Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 256-S.F.No. 1393
An act relating to public finance; providing
conditions and requirements for the issuance of debt
and use of the proceeds; authorizing use of capital
improvement bonds for indoor ice arenas; exempting
issuance of certain debt from election requirements;
modifying loans to political subdivisions for fire or
rescue purposes; authorizing operation of certain
recreational facilities; authorizing continuing
disclosure agreements; providing for funding of
self-insurance by political subdivisions; providing
for the issuance of temporary obligations and
modifying issuance and lease procedures; renaming and
modifying technical provisions relating to incentives
in enterprise zones; amending Minnesota Statutes 1994,
sections 373.40, subdivision 1; 447.46; 462C.05,
subdivision 1; 465.73; 469.041; 469.060, subdivision
1; 469.102, subdivision 1; 469.305, subdivisions 1 and
3; 469.306; 469.307; 469.309; 469.31; 471.16,
subdivision 1; 471.191, subdivisions 1 and 2; 471.98,
subdivision 3; 471.981, subdivisions 2, 4a, 4b, and
4c; 475.51, subdivision 4; 475.52, subdivision 6;
475.58, subdivision 1, and by adding a subdivision;
475.60, by adding a subdivision; 475.61, by adding a
subdivision; 475.63; and 475.79; Laws 1994, chapter
643, section 14, subdivision 6; proposing coding for
new law in Minnesota Statutes, chapter 373; repealing
Minnesota Statutes 1994, section 469.305, subdivision
2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1994, section 373.40,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For purposes of this
section, the following terms have the meanings given.
(a) "Bonds" means an obligation as defined under section
475.51.
(b) "Capital improvement" means acquisition or betterment
of public lands, buildings, or other improvements within the
county for the purpose of a county courthouse, administrative
building, health or social service facility, correctional
facility, jail, law enforcement center, hospital, morgue,
library, park, qualified indoor ice arena, and roads and
bridges. An improvement must have an expected useful life of
five years or more to qualify. "Capital improvement" does not
include light rail transit or any activity related to it or a
recreation or sports facility building (such as, but not limited
to, a gymnasium, ice arena, racquet sports facility, swimming
pool, exercise room or health spa), unless the building is part
of an outdoor park facility and is incidental to the primary
purpose of outdoor recreation.
(c) "Commissioner" means the commissioner of trade and
economic development.
(d) "Metropolitan county" means a county located in the
seven-county metropolitan area as defined in section 473.121 or
a county with a population of 90,000 or more.
(e) "Population" means the population established by the
most recent of the following (determined as of the date the
resolution authorizing the bonds was adopted):
(1) the federal decennial census,
(2) a special census conducted under contract by the United
States Bureau of the Census, or
(3) a population estimate made either by the metropolitan
council or by the state demographer under section 4A.02.
(f) "Qualified indoor ice arena" means a facility that
meets the requirements of section 2.
(g) "Tax capacity" means total taxable market value, but
does not include captured market value.
Sec. 2. [373.43] [FINANCING AUTHORITY; ICE FACILITIES.]
A county may issue and sell its general obligations under
chapter 475 to finance acquisition and construction of an indoor
ice arena intended to be used predominantly for youth athletic
activities if all the following conditions are met.
(a) The obligations are secured by a pledge of revenues
from the facility.
(b) The county has entered into a qualified agreement. A
qualified agreement means:
(1) a joint powers agreement with the school district or
the city in which the facility is located that governs
ownership, operation, and maintenance of the facility; or
(2) an agreement with a nonprofit corporation, qualifying
under section 501(c)(3) of the Internal Revenue Code of 1986,
that provides that the corporation will operate, manage, and
maintain the facility; or
(3) any combination of agreements under clauses (1) and (2).
(c) The agreements under paragraph (b) provide that all
parties must pay the principal and interest on obligations, if
the revenues for the facility are insufficient to pay the
obligations in full.
(d) The county board finds, based on analysis provided by a
professional experienced in finance, that the facility's
revenues and other available money will be sufficient to pay the
obligations, without reliance on a property tax levy or the
general purpose state aid of the county or any party to a joint
powers agreement.
Sec. 3. [373.44] [REVENUE FINANCING AUTHORITY; ICE
FACILITIES.]
For the purpose of acquiring, leasing, equipping, or
maintaining land or buildings for use as an indoor ice arena as
defined in section 2, a county has the same authority and powers
granted to a city by section 471.191.
Sec. 4. Minnesota Statutes 1994, section 447.46, is
amended to read:
447.46 [REVENUE PLEDGED.]
The county, city, or hospital district may pledge and
appropriate the revenues to be derived from its operation of the
facilities, except related medical facilities, to pay the
principal and interest on the bonds when due and to create and
maintain reserves for that purpose, as a first and prior lien on
the revenues or, if so provided in the bond resolution, as a
lien on the revenues subordinate to the current payment of a
fixed amount or percentage or all of the costs of running the
facilities.
Sec. 5. Minnesota Statutes 1994, section 462C.05,
subdivision 1, is amended to read:
Subdivision 1. A city may also include in the housing
plan, a program or programs to administer, and make or purchase
a loan or loans to finance one or more multifamily housing
developments within its boundaries, of the kind described in
subdivision 2, 3, 4 or 7, and upon the conditions set forth in
this section. A loan may be made or purchased for
(a) the acquisition and preparation of a site and the
construction of a new development,
(b) the rehabilitation of an existing building and site and
the discharge of any lien or other interest in the building and
site,
(c) for the acquisition of an existing building and site
and the rehabilitation thereof,
(d) for the acquisition of an existing building and site
for purposes of conversion to limited equity cooperative
ownership by low or moderate income families, or
(e) for the acquisition, or acquisition and improvement, of
an existing building and site by a nonprofit corporation which
will operate the building as a multifamily housing development
for rental primarily to elderly or handicapped persons, or
(f) the taking out of accumulated equity in connection with
a program of federal insurance for the preservation of
low-income housing.
With respect to loans made or purchased pursuant to clause
(b) or (c), the cost of rehabilitation of an existing building
must be estimated to equal at least $1,000 per dwelling unit or
20 percent of the appraised value of the original building and
site whichever is less, except that with respect to
rehabilitation which consists primarily of improvement of the
property with facilities or improvements to conserve energy or
convert or retrofit for use of alternative energy sources,
rehabilitation loans may be made without regard to cost; and at
least a substantial portion of such rehabilitation cost must be
estimated to be incurred for compliance with building codes or
conservation of energy.
Each development upon completion shall comply with all
applicable code requirements. A loan or loans may be made or
purchased for either the construction or the long-term financing
of a development, or both, including the financing of the
acquisition of dwelling units and interests in common facilities
provided therein, by persons to whom such units and facilities
may be sold as contemplated in chapter 515 or 515A or any
supplemental or amendatory law thereof or as contemplated for a
development consisting of cooperative housing.
Substantially all of the proceeds of each loan shall be
used to pay the cost of a multifamily housing development,
including property functionally related and subordinate to it;
but nothing herein prevents the construction or acquisition of
the development over, under, or adjacent to, and in conjunction
with facilities to be used for purposes other than housing.
Sec. 6. Minnesota Statutes 1994, section 465.73, is
amended to read:
465.73 [TOWN HALLS; FIRE HALLS OR RESCUE EQUIPMENT; LOANS
TO POLITICAL SUBDIVISIONS.]
For purposes of constructing, repairing, or acquiring town
halls, fire halls or fire or rescue equipment any city, county,
or town may borrow up to $250,000 from funds granted to a rural
electric cooperative organized under chapter 308A by, directly
from or guaranteed by the Farmers Home Administration or other
agency of the United States Department of Agriculture on a note
secured by a mortgage on the property purchased with the
borrowed funds. The city, county, or town may assign or pledge
revenues from the town halls, fire or rescue department, or fire
hall or any other available funds, including taxes levied
pursuant to section 475.61 to the Farmers Home Administration or
other agency of the United States Department of Agriculture or
its guaranteed lender or a rural electric cooperative organized
under chapter 308A as its grantee to repay the loan. The amount
of the obligation shall not be included when computing the net
debt of the city, county, or town. An election shall not be
required to authorize the note and mortgage or assignment of
revenues.
Sec. 7. Minnesota Statutes 1994, section 469.041, is
amended to read:
469.041 [STATE PUBLIC BODIES, POWERS AS TO PROJECTS.]
For the purpose of aiding and cooperating in the planning,
undertaking, construction, or operation of projects, any state
public body may upon the terms, with or without consideration,
as it may determine:
(1) Dedicate, sell, convey, or lease any of its interests
in any property, or grant easements, licenses, or any other
rights or privileges therein to an authority. Except in cities
of the first class having a population of less than 200,000, the
public body may pay the bonds of or make loans or contributions
for redevelopment projects, and the receipt or expenditure of
any money expended hereunder by the state public body shall not
be included within the definition of any limitation imposed on
per capita taxing or spending in the charter of the state public
body. No state public body may use any revenues or money of
that state public body to pay the bonds of or make any loans or
contributions to any public housing project, except to a public
low-rent housing project (i) for which financial assistance is
provided by the federal government which requires a municipality
or other local public body to use its revenues or money for a
direct loan or grant to the project as a condition for federal
financial assistance and (ii) where the local financial
assistance for the project is authorized by resolution of the
governing body of the municipality;
(2) Cause parks, playgrounds, recreational, community,
education, water, sewer or drainage facilities, or any other
works which it may undertake, to be furnished adjacent to or in
connection with such projects;
(3) Approve, through its governing body or through an
agency designated by it for the purpose, redevelopment plans,
plan or replan, zone or rezone its parks; in the case of a city
or town, make changes in its map; the governing body of any city
may waive any building code requirements in connection with the
development of projects;
(4) Cause services to be furnished to the authority of the
character which it may otherwise furnish;
(5) Enter into agreements with respect to the exercise by
it of its powers relating to the repair, closing, or demolition
of unsafe, unsanitary, or unfit buildings;
(6) Do any and all things necessary or convenient to aid
and cooperate in the planning, undertaking, construction, or
operation of the projects;
(7) Incur the entire expense of any public improvements
made by it in exercising the powers granted in sections 469.001
to 469.047;
(8) Enter into agreements with an authority respecting
action to be taken by the state public body pursuant to any of
the powers granted by sections 469.001 to 469.047; the
agreements may extend over any period, notwithstanding any law
to the contrary; and
(9) Furnish funds available to it from any source,
including the proceeds of bonds, to an authority to pay all or
any part of the cost to the authority of the activities
authorized by section 469.012, subdivision 1, clause (7); and
(10) With respect to a housing development project and
bonds which an authority has issued for the project, exercise
the powers available to a city under section 471.191,
subdivision 2, as though the project were a recreational
program; provided that this power may only be exercised by a
city or county in which the project is located or in accordance
with a joint powers agreement with other cities or counties that
have authorized the exercise of the powers for other projects as
part of a common financing plan.
Sec. 8. Minnesota Statutes 1994, section 469.060,
subdivision 1, is amended to read:
Subdivision 1. [POWER; PROCEDURE.] A port authority may
issue bonds in the principal amount authorized by its city's
council. The bonds may be issued in anticipation of income from
any source. The bonds may be issued: (1) to secure funds
needed by the authority to pay for acquired property or (2) for
other purposes in sections 469.049, 469.050, and 469.058 to
469.068. The bonds must be in the amount and form and bear
interest at the rate set by the city council. The authority
shall sell the bonds to the highest bidder. The authority shall
publish notice of the time and the place for receiving bids once
at least two weeks before the bid deadline. Except as otherwise
provided in sections 469.048 to 469.068, the issuance of the
bonds is governed by chapter 475. The port authority when
issuing the bonds is a municipal corporation under chapter 475.
Notwithstanding any contrary city charter provision or any
general or special law, the bonds may be issued and sold without
submission of the question to the electors of the city, provided
that the ordinance of the governing body of the city authorizing
issuance of the bonds by the port authority shall be subject to
any provisions in the city charter pertaining to the procedure
for referendum on ordinances enacted by the governing body.
Sec. 9. Minnesota Statutes 1994, section 469.102,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORITY; PROCEDURE.] An economic
development authority may issue general obligation bonds in the
principal amount authorized by two-thirds majority vote of its
city's council. The bonds may be issued in anticipation of
income from any source. The bonds may be issued: (1) to secure
funds needed by the authority to pay for acquired property or
(2) for other purposes in sections 469.090 to 469.108. The
bonds must be in the amount and form and bear interest at the
rate set by the city council. The authority shall sell the
bonds to the highest bidder. The authority shall publish notice
of the time and the place for receiving bids, once at least two
weeks before the bid deadline. Except as otherwise provided in
sections 469.090 to 469.108, the issuance of the bonds is
governed by chapter 475. The authority when issuing the bonds
is a municipal corporation under chapter 475.
Sec. 10. Minnesota Statutes 1994, section 469.305,
subdivision 1, is amended to read:
Subdivision 1. [INCOME OR FRANCHISE TAX CREDIT INCENTIVE
GRANTS.] An income or corporate franchise tax credit incentive
grant is available to businesses located in an enterprise zone
that meet the conditions of this section. Each city designated
as an enterprise zone is allocated $3,000,000 to be used to
provide credits grants under this section for the duration of
the program. Each city of the second class designated as an
economically depressed area by the United States Department of
Commerce is allocated $300,000 to be used to provide credits
grants under this section for the duration of the program. For
fiscal year 1998 and subsequent years, the proration in section
469.31 shall continue to apply until the amount designated in
this subdivision is expended.
The credit incentive grant is in an amount equal to 20
percent of the wages paid to an employee, not to exceed $5,000
per employee per taxable calendar year. The credit incentive
grant is available to an employer for a zone resident employed
in the zone at full-time wage levels of not less than 170
percent of minimum wage. The credit incentive grant is not
available to workers employed in construction or employees of
financial institutions, gambling enterprises, public utilities,
sports, fitness, and health facilities, or racetracks. The
employee must be employed at that rate at the time the business
applies for a tax credit grant, and must have been employed for
at least one year at the business. The credit applies to A
grant may be provided only for new jobs; for purposes of this
section, a "new job" is a job that did not exist in Minnesota
before May 6, 1994. The credit is applicable to The incentive
grant authority is available for the five taxable calendar years
after the application has been approved to the extent the
allocation to the city remains available to fund the credit
grants, and provided that if the city certifies to the
commissioner on an annual basis that the business is in
compliance with the plan to recruit, hire, train, and retain
zone residents.
Sec. 11. Minnesota Statutes 1994, section 469.305,
subdivision 3, is amended to read:
Subd. 3. [REVIEW AND ANALYSIS.] The city must submit
the proposed tax credit incentive grant proposal to the
commissioner for approval. The proposal shall include a plan to
recruit, hire, train, and retain zone residents. The tax credit
proposal shall be approved unless the commissioner finds that
the proposal is not in conformity with the provisions of
sections 469.301 to 469.308.
If the city submits the tax credit incentive grant proposal
to the commissioner before the expiration of the zone
designation under section 469.302, subdivision 2, the authority
of the commissioner to approve the tax credit proposal continues
until the commissioner acts on the proposal.
Sec. 12. Minnesota Statutes 1994, section 469.306, is
amended to read:
469.306 [REVOCATION.]
The commissioner may revoke a business' tax credit
incentive grant if the applicant has not proceeded in good faith
with its operations in a manner which is consistent with the
purpose of sections 469.301 to 469.308 and is possible under
circumstances reasonably within the control of the applicant.
The commissioner may reconsider the revocation of the tax
credit incentive grant if the business provides evidence that
circumstances of its failure to proceed were beyond its control
or that it did not act in bad faith.
Sec. 13. Minnesota Statutes 1994, section 469.307, is
amended to read:
469.307 [RECAPTURE.]
Subdivision 1. [TERMINATION OF OPERATIONS; OTHER
VIOLATIONS.] Any business that receives a tax credit authorized
by an incentive grant under section 469.305 and ceases to
operate or otherwise violates the criteria for obtaining
the credit grant for its facility located within the enterprise
zone within seven years after the first receipt of a credit
grant by the business shall repay the portion of the tax credit
grant received as provided in the following schedule:
Termination of Operations Repayment of Portion
or Other Violations
Less than two years 100 percent
Between two years and four years 75 percent
Between four years and seven years 50 percent
More than seven years 0 percent
Subd. 2. [REPAYMENT.] The repayment must be paid to the
state. The amount repaid must be credited to the amount
certified as available for tax credits incentive grants in the
zone under section 469.305.
Subd. 3. [LIEN.] If an event occurs that creates an
obligation under subdivision 1 to repay all or part of the tax
credit incentive grant, the repayment obligation immediately
becomes a lien against the business' real and personal property
located in Minnesota, including the property of subsidiaries,
parents, and related corporations. A lien against real property
under this subdivision has the same legal effect and must be
collected in the same manner as unpaid real property taxes.
Sec. 14. Minnesota Statutes 1994, section 469.309, is
amended to read:
469.309 [RURAL JOB CREATION CREDIT GRANTS.]
Subdivision 1. [CREDIT FOR JOB CREATION GRANTS.] The
commissioner of trade and economic development may approve a
credit against the tax due under chapter 290 an incentive grant
for an eligible business beginning with the first taxable year
after December 31, 1994 calendar year 1995. The maximum credit
available grant is $5,000 per eligible employee. The
actual credit grant is based on the following schedule:
$2,000 for each eligible employee with wages greater than
or equal to 170 percent and less than 200 percent of the minimum
wage;
$3,000 for each eligible employee with wages greater than
or equal to 200 percent and less than 250 percent of the minimum
wage;
$4,000 for each eligible employee with wages greater than
or equal to 250 percent and less than 300 percent of the minimum
wage; and
$5,000 for each eligible employee with wages greater than
or equal to 300 percent of the minimum wage.
The total credit grant for an employer is equal to the
actual credit grant multiplied by the number of employees
eligible for that credit grant. For purposes of this section
"minimum wage" means the minimum wage that is required by
federal law. An eligible business may apply for a rural job
creation credit grant only once for each new job. The credit is
refundable.
Subd. 2. [ELIGIBLE BUSINESS.] An employer eligible for a
job credit creation incentive grant under this section must (1)
be located outside the metropolitan area as defined under
section 473.121 (2) create at least ten qualifying new jobs in a
two-year period, and (3) consist of a for-profit business. For
the purposes of this section, a "qualifying new job" is a job
that did not exist in Minnesota before May 6, 1994.
Subd. 3. [ELIGIBLE EMPLOYEE.] To be eligible for a
credit grant, the employee must be employed full time by an
eligible business at a wage level of not less than 170 percent
of the minimum wage at the time the eligible business applies
for the credit grant and must have been employed there at that
wage level for a minimum of 12 months. The credit grant applies
only to new jobs created at the eligible business after May 6,
1994.
Subd. 4. [RESTRICTIONS.] The tax credits incentive grants
provided by this section do not apply to racetracks, financial
institutions, gambling enterprises, public utilities, or sports,
fitness, and health facilities. An employer is not eligible for
a tax credit an incentive grant if the commissioner determines
that the position held by the employee for which the business is
seeking a credit grant was transferred from an enterprise
conducted by substantially the same business enterprise at
another site in the state.
Sec. 15. Minnesota Statutes 1994, section 469.31, is
amended to read:
469.31 [LIMIT ON TAX CREDITS GRANTS; APPROPRIATION.]
The maximum amount of tax credits allowable incentive
grants payable under sections 469.305 and 469.309 is $900,000
for fiscal year 1997. Of that amount, one-third must be
allocated to the city of Minneapolis, one-third to the city of
St. Paul, and one-third to the remaining cities. Of the amounts
allocated to the cities of Minneapolis and St. Paul, $25,000
must be subtracted from each city's allocation and is
appropriated to the commissioner of economic security for
administration of this program, provided that $25,000 of the
appropriation is for fiscal year 1996 and $25,000 is for fiscal
year 1997. Of the amount allocated to the remaining cities, a
minimum of $60,000 must be allocated to the city of South St.
Paul. No tax credits are allowable incentive grants may be paid
before fiscal year 1997. If the commissioner of revenue
economic security estimates by March 1, 1996, that tax credits
incentive grants for fiscal year 1997 will exceed $900,000, the
commissioner shall proportionately reduce each city's allocation
to remain within the limit. The amount necessary to pay the
allocations for grants under this section are appropriated to
the commissioner of trade and economic development and the
commissioner of economic security.
Sec. 16. Minnesota Statutes 1994, section 471.16,
subdivision 1, is amended to read:
Subdivision 1. Any city, however organized, or any town,
county, school district, or any board thereof, or any
incorporated post of the American Legion or any other
incorporated veterans' organization, may operate such a program
independently, or they may cooperate among themselves or with
any nonprofit organization in its conduct and in any manner in
which they may mutually agree; or they may delegate the
operation of the program to a recreation board created by one or
more of them, and appropriate money voted for this purpose to
such board which may in turn support or cooperate with a
nonprofit organization. In the case of school districts after
May 15, 1978, the right to enter into such agreements with any
other corporation, board or body hereinbefore designated where
bonds are issued by the other party and revenue pledged for
bonds issued pursuant to section 471.191, shall be authorized
only upon obtaining the approval of a majority of the electors
voting on the question at a regular or special school election.
Sec. 17. Minnesota Statutes 1994, section 471.191,
subdivision 1, is amended to read:
Subdivision 1. Any city operating a program of public
recreation and playgrounds pursuant to sections 471.15 to 471.19
may acquire or lease, equip, and maintain land, buildings, and
other recreational facilities, including, but without
limitation, outdoor or indoor swimming pools, skating rinks and
arenas, athletic fields, golf courses, marinas, concert halls,
museums, and facilities for other kinds of athletic or cultural
participation, contests, and exhibitions, together with related
automobile parking facilities as defined in section 459.14, and
may expend funds for the operation of such program and borrow
and expend funds for capital costs thereof pursuant to the
provisions of this section. A school district operating a
program of public recreation and playgrounds has the rights
provided in this section. Any facilities to be operated by a
nonprofit corporation, as contemplated in section 471.16, may be
leased to the corporation upon such rentals and for such term,
not exceeding 30 years, and subject to such other provisions as
may be agreed; including but not limited to provisions (a)
permitting the lessee, subject to whatever conditions are
stated, to provide for the construction and equipment of the
facilities by any means available to it and in the manner
determined by it, without advertisement for bids as required for
other municipal facilities, and (b) granting the lessee the
option to renew the lease upon such conditions and rentals, or
to purchase the facilities at such price, as may be agreed;
provided that (c) any such lease shall require the lessee to pay
net rentals sufficient to pay the principal, interest,
redemption premiums, and other expenses when due with respect to
all city bonds issued for the acquisition or betterment of the
facilities, less such amount of taxes and special assessments,
if any, as may become payable in any year of the term of the
lease, on the land, building, or other facilities leased, and
(d) no option shall be granted to purchase the facilities at any
time at a price less than the amount required to pay all
principal and interest to become due on such bonds to the
earliest date or dates on which they may be paid and redeemed,
and all redemption premiums and other expenses of such payment
and redemption.
Sec. 18. Minnesota Statutes 1994, section 471.191,
subdivision 2, is amended to read:
Subd. 2. Any such city may issue bonds pursuant to chapter
475, for the acquisition and betterment of land, buildings, and
facilities for the purpose of carrying out the powers granted by
this section. Such bonds, unless authorized as general
obligations of the issuer pursuant to approval of the electors
or pursuant to another law or charter provision permitting such
issuance without an election, shall be payable solely from the
income of land, buildings, and facilities used or useful for the
operation of the program, but may be secured by a pledge to the
bondholders, or to a trustee, of all income and revenues of
whatsoever nature derived from any such land, buildings, and
facilities, as a first charge on the gross revenues thereof to
the extent necessary to pay the bonds and interest thereon when
due and to accumulate and maintain an additional reserve for
that purpose in an amount equal to the total amount of payments
to become due in any fiscal year. In this event the governing
body of the issuer may by resolution or trust indenture define
the land, buildings, or facilities, the revenues of which are
pledged, and establish covenants and agreements to be made by
the issuer for the security of the bonds, including a covenant
that the issuer will establish, maintain, revise when necessary,
and collect charges for all services, products, use, and
occupancy of the land, buildings, and facilities, in the amounts
and at the times required to produce the revenues pledged, and
also sufficient, with any other funds appropriated by the
governing body from time to time, to provide adequately for the
operation and maintenance of the land, buildings, and
facilities. After the issuance of any bonds for which revenues
are so pledged, the governing body of the issuer shall provide
in its budget each year for any anticipated deficiency in the
revenues available for such operation and maintenance. For this
purpose any issuer may levy a tax on the taxable property within
its boundaries, in excess of taxes which may otherwise be levied
within charter limitations, provided the excess levy for a city
subject to a charter limitation is approved by a majority of its
electors voting on the question at a regular or special
election. The authority to levy additional taxes granted herein
shall not apply to cities or towns in which the net tax capacity
consists in part of iron ore or lands containing taconite or
semitaconite.
Sec. 19. Minnesota Statutes 1994, section 471.98,
subdivision 3, is amended to read:
Subd. 3. [POOL.] "Pool" means any self-insurance fund or
agreement for the reciprocal assumption of risk established by
or among two or more political subdivisions for coverage of
their respective risks including, but not limited to, the pools
described in section 471.982, subdivision 3.
Sec. 20. Minnesota Statutes 1994, section 471.981,
subdivision 2, is amended to read:
Subd. 2. A political subdivision may establish a self
insurance revolving fund. The initial amount of the fund shall
be determined by the governing body. The governing body may
appropriate the amounts necessary to maintain the fund at the
level specified in the ordinance or resolution establishing it.
Expenditures from the fund may be made for:
(a) Payment of losses;
(b) Costs of defense and investigation;
(c) Premiums and deductible amounts when commercial
insurance is purchased for a risk;
(d) Debt service and debt service related expenses for
bonds issued under this section;
(e) Cost of loss control activities; and
(e) (f) Any other costs customarily borne by commercial
insurers under conventional insurance policies.
Sec. 21. Minnesota Statutes 1994, section 471.981,
subdivision 4a, is amended to read:
Subd. 4a. [INSURANCE INSTALLMENT PURCHASE AGREEMENT.]
A county political subdivision may, by resolution of its
governing body, and without advertisement for bids, enter into
an insurance installment purchase agreement with a
self-insurance pool created under subdivision 3. Such a
self-insurance pool may purchase insurance on behalf of the
participating counties political subdivisions and may use
insurance installment purchase agreements or other obligations
of the participating counties political subdivisions to provide
the participating counties political subdivisions with coverage
against all or any part of the risks enumerated in subdivision 1
and against any risk which the county political subdivision is
authorized to insure under section 176.181, subdivision 1. The
Notwithstanding any limitations set forth under section 475.52,
a political subdivision which has established a self-insurance
revolving fund under subdivision 2 or self-insurance pool may
fund insurance claims and reserves and finance insurance
installment purchase agreements for the political subdivision,
self-insurance pool, or a mutual insurance company established
pursuant to subdivision 4 and fund other costs set forth in
subdivision 2 by issuing revenue bonds, bonds which are general
obligations of the self-insurance pool or mutual insurance
company, as applicable, or other obligations secured by payments
made or to be made by the participating counties political
subdivisions or pool. An insurance installment purchase
agreement of a participating county political subdivision may
require that the county political subdivision make payments
sufficient to produce revenue for the prompt payment of the
bonds or other obligations, including all interest and premiums,
if any, accruing on them. The insurance installment purchase
agreements may provide for additional contributions or premiums
if it is actuarially determined that the assets of the insurance
installment purchase agreements available to pay claims are
insufficient. The insurance installment purchase agreements may
be multiyear contracts and shall not be subject to any
referendum, public bidding, or net debt limitation requirement
of chapter 475.
Sec. 22. Minnesota Statutes 1994, section 471.981,
subdivision 4b, is amended to read:
Subd. 4b. [BOND ISSUE FOR INSURANCE PROCUREMENT OR
SELF-INSURANCE.] A self-insurance pool of counties may issue
bonds which are general obligations of the self-insurance pool
or revenue bonds secured by insurance installment purchase
agreements of the participating counties political subdivisions
issued pursuant to subdivision 4a. The self-insurance pool,
with the approval of the governing body of each
participating county political subdivision, shall fix the total
amount needed for the procurement of insurance and shall
apportion to each participating county political subdivision the
county's political subdivision's share of that amount and of the
costs of operation, or of annual debt service or payments
required to pay such amount with interest. Notwithstanding any
limitations set forth under section 475.52, or any other general
or special law or charter to the contrary, a political
subdivision may issue revenue bonds or other obligations to
provide funds for the purposes, including self-insurance,
authorized by this section. Any other law notwithstanding,
bonds or other obligations issued under this subdivision may be
sold at public or private sale upon the terms and conditions the
issuer determines. No election shall be required to authorize
the issuance of the obligations, and the obligations shall not
be subject to any limitation on net debt. Notwithstanding any
limitation imposed by section 475.54, the obligations shall
mature in the years the issuer determines. In addition to
permitted uses described above, proceeds of obligations issued
pursuant to this subdivision may be used to establish a debt
service reserve for the obligations, pay costs of issuing the
bonds or to refund obligations previously issued pursuant to
this subdivision. Any debt service reserve fund established
under this subdivision shall not be subject to investment
guidelines set forth in chapters 118 and 475. A self-insurance
pool An issuer of bonds authorized under this subdivision may
designate a bank or trust company authorized to exercise trust
powers in this state as trustee for the holders of obligations
issued pursuant to this subdivision and may create funds and
accounts necessary to secure payment of the obligations. Sales
proceeds of bonds issued under this subdivision, except for
sales proceeds used to pay costs of issuing the bonds shall be
invested so that the average life of the investments exceeds the
average life of the bonds. The proceeds from bonds issued under
this subdivision must be held in trust and may only be paid to
the self-insurer according to the schedule of payments set forth
in the trust instruments.
A qualified actuary shall certify that the amount of the
scheduled payment does not exceed the amount necessary to meet
the obligation of the self-insurer at the time payment is
scheduled to be made.
Notwithstanding the investment limitations imposed in
chapters 118 and 475, proceeds of bonds issued pursuant to this
subdivision, and debt service funds and reserves held in
connection with them shall be invested solely in governmental
bonds, notes, bills, and other securities, which are direct
obligations or are guaranteed or insured issues of the United
States, its agencies, its instrumentalities, or organizations
created by act of Congress, excluding mortgage-backed securities.
If required by the resolution authorizing the issuance of
obligations pursuant to this subdivision, the governing body of
each participating county political subdivision shall annually
levy a tax sufficient to repay the costs of retirement of any
bonds or to make payments under insurance installment purchase
agreements. Taxes may be levied pursuant to this subdivision
without limitation as to rate or amount.
Sec. 23. Minnesota Statutes 1994, section 471.981,
subdivision 4c, is amended to read:
Subd. 4c. [INSURANCE INSTALLMENT PURCHASE; INTEREST RATE.]
Participating counties political subdivisions may delegate to a
self-insurance pool of counties political subdivisions the power
to determine the interest rate on insurance installment purchase
agreements provided that the rate is uniform and does not exceed
the net effective rate on revenue bonds or other obligations
sold by or on behalf of the pool by more than one-fourth of one
percent.
Sec. 24. Minnesota Statutes 1994, section 475.51,
subdivision 4, is amended to read:
Subd. 4. [NET DEBT.] "Net debt" means the amount remaining
after deducting from its gross debt the amount of current
revenues which are applicable within the current fiscal year to
the payment of any debt and the aggregate of the principal of
the following:
(1) Obligations issued for improvements which are payable
wholly or partly from the proceeds of special assessments levied
upon property specially benefited thereby, including those which
are general obligations of the municipality issuing them, if the
municipality is entitled to reimbursement in whole or in part
from the proceeds of the special assessments.
(2) Warrants or orders having no definite or fixed maturity.
(3) Obligations payable wholly from the income from revenue
producing conveniences.
(4) Obligations issued to create or maintain a permanent
improvement revolving fund.
(5) Obligations issued for the acquisition, and betterment
of public waterworks systems, and public lighting, heating or
power systems, and of any combination thereof or for any other
public convenience from which a revenue is or may be derived.
(6) Debt service loans and capital loans made to a school
district under the provisions of sections 124.42 and 124.431.
(7) Amount of all money and the face value of all
securities held as a debt service fund for the extinguishment of
obligations other than those deductible under this subdivision.
(8) Obligations to repay loans made under section 216C.37.
(9) Obligations to repay loans made from money received
from litigation or settlement of alleged violations of federal
petroleum pricing regulations.
(10) Obligations issued to pay pension fund liabilities
under section 475.52, subdivision 6, or any charter authority.
(11) All other obligations which under the provisions of
law authorizing their issuance are not to be included in
computing the net debt of the municipality.
Sec. 25. Minnesota Statutes 1994, section 475.52,
subdivision 6, is amended to read:
Subd. 6. [CERTAIN PURPOSES.] Any municipality may issue
bonds for paying judgments against it; for refunding outstanding
bonds; for funding floating indebtedness; or for funding all or
part of the municipality's current and future unfunded liability
for a pension or retirement fund or plan referred to in section
356.20, subdivision 2, as those liabilities are most recently
computed pursuant to sections 356.215 and 356.216 by purchasing
one or more insurance policies or annuity contracts to pay all
or a specified part of the liability within the period required
by law. The board of trustees or directors of a pension fund or
relief association referred to in section 69.77 or chapter 422A
must consent and must be a party to any contract made under this
section with respect to the fund held by it for the benefit of
and in trust for its members.
Sec. 26. Minnesota Statutes 1994, section 475.58,
subdivision 1, is amended to read:
Subdivision 1. [APPROVAL BY MAJORITY OF ELECTORS;
EXCEPTIONS.] Obligations authorized by law or charter may be
issued by any municipality upon obtaining the approval of a
majority of the electors voting on the question of issuing the
obligations, but an election shall not be required to authorize
obligations issued:
(1) to pay any unpaid judgment against the municipality;
(2) for refunding obligations;
(3) for an improvement or improvement program, which
obligation is payable wholly or partly from the proceeds of
special assessments levied upon property specially benefited by
the improvement or by an improvement within the improvement
program, or of taxes levied upon the increased value of property
within a district for the development of which the improvement
is undertaken, including obligations which are the general
obligations of the municipality, if the municipality is entitled
to reimbursement in whole or in part from the proceeds of such
special assessments or taxes and not less than 20 percent of the
cost of the improvement or the improvement program is to be
assessed against benefited property or is to be paid from the
proceeds of federal grant funds or a combination thereof, or is
estimated to be received from such taxes within the district;
(4) payable wholly from the income of revenue producing
conveniences;
(5) under the provisions of a home rule charter which
permits the issuance of obligations of the municipality without
election;
(6) under the provisions of a law which permits the
issuance of obligations of a municipality without an election;
(7) to fund pension or retirement fund liabilities pursuant
to section 475.52, subdivision 6; and
(8) under a capital improvement plan under section 373.40;
and
(9) to fund facilities as provided in subdivision 3.
Sec. 27. Minnesota Statutes 1994, section 475.58, is
amended by adding a subdivision to read:
Subd. 3. [YOUTH ICE FACILITIES.] (a) A municipality may,
without regard to the election requirement under subdivision 1
or under any other provision of law or a home rule charter,
issue and sell obligations to finance acquisition, improvement,
or construction of an indoor ice arena intended to be used
predominantly for youth athletic activities if all the following
conditions are met:
(1) the obligations are secured by a pledge of revenues
from the facility;
(2) the facility and its financing are approved by
resolutions of at least two of the following governing bodies of
(i) the city in which the facility is located, (ii) the school
district in which the facility is located, or (iii) the county
in which the facility is located;
(3) the governing body of the municipality finds, based on
analysis provided by a professional experienced in finance, that
the facility's revenues and other available money will be
sufficient to pay the obligations, without reliance on a
property tax levy or the municipality's general purpose state
aid; and
(4) no petition for an election has been timely filed under
paragraph (b).
(b) At least 30 days before issuing obligations under this
subdivision, the municipality must hold a public hearing on the
issue. The municipality must publish or provide notice of the
hearing in the same manner provided for its regular meetings.
The obligations are not exempt from the election requirement
under this subdivision, if:
(1) registered voters equal to ten percent of the votes
cast in the last general election in the municipality sign a
petition requesting a vote on the issue; and
(2) the petition is filed with the municipality within 20
days after the public hearing.
(c) This subdivision expires December 31, 1997.
Sec. 28. Minnesota Statutes 1994, section 475.60, is
amended by adding a subdivision to read:
Subd. 8. [CONTINUING DISCLOSURE AGREEMENTS.] Any officer
of a municipality charged with the responsibility of issuing
bonds for or on behalf of the municipality is authorized to
enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with,
or facilitate the issuance of bonds in accordance with, federal
securities laws, rules and regulations, including securities and
exchange commission rules and regulations, section 240.15c2-12.
An agreement may comprise covenants with purchasers and holders
of bonds set forth in the resolution authorizing the issuance of
the bonds, or a separate document authorized by resolution.
Sec. 29. Minnesota Statutes 1994, section 475.61, is
amended by adding a subdivision to read:
Subd. 6. [OTHER TEMPORARY OBLIGATIONS.] When all
conditions exist precedent to the offering for sale of
obligations of any municipality in any amount for any purpose
authorized by law, the governing body may issue and sell
temporary obligations not exceeding the total amount authorized,
maturing in not more than three years from the date the
obligations are issued, in anticipation of the issuance of the
permanent obligations. To the extent that the principal of and
interest on the temporary obligations cannot be paid when due
from other sources pledged or appropriated for the purpose, they
shall be paid from the proceeds of permanent bonds or additional
temporary bonds which the governing body shall offer for sale in
advance of their maturity 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. The holders of any temporary bonds shall
have and may enforce, by mandamus or other appropriate
proceedings, all rights respecting the levy and collection of
taxes that are granted by law to holders of permanent bonds,
except the right to require the levies to be collected prior to
the maturity of the temporary bonds. If any temporary bonds are
not paid in full at maturity, the holders may require the
issuance in exchange for them, at par, of new temporary bonds
maturing within one year from their date of issue but not
subject to any other maturity limitation, and bearing interest
at the maximum rate permitted by law. The governing body may by
resolution adopted prior to the sale of any temporary bonds
pledge the full faith, credit, and taxing power of the
municipality for the payment of the principal and interest, in
addition to all provisions made for their security in the
authorizing resolution. If it does so, the bonds will be
designated as general obligation temporary bonds, and the
governing body shall levy taxes for their payment in accordance
with this section. Proceeds of permanent bonds or temporary
bonds not yet sold may be treated as pledged revenues, in
reduction of the tax otherwise required by this section to be
levied prior to delivery of the obligations. Funds of a
municipality may be invested in its temporary bonds in
accordance with section 471.56, and may be purchased upon their
initial issue, but shall be purchased only from funds which the
municipality determines will not be required for other purposes
before the maturity date, and shall be resold before maturity
only in the case of an emergency.
Sec. 30. Minnesota Statutes 1994, section 475.63, is
amended to read:
475.63 [CERTIFICATE AS TO REGISTRATION.]
Before any obligations payable in whole or in part from
taxes shall be delivered to the purchaser, the municipality
shall obtain and deliver to the purchaser a certificate of the
county auditor that the issue has been entered on the register.
If a tax levy is required by law, such certificate shall also
recite that such tax has been levied as required by law.
Sec. 31. Minnesota Statutes 1994, section 475.79, is
amended to read:
475.79 [POWERS AVAILABLE TO OTHER POLITICAL SUBDIVISIONS.]
Any powers granted to a municipality under this chapter,
other than the power to issue general obligation bonds and levy
taxes, may be exercised by any other governmental unit. This
grant of authority does not limit the powers granted to an
entity under any other law. In connection with the issuance of
bonds authorized to be issued by any law or charter provision
other than this chapter, a governmental unit determining to
exercise any power under any of sections 475.54, 475.55,
475.553, 475.56, 475.561, 475.60, 475.61, 475.65, 475.66,
475.67, 475.69, 475.70, and 475.78 may do so notwithstanding any
contrary provision in the authorizing law or charter unless the
authorizing law or charter provides that this chapter or the
specific section does not apply. 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 and chapter 475.
Sec. 32. Laws 1994, chapter 643, section 14, subdivision
6, is amended to read:
Subd. 6. Community Service Centers 1,200,000
For a grant to independent school
district No. 432, Mahnomen, to
construct a community service center at
Nay-Tay-Waush in Mahnomen county on the
White Earth Indian reservation. The
center must be constructed on land
leased to the school district by the
White Earth Band of Chippewa Indians
under a ground lease having an initial
term of at least 20 years and a total
term of at least 40 years, including
renewal options. The school district
must contract with the White Earth Band
to operate the center on behalf of the
school district for the term of the
lease and any renewal options, and
otherwise subject to new Minnesota
Statutes, section 16A.695. The center
and all the services provided by the
center must be open to the public.
This grant is contingent on a match of
$1,300,000 from the White Earth Band of
Chippewa Indians.
Sec. 33. [REPEALER.]
Minnesota Statutes 1994, section 469.305, subdivision 2, is
repealed.
Sec. 34. [EFFECTIVE DATE.]
This act is effective the day following final enactment.
Presented to the governor May 30, 1995
Signed by the governor June 1, 1995, 11:42 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes