1.1                          A bill for an act 
  1.2             relating to public finance; providing for capital 
  1.3             improvement bonds for cities and other capital and 
  1.4             public financing and economic development tools and 
  1.5             procedures for cities, counties, and other 
  1.6             municipalities and local government units; amending 
  1.7             Minnesota Statutes 2002, sections 373.01, subdivision 
  1.8             3; 373.45, subdivision 1; 376.009; 376.55, subdivision 
  1.9             3, by adding a subdivision; 376.56, subdivision 3; 
  1.10            410.32; 412.301; 469.034, subdivision 2; 469.103, 
  1.11            subdivision 2; 469.175, subdivision 3, by adding a 
  1.12            subdivision; 469.1813, subdivision 8; 475.58, 
  1.13            subdivision 3b; proposing coding for new law in 
  1.14            Minnesota Statutes, chapter 410. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 2002, section 373.01, 
  1.17  subdivision 3, is amended to read: 
  1.18     Subd. 3.  [CAPITAL NOTES.] A county board may, by 
  1.19  resolution and without referendum, issue capital notes subject 
  1.20  to the county debt limit to purchase capital equipment useful 
  1.21  for county purposes that has an expected useful life at least 
  1.22  equal to the term of the notes.  The notes shall be payable in 
  1.23  not more than five years and shall be issued on terms and in a 
  1.24  manner the board determines.  A tax levy shall be made for 
  1.25  payment of the principal and interest on the notes, in 
  1.26  accordance with section 475.61, as in the case of bonds.  For 
  1.27  purposes of this subdivision, "capital equipment" means public 
  1.28  safety, ambulance, road construction or maintenance, medical, 
  1.29  and data processing equipment, and computer hardware and 
  1.30  software. 
  2.1      Sec. 2.  Minnesota Statutes 2002, section 373.45, 
  2.2   subdivision 1, is amended to read: 
  2.3      Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
  2.4   the following terms have the meanings given. 
  2.5      (b) "Authority" means the Minnesota public facilities 
  2.6   authority. 
  2.7      (c) "Commissioner" means the commissioner of finance. 
  2.8      (d) "Debt obligation" means a general obligation bond 
  2.9   issued by a county, or a bond payable from a county lease 
  2.10  obligation under section 641.24, to provide funds for the 
  2.11  construction of: 
  2.12     (1) jails; 
  2.13     (2) correctional facilities; 
  2.14     (3) law enforcement facilities; 
  2.15     (4) social services and human services facilities; or 
  2.16     (5) solid waste facilities. 
  2.17     Sec. 3.  Minnesota Statutes 2002, section 376.009, is 
  2.18  amended to read: 
  2.19     376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, 
  2.20  SITES.] 
  2.21     For the purposes of sections 376.01 to 376.06, "county 
  2.22  hospital" means any hospital owned or operated by a county which 
  2.23  may consist of any number of buildings at one location or any 
  2.24  number of buildings at different locations within the 
  2.25  county.  The county board of any county that has not established 
  2.26  a county hospital may by resolution authorize a statutory or 
  2.27  home rule charter city and its city council to exercise the 
  2.28  powers of a county and the county board under sections 376.01 to 
  2.29  376.07, in which case references in sections 376.01 to 376.07 to 
  2.30  "county" and "county board" refer to the city so designated and 
  2.31  its governing body, respectively. 
  2.32     Sec. 4.  Minnesota Statutes 2002, section 376.55, 
  2.33  subdivision 3, is amended to read: 
  2.34     Subd. 3.  [FINANCING.] The county board may transfer 
  2.35  surplus funds from any fund except the road and bridge, sinking 
  2.36  or drainage ditch funds for the purpose of 
  3.1   establishing, acquiring, maintaining, enlarging, or adding to a 
  3.2   county nursing home.  When surplus funds are not available for 
  3.3   transfer, a county board may issue bonds to pay the cost of 
  3.4   establishing, acquiring, equipping, furnishing, enlarging, or 
  3.5   adding to a county nursing home, subject to section 376.56. 
  3.6      Sec. 5.  Minnesota Statutes 2002, section 376.55, is 
  3.7   amended by adding a subdivision to read: 
  3.8      Subd. 7.  [CITY POWERS.] The county board of any county 
  3.9   that has not established a nursing home may by resolution 
  3.10  authorize a statutory or home rule charter city to exercise the 
  3.11  powers of a county under sections 376.55 to 376.60.  A city so 
  3.12  designated may exercise within its boundaries all the powers of 
  3.13  a county under sections 376.55 to 376.60. 
  3.14     Sec. 6.  Minnesota Statutes 2002, section 376.56, 
  3.15  subdivision 3, is amended to read: 
  3.16     Subd. 3.  [CHAPTER 475 BONDS.] Bonds issued under section 
  3.17  376.55, subdivision 3, may be general obligations of the county 
  3.18  and may be issued and sold, and taxes levied for their payment 
  3.19  as provided under chapter 475.  No election shall be required to 
  3.20  authorize the bond issue for acquiring, improving, remodeling, 
  3.21  or replacing an existing nursing home without increasing the 
  3.22  total number of accommodations for residents in all nursing 
  3.23  homes in the county.  The revenues of the nursing home shall 
  3.24  also be pledged for the payment of the bonds and for any 
  3.25  interest and premium.  Part of the proceeds may be deposited in 
  3.26  the debt service fund for the issue, to capitalize interest and 
  3.27  create a reserve to reduce or eliminate the tax otherwise 
  3.28  required by section 475.61 to be levied before issuing the 
  3.29  bonds.  The remaining proceeds from the sale of the bonds and 
  3.30  any surplus funds transferred under section 376.55, subdivision 
  3.31  3 must be credited to and deposited in the county nursing home 
  3.32  building fund of the county in which the nursing home is located.
  3.33     Sec. 7.  Minnesota Statutes 2002, section 410.32, is 
  3.34  amended to read: 
  3.35     410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL 
  3.36  EQUIPMENT.] 
  4.1      Notwithstanding any contrary provision of other law or 
  4.2   charter, a home rule charter city may, by resolution and without 
  4.3   public referendum, issue capital notes subject to the city debt 
  4.4   limit to purchase public safety equipment, ambulance and other 
  4.5   medical equipment, road construction and maintenance equipment, 
  4.6   and other capital equipment having and computer software, 
  4.7   provided the equipment or software has an expected useful life 
  4.8   at least as long as the term of the notes.  The notes shall be 
  4.9   payable in not more than five years and be issued on terms and 
  4.10  in the manner the city determines.  The total principal amount 
  4.11  of the capital notes issued in a fiscal year shall not exceed 
  4.12  0.03 percent of the market value of taxable property in the city 
  4.13  for that year.  A tax levy shall be made for the payment of the 
  4.14  principal and interest on the notes, in accordance with section 
  4.15  475.61, as in the case of bonds.  Notes issued under this 
  4.16  section shall require an affirmative vote of two-thirds of the 
  4.17  governing body of the city.  Notwithstanding a contrary 
  4.18  provision of other law or charter, a home rule charter city may 
  4.19  also issue capital notes subject to its debt limit in the manner 
  4.20  and subject to the limitations applicable to statutory cities 
  4.21  pursuant to section 412.301. 
  4.22     Sec. 8.  [410.326] [CAPITAL IMPROVEMENT BONDS.] 
  4.23     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  4.24  section, the following terms have the meanings given. 
  4.25     (a) "Bonds" mean an obligation defined under section 475.51.
  4.26     (b) "Capital improvement" means acquisition or betterment 
  4.27  of public lands, development rights in the form of conservation 
  4.28  easements under chapter 84C, buildings or other improvements for 
  4.29  the purpose of a city hall, administrative building, public 
  4.30  safety, public works facility, parks, library, and roads and 
  4.31  bridges.  An improvement must have an expected useful life of 
  4.32  five years or more to qualify.  Capital improvement does not 
  4.33  include light rail transit or any activity related to it or to a 
  4.34  recreational or sports facility building, including, but not 
  4.35  limited to, a gymnasium, ice arena, racquet sports facility, 
  4.36  swimming pool, exercise room, or health spa, unless the building 
  5.1   is part of an outdoor park and is incidental to the primary 
  5.2   purpose of outdoor recreation. 
  5.3      (c) "City" means a home rule charter or statutory city. 
  5.4      Subd. 2.  [ELECTION REQUIREMENT.] (a) Bonds issued by a 
  5.5   city to finance capital improvements under an approved capital 
  5.6   improvements plan are not subject to the election requirements 
  5.7   of section 475.58.  The bonds are subject to the net debt limits 
  5.8   under section 475.53.  The bonds must be approved by an 
  5.9   affirmative vote of three-fifths of the members of a five-member 
  5.10  city council.  In the case of a city council having more than 
  5.11  five members, the bonds must be approved by a vote of at least 
  5.12  two-thirds of the city council. 
  5.13     (b) Before the issuance of bonds qualifying under this 
  5.14  section, the city must publish a notice of its intention to 
  5.15  issue the bonds and the date and time of the hearing to obtain 
  5.16  public comment on the matter.  The notice must be published in 
  5.17  the official newspaper of the city or in a newspaper of general 
  5.18  circulation in the city or on the official Web site, if any, of 
  5.19  the city.  The notice must be published at least 14 but not more 
  5.20  than 28 days before the date of the hearing. 
  5.21     (c) A city may issue the bonds only after obtaining the 
  5.22  approval of a majority of the voters voting on the question of 
  5.23  issuing the obligations, if a petition requesting a vote on the 
  5.24  issuance is signed by voters equal to five percent of the votes 
  5.25  cast in the city in the last general election and is filed with 
  5.26  the city clerk within 30 days after the public hearing.  The 
  5.27  commissioner of revenue shall prepare a suggested form of the 
  5.28  question to be presented at the election. 
  5.29     Subd. 3.  [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt 
  5.30  a capital improvement plan.  The plan must cover at least a 
  5.31  five-year period beginning with the date of its adoption.  The 
  5.32  plan must set forth the estimated schedule, timing, and details 
  5.33  of specific capital improvements by year, together with the 
  5.34  estimated cost, the need for the improvement, and sources of 
  5.35  revenue to pay for the improvement.  In preparing the capital 
  5.36  improvement plan, the city council must consider for each 
  6.1   project and for the overall plan: 
  6.2      (1) the condition of the city's existing infrastructure, 
  6.3   including the projected need for repair or replacement; 
  6.4      (2) the likely demand for the improvement; 
  6.5      (3) the estimated cost of the improvement; 
  6.6      (4) the available public resources; 
  6.7      (5) the level of overlapping debt in the city; 
  6.8      (6) the relative benefits and costs of alternative uses of 
  6.9   the funds; 
  6.10     (7) operating costs of the proposed improvements; and 
  6.11     (8) alternatives for providing services most efficiently 
  6.12  through shared facilities with other cities or local government 
  6.13  units. 
  6.14     (b) The capital improvement plan and annual amendments to 
  6.15  it must be approved by the city council after public hearing. 
  6.16     Subd. 4.  [APPLICATION OF CHAPTER 475.] Bonds to finance 
  6.17  capital improvements qualifying under this section must be 
  6.18  issued under the issuance authority in chapter 475 and the 
  6.19  provisions of chapter 475 apply, except as otherwise 
  6.20  specifically provided in this section. 
  6.21     Sec. 9.  Minnesota Statutes 2002, section 412.301, is 
  6.22  amended to read: 
  6.23     412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
  6.24     The council may issue certificates of indebtedness or 
  6.25  capital notes subject to the city debt limits to purchase public 
  6.26  safety equipment, ambulance equipment, road construction or 
  6.27  maintenance equipment, and other capital equipment having and 
  6.28  computer software, provided the equipment or software has an 
  6.29  expected useful life at least as long as the terms of the 
  6.30  certificates or notes.  Such certificates or notes shall be 
  6.31  payable in not more than five years and shall be issued on such 
  6.32  terms and in such manner as the council may determine.  If the 
  6.33  amount of the certificates or notes to be issued to finance any 
  6.34  such purchase exceeds 0.25 percent of the market value of 
  6.35  taxable property in the city, they shall not be issued for at 
  6.36  least ten days after publication in the official newspaper of a 
  7.1   council resolution determining to issue them; and if before the 
  7.2   end of that time, a petition asking for an election on the 
  7.3   proposition signed by voters equal to ten percent of the number 
  7.4   of voters at the last regular municipal election is filed with 
  7.5   the clerk, such certificates or notes shall not be issued until 
  7.6   the proposition of their issuance has been approved by a 
  7.7   majority of the votes cast on the question at a regular or 
  7.8   special election.  A tax levy shall be made for the payment of 
  7.9   the principal and interest on such certificates or notes, in 
  7.10  accordance with section 475.61, as in the case of bonds.  
  7.11     Sec. 10.  Minnesota Statutes 2002, section 469.034, 
  7.12  subdivision 2, is amended to read: 
  7.13     Subd. 2.  [GENERAL OBLIGATION REVENUE BONDS.] (a) An 
  7.14  authority may pledge the general obligation of the general 
  7.15  jurisdiction governmental unit as additional security for bonds 
  7.16  payable from income or revenues of the project or the 
  7.17  authority.  The authority must find that the pledged revenues 
  7.18  will equal or exceed 110 percent of the principal and interest 
  7.19  due on the bonds for each year.  The proceeds of the bonds must 
  7.20  be used for a qualified housing development project or 
  7.21  projects.  The obligations must be issued and sold in the manner 
  7.22  and following the procedures provided by chapter 475, except the 
  7.23  obligations are not subject to approval by the electors and the 
  7.24  maturities may extend to not more than 30 40 years from the 
  7.25  estimated date of completion of the project.  The authority is 
  7.26  the municipality for purposes of chapter 475.  
  7.27     (b) The principal amount of the issue must be approved by 
  7.28  the governing body of the general jurisdiction governmental unit 
  7.29  whose general obligation is pledged.  Public hearings must be 
  7.30  held on issuance of the obligations by both the authority and 
  7.31  the general jurisdiction governmental unit.  The hearings must 
  7.32  be held at least 15 days, but not more than 120 days, before the 
  7.33  sale of the obligations. 
  7.34     (c) The maximum amount of general obligation bonds that may 
  7.35  be issued and outstanding under this section equals the greater 
  7.36  of (1) one-half of one percent of the taxable market value of 
  8.1   the general jurisdiction governmental unit whose general 
  8.2   obligation which includes a tax on property is pledged, or (2) 
  8.3   $3,000,000.  In the case of county or multicounty general 
  8.4   obligation bonds, the outstanding general obligation bonds of 
  8.5   all cities in the county or counties issued under this 
  8.6   subdivision must be added in calculating the limit under clause 
  8.7   (1). 
  8.8      (d) "General jurisdiction governmental unit" means the city 
  8.9   in which the housing development project is located.  In the 
  8.10  case of a county or multicounty authority, the county or 
  8.11  counties may act as the general jurisdiction governmental unit.  
  8.12  In the case of a multicounty authority, the pledge of the 
  8.13  general obligation is a pledge of a tax on the taxable property 
  8.14  in each of the counties. 
  8.15     (e) "Qualified housing development project" means a housing 
  8.16  development project providing housing either for the elderly or 
  8.17  for individuals and families with incomes not greater than 80 
  8.18  percent of the median family income as estimated by the United 
  8.19  States Department of Housing and Urban Development for the 
  8.20  standard metropolitan statistical area or the nonmetropolitan 
  8.21  county in which the project is located, and will be owned by the 
  8.22  authority for the term of the bonds.  A qualified housing 
  8.23  development project may admit nonelderly individuals and 
  8.24  families with higher incomes if: 
  8.25     (1) three years have passed since initial occupancy; 
  8.26     (2) the authority finds the project is experiencing 
  8.27  unanticipated vacancies resulting in insufficient revenues, 
  8.28  because of changes in population or other unforeseen 
  8.29  circumstances that occurred after the initial finding of 
  8.30  adequate revenues; and 
  8.31     (3) the authority finds a tax levy or payment from general 
  8.32  assets of the general jurisdiction governmental unit will be 
  8.33  necessary to pay debt service on the bonds if higher income 
  8.34  individuals or families are not admitted. 
  8.35     Sec. 11.  Minnesota Statutes 2002, section 469.103, 
  8.36  subdivision 2, is amended to read: 
  9.1      Subd. 2.  [FORM.] The bonds of each series issued by the 
  9.2   authority under this section shall bear interest at a rate or 
  9.3   rates, shall mature at the time or times within 20 30 years from 
  9.4   the date of issuance, and shall be in the form, whether payable 
  9.5   to bearer, registrable as to principal, or fully registrable, as 
  9.6   determined by the authority.  Section 469.102, subdivision 6, 
  9.7   applies to all bonds issued under this section, and the bonds 
  9.8   and their coupons, if any, when payable to bearer, shall be 
  9.9   negotiable instruments. 
  9.10     Sec. 12.  Minnesota Statutes 2002, section 469.175, 
  9.11  subdivision 3, is amended to read: 
  9.12     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
  9.13  not certify the original net tax capacity of a tax increment 
  9.14  financing district until the tax increment financing plan 
  9.15  proposed for that district has been approved by the municipality 
  9.16  in which the district is located.  If an authority that proposes 
  9.17  to establish a tax increment financing district and the 
  9.18  municipality are not the same, the authority shall apply to the 
  9.19  municipality in which the district is proposed to be located and 
  9.20  shall obtain the approval of its tax increment financing plan by 
  9.21  the municipality before the authority may use tax increment 
  9.22  financing.  The municipality shall approve the tax increment 
  9.23  financing plan only after a public hearing thereon after 
  9.24  published notice in a newspaper of general circulation in the 
  9.25  municipality at least once not less than ten days nor more than 
  9.26  30 days prior to the date of the hearing.  The published notice 
  9.27  must include a map of the area of the district from which 
  9.28  increments may be collected and, if the project area includes 
  9.29  additional area, a map of the project area in which the 
  9.30  increments may be expended.  The hearing may be held before or 
  9.31  after the approval or creation of the project or it may be held 
  9.32  in conjunction with a hearing to approve the project.  Before or 
  9.33  at the time of approval of the tax increment financing plan, the 
  9.34  municipality shall make the following findings, and shall set 
  9.35  forth in writing the reasons and supporting facts for each 
  9.36  determination: 
 10.1      (1) that the proposed tax increment financing district is a 
 10.2   redevelopment district, a renewal or renovation district, a 
 10.3   housing district, a soils condition district, or an economic 
 10.4   development district; if the proposed district is a 
 10.5   redevelopment district or a renewal or renovation district, the 
 10.6   reasons and supporting facts for the determination that the 
 10.7   district meets the criteria of section 469.174, subdivision 10, 
 10.8   paragraph (a), clauses (1) and (2), or subdivision 10a, must be 
 10.9   documented in writing and retained and made available to the 
 10.10  public by the authority until the district has been terminated; 
 10.11     (2) that the proposed development or redevelopment, in the 
 10.12  opinion of the municipality, would not reasonably be expected to 
 10.13  occur solely through private investment within the reasonably 
 10.14  foreseeable future and that the increased market value of the 
 10.15  site that could reasonably be expected to occur without the use 
 10.16  of tax increment financing would be less than the increase in 
 10.17  the market value estimated to result from the proposed 
 10.18  development after subtracting the present value of the projected 
 10.19  tax increments for the maximum duration of the district 
 10.20  permitted by the plan.  The requirements of this clause do not 
 10.21  apply if the district is a qualified housing district, as 
 10.22  defined in section 273.1399, subdivision 1; 
 10.23     (3) that the tax increment financing plan conforms to the 
 10.24  general plan for the development or redevelopment of the 
 10.25  municipality as a whole; 
 10.26     (4) that the tax increment financing plan will afford 
 10.27  maximum opportunity, consistent with the sound needs of the 
 10.28  municipality as a whole, for the development or redevelopment of 
 10.29  the project by private enterprise; 
 10.30     (5) that the municipality elects the method of tax 
 10.31  increment computation set forth in section 469.177, subdivision 
 10.32  3, clause (b), if applicable. 
 10.33     When the municipality and the authority are not the same, 
 10.34  the municipality shall approve or disapprove the tax increment 
 10.35  financing plan within 60 days of submission by the authority.  
 10.36  When the municipality and the authority are not the same, the 
 11.1   municipality may not amend or modify a tax increment financing 
 11.2   plan except as proposed by the authority pursuant to subdivision 
 11.3   4.  Once approved, the determination of the authority to 
 11.4   undertake the project through the use of tax increment financing 
 11.5   and the resolution of the governing body shall, except as 
 11.6   provided in subdivision 9, be conclusive of the findings therein 
 11.7   and of the public need for the financing. 
 11.8      Sec. 13.  Minnesota Statutes 2002, section 469.175, is 
 11.9   amended by adding a subdivision to read: 
 11.10     Subd. 9.  [LIMITS ON ACTIONS.] (a) A person in interest who 
 11.11  has timely objected to a determination required to be made under 
 11.12  subdivision 3 or 4 may contest the determination, the formation 
 11.13  and approval or the legality of the district, or the tax 
 11.14  increment financing plan or its modification. 
 11.15     (b) A taxpayer in the county is an example of a person in 
 11.16  interest. 
 11.17     (c) To timely object, the contestant must object on the 
 11.18  record, either orally or in writing, at the hearing at which the 
 11.19  plan or its modification is approved, and the objection must be 
 11.20  the basis of the person's contest. 
 11.21     (d) The contestant must start the contest within 30 days 
 11.22  after the adoption of a resolution approving a tax increment 
 11.23  financing plan under subdivision 3 or modification of the plan 
 11.24  under subdivision 4. 
 11.25     (e) The procedure set out in paragraphs (a) through (d) is 
 11.26  the exclusive means to contest: 
 11.27     (1) the formation and approval or the legality of a 
 11.28  district, or a tax financing plan or its modification; 
 11.29     (2) the inclusion of a parcel in a district; or 
 11.30     (3) the legality of the collection or retention of a tax 
 11.31  increment from the district, or the legality of the bonds issued 
 11.32  under a tax increment financing plan based on a defect in the 
 11.33  formation of the district or the adoption or approval of the 
 11.34  plan or its modification. 
 11.35     (f) To restate paragraph (e) in the negative:  unless an 
 11.36  action, contest, or proceeding, including a proceeding under 
 12.1   section 469.1771, is both started: 
 12.2      (1) within the 30-day period required by paragraph (d); and 
 12.3      (2) by a person in interest who timely objected to the 
 12.4   process as provided in paragraphs (a), (b), and (c), 
 12.5   the validity, legality, and regularity of the resolution and of 
 12.6   the district, the tax increment financing plan, or its 
 12.7   modification; and the inclusion of any parcel in a district is 
 12.8   conclusively presumed. 
 12.9      (g) Once the conclusive presumption set out in paragraph (f)
 12.10  applies, no court, government unit, or state agency may contest 
 12.11  or inquire into the matters that are the subject of the 
 12.12  presumption. 
 12.13     (h) The state auditor retains all rights and powers granted 
 12.14  to the state auditor under section 469.1771, except to the 
 12.15  extent otherwise provided in this subdivision. 
 12.16     (i) If the state auditor files a notice of noncompliance 
 12.17  with the county attorney regarding a matter limited by this 
 12.18  subdivision, and the notice is filed after 30 days from the 
 12.19  adoption of the approving resolution, then in any action begun 
 12.20  later by the county attorney under section 469.1771, subdivision 
 12.21  1, paragraph (b), the remedy in district court is limited to the 
 12.22  remedies that would apply under section 469.1771, subdivision 
 12.23  2b, paragraphs (c) and (d), for petitions filed by the attorney 
 12.24  general in tax court under section 469.1771, subdivision 2b, 
 12.25  paragraph (a). 
 12.26     Sec. 14.  Minnesota Statutes 2002, section 469.1813, 
 12.27  subdivision 8, is amended to read: 
 12.28     Subd. 8.  [LIMITATION ON ABATEMENTS.] In any year, the 
 12.29  total amount of property taxes abated by a political subdivision 
 12.30  under this section may not exceed (1) five ten percent of the 
 12.31  current levy, or (2) $100,000 $200,000, whichever is greater. 
 12.32     Sec. 15.  Minnesota Statutes 2002, section 475.58, 
 12.33  subdivision 3b, is amended to read: 
 12.34     Subd. 3b.  [STREET RECONSTRUCTION.] (a) A municipality may, 
 12.35  without regard to the election requirement under subdivision 1, 
 12.36  issue and sell obligations for street reconstruction, if the 
 13.1   following conditions are met: 
 13.2      (1) the streets are reconstructed under a street 
 13.3   reconstruction plan that describes the streets to be 
 13.4   reconstructed, the estimated costs, and any planned 
 13.5   reconstruction of other streets in the municipality over the 
 13.6   next five years, and the plan and issuance of the obligations 
 13.7   has been approved by a vote of all of the members of the 
 13.8   governing body following a public hearing for which notice has 
 13.9   been published in the official newspaper at least ten days but 
 13.10  not more than 28 days prior to the hearing; and 
 13.11     (2) if a petition requesting a vote on the issuance is 
 13.12  signed by voters equal to five percent of the votes cast in the 
 13.13  last municipal general election and is filed with the municipal 
 13.14  clerk within 30 days of the public hearing, the municipality may 
 13.15  issue the bonds only after obtaining the approval of a majority 
 13.16  of the voters voting on the question of the issuance of the 
 13.17  obligations. 
 13.18     (b) Obligations issued under this subdivision are subject 
 13.19  to the debt limit of the municipality and are not excluded from 
 13.20  net debt under section 475.51, subdivision 4. 
 13.21  For purposes of this subdivision, street reconstruction includes 
 13.22  utility replacement and relocation and other activities 
 13.23  incidental to the street reconstruction, but does not include 
 13.24  the portion of project cost allocable to widening a street or 
 13.25  adding curbs and gutters where none previously existed. 
 13.26     Sec. 16.  [EFFECTIVE DATES.] 
 13.27     This act is effective the day following final enactment.  
 13.28  Sections 12 and 13 apply to all districts, regardless of when 
 13.29  created, and are effective the day following final enactment and 
 13.30  for all actions commenced after November 13, 2001.