior to November 1, the entitlement
issuer must have either adopted a final resolution authorizing
the sale of obligations in an amount equal to any allocation
received under section 16 or returned any remaining allocation
for reallocation under this section. State entitlement issuers,
other than the iron range resources and rehabilitation
commissioner, may not apply for an allocation under this section
except as provided in clause (d).
Notwithstanding the preceding paragraph, the following
entitlement issuers may apply for an allocation under this
section:
(a) Entitlement issuers that received an allocation only
under section 16, subdivision 1, clause (4) or (5), may apply
for an allocation at any time.
(b) A city of the first class may apply for an allocation
for a manufacturing project at any time.
(c) Any entitlement issuer, other than state issuers, may
apply for an allocation for a qualified multifamily housing
project after September 1 if (1) it has adopted a preliminary
resolution for specific projects for the amount of any of its
retained entitlement allocation, and (2) the amount of
allocation applied for does not exceed $10,000,000.
(d) State issuers may apply for and receive allocations
under this section at any time in an aggregate amount not to
exceed that portion of the state's entitlement allocation
returned for reallocation under section 18.
Subd. 2. [APPLICATION.] An issuer may apply for an
allocation pursuant to this section by submitting to the
department an application on forms provided by the department
accompanied by (1) a preliminary resolution, and (2) if the
application is submitted prior to September 1 of any calendar
year, an application deposit in the amount of one percent of the
requested allocation, or if the application is submitted after
August 31, 1986, an application deposit in the amount of two
percent of the requested allocation, provided that there shall
be credited against the required deposit any deposit made with
respect to the same project in accordance with section 13. An
application deposit for a qualified multifamily housing project
must include an additional application deposit in the amount of
one percent of the requested allocation. An application
pursuant to this section may be combined with an application
under section 13.
Subd. 3. [ALLOCATION CRITERIA.] The department shall rank
each application received under this section on the basis of the
number of points awarded to it, with one point being awarded for
each of the criteria listed in section 13, subdivision 3, that
are satisfied, and one point being awarded for each of the
following criteria:
(1) the project is a multifamily housing project; and
(2) the project is a multifamily housing project designed
for rental primarily to handicapped persons or to elderly
persons.
An application for an allocation relating to an issue of
obligations the proceeds of which are to be used to refund
outstanding obligations shall be assigned a ranking of no points.
Subd. 4. [ALLOCATION PROCEDURE.] (a) The department shall
allocate available issuance authority on Monday of each week to
applications received by Monday of the preceding week, in the
following order of priority and available issuance authority may
not be allocated to any other project prior to October 1, 1986:
(1) applications for manufacturing projects;
(2) applications for pollution control projects or waste
management projects; and
(3) applications for commercial redevelopment projects or
multifamily housing projects.
Within each category of applications available authority
must be allocated on the basis of the numerical rank determined
under this section. In the case of an application for an
allocation relating to more than one project to be financed by
one issue of obligations, the points assigned to the application
shall be computed on the basis of the weighted average of points
for the projects. The projects must all be of the same category
of projects to be submitted as a multiproject application. If
two or more applications have the same numerical rank, the
ranking of the applications must be by lot unless otherwise
agreed by the respective issuers. If an application is
rejected, the department shall notify the applicant and shall
return the application deposit to the applicant within 30 days
unless the applicant requests in writing that the application be
resubmitted.
(b) From January 1 to September 30, no more than 20 percent
of the total amount of issuance authority available for
allocation during the calendar year pursuant to this section may
be allocated to pollution control and waste management projects.
(c) From January 1 to September 30, no more than 35 percent
of the total amount of issuance authority available for
allocation during the calendar year pursuant to this section may
be allocated to commercial redevelopment projects and
multifamily housing projects. This amount is increased to 50
percent of the total available authority for the next month's
allocation if the following two conditions occur: (1) on or
after June 30 the total amount of issuance authority available
under this section which has not been allocated or has been
allocated to but was returned by an issuer exceeds 45 percent of
the total amount of issuance authority available for allocation
under this section for the calendar year; and (2) the entire
amount of issuance authority available under this clause for
commercial redevelopment and multifamily housing projects has
been allocated.
From October 1 to December 31 of each year, the annual
volume cap under a federal volume limitation act, which is not
both previously allocated and subject to a preliminary
resolution for a specific project, whether or not committed
pursuant to a letter of intent, or which is not reserved for
qualified mortgage bonds, is available for allocation or
reallocation and shall be allocated among issuers. An
entitlement issuer may reallocate after September 30 its
retained allocation among projects identified in preliminary
resolutions filed with the department prior to October 1.
After September 30, allocations shall be made under this
subdivision to any project including, without limitation,
projects for owner-occupied housing, notwithstanding the
percentage limits and other restrictions contained in this
subdivision. Applications must be ranked and allocations made
first according to the order of priority and ranking of points
under subdivision 3 and this subdivision. Any remaining amount
must be allocated according to the ranking of points under
subdivision 3. If two or more applications receive an equal
number of points, allocations among the applications must be
made by lot unless otherwise agreed by the respective applicants.
Subd. 5. [CERTIFICATE OF ALLOCATION.] The granting of an
allocation of issuance authority by the department pursuant to
this section shall be evidenced by issuance of a certificate of
allocation provided to the applicant in accordance with section
21.
Subd. 6. [FINAL ALLOCATION.] If issuance remains or
becomes available following the last Monday on which allocations
are made during any calendar year, the department must allocate
the remaining authority to the department of finance, and the
department of finance shall allocate the remaining authority
between the Minnesota housing finance agency and the higher
education coordinating board. Amounts so allocated to the
Minnesota housing finance agency must be used for the issuance
of mortgage credit certificates, and amounts allocated to the
higher education coordinating board must be used for the
issuance of obligations under chapter 136A.
Sec. 20. [474A.12] [501(c)(3) POOL; FEDERAL VOLUME
LIMITATION ACT.]
Subdivision 1. [501(c)(3) POOL.] This section applies only
to allocations made under a federal volume limitation act. The
amount, if any, of the aggregate annual volume cap that must be
set aside for qualified 501(c)(3) bonds in 1986 or in 1987 or
pursuant to subdivision 9 shall be allocated under this section.
Subd. 2. [HIGHER EDUCATION FACILITIES AUTHORITY.] Of the
portion of the annual volume cap allocated under this section,
$20,000,000 for each calendar year is allocated to the higher
education facilities authority for the issuance of obligations
under sections 136A.25 through 136A.42. After September 1 of
each year, the higher education facilities authority may retain
any unused portion of its allocation only if the higher
education facilities authority submits to the department on or
before September 1 a letter which states (1) its intent to issue
obligations pursuant to its allocation or a portion of it before
the end of the calendar year or within the time period permitted
under a federal volume limitation act, and (2) a description of
the specific project or projects for which the obligations will
be issued, together with an application deposit in the amount of
one percent of the amount of the unused allocation or the
portion of it pursuant to which it intends to issue
obligations. The authority may subsequently reallocate the
retained allocation among the projects described in clause (2).
On September 1 any unused portion of the amount allocated to the
higher education facilities authority and not reserved by a
letter of intent and an application deposit is canceled and
subject to reallocation in accordance with subdivision 3. If
the higher education facilities authority returns for
reallocation all or any part of its allocation on or before
October 31, that portion of the application deposit equal to one
percent of the amount returned shall be refunded within 30 days.
Subd. 3. [APPLICATION.] An issuer may apply for an
allocation of bond issuance authority under this section by
submitting to the department an application on forms provided by
the department, accompanied by (1) a preliminary resolution of
the issuer, and (2) an application deposit in the amount of one
percent of the requested allocation. The higher education
facilities authority may apply for an allocation under
subdivision 4 or subdivision 6 only if it has adopted a final
resolution authorizing the sale of obligations in an amount
equal to the allocation received and not returned for
reallocation under subdivision 2.
Subd. 4. [ALLOCATION.] As of the 10th and 25th day of each
month prior to September 1, the department shall allocate
issuance authority available under this section on the basis of
applications then on hand, assigning allocations in the order in
which the applications are received by the department. If two
or more applications are filed with the department on the same
day and if there is insufficient issuance authority for the
applications, the allocation between or among the applications
shall be by lot unless otherwise agreed by the respective
applicants. Before September 1 the amount allocated to an
issuer for a 501(c)(3) organization may not exceed $15,000,000
for the year. Two or more local issuers may combine their
allocations in one or more single bond issues which exceed
$15,000,000 so long as no more than $10,000,000 of the bond
issue is for facilities located within the geographic boundaries
of each issuer. The obligations may be issued jointly by a
joint powers board or by one issuer on behalf of all the issuers
to whom the allocation is made.
Subd. 5. [LETTER OF INTENT.] After September 1 of each
calendar year, an issuer which has received an allocation
pursuant to this section prior to September 1, may retain an
unused portion of the allocation only if the issuer has
submitted to the department on or before September 1 a letter
stating its intent to issue obligations before the end of the
calendar year or within the time period permitted by a federal
volume limitation act. If the letter of intent is not submitted
to the department, the one percent application deposit must be
returned to the issuer and the allocation is canceled and
available for reallocation pursuant to subdivision 6. If an
issuer returns for reallocation all or any part of its
allocation on or before October 31, that portion of its
application deposit equal to one percent of the amount returned
shall be refunded within 30 days. If it returns the allocation
after October 31 but before December 1, that portion of the
application deposit equal to one-third of one percent of the
amount returned must be refunded within 30 days.
Subd. 6. [ALLOCATION AFTER SEPTEMBER 1.] On September 1 of
each year the aggregate amount set aside for qualified 501(c)(3)
bonds, less any amounts previously allocated or reallocated and
either reserved by an issuer with a letter of intent or with
respect to which a notice of issue has been filed shall be
reallocated in accordance with this subdivision.
Bond issuance authority subject to reallocation under this
subdivision on and after September 1 in any year must be
allocated by the department in the order in which the
applications were received by the department. If two or more
applications are filed with the department on the same day and
if there is insufficient issuance authority for the
applications, the allocation between or among such applications
shall be by lot unless otherwise agreed by the respective
applicants. As soon as practicable after September 1, the
department shall publish in the State Register a notice of the
aggregate amount available for reallocation pursuant to this
subdivision. Within five days after September 10, October 10,
November 10, December 10, and December 20, the department shall
allocate available authority under this subdivision. If
issuance remains or becomes available following the final
December 20th allocation, the department must allocate the
remaining authority to the department of finance, and the
department of finance shall allocate the remaining authority to
eligible projects under a federal volume limitation act.
Subd. 7. [NOTICE OF 501(c)(3) ALLOCATION.] The department
shall issue a notice granting an allocation of issuance
authority under this section. No allocation shall be made if
the sum of the principal amount of proposed allocation and the
aggregate principal amount of allocations previously made and
not returned for reallocation exceeds the amount of issuance
authority set aside, without the right to override by state
legislation for qualified 501(c)(3) bonds under a federal volume
limitation act. If an application is rejected, the department
must notify the applicant and return the application deposit to
the applicant within 30 days, unless the applicant requests in
writing that the application be resubmitted.
Subd. 8. [NOTICE OF ISSUE.] Issuers that issue obligations
under this section shall provide a notice of issue to the
department on forms provided by the department stating (1) the
date of issuance of the obligations; (2) the title of the issue;
(3) the principal amount of the obligations; and (4) the dollar
amount of the obligations subject to the annual volume cap of a
federal volume limitation act. For obligations issued as a part
of a series of obligations, a notice must be provided for each
series. Any issue of obligations for which a notice of issue is
not provided to the department within five days after issuance
is deemed not to have received an allocation under a federal
volume limitation act. Within 30 days after receipt of the
notice of issue, the department shall refund a portion of any
deposit made pursuant to subdivision 3 equal to one percent of
the amount of allocation authority issued.
Subd. 9. [NO MANDATORY SET-ASIDE; 501(C)(3) POOL.] If a
federal volume limitation act is enacted that does not require
that issuance authority be set aside for qualified 501(c)(3)
bonds, $70,000,000 of issuance authority is available for
allocation under this section from January 1 through October 31
of 1986 and $35,000,000 of issuance authority is available for
allocation under this section from January 1, 1987 through June
30, 1987. Notwithstanding the provisions of subdivision 6, if
issuance authority is available for allocation pursuant to this
subdivision, no allocation may be made pursuant to this section
after October 31 for calendar year 1986 and the remaining amount
of unallocated authority under this section that is or becomes
available is canceled and must be reallocated pursuant to
section 19.
Sec. 21. [474A.13] [CERTIFICATE OF ALLOCATION UNDER
FEDERAL VOLUME LIMITATION ACT.]
Subdivision 1. [ISSUANCE OF CERTIFICATE OF
ALLOCATION.] The department shall issue a certificate of
allocation for any allocation granted under section 19, except
as provided in subdivision 4.
Subd. 2. [ISSUANCE OF CERTIFICATE OF ALLOCATION; GENERAL
OBLIGATIONS.] The department shall issue a certificate of
allocation for any general obligation for which an allocation
request is received upon forms provided by the department,
except as provided in subdivision 4. Such forms shall contain:
(1) the name and address of the issuer;
(2) the address, telephone number, and name of an
authorized representative of the issuer;
(3) the principal amount of general obligations proposed to
be issued by the issuer;
(4) the title of the proposed issue;
(5) a statement of the issuer that the proposed issue of
obligations is expected to be offered for sale on or before the
expiration date of the certificate of allocation for which the
request is being made;
(6) the amount of the allocation requested;
(7) the project or projects to be financed with the general
obligations; and
(8) a certification that the general obligations do not
constitute "industrial development bonds" as defined in section
103(b) of the Internal Revenue Code of 1954, as amended through
December 31, 1985, which certification shall be accompanied by
an opinion of bond counsel to such effect.
An entitlement city may apply for a certificate of
allocation under this subdivision prior to October 1 only if it
has adopted a final resolution authorizing the sale of
obligations in an amount equal to any allocation received under
section 16 or returned any remaining allocation for reallocation
under section 19. No certificate of allocation shall be issued
pursuant to this authorization in excess of $10,000,000. The
aggregate amount of issuance authority that may be allocated to
an issuer pursuant to this subdivision for the calendar year may
not exceed $20,000,000. If submitted on or after September 1
for calendar year 1986, an allocation request shall be
accompanied by a deposit in the amount of one percent of the
amount of allocation requested. The department shall issue
certificates of allocation on Monday of each week for
applications received by Monday of the preceding week and shall
make the allocations among the applications by lot.
Subd. 3. [NOTICE OF ISSUE.] A certificate of allocation
expires and is deemed not to have been issued if the department
has not received a notice of issue on a form provided by the
department stating that the obligations for which the
certificate of allocation was provided were issued, or in the
case of a general obligation, a final resolution providing for
sale was adopted, within the longest of the following periods:
(1) for a certificate of allocation issued on or prior to
August 15, 1986, or anytime in 1987, within 30 days of the date
of issuance of the certificate;
(2) for a certificate of allocation issued between August
16 and September 1, 1986, by September 16, 1986;
(3) for a certificate of allocation issued on or after
September 1 and before the second to the last Monday of December
1986, within 15 days of the date of issuance of the certificate;
(4) for a certificate of allocation issued on or after the
second to the last Monday of December 1986, by the end of that
year or within the time permitted by a federal volume limitation
act; and
(5) for a certificate of allocation issued to an
entitlement issuer for a qualified multifamily housing project,
within 30 days of issuance of the certificate of allocation.
Any of the periods specified in clauses (1), (2), or (3)
may be extended for an additional period of the same number of
days if an additional deposit in the amount of three percent of
the amount of the certificate of allocation is provided before
the end of the initial period. The period specified in clause
(5) may be extended for an additional 30 days if an additional
deposit in the amount of four percent of the amount of the
certificate of allocation is provided before the end of the
initial period.
The notice of issue must be executed by an officer of the
issuer or by the bond counsel approving the issue and must state
the principal amount of the obligations issued or to be issued
and the difference, if any, between the amount issued or to be
issued and the amount stated in the certificate of allocation.
If the notice of issue is not provided to the department by the
time required, the certificate of allocation expires, the issue
is deemed not to have received an allocation for the purpose of
complying with a federal volume limitation act, and the deposit
required by section 19 or this section is forfeited by the
issuer. If the notice is received by the department on or prior
to the prescribed deadline, then within 30 days after receipt of
this notice, the department shall refund a portion of any
application deposit in proportion to the amount of allocation
authority issued, reduced by any amount refunded under section
13.
Subd. 4. [LIMITATIONS ON THE ISSUANCE OF CERTIFICATES.] No
certificate of allocation may be granted under a federal volume
limitation act under any of the following circumstances:
(1) the amount of the allocation requested, when added to
(i) the aggregate amount of certificates of allocation issued
and not expired; (ii) amounts remaining available to be
allocated pursuant to section 19; and (iii) entitlement
authority allocated pursuant to section 16 and not returned
pursuant to section 18, subdivision 3, for reallocation would
cause the governmental volume cap to be exceeded. If two or
more applications for a certificate of allocation are filed with
the department on the same day and there is insufficient
issuance authority for the applications, certificates shall be
issued first for applications made pursuant to subdivision 2 and
thereafter for applications made pursuant to subdivision 1; or
(2) the principal amount of the proposed allocation exceeds
$25,000,000 unless the issuer is the Minnesota housing finance
agency or the Minnesota higher education coordinating board, or
unless the issue is a pooled or joint issue or any issue of a
joint powers board, provided that for joint or pooled issues or
issues of a joint powers board the aggregate amount of the issue
cannot exceed $100,000,000.
Subd. 5. [CERTIFICATES ARE NOT TRANSFERABLE.] Certificates
of allocation are not transferable. An issuer that receives an
allocation of issuance authority pursuant to sections 9 to 29 to
finance a project within the boundaries of the issuer may allow
another issuer to issue obligations pursuant to the issuance
authority only if the boundaries of the other issuer are
coterminous with the boundaries of the issuer that received the
authority.
Sec. 22. [474A.14] [NOTICE OF AVAILABLE AUTHORITY.]
The department shall publish in the State Register at least
twice monthly, a notice of the amount of issuance authority, if
any, available for allocation pursuant to sections 13, 19, and
20.
Sec. 23. [474A.15] [STATE HELD HARMLESS.]
The state is not liable in any manner to any issuer, holder
of obligations, or other person for carrying out the duties
imposed on it under sections 9 to 29.
Sec. 24. [474A.16] [EXCLUSIVE METHOD OF ALLOCATION.]
Sections 9 to 29 shall be the exclusive method for
allocating authority to issue obligations for the purposes of
complying with the volume limitation of a federal volume
limitation act and existing federal tax law. An issuer of
obligations may elect to obtain an allocation of authority under
either existing federal tax law, a federal volume limitation
act, or both.
Sec. 25. [474A.17] [ADMINISTRATIVE PROCEDURE ACT NOT
APPLICABLE.]
Minnesota Statutes, chapter 14, shall not apply to actions
taken by any state agency, entity, or the governor under
sections 9 to 29.
Sec. 26. [474A.18] [PROSPECTIVE OVERRIDE OF FEDERAL VOLUME
LIMITATION ACT.]
Sections 9 to 29 prospectively override and replace the
method of allocating the authority to issue obligations among
uses and among issuers as provided in a federal volume
limitation act to the extent allowed by a federal volume
limitation act.
Sec. 27. [474A.19] [GOVERNOR'S ACTION.]
If at any time before June 30, 1987, a federal volume
limitation act is enacted into law in a form different from that
existing as of December 31, 1985, which eliminates or adds any
requirement that a specific type of obligation is subject to a
volume limitation that is inconsistent with the allocation
mechanism provided for in sections 9 to 29, or provides for
other restrictions on the allocation of issuance authority that
are inconsistent with the allocation mechanism provided for in
sections 9 to 29, the governor may, consistent with a federal
volume limitation act as enacted, by executive order or
proclamation, establish such revisions to the allocation system
as may be necessary and appropriate and which the governor, in
consultation with the legislative advisory commission and the
attorney general, determines are most consistent with the
purposes of and the allocation mechanism provided for in
sections 9 to 29. An executive order or proclamation made by
the governor under this section shall not withdraw or impair any
allocation made if obligations have been issued under such
allocations unless the obligations are not or will not be
subject to the volume cap of a federal volume limitation act and
written notice is provided to the issuer.
Any executive order made by the governor under this section
must, to the extent possible, comply with the following
requirements:
(a) If 501(c)(3) bonds are excluded from the volume cap in
a federal volume limitation act, any allocation made under
section 20 must be canceled, the provisions of section 20 will
no longer be in force and effect, any unrefunded deposit made
with the department under section 20 shall be refunded to the
issuer within 30 days of the cancellation and any excess
issuance authority previously set aside under section 20 for
501(c)(3) bonds shall, to the extent the exclusion of the
501(c)(3) bonds increases the amount of the governmental volume
cap, be added on a pro rata basis to the amount of the
governmental volume cap allocated to (1) state issuers under
section 16, subdivision 1, clause (1); (2) entitlement cities
under section 16, subdivision 1, clause (2); and (3) to the pool
under section 11, subdivision 2, clause (3).
(b) If obligations for multifamily housing projects, or
certain kinds thereof, are excluded from the volume cap in a
federal volume limitation act, allocations granted for the
projects are canceled and the commissioner shall refund any
deposits for the projects within 30 days of cancellation. No
adjustment shall be made in the allocation of the governmental
volume cap except as provided under section 11, subdivision 3.
Sec. 28. [474A.20] [STATE CERTIFICATION.]
The commissioner of the department is designated as the
state official to provide any pre-issuance or post-issuance
certification required by a federal volume limitation act.
Sec. 29. [474A.21] [APPROPRIATION; RECEIPTS.]
Any fees collected by the department under sections 9 to 29
must be deposited in the general fund. The amount necessary to
refund application deposits is appropriated to the department
from the general fund for that purpose.
Sec. 30. Minnesota Statutes 1984, section 475.77, is
amended to read:
475.77 [OBLIGATIONS SUBJECT TO FEDERAL VOLUME LIMITATION
ACT.]
Sections 474.16 to 474.23 9 to 29 apply to any issuance of
obligations which are subject to limitation under a
federal volume limitation act as defined in section 474.16 10,
subdivision 5 9, or existing federal tax law as defined in
section 10, subdivision 8.
Sec. 31. [REPEALER.]
Minnesota Statutes 1984, sections 462C.09, subdivision 4;
474.16, subdivisions 1, 2, and 5; 474.21; and 474.25; and
Minnesota Statutes 1985 Supplement, sections 116J.58,
subdivision 4; 462C.09, subdivisions 1, 2a, 3, 5, and 6; 474.16,
subdivisions 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15; 474.17;
474.19; 474.20; 474.23; and 474.26 are repealed. Nothing in
this section is intended to affect the validity of any
allocation granted pursuant to the repealed sections prior to
the effective date of this article, including any allocation
carried forward for use in a later calendar year. Nothing in
this section is intended to affect the validity of any
allocation granted pursuant to the repealed sections prior to
the effective date of this article, including any allocation
carried forward for use in a later calendar year. If prior to
the date of enactment of this article, a notice of allocation is
received pursuant to Minnesota Statutes 1985 Supplement, section
474.19, and if obligations pursuant to that allocation are not
issued on or before the date of enactment of this article, the
issuer may elect within 30 days after enactment of this article
to either resubmit its application pursuant to the provisions of
this article and receive a credit for the deposit already made
or request a refund of the deposit. If a refund of the deposit
is requested, the department must refund the deposit within 15
days.
Sec. 32. [EFFECTIVE DATE; SUNSET.]
This article is effective the day following final enactment.
Sections 10, subdivisions 3, 9, 10, 11, 16, 22, and 25; 11,
subdivisions 2 and 3; 15, subdivision 7; 16 to 21; and 26 to 28
are repealed effective July 1, 1987.
ARTICLE 2
Section 1. Minnesota Statutes 1984, section 124.214, is
amended by adding a subdivision to read:
Subd. 3. If a return of excess tax
increment is made to a
school district pursuant to section 273.75, subdivision 2 or
upon decertification of a tax increment district, the school
district's aid entitlements and levy limitations must be
adjusted for the fiscal year in which the excess tax increment
is paid under the provisions of this subdivision.
(a) An amount must be subtracted from the school district's
aid for the current fiscal year equal to the product of:
(1) the amount of the payment of excess tax increment to
the school district, times
(2) the ratio of:
(A) the sum of the amounts of the school district's
certified levy for the fiscal year in which the excess tax
increment is paid according to the following:
(i) sections 124A.03, subdivision 1, 124A.06, subdivision
3a, and 124A.08, subdivision 3a, if the school district is
entitled to basic foundation aid according to section 124A.02;
(ii) section 124A.10, subdivision 3a, and section 124A.20,
subdivision 2, if the school district is entitled to third-tier
aid according to section 124A.10, subdivision 4;
(iii) sections 124A.12, subdivision 3a, and 124A.14,
subdivision 5a, if the school district is eligible for
fourth-tier aid according to section 124A.12, subdivision 4;
(iv) section 124A.03, subdivision 4, if the school district
is entitled to summer school aid according to section 124.201;
and
(v) section 275.125, subdivisions 5 and 5c, if the school
district is entitled to transportation aid according to section
124.225, subdivision 8a;
(B) to the total amount of the school district's certified
levy for the fiscal year pursuant to sections 124A.03, 124A.06,
subdivision 3a, 124A.08, subdivision 3a, 124A.10, subdivision
3a, 124A.12, subdivision 3a, 124A.14, subdivision 5a, 124A.20,
subdivision 2, and 275.125, plus or minus auditor's adjustments.
(b) An amount must be subtracted from the school district's
levy limitation for the next levy certified equal to the
difference between:
(1) the amount of the distribution of excess increment, and
(2) the amount subtracted from aid pursuant to clause (a)
of this subdivision.
If the aid and levy reductions required by this subdivision
cannot be made to the aid for the fiscal year specified or to
the levy specified, the reductions must be made from aid for
subsequent fiscal years, and from subsequent levies. The school
district shall use the payment of excess tax increment to
replace the aid and levy revenue reduced under this subdivision.
This subdivision applies only to the total amount of excess
increments received by a school district for a calendar year
that exceeds $25,000.
Sec. 2. Minnesota Statutes 1984, section 273.1314, is
amended by adding a subdivision to read:
Subd. 8a. [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] (a) In
addition to tax reductions authorized in subdivision 8, the
commissioner may allocate $600,000 for tax reductions pursuant
to subdivision 9 to enterprise zones designated under section
273.1312, subdivision 4, paragraph (c), clause (1) or (3). Of
this amount, a minimum of $200,000 must be allocated to an area
added to an enterprise zone pursuant to section 3. Allocations
made pursuant to this subdivision may not be used to reduce a
tax liability, or increase a tax refund, prior to July 1, 1987.
Limits on the maximum allocation to a zone imposed by
subdivision 8 do not apply to allocations made under this
subdivision.
(b) A city encompassing an enterprise zone, or portion of
an enterprise zone, qualifies for an additional allocation under
this subdivision if the following requirements are met:
(1) the city encompassing an enterprise zone, or portion of
an enterprise zone, has signed contracts with qualifying
businesses that commit the city's total initial allocation
received pursuant to subdivision 8.
(2) the city encompassing an enterprise zone, or portion of
an enterprise zone, submits an application to the commissioner
requesting an additional allocation for tax reductions
authorized by subdivision 9. The application must identify a
specific business expansion project which would not take place
but for the availability of enterprise zone tax incentives.
(c) The commissioner shall use the following criteria when
determining which qualifying cities shall receive an additional
allocation under this subdivision and the amount of the
additional allocation the city is to receive:
(1) additional allocations to qualifying cities under this
subdivision shall be made within 60 days of receipt of an
application.
(2) applications from cities with the highest level of
economic distress, as determined using criteria listed in
section 273.1312, subdivision 4, paragraph (c), clauses (A) to
(E), shall receive priority for an additional allocation under
this subdivision.
(3) if the commissioner determines that two cities
submitting applications within one week of each other have equal
levels of economic distress, the application from the city with
the business prospect which will have the greatest positive
economic impact shall receive priority for an additional
allocation. Criteria used by the commissioner to determine the
potential economic impact a business would have shall include
the number of jobs created and retained, the amount of private
investment which will be made by the business, and the extent to
which the business would help alleviate the economic distress in
the immediate community.
(4) the commissioner shall determine the amount of any
additional allocation a city may receive. The commissioner
shall base the amount of additional allocations on the
commissioner's determination of the amount of tax incentives
which are necessary to ensure the business prospect will expand
in the city. No single allocation under this subdivision may
exceed $100,000. No city may receive more than $250,000 under
this subdivision.
Sec. 3. Minnesota Statutes 1985 Supplement, section
273.1314, subdivision 16a, is amended to read:
Subd. 16a. [ZONE BOUNDARY REALIGNMENT.] The commissioner
may approve specific applications by a municipality to amend the
boundaries of a zone or of an area or areas designated pursuant
to subdivision 9, paragraph (e) at any time. Boundaries of a
zone may not be amended to create noncontiguous subdivisions.
If the commissioner approves the amended boundaries, the change
is effective on the date of approval. Notwithstanding the area
limitation under section 273.1312, subdivision 4, paragraph (b),
the commissioner may approve a specific application to amend the
boundaries of an enterprise zone which is located within five
municipalities and was designated in 1984, to increase its area
to not more than 800 acres, and may approve an additional
specific application to amend the boundaries of that enterprise
zone to include a sixth municipality.
Sec. 4. Minnesota Statutes 1984, section 273.73,
subdivision 10, is amended to read:
Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that one of the following
conditions, reasonably distributed throughout the district,
exists:
(1) 70 percent of the parcels in the district are occupied
by buildings, streets, utilities or other improvements and more
than 50 percent of the buildings, not including outbuildings,
are structurally substandard to a degree requiring substantial
renovation or clearance; or
(2) 70 percent of the parcels in the district are occupied
by buildings, streets, utilities or other improvements and 20
percent of the buildings are structurally substandard and an
additional 30 percent of the buildings are found to require
substantial renovation or clearance in order to remove such
existing conditions as: inadequate street layout, incompatible
uses or land use relationships, overcrowding of buildings on the
land, excessive dwelling unit density, obsolete buildings not
suitable for improvement or conversion, or other identified
hazards to the health, safety and general well being of the
community; or
(3) Less than 70 percent of the parcels in the district are
occupied by buildings, streets, utilities or other improvements,
but due to unusual terrain or soil deficiencies requiring
substantial filling, grading or other physical preparation for
use at least 80 percent of the total acreage of such land has a
fair market value upon inclusion in the redevelopment district
which, when added to the estimated cost of preparing that land
for development, excluding costs directly related to roads as
defined in section 160.01 and local improvements as described in
section 429.021, subdivision 1, clauses 1 to 7, 11 and 12, and
section 430.01, if any, exceeds its anticipated fair market
value after completion of said preparation; provided that no
parcel shall be included within a redevelopment district
pursuant to this paragraph (3) unless the authority has
concluded an agreement or agreements for the development of at
least 50 percent of the acreage having the unusual soil or
terrain deficiencies, which agreement provides recourse for the
authority should the development not be completed; or
(4) The property consists of underutilized air rights
existing over a public street, highway or right-of-way; or
(5) The property consists of vacant, unused, underused,
inappropriately used or infrequently used railyards, rail
storage facilities or excessive or vacated railroad
rights-of-way; or
(6) The district consists of an existing or proposed
industrial park no greater in size than 250 acres, which
contains a sewage lagoon contaminated with polychlorinated
biphenyls.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance. "Parcel" shall mean a tract or plat of land
established prior to the certification of the district as a
single unit for purposes of assessment.
Sec. 5. Minnesota Statutes 1984, section 273.75,
subdivision 2, is amended to read:
Subd. 2. [EXCESS TAX INCREMENTS.] In any year in which the
tax increment exceeds the amount necessary to pay the costs
authorized by the tax increment financing plan, including the
amount necessary to cancel any tax levy as provided in section
475.61, subdivision 3, the authority shall use the excess amount
to do any of the following, in the order determined by the
authority: (a) prepay any outstanding bonds, (b) discharge the
pledge of tax increment therefor, (c) pay into an escrow account
dedicated to the payment of such bond, or (d) return the excess
amount to the county auditor who shall distribute the excess
amount to the municipality, county and school district in which
the tax increment financing district is located in direct
proportion to their respective mill rates. The county auditor
must report to the commissioner of education the amount of any
excess tax increment distributed to a school district within 30
days of the distribution.
Sec. 6. Minnesota Statutes 1985 Supplement, section
273.75, subdivision 4, is amended to read:
Subd. 4. [LIMITATION ON USE OF TAX INCREMENT.] All
revenues derived from tax increment shall be used in accordance
with the tax increment financing plan. The revenues shall be
used solely for the following purposes: (a) to pay the
principal of and interest on bonds issued to finance a project;
(b) by a rural development financing authority for the purposes
stated in section 362A.01, subdivision 2, by a port authority or
municipality exercising the powers of a port authority to
finance or otherwise pay the cost of redevelopment pursuant to
chapter 458, by a housing and redevelopment authority to finance
or otherwise pay public redevelopment costs pursuant to chapter
462, by a municipality to finance or otherwise pay the capital
and administration costs of a development district pursuant to
chapter 472A, by a municipality or redevelopment agency to
finance or otherwise pay premiums for insurance or other
security guaranteeing the payment when due of principal of and
interest on the bonds pursuant to chapters 462C, 474, or both
chapters, or to accumulate and maintain a reserve securing the
payment when due of the principal of and interest on the bonds
pursuant to chapters 462C, 474, or both chapters, which revenues
in the reserve shall not exceed, subsequent to the fifth
anniversary of the date of issue of the first bond issue secured
by the reserve, an amount equal to 20 percent of the aggregate
principal amount of the outstanding and nondefeased bonds
secured by the reserve. Revenues derived from tax increment may
be used to finance the costs of an interest reduction program
operated pursuant to section 462.445, subdivisions 10 to 13, or
pursuant to other law granting interest reduction authority and
power by reference to those subdivisions only under the
following conditions: (a) tax increments may not be collected
for a program for a period in excess of 12 years after the date
of the first interest rate reduction payment for the program,
(b) tax increments may not be used for an interest reduction
program, if the proceeds of bonds issued pursuant to section
273.77 after December 31, 1985, have been or will be used to
provide financial assistance to the specific project which would
receive the benefit of the interest reduction program, and (c)
not more than 50 percent of the estimated tax increment
increments derived from a project may not be used to finance an
interest reduction program for owner-occupied single-family
dwellings unless a project is located either in an area which
would qualify as a redevelopment district or within a city
designated as an enterprise zone pursuant to section 273.1312,
subdivision 4, clause (c)(3). These revenues shall not be used
to circumvent existing levy limit law. No revenues derived from
tax increment shall be used for the construction or renovation
of a municipally owned building used primarily and regularly for
conducting the business of the municipality; this provision
shall not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking
structure, a commons area used as a public park or a facility
used for social, recreational or conference purposes and not
primarily for conducting the business of the municipality.
Sec. 7. [340A.318] [CREDIT EXTENSIONS RESTRICTED.]
Subdivision 1. [RESTRICTION.] Except as provided in this
section, no retail licensee may accept or receive credit, other
than merchandising credit in the ordinary course of business for
a period not to exceed 30 days, from a distiller, manufacturer,
or wholesaler of distilled spirits or wine, or agent or employee
thereof. No distiller, manufacturer or wholesaler may extend
the prohibited credit to a retail licensee. No retail licensee
delinquent beyond the 30 day period shall solicit, accept or
receive credit or purchase or acquire distilled spirits or wine
directly or indirectly, and no distiller, manufacturer or
wholesaler shall knowingly grant or extend credit nor sell,
furnish or supply distilled spirits or wine to a retail licensee
who has been posted delinquent under subdivision 3. No right of
action shall exist for the collection of any claim based upon
credit extended contrary to the provisions of this section.
Subd. 2. [REPORTING.] Every distiller, manufacturer or
wholesaler selling to retailers shall submit to the commissioner
in triplicate not later than Thursday of each calendar week a
verified list of the names and addresses of each retail licensee
purchasing distilled spirits or wine from that distiller,
manufacturer or wholesaler who, on the first day of that
calendar week, was delinquent beyond the 30 day period, or a
verified statement that no delinquencies exist which are
required to be reported. If a retail licensee previously
reported as delinquent cures the delinquency by payment, the
name and address of that licensee shall be submitted in
triplicate to the commissioner not later than the close of the
second full business day following the day the delinquency was
cured.
Subd. 3. [POSTING; NOTICE.] Verified list or statements
required by subdivision 2 shall be posted by the commissioner in
offices of the department in places available for public
inspection and mailed to each licensed wholesaler not later than
the day following receipt. Documents so posted and mailed shall
constitute notice to every distiller, manufacturer or wholesaler
of the information posted. Actual notice, however received,
also constitutes notice.
Subd. 4. [MISCELLANEOUS PROVISIONS.] The 30 day
merchandising period allowed by this section shall commence with
the day immediately following the date of invoice and shall
include all successive days, including Sundays and holidays, to
and including the 30th successive day. In addition to other
legal methods, payment by check during the period for which
merchandising credit may be extended shall be considered
payment. All checks received in payment for distilled spirits
or wine shall be deposited promptly for collection. A postdated
check or a check dishonored on presentation for payment does not
constitute payment. A retail licensee shall not be deemed
delinquent for any alleged sale in any instance where there
exists a bona fide dispute between the licensee and the
distiller, manufacturer or wholesaler as to the amount owing as
a result of the alleged sale. A delinquent retail licensee who
engages in the retail liquor business at two or more locations
shall be deemed to be delinquent with respect to each location.
Subd. 5. [LICENSE SUSPENSION OR REVOCATION.] The license
of any retail licensee, distiller, manufacturer or wholesaler
violating any provision of this section shall be subject to
suspension or revocation in the manner provided by this chapter.
Sec. 8. Minnesota Statutes 1984, section 412.301, is
amended to read:
412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.]
The council may issue certificates of indebtedness within
existing or capital notes subject to the city debt limits for
the purpose of purchasing fire or police to purchase public
safety equipment or, ambulance equipment or street, road
construction or maintenance equipment, and other capital
equipment having an expected useful life at least as long as the
terms of the certificates or notes. Such certificates or notes
shall be payable in not more than five years and shall be issued
on such terms and in such manner as the council may determine.
If the amount of the certificates or notes to be issued to
finance any such purchase exceeds one percent of the assessed
valuation of the city, excluding money and credits, they shall
not be issued for at least ten days after publication in the
official newspaper of a council resolution determining to issue
them; and if before the end of that time, a petition asking for
an election on the proposition signed by voters equal to ten
percent of the number of voters at the last regular municipal
election is filed with the clerk, such certificates or notes
shall not be issued until the proposition of their issuance has
been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made for the
payment of the principal and interest on such certificates or
notes, in accordance with section 475.61, as in the case of
bonds.
Sec. 9. Minnesota Statutes 1985 Supplement, section
462.445, subdivision 13, is amended to read:
Subd. 13. [INTEREST REDUCTION PROGRAM.] The authority to
authorize payment of interest reduction assistance pursuant to
subdivisions 10, 11 and 12 shall expire on January 1, 1987 1989.
Interest reduction assistance payments authorized prior to
January 1, 1987 1989 may be paid after January 1, 1987 1989.
Sec. 10. Minnesota Statutes 1984, section 462A.03,
subdivision 13, is amended to read:
Subd. 13. "Eligible mortgagor" means a nonprofit or
cooperative housing corporation, limited profit entity or a
builder as defined by the agency in its rules, which sponsors or
constructs residential housing as defined in subdivision 7, or a
natural person of low or moderate income, except that the return
to a limited dividend entity shall not exceed ten percent of the
capital contribution of the investors or such lesser percentage
as the agency shall establish in its rules; provided that
residual receipts funds of a limited dividend entity may be used
for agency-approved, housing-related investments owned by the
limited dividend entity without regard to the limitation on
returns. Owners of existing residential housing occupied by
renters shall be eligible for rehabilitation loans, only if, as
a condition to the issuance of the loan, the owner agrees to
conditions established by the agency in its rules relating to
rental or other matters that will insure that the housing will
be occupied by persons and families of low or moderate income.
The agency shall require by rules that the owner give preference
to those persons of low or moderate income who occupied the
residential housing at the time of application for the loan.
Sec. 11. Minnesota Statutes 1984, section 462C.02,
subdivision 6, is amended to read:
Subd. 6. "City" means any statutory or home rule charter
city, a county housing and redevelopment authority created by
special law or authorized by its county to exercise its powers
pursuant to section 462.426, or any public body which (a) is the
housing and redevelopment authority in and for a statutory or
home rule charter city, or the port authority of a statutory or
home rule charter city, and (b) is authorized by ordinance to
exercise, on behalf of a statutory or home rule charter city,
the powers conferred by sections 462C.01 to 462C.08 462C.10.
Sec. 12. Minnesota Statutes 1984, section 462C.06, is
amended to read:
462C.06 [COUNTY HOUSING AND REDEVELOPMENT AUTHORITY ACTING
ON BEHALF OF CITY.]
A housing and redevelopment authority in and for a county
may exercise the powers conferred by sections 462C.01 to 462C.07
462C.10 either (1) on its own behalf or (2) on behalf of a
city (other than a county housing and redevelopment authority),
if the city authorizes the housing and redevelopment authority
in and for the county in which the city is located to exercise
such powers and the county has authorized its housing and
redevelopment authority to exercise its powers pursuant to
section 462.426 or the county housing and redevelopment
authority has been created by special law; provided, however,
that any program undertaken pursuant to this section shall be
included in the limitations provided in section 462C.07,
subdivision 2, and also shall be is subject to the limitations
of sections 462C.03 and 462C.04 in the case of a single family
housing program, and subject to the limitations of section
462C.05 in the case of a multifamily housing development program.
Sec. 13. Minnesota Statutes 1984, section 462C.07,
subdivision 1, is amended to read:
Subdivision 1. To finance programs or developments
described in any plan the city may, upon approval of the program
as provided in section 462C.04, subdivision 2, issue and sell
revenue bonds or obligations which shall be payable exclusively
from the revenues of the programs or developments. In the
purchase or making of single family housing loans and the
purchase or making of multifamily housing loans and the issuance
of revenue bonds or other obligations the city may exercise
within its corporate limits, any of the powers the Minnesota
housing finance agency may exercise under chapter 462A, without
limitation under the provisions of chapter 475. The proceeds of
revenue bonds issued to make or purchase single family housing
loans that are jointly issued by two or more cities pursuant to
section 471.59 may be used to make or purchase single family
housing loans secured by homes in any of the cities.
Sec. 14. [471.572] [INFRASTRUCTURE REPLACEMENT RESERVE
FUND.]
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given:
"Reserve fund" means the infrastructure replacement reserve
fund.
"City" means a statutory or home rule charter city.
Subd. 2. [TAX LEVY.] The governing body of a city may
establish, by a two-thirds vote of all its members, by ordinance
or resolution a reserve fund and may annually levy a property
tax for the support of the fund. The proceeds of taxes levied
for its support must be paid into the reserve fund. Any other
revenue from a source not required by law to be paid into
another fund for purposes other than those provided for the use
of the reserve fund may be paid into the fund. A tax levied by
the city in accordance with this section is a special levy
within the meaning of section 275.50, subdivision 5. Before a
tax is levied under this section, the city must publish in the
official newspaper of the city an initial resolution authorizing
the tax levy. If within ten days after the publication a
petition is filed with the city clerk requesting an election on
the tax levy signed by a number of qualified voters greater than
ten percent of the number who voted in the city at the last
general election, the tax may not be levied until the levy has
been approved by a majority of the votes cast on it at a regular
or special election.
Subd. 3. [PURPOSES.] The reserve fund may be used only for
the replacement of streets, bridges, curbs, gutters and storm
sewers.
Subd. 4. [USE OF FUND FOR A SPECIFIC PURPOSE.] If the city
has established a reserve fund, it may submit to the voters at a
regular or special election the question of whether use of the
fund should be restricted to a specific improvement or type of
capital improvement. If a majority of the votes cast on the
question are in favor of the limitation on the use of the
reserve fund, it may be used only for the purpose approved by
the voters.
Subd. 5. [HEARING; NOTICE.] A reserve fund may not be
established until after a public hearing is held on the
question. Notice of the time, place, and purpose of the hearing
must be published for two successive weeks in the official
newspaper of the city. The second publication must be not later
than seven days before the date of the hearing.
Subd. 6. [TERMINATION OF FUND.] The city may terminate a
reserve fund at any time in the same manner as the fund was
established. Upon termination of the fund any balance is
irrevocably appropriated to the debt service fund of the city to
be used solely to reduce tax levies for or bonded indebtedness
of the city or, if the city has no bonded indebtedness, for
capital improvements authorized by this section.
Sec. 15. Minnesota Statutes 1984, section 471.59,
subdivision 11, is amended to read:
Subd. 11. [JOINT POWERS BOARD.] Two or more governmental
units, through action of their governing bodies, by adoption of
a joint powers agreement that complies with the provisions of
subdivisions 1 through 5, may establish a joint board to issue
bonds or obligations pursuant to any law by which any of the
governmental units establishing the joint board may
independently issue bonds or obligations and may use the
proceeds of the bonds or obligations to carry out the purposes
of the law under which the bonds or obligations are issued. A
joint board created pursuant to this section may issue
obligations and other forms of indebtedness only pursuant
to express authority granted by the action of the governing
bodies of the governmental units which established the joint
board. The joint board established pursuant to this subdivision
shall be composed solely of members of the governing bodies of
the governmental unit which established the joint board, and the
joint board may not pledge the full faith and credit or taxing
power of any of the governmental units which established the
joint board. The obligations or other forms of indebtedness
shall be obligations of the joint board issued on behalf of the
governmental units creating the joint board. The obligations or
other forms of indebtedness shall be issued in the same manner
and subject to the same conditions and limitations which would
apply if the obligations were issued or indebtedness incurred by
one of the governmental units which established the joint board
provided that any reference to a governmental unit in the
statute, law, or charter provision authorizing the issuance of
the bonds or the incurring of the indebtedness shall be
considered a reference to the joint board.
Sec. 16. Minnesota Statutes 1984, section 474.01,
subdivision 6, is amended to read:
Subd. 6. In order to further these purposes and policies
the department of energy and economic development authority
shall investigate, shall assist and advise municipalities, and
shall report to the governor and the legislature concerning the
operation of sections 474.01 to 474.13 and the projects
undertaken hereunder, and shall have all of the powers and
duties in connection therewith which are granted to him by
chapter 362 with respect to other aspects of business
development and research.
Sec. 17. Minnesota Statutes 1984, section 474.01,
subdivision 7b, is amended to read:
Subd. 7b. Prior to submitting an application to the
department of energy and economic development authority
requesting approval of a project pursuant to subdivision 7a, the
governing body or a committee of the governing body of the
municipality or redevelopment agency shall conduct a public
hearing on the proposal to undertake and finance the project.
Notice of the time and place of hearing, and stating the general
nature of the project and an estimate of the principal amount of
bonds or other obligations to be issued to finance the project,
shall be published at least once not less than 15 14 days nor
more than 30 days prior to the date fixed for the hearing, in
the official newspaper and a newspaper of general circulation of
the municipality or redevelopment agency. The notice shall
state that a draft copy of the proposed application to
the department of energy and economic development authority,
together with all attachments and exhibits thereto, shall be
available for public inspection following the publication of the
notice and shall specify the place and times where and when it
will be so available. At the time and place fixed for the
public hearing, the governing body of the municipality or the
redevelopment agency shall give all parties who appear at the
hearing an opportunity to express their views with respect to
the proposal to undertake and finance the project. Following
the completion of the public hearing, the governing body of the
municipality or redevelopment agency shall adopt a resolution
determining whether or not to proceed with the project and its
financing and may thereafter apply to the department of energy
and economic development authority for approval of the project.
Sec. 18. Minnesota Statutes 1984, section 475.55,
subdivision 1, is amended to read:
Subdivision 1. [INTEREST; FORM.] (1) Interest on
obligations shall not exceed the greatest of (a) the rate
determined pursuant to subdivision 4 for the month in which the
resolution authorizing the obligations was adopted, or (b) the
rate determined pursuant to subdivision 4 for the month in which
the obligations are sold, or (c) the rate of ten percent per
annum. All obligations shall be securities as provided in the
Uniform Commercial Code, chapter 336, article 8, may be issued
as certificated securities or as uncertificated securities, and
if issued as certificated securities may be issued in bearer
form or in registered form, as defined in section 336.8-102.
The validity of an obligation shall not be impaired by the fact
that one or more officers authorized to execute it by the
governing body of the municipality shall have ceased to be in
office before delivery to the purchaser or shall not have been
in office on the formal issue date of the obligation. Every
obligation, as to certificated securities, or transaction
statement, as to uncertificated securities, shall be signed
manually by one officer of the municipality or by a person
authorized to act on behalf of a bank or trust company, located
in or outside of the state, which has been designated by the
governing body of the municipality to act as authenticating
agent. Other signatures and the seal of the issuer may be
printed, lithographed, stamped or engraved thereon and on any
interest coupons to be attached thereto. The seal need not be
used. A municipality may do all acts and things which are
permitted or required of issuers of securities under the Uniform
Commercial Code, chapter 336, article 8, and may designate a
corporate registrar to perform on behalf of the municipality the
duties of a registrar as set forth in those sections. Any
registrar shall be an incorporated bank or trust company,
located in or outside of the state, authorized by the laws of
the United States or of the state in which it is located to
perform the duties. If obligations are issued as uncertificated
securities, and a law requires or permits the obligations to
contain a statement or recital, whether on their face or
otherwise, it shall be sufficient compliance with the law that
the statement or recital is contained in the transaction
statement or in an ordinance, resolution, or other instrument
which is made a part of the obligation by reference in the
transaction statement as provided in section 336.8-202.
(2) Notwithstanding paragraph (1), interest on obligations
issued after April 1, 1986 and before July 1, 1987 is not
subject to any limitation on rate or amount. For purposes of
this paragraph, obligations issued after April 1, 1986 and
before July 1, 1987 include reissuing, reselling, remarketing,
refunding, refinancing or tendering, whether pursuant to section
475.54, subdivision 5a, or otherwise, of obligations after July
1, 1987 if the original obligations were issued before July 1,
1987 and after April 1, 1986.
Sec. 19. Minnesota Statutes 1984, section 475.55, is
amended by adding a subdivision to read:
Subd. 7. [ASSUMED MAXIMUM INTEREST RATE FOR OTHER
LAWS.] If an obligation is not subject to a maximum interest
rate pursuant to subdivision 1, paragraph (1) and another law
provides for a calculation of a debt service levy, determination
of a rate of interest on a special assessment, or other factor
based on an assumption that a maximum interest rate applies to
the obligation, the governing body of the municipality may
estimate or determine an assumed maximum interest rate for
purposes of that law. If the municipality does not determine,
specify or estimate the maximum interest rate for such purpose,
then the maximum interest rate for purposes of the other law is
the maximum interest rate that would apply if subdivision 1,
paragraph (2) were not in effect. This subdivision does not
limit the interest rate that may be paid on obligations under
subdivision 1.
Sec. 20. Minnesota Statutes 1985 Supplement, section
475.56, is amended to read:
475.56 [INTEREST RATE.]
(a) Any municipality issuing obligations under any law may
issue obligations bearing interest at a single rate or at rates
varying from year to year which may be lower or higher in later
years than in earlier years. Such higher rate for any period
prior to maturity may be represented in part by separate coupons
designated as additional coupons, extra coupons, or B coupons,
but the highest aggregate rate of interest contracted to be so
paid for any period shall not exceed the maximum rate authorized
by law. Such higher rate may also be represented in part by the
issuance of additional obligations of the same series, over and
above but not exceeding two percent of the amount otherwise
authorized to be issued, and the amount of such additional
obligations shall not be included in the amount required by
section 475.59 to be stated in any bond resolution, notice, or
ballot, or in the sale price required by section 475.60 or any
other law to be paid; but if the principal amount of the entire
series exceeds its cash sale price, such excess shall not, when
added to the total amount of interest payable on all obligations
of the series to their stated maturity dates, cause the average
annual rate of such interest to exceed the maximum rate
authorized by law. This section does not authorize a provision
in any such obligations for the payment of a higher rate of
interest after maturity than before.
(b) Any obligation of an issue of obligations otherwise
subject to section 475.55, subdivision 1, may bear interest at a
rate varying periodically at the time or times and on the terms,
including convertibility to a fixed rate of interest, determined
by the governing body of the municipality, but the rate of
interest for any period shall not exceed the maximum rate of
interest for the obligations determined in accordance with
section 475.55, subdivision 1. For purposes of section 475.61,
subdivisions 1 and 3, the interest payable on variable rate
obligations for their term shall be determined as if their rate
of interest is the maximum rate permitted for the obligations
under section 475.55, subdivision 1, or the lesser maximum rate
of interest payable on the obligations in accordance with their
terms, but if the interest rate is subsequently converted to a
fixed rate the levy may be modified to provide at least five
percent in excess of amounts necessary to pay principal of and
interest at the fixed rate on the obligations when due. For
purposes of computing debt service or interest pursuant to
section 475.67, subdivision 12, interest throughout the term of
bonds issued pursuant to this subdivision is deemed to accrue at
the rate of interest first borne by the bonds. The provisions
of this paragraph do not apply to obligations issued by a
statutory or home rule charter city with a population of less
than 10,000, as defined in section 477A.011, subdivision 3, or
to obligations that are not rated A or better, or an equivalent
subsequently established rating, by Standard and Poor's
Corporation, Moody's Investors Service or other similar
nationally-recognized rating agency, except that any statutory
or home rule charter city, regardless of population or bond
rating, may issue variable rate obligations as a participant in
a bond pooling program established by the league of Minnesota
cities that meets this bond rating requirement.
Sec. 21. Minnesota Statutes 1985 Supplement, section
475.60, subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS WAIVED.] The requirements as to
public sale shall not apply to:
(1) obligations issued under the provisions of a home rule
charter or of a law specifically authorizing a different method
of sale, or authorizing them to be issued in such manner or on
such terms and conditions as the governing body may determine;
(2) obligations sold by an issuer in an amount not
exceeding the total sum of $300,000 in any three-month period;
(3) obligations issued by a governing body other than a
school board in anticipation of the collection of taxes or other
revenues appropriated for expenditure in a single year, if sold
in accordance with the most favorable of two or more proposals
solicited privately;
(4) obligations sold to any board, department, or agency of
the United States of America or of the state of Minnesota, in
accordance with rules or regulations promulgated by such board,
department, or agency; and
(5) obligations issued to fund pension and retirement fund
liabilities under section 475.52, subdivision 6, obligations
issued with tender options under section 475.54, subdivision 5a,
crossover refunding obligations referred to in section 475.67,
subdivision 13, and any issue of obligations comprised in whole
or in part of obligations bearing interest at a rate or rates
which vary periodically referred to in section 475.56; and
(b) obligations qualifying under section 475.55,
subdivision 1, paragraph (2), if the governing body of the
municipality determines that interest on the obligations will be
includable in gross income for purposes of federal income
taxation.
Sec. 22. [475.561] [TAXABLE STATUS; SPECIAL PROVISIONS.]
Subdivision 1. [INCREASE OR DECREASE IN INTEREST.] (a)
Obligations may be issued which provide, if interest on the
obligations is determined under the terms of the obligations to
be subject to federal income taxation, for an increase in the
rate of interest payable on the obligations, from the date of
issuance or another date, to a rate provided under the terms of
the obligations.
(b) If the municipality issues obligations it intends to be
exempt from federal income taxation but bond counsel cannot
provide an opinion that the interest on the obligations will be
exempt from federal income taxation under pending legislation or
regulations existing or proposed with retroactive effect or
otherwise, the municipality may provide for the obligations to
bear interest at a rate that will decrease, if the obligations
are subsequently determined to be exempt from federal income
taxation, to a rate and from a date to be determined under the
provisions of the obligations.
(c) For purposes of section 475.61, subdivisions 1 and 3,
the increase or decrease in interest rate permitted by this
subdivision need not be taken into account until the increase or
decrease occurs. Upon occurrence of the increase or decrease,
the levy must be modified to provide at least five percent in
excess of the amount necessary to pay principal and interest at
the new rate of interest on the obligations.
Subd. 2. [ARBITRAGE REBATE.] A municipality may, from the
proceeds of bonds, investment earnings, or any other available
moneys of the municipality, pay to the United States or an
officer, department, agency or instrumentality of the United
States a rebate of excess earnings payment required by federal
law to maintain the interest as tax exempt. A covenant to make
a payment or payments pursuant to this subdivision is not an
obligation of the municipality as defined in section 475.51,
subdivision 3.
Subd. 3. [PREPAYMENT OR PURCHASE OF BONDS.] A municipality
that issues obligations it intends to be exempt from federal
income taxation may agree to prepay or purchase the obligations
(a) at the time and in the amount it determines necessary or
desirable to maintain the obligations as exempt from federal
income taxation or (b) upon a determination that the obligations
are taxable. A municipality may make arrangements to have money
available with which to purchase or prepay the obligations as
the municipality determines necessary or desirable. If
arrangements are made with a financial institution pursuant to
section 475.54, subdivision 5a or this subdivision and if the
municipality owes the financial institution money under the
arrangement, the agreement to pay the financial institution is
not an obligation of the municipality as defined in section
475.51, subdivision 3, unless and until the amount to be paid or
reimbursed is determined and becomes due and payable, whereupon,
the obligation is, as provided by the agreement, a general or
special obligation of the municipality, and may also be paid
from the proceeds of refunding bonds issued pursuant to this
chapter. The agreement may not be or become a general
obligation of the municipality unless the underlying, originally
issued obligation was a general obligation of the municipality.
For purposes of section 475.61, subdivisions 1 and 3, money
necessary to make the purchase or prepayment are not amounts
needed to meet when due principal and interest payments on the
obligations.
Subd. 4. [RATIFICATION.] This section is, in part,
remedial in nature. Obligations issued prior to the effective
date of this section are not invalid or unenforceable for
providing terms, consequences or remedies that are authorized by
this section.
Sec. 23. [CITY OF MINNEAPOLIS; PROPERTY TAX FORGIVENESS.]
Notwithstanding any other law to the contrary, the
governing bodies of the city of Minneapolis, Hennepin county,
Special School District No. 1, and any special taxing district
may by resolution or ordinance forgive any or all of the
liability for the tax imposed by section 272.01, subdivision 2,
relating to property leased by the Minneapolis community
development agency.
Sec. 24. [REPEALER.]
Laws 1963, chapter 728 is repealed.
Sec. 25. [EFFECTIVE DATE.]
Sections 18, 19, 21, 22 and 23 are effective the day
following final enactment.
ARTICLE 3
Section 1. Minnesota Statutes 1984, section 115.07,
subdivision 1, is amended to read:
Subdivision 1. [OBTAIN PERMIT.] It shall be unlawful for
any person to construct, install or operate a disposal system,
or any part thereof, until plans therefor shall have been
submitted to the agency unless the agency shall have waived the
submission thereof to it and a written permit therefor shall
have been granted by the agency.
For disposal systems operated on streams with extreme
seasonal flows, the agency must allow seasonal permit limits
based on a fixed or variable effluent limit when the
municipality operating the disposal system requests them and is
in compliance with agency water quality standards.
Sec. 2. [115.54] [TECHNICAL ADVISORY COMMITTEE.]
The agency shall adopt and revise rules governing waste
water treatment control under chapters 115 or 116 only with the
advice of a technical advisory committee of nine members. One
member of the committee shall be selected by each of the
following: the state consulting engineers council, the
University of Minnesota division of environmental engineering,
the state association of general contractors, the state
wastewater treatment plant operators association, the
metropolitan waste control commission created by section
473.503, the association of metropolitan municipalities, the
state association of small cities, and two members from the
league of Minnesota cities. The technical advisory committee
may review and advise the agency on any rule or technical
requirements governing the wastewater treatment grant or loan
program and may review the work of other professional persons
working on a wastewater treatment project and make
recommendations to those persons, the agency, and the concerned
municipality, in order for the agency to ensure that water
quality treatment standards will be met. The committee shall
meet at least once a year, or at the call of the chair, and
shall elect its chairperson. The agency must provide staff
support for the committee, prepare committee minutes and provide
information to the committee it may request. A quorum is a
simple majority and official action must be by a majority vote
of the quorum.
Sec. 3. Minnesota Statutes 1984, section 115A.14,
subdivision 4, is amended to read:
Subd. 4. [POWERS AND DUTIES.] The commission shall review
the biennial report of the board, the agency municipal project
list and municipal needs list reports, and the budget for the
agency division of water quality. The commission shall oversee
the activities of the board under sections 115A.01 to 115A.72
and the activities of the agency under sections 115A.42 to
115A.46 and, 115A.49 to 115A.54, and 116.16 to 116.18 and direct
such changes or additions in the work plan of the board and
agency as it deems fit. The commission may conduct public
hearings and otherwise secure data and expressions of opinion.
The commission shall make such recommendations as it deems
proper to assist the legislature in formulating legislation.
Any data or information compiled by the commission shall be made
available to any standing or interim committee of the
legislature upon request of the chairperson of the respective
committee.
Sec. 4. [116.163] [AGENCY FUNDING APPLICATION REVIEW.]
Subdivision 1. [CONSTRUCTION GRANT AND LOAN APPLICATIONS.]
The agency shall, pursuant to agency rules and within 90 days of
receipt of a completed application for a wastewater treatment
facility construction grant or loan, grant or deny the
application and notify the municipality of the agency's
decision. The time for consideration of the application by the
agency may be extended up to 180 days if the municipality and
the agency agree it is necessary.
Subd. 2. [LIMITATION ON MUNICIPAL PLANNING TIME.] A
municipality shall complete all planning work required by the
agency for award of a grant or loan, and be ready to advertise
for bids for construction, within two years of receipt of grant
or loan funds under subdivision 1. The planning time may be
extended automatically by the amount of time the agency exceeds
its 90-day review under subdivision 1.
Subd. 3. [BID REVIEW.] After a municipality has accepted
bids for construction of a wastewater treatment project, the
agency must review the bids within 30 days of receipt.
Sec. 5. [116.165] [INSPECTION RESPONSIBILITY.]
When a wastewater treatment plant is constructed with
federal funds and a federal agency conducts inspections of the
plant, the owner of the plant or the owner's designee must
conduct inspections and forward all inspection documents
required by the agency to the agency for its review.
Sec. 6. [116.167] [REVOLVING LOAN ACCOUNT.]
Subdivision 1. [APPLICATION.] This section is effective
only if the federal government requires revolving loan accounts
to be established under the authority of the federal Water
Pollution Control Act.
Subd. 2. [STATE WATER POLLUTION CONTROL REVOLVING LOAN
ACCOUNT.] The commissioner of finance shall maintain in the
state bond fund a separate bookkeeping account which shall be
designated as the state water pollution control revolving loan
account to receive any federal money authorized for loans under
the federal Water Pollution Control Act, and other money
appropriated by law, for the purpose of providing financial
assistance to municipalities for wastewater treatment.
Subd. 3. [LOANS.] A loan made to a municipality under this
section shall be made only after resolutions have been adopted
by the agency and the governing body of the municipality
obligating the municipality to repay the loan to the state
treasurer in annual installments, including both principal and
interest. Each installment shall be in an amount sufficient to
pay the principal amount within 20 years or a shorter time
interval if the amount of the annual payment will not justify
the administrative expenses of processing the payment, and shall
be paid from user charges, taxes, special assessments, or other
funds available to the municipality. Interest on loans made to
municipalities shall be established at a rate the commissioner
of revenue reasonably determines sufficient to pay interest
rates on state bonds issued under section 116.17, subdivision
2. Loan repayments must be deposited in the revolving loan
account created by this section. Each participating
municipality shall provide the agency with a financial health
report compiled by the state auditor and the agency shall review
the report before approving a loan. Municipalities receiving a
loan under this section may still be eligible for a wastewater
treatment grant from the agency.
Subd. 4. [RULES APPLICATION.] The disbursement of loans
under this section must comply with rules adopted by the agency
for loans for wastewater treatment facilities under chapter 116.
Sec. 7. [EFFECTIVE DATE.]
Article 3 is effective July 1, 1986.
ARTICLE 4
Section 1. [297A.258] [PRIVATE SUPPLIERS OF PUBLIC
SERVICES.]
A private vendor that has entered into a service contract
with a municipality under sections 3 and 4 is a political
subdivision for purposes of determining the tax imposed under
this chapter. This section applies only to the extent that the
vendor is acting for the purposes of constructing, maintaining,
or operating related facilities pursuant to the service contract.
The commissioner may provide for the issuance of a limited
exemption certificate to a private vendor for purposes of
administering this section. The commissioner may further
require a vendor to obtain a certificate in order to qualify as
a political subdivision under this section.
For purposes of this section, "private vendor," "service
contract," and "related facilities" have the meanings given in
sections 3 and 4.
Sec. 2. [471A.01] [PUBLIC PURPOSE FINDINGS.]
The legislature finds that the privatization of facilities
for the prevention, control, and abatement of water pollution,
and the furnishing of potable water provides municipalities an
opportunity under appropriate circumstances to provide those
capital intensive public services in a manner that will speed
construction and is less costly and more efficient than the
furnishing of those services through facilities exclusively
owned and operated by municipalities. The legislature further
finds that other law may create unnecessary and costly obstacles
to the privatization of those capital intensive public services
and that a comprehensive act is required to permit
municipalities to enter into appropriate contractual
arrangements with private parties to facilitate the
privatization of those capital intensive public services.
Sec. 3. [471A.02] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] The definitions in this
section apply to sections 2 to 13.
Subd. 2. [ADMINISTRATOR.] "Administrator" means the
pollution control agency or any other agency, instrumentality,
or political subdivision of the state responsible for
administering the loan or grant program described in section 8.
Subd. 3. [CAPITAL COST COMPONENT.] "Capital cost component"
means that part of the service fee that the municipality
determines is intended to reimburse the private vendor for the
capital cost, including debt service expense, of the related
facilities.
Subd. 4. [CAPITAL COST COMPONENT GRANT.] "Capital cost
component grant" means any grant made to the municipality by the
pollution control agency over a term of at least ten years to
pay or reimburse the municipality for the payment of all or part
of the capital cost component of the service fee.
Subd. 5. [CAPITAL COST COMPONENT LOAN.] "Capital cost
component loan" means any loan made to the municipality by the
pollution control agency over a term of at least ten years to
pay or reimburse the municipality for the payment of all or part
of the capital cost component of the service fee.
Subd. 6. [CAPITAL INTENSIVE PUBLIC SERVICES.] "Capital
intensive public services" means the prevention, control, and
abatement of water pollution through wastewater treatment
facilities as defined by section 115.71, subdivision 8, and the
furnishing of potable water. Capital intensive public services
may be limited to the acquisition, construction, and ownership
by the private vendor of related facilities, but does not
include the furnishing of heating or cooling energy.
Subd. 7. [CONTROLLING INTEREST.] "Controlling interest"
means either (1) the power, by ownership interest, contract, or
otherwise, to direct the management of the private vendor or to
designate or elect at least a majority of the private vendor's
governing body or board, or (2) having more than a 50 percent
ownership interest in the private vendor.
Subd. 8. [MUNICIPALITY.] "Municipality" means a home rule
charter or statutory city, county, sanitary district, or other
governmental subdivision or public corporation, including the
metropolitan council and the metropolitan waste control
commission.
Subd. 9. [PERMITTED OBLIGATION.] "Permitted obligation"
means the obligation of the municipality under the service
contract to pay a service fee or perform any other obligation
under the service contract except an obligation to pay, in a
future fiscal year of the municipality from a revenue source
other than funds on hand, a stated amount of money for money
borrowed or for related facilities purchased by the municipality
under the service contract.
Subd. 10. [PRIVATE VENDOR.] "Private vendor" means one or
more persons who are not a municipality and in which no
governmental entity or group of governmental entities has a
controlling interest.
Subd. 11. [RELATED FACILITIES.] "Related facilities" means
all real and personal property used by the private vendor in
furnishing capital intensive public services, excluding any
product of the related facilities, such as drinking water,
furnished under the service contract.
Subd. 12. [SERVICE CONTRACT.] "Service contract" means any
agreement or agreements between a municipality and a private
vendor under which:
(1) the private vendor agrees to furnish to the
municipality or any other user capital intensive public services
in accordance with performance standards set forth in the
agreement or agreements and the municipality agrees to pay or
cause to be paid to the private vendor a service fee for the
services, and
(2) other covenants incident to clause (1) are made.
Subd. 13. [SERVICE FEE.] "Service fee" means the payments
the municipality is required under the service contract to make,
or cause to be made, to the private vendor, including payments
made by third parties to the private vendor for products or
services and credited against payments the municipality would
otherwise have to make, or cause to be made, under the service
contract.
Subd. 14. [USEFUL LIFE OF THE RELATED FACILITIES.] "Useful
life of the related facilities" means the economic useful life
of the related facilities as determined by the municipality.
Subd. 15. [UNRESTRICTED FUNDS.] "Unrestricted funds" means
any funds other than funds granted to the state or administrator
by the federal government or any agency of the federal
government and unavailable under federal law for the purposes
set forth in section 8.
Subd. 16. [USER.] "User" means the municipality and all
other persons which use the capital intensive public services
furnished by the private vendor.
Sec. 4. [471A.03] [BASIC AUTHORIZATION AND RELATED
POWERS.]
Subdivision 1. [BASIC AUTHORIZATION.] A municipality may
contract with a private vendor to furnish in accordance with a
service contract any capital intensive public services the
municipality is authorized by law to furnish, and for that
purpose a municipality may exercise any and all of the powers
provided in this section.
Subd. 2. [SERVICE CONTRACT.] Subject to the provisions of
section 10, a municipality may enter into a service contract for
a term of not more than 30 years. However, the service contract
may permit the municipality to either extend or renew the term
of the service contract so long as the municipality is not bound
under the service contract for an extended or renewal period of
more than 30 years. Under the service contract the municipality
may, under terms and conditions agreed to by the municipality
and the private vendor:
(1) obligate itself to pay or cause to be paid a service
fee for the availability and use of the capital intensive public
services to be furnished under the service contract;
(2) enter into other agreements relating to the service to
be provided and which the municipality considers appropriate
that are not otherwise contrary to law; and
(3) either pledge its full faith and credit or obligate a
specific source of payment for the payment of the service fee
and the performance of other obligations under the service
contract and the payment of damages for failure to perform the
obligations.
The obligation of the municipality to pay the service fee
and perform any other permitted obligations under the service
contract are not considered a debt within the meaning of any
statutory or charter limitation, and no election is required as
a precondition to the municipality entering into any permitted
obligation or undertaking a project under a service contract.
Subd. 3. [PROCUREMENT PROCEDURES.] The municipality may
agree under the service contract that the private vendor will
acquire and construct any and all related facilities without
compliance with any competitive bidding requirements, provided
(1) the municipality, or municipalities if the related
facilities furnish capital intensive public services to more
than one municipality, has in the aggregate either no or no more
than a 50 percent ownership interest in the related facilities,
and (2) the municipality enters into the service contract only
after requesting from two or more private vendors proposals for
the furnishing of the capital intensive public services, under
terms and conditions the municipality determines to be fair and
reasonable. After making the request and receiving any
proposals in response to the request, the municipality may
negotiate the service contract with any private vendor that
meets the requirements specified in the request for proposals.
Subd. 4. [SOURCES OF PAYMENT; COLLECTION PROCEDURE.] (a)
For the payment of a service fee or other monetary obligation
under an existing service contract or in anticipation of need
under a future service contract, the municipality may:
(1) levy property taxes, impose rates and charges, levy
special assessments, and exercise any other revenue producing
authority granted to it and apply public funds for the payment
of the service fee and any other monetary obligations under the
service contract in the same manner, and subject to the same
conditions and limitations, except as provided in section 5,
that would apply if the related facilities were acquired,
constructed, owned, and operated exclusively by the municipality;
and
(2) establish by ordinance, revise when considered
advisable, and collect just and reasonable rates and charges for
the capital intensive public services provided under the service
contract. The ordinance may obligate the owners, lessees, or
occupants of property, or any or all of them, to pay charges for
the capital intensive public services available for their
properties and may obligate the user of a related facility to
pay a reasonable charge for the use of the related facility.
Rates and charges may take into account the character, kind, and
quality of the capital intensive public service and all other
factors that enter into the cost of the capital intensive public
service, including but not limited to the service fee payable
with respect to it, depreciation, and payment of principal and
interest on money borrowed for the acquisition or betterment of
related facilities.
(b) The rates and charges may be billed and collected in a
manner the municipality shall determine consistent with this
paragraph and other applicable law. On or before October 15 in
each year, the municipality shall certify to the county auditor
all unpaid outstanding charges for services provided under the
service contract and a statement of the description of the lands
against which the charges arose. It is the duty of the county
auditor, upon order of the governing body of the municipality,
to extend the rates and charges with interest as provided for by
ordinance upon the tax rolls of the county for the taxes of the
year in which the rate or charge is filed. For each year ending
October 15 the rates and charges with interest shall be carried
into the tax becoming due and payable in January of the
following year, and shall be enforced and collected in the
manner provided for the enforcement and collection of real
property taxes in accordance with the provisions of the laws of
the state. The rates and charges, if not paid, shall become
delinquent and be subject to the same penalties and the same
rate of interest as the taxes under the general laws of the
state. All rates and charges shall be uniform in their
application to use and service of the same character or quantity.
(c) An ordinance establishing rates and charges shall also
establish a procedure by which a person obligated to pay the
rates and charges may, each year at a public hearing held before
August 1 of each year, protest the payment of the rates and
charges on the grounds that services to be provided under the
service contract are not available to the person. The services
shall be deemed available for the property of the person if the
vendor agrees, and the related facilities have the capacity, to
provide the services to the person as soon as the municipality
or any other entity provides the property of the person with
access to the services. Notice of the hearing shall be
published at least 30 days prior to the hearing in an official
newspaper in general circulation in the municipality. A person
protesting the assessment of rates and charges under this
paragraph shall file the objection in writing with the
municipality at least five days prior to the hearing. Within
ten days after the hearing, the municipality shall determine
whether the rates and charges were properly assessed. A person
protesting the assessment of rates and charges may appeal the
assessment, and a private vendor may appeal a reduction in rates
and charges for any person, to the district court in the same
manner as appeal of other civil cases. Rates and charges
erroneously collected shall be refunded with the same rate of
interest as taxes refunded with interest under the general laws
of this state.
(d) A public hearing on the proposed ordinance shall be
held prior to the meeting at which it is to be considered by the
governing body of the municipality and after notice of the
hearing has been published in the official newspaper of the
municipality not less than ten days prior to the hearing. The
notice shall state the subject matter and the general purpose of
the proposed ordinance.
Subd. 5. [SALE OR LEASE OF EXISTING FACILITIES.] For
purposes of carrying out the service contract, the municipality
may, in compliance with subdivision 3, sell or lease to the
private vendor or any other municipality on terms and conditions
as the municipality considers appropriate any existing related
facilities, including land, owned by the municipality.
Subd. 6. [REMEDIES.] The municipality may provide that
title to the facilities shall vest in or revert to the
municipality if the private vendor defaults under any specified
provisions in the service contract. The municipality may acquire
or reacquire any facilities and terminate the service contract
in accordance with its terms notwithstanding that the service
contract may constitute an equitable mortgage. No lease of
facilities by the municipality to the private vendor is subject
to the provisions of section 504.02, unless expressly so
provided in the service contract.
Subd. 7. [INTEREST IN THE RELATED FACILITIES.] The
municipality may retain or acquire, on terms and conditions it
considers appropriate, a present or future interest in all or
part of the related facilities and grant a mortgage or security
interest in its interest in the related facilities.
Subd. 8. [INTEREST IN THE PRIVATE VENDOR.] The
municipality may, on terms and conditions it considers
appropriate, acquire an interest in the private vendor as a
joint venturer, including a share in the revenues derived from
the related facilities, and grant a security interest in its
interest in the private vendor and such revenues. However, no
municipality or group of municipalities may have a controlling
interest in the private vendor.
Subd. 9. [USE OF BOND PROCEEDS.] The municipality may
issue bonds and other obligations and apply their proceeds
toward the payment of the costs of the related facilities in the
same manner and subject to the same conditions and limitations
that would apply if the related facilities were acquired,
constructed, owned, and operated exclusively by the municipality
and for these purposes, related facilities shall be considered
to be a project within the meaning of section 474.02,
subdivision 1a.
Subd. 10. [REQUIRED PUBLIC USE.] The municipality may
agree, subject to any applicable state statutory requirements as
to designated use of the related facilities, that the sole and
exclusive right to provide the capital intensive public services
within its jurisdiction be assumed by the private vendor under
the service contract and may require that any and all members of
the public within its jurisdiction use the services provided
under the service contract in the same manner and subject to the
same limitations and conditions that would apply if the related
facilities were acquired, constructed, owned, and operated
exclusively by the municipality.
Subd. 11. [CONDEMNATION POWERS.] The municipality may
exercise the right of eminent domain in the manner provided by
chapter 117, for the purpose of acquiring for itself or the
private vendor any and all related facilities. If the related
facilities are acquired for the private vendor, the service
contract shall be for a term of at least five years.
Subd. 12. [CONTRACTOR'S BOND AND MECHANICS' LIENS.] The
municipality may waive or require the furnishing of a
contractor's payment and performance bond of the kind described
in section 574.26 in connection with the installation and
construction of any related facilities. If the bond is
required, the provisions of chapter 514 relating to liens for
labor and materials are not applicable with respect to work done
or labor or materials supplied for the related facilities. If
the bond is waived, the provisions of chapter 514 apply with
respect to work done or labor or materials supplied for the
related facilities.
Sec. 5. [471A.04] [LEVY LIMITS.]
For purposes of applying sections 275.50 to 275.56, any
property taxes levied for the payment of the service fee shall
be treated as a special levy under the provisions of section
275.50, to the same extent and subject to the same limitations
that would apply if the capital cost component of the service
fee represented principal and interest payments on bonded
indebtedness of the municipality within the meaning of section
275.50, subdivision 5, clause (e), and if the balance of the
service fee represented operation and maintenance expenses for
related facilities owned and operated exclusively by the
municipality. The provisions of section 275.11 and any levy
limits imposed by home rule charter do not apply to taxes levied
to pay the service fee.
Sec. 6. [471A.05] [EXEMPTION FROM PROPERTY TAXES.]
If the service contract provides that property taxes
imposed with respect to the related facilities are to be
included in the service fee as pass-through costs, the
municipality may apply to the commissioner of revenue for an
exemption from property taxation of the related facilities. The
property is exempt from ad valorem taxation, if the commissioner
of revenue determines that the related facilities serve the
general public and that similar municipally-owned facilities are
exempt from ad valorem property taxation. The commissioner of
revenue must notify the assessor that the property is exempt
from taxation. The exemption is only effective during the term
of the service contract from and after the date of filing the
certificate in the case of property taxes. The exemption is not
effective with respect to any property taxes levied or imposed
but not collected prior to the date of approval of the exemption
by the commissioner of revenue.
Sec. 7. [471A.06] [JOINT POWERS AGREEMENT.]
Two or more municipalities may enter into joint powers
agreements they consider appropriate under the provisions of
section 471.59 for purposes of exercising the powers granted in
sections 2 to 13.
Sec. 8. [471A.07] [STATE GRANTS AND LOANS.]
On or before January 1, 1987, the pollution control agency
shall submit to the legislature proposed legislation and draft
implementing regulations providing for (1) the use by the
administrator of unrestricted funds to provide grants and loans
for related facilities that constitute wastewater treatment
facilities as defined by section 115.71, subdivision 8, and (2)
the use of such funding as a means of speeding construction of
wastewater treatment facilities and better targeting scarce
unrestricted funds to help finance wastewater treatment
facilities (including reimbursement of municipalities for a
portion of the capital cost component in service contracts under
capital cost component loans and capital cost component grants).
Sec. 9. [471A.08] [HEARING.]
Subdivision 1. [PUBLIC HEARING REQUIRED.] Except as
provided in subdivision 2, a municipality shall, before entering
into a service contract under sections 2 to 13, conduct a public
hearing on the proposal to provide specified capital intensive
public services under sections 2 to 13. The hearing may be
conducted either before or after the date on which any request
for proposals is made under section 4, subdivision 3, clause
(2). A notice of the hearing shall be published in the local
official newspaper of the municipality no less than 15 and no
more than 45 days prior to the date set for hearing and shall
describe the general nature of the proposal. Any written
information developed for the proposal prior to the hearing
shall be available to the public for inspection prior to the
hearing. The hearing on the proposal shall be sufficient even
though the site of the related facilities, the name of the
private vendor, and the specific structure of the contractual
arrangements with the private vendor are not known at the time
of the hearing.
Subd. 2. [EXISTING CONTRACTS.] A municipality that entered
into a service contract prior to the effective date of sections
2 to 13 may exercise any of the powers authorized by those
sections without complying with subdivision 1.
Sec. 10. [471A.09] [INVESTMENT OF FUNDS.]
Any sums paid to the private vendor under the service
contract are not considered public funds and may be invested in
any securities in which the private vendor is authorized by law
to invest.
Sec. 11. [471A.10] [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF
EXISTING FACILITY.]
(a) Unless expressly provided therein, and except as
provided in this section, no state law, charter provision, or
ordinance of a municipality relating to public employees shall
apply to a person solely by reason of that person's employment
by a private vendor in connection with services rendered under a
service contract.
(b) A private vendor purchasing or leasing existing related
facilities from a municipality shall recognize all exclusive
bargaining representatives and existing labor agreements and
those agreements shall remain in force until they expire by
their terms. Persons who are not employed by a municipality in
a related facility at the time of a lease or purchase of the
facility by the private vendor are not "public employees" within
the meaning of the public employees retirement act, chapter
353. Persons employed by a municipality in a related facility
at the time of a lease or purchase of the facility by a private
vendor shall continue to be considered to be "public employees"
within the meaning of the public employees retirement act,
chapter 353, but may elect to terminate their participation in
the public employees retirement association as provided in this
section. Each such employee may exercise the election annually
on the anniversary of the person's initial employment by the
municipality. An employee electing to terminate participation
in the association is entitled to benefits that the employee
would be entitled to if terminating public employment and may
participate in a retirement program established by the private
vendor.
Sec. 12. [471A.11] [REGULATION OF RATES AND CHARGES AND
PUBLIC UTILITY LAWS.]
A municipality may regulate by ordinance, contract, or
otherwise the rates and charges imposed by the private vendor
with respect to any capital intensive public services provided
to the public under the service contract. Whether or not the
imposition of such rates and charges is so regulated, no capital
intensive public services provided under the service contract
are subject to regulation under the provisions of chapter 216B,
unless the municipality elects to subject the services to
regulation under that chapter. An election for regulation may
be affected by resolution of the governing body of the
municipality requesting regulation and filing the resolution
with the state public utilities commission.
Sec. 13. [471A.12] [POWERS; ADDITIONAL AND SUPPLEMENTAL.]
The powers conferred by sections 2 to 13 shall be liberally
construed in order to accomplish their purposes and shall be in
addition and supplemental to the powers conferred by any other
law or charter. If any other law or charter is inconsistent
with sections 2 to 13, these sections are controlling as to
service contracts entered into under sections 2 to 13. However,
nothing in sections 2 to 13 limits or qualifies (1) any other
law that a municipality must comply with to obtain any permit in
connection with related facilities, (2) any performance standard
or effluent limitations applicable to related facilities, or (3)
the provisions of any law relating to conflict of interest.
Sec. 14. Minnesota Statutes 1984, section 474.02, is
amended by adding a subdivision to read:
Subd. 1h. The term "project" shall also include related
facilities as defined by section 3, subdivision 11.
Sec. 15. [EFFECTIVE DATE.]
Article 4 is effective the day following final enactment.
Approved March 25, 1986
Official Publication of the State of Minnesota
Revisor of Statutes