1.1 	A bill for an act
1.2 	relating to public finance; modifying requirements
1.3 	relating to financial statements; authorizing
1.4 	purchases of certain guaranteed investment contracts;
1.5 	authorizing a special levy; modifying the authority of
1.6 	cities and counties to finance purchases of computers
1.7 	and related items; extending the term of certain
1.8 	notes; clarifying the financing of conservation
1.9 	easements; extending sunsets on establishment of
1.10 	special service districts and housing improvement
1.11 	areas; providing for financing of certain
1.12 	improvements; extending the maximum maturity of
1.13 	certain bonds; revising time for certain notices of
1.14 	issues; exempting obligations issued to pay judgments
1.15 	from net debt limits; modifying the authority to
1.16 	finance street reconstruction; modifying limits on
1.17 	city capital improvement bonds and enabling certain
1.18 	towns to issue bonds under a capital improvement plan;
1.19 	amending Minnesota Statutes 2004, sections 80A.25,
1.20 	subdivision 3; 118A.05, subdivision 5; 275.70,
1.21 	subdivision 5; 373.01, subdivision 3; 373.40,
1.22 	subdivision 1; 410.32; 412.301; 428A.101; 428A.21;
1.23 	429.031, by adding a subdivision; 429.051; 469.034,
1.24 	subdivision 2; 469.158; 474A.131, subdivision 1;
1.25 	475.51, subdivision 4; 475.52, subdivisions 1, 3, 4;
1.26 	475.521, subdivisions 1, 2, 3, 4; 475.58, subdivision
1.27 	3b.
1.28 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.29 	Section 1. Minnesota Statutes 2004, section 80A.25,
1.30 	subdivision 3, is amended to read:
1.31 		Subd. 3.Financial statements.  The commissioner may by
1.32 	rule or order prescribe (a) the form and content of financial
1.33 	statements required under sections 80A.01 to 80A.31, (b) the
1.34 	circumstances under which consolidated financial statements
1.35 	shall be filed, and (c) whether any required financial
1.36 	statements shall be certified by independent or certified public
2.1 	accountants.  All financial statements shall be prepared in
2.2 	accordance with generally accepted accounting principles unless
2.3 	otherwise permitted by rule or order. The commissioner may not
2.4 	require, as a condition of registration, the consent of the
2.5 	independent or certified public accountants to the use of
2.6 	financial statements in the offering documents.

2.7 	Sec. 2. Minnesota Statutes 2004, section 118A.05,
2.8 	subdivision 5, is amended to read:
2.9 		Subd. 5.Guaranteed investment contracts.  Agreements or
2.10 	contracts for guaranteed investment contracts may be entered
2.11 	into if they are issued or guaranteed by United States
2.12 	commercial banks, domestic branches of foreign banks, United
2.13 	States insurance companies, or their Canadian subsidiaries, or
2.14 	the domestic affiliates of any of the foregoing.  The credit
2.15 	quality of the issuer's or guarantor's short- and long-term
2.16 	unsecured debt must be rated in one of the two highest
2.17 	categories by a nationally recognized rating agency.  Should the
2.18 	issuer's or guarantor's credit quality be downgraded below "A",
2.19 	the government entity must have withdrawal rights.

2.20 	Sec. 3. Minnesota Statutes 2004, section 275.70,
2.21 	subdivision 5, is amended to read:
2.22 		Subd. 5.Special levies.  "Special levies" means those
2.23 	portions of ad valorem taxes levied by a local governmental unit
2.24 	for the following purposes or in the following manner:
2.25 	(1) to pay the costs of the principal and interest on
2.26 	bonded indebtedness or to reimburse for the amount of liquor
2.27 	store revenues used to pay the principal and interest due on
2.28 	municipal liquor store bonds in the year preceding the year for
2.29 	which the levy limit is calculated;
2.30 	(2) to pay the costs of principal and interest on
2.31 	certificates of indebtedness issued for any corporate purpose
2.32 	except for the following:
2.33 	(i) tax anticipation or aid anticipation certificates of
2.34 	indebtedness;
2.35 	(ii) certificates of indebtedness issued under sections
2.36 	298.28 and 298.282;
3.1 	(iii) certificates of indebtedness used to fund current
3.2 	expenses or to pay the costs of extraordinary expenditures that
3.3 	result from a public emergency; or
3.4 	(iv) certificates of indebtedness used to fund an
3.5 	insufficiency in tax receipts or an insufficiency in other
3.6 	revenue sources;
3.7 	(3) to provide for the bonded indebtedness portion of
3.8 	payments made to another political subdivision of the state of
3.9 	Minnesota;
3.10 	(4) to fund payments made to the Minnesota State Armory
3.11 	Building Commission under section 193.145, subdivision 2, to
3.12 	retire the principal and interest on armory construction bonds;
3.13 	(5) property taxes approved by voters which are levied
3.14 	against the referendum market value as provided under section
3.15 	275.61;
3.16 	(6) to fund matching requirements needed to qualify for
3.17 	federal or state grants or programs to the extent that either
3.18 	(i) the matching requirement exceeds the matching requirement in
3.19 	calendar year 2001, or (ii) it is a new matching requirement
3.20 	that did not exist prior to 2002;
3.21 	(7) to pay the expenses reasonably and necessarily incurred
3.22 	in preparing for or repairing the effects of natural disaster
3.23 	including the occurrence or threat of widespread or severe
3.24 	damage, injury, or loss of life or property resulting from
3.25 	natural causes, in accordance with standards formulated by the
3.26 	Emergency Services Division of the state Department of Public
3.27 	Safety, as allowed by the commissioner of revenue under section
3.28 	275.74, subdivision 2;
3.29 	(8) pay amounts required to correct an error in the levy
3.30 	certified to the county auditor by a city or county in a levy
3.31 	year, but only to the extent that when added to the preceding
3.32 	year's levy it is not in excess of an applicable statutory,
3.33 	special law or charter limitation, or the limitation imposed on
3.34 	the governmental subdivision by sections 275.70 to 275.74 in the
3.35 	preceding levy year;
3.36 	(9) to pay an abatement under section 469.1815;
4.1 	(10) to pay any costs attributable to increases in the
4.2 	employer contribution rates under chapter 353 that are effective
4.3 	after June 30, 2001;
4.4 	(11) to pay the operating or maintenance costs of a county
4.5 	jail as authorized in section 641.01 or 641.262, or of a
4.6 	correctional facility as defined in section 241.021, subdivision
4.7 	1, paragraph (f), to the extent that the county can demonstrate
4.8 	to the commissioner of revenue that the amount has been included
4.9 	in the county budget as a direct result of a rule, minimum
4.10 	requirement, minimum standard, or directive of the Department of
4.11 	Corrections, or to pay the operating or maintenance costs of a
4.12 	regional jail as authorized in section 641.262.  For purposes of
4.13 	this clause, a district court order is not a rule, minimum
4.14 	requirement, minimum standard, or directive of the Department of
4.15 	Corrections.  If the county utilizes this special levy, except
4.16 	to pay operating or maintenance costs of a new regional jail
4.17 	facility under sections 641.262 to 641.264 which will not
4.18 	replace an existing jail facility, any amount levied by the
4.19 	county in the previous levy year for the purposes specified
4.20 	under this clause and included in the county's previous year's
4.21 	levy limitation computed under section 275.71, shall be deducted
4.22 	from the levy limit base under section 275.71, subdivision 2,
4.23 	when determining the county's current year levy limitation.  The
4.24 	county shall provide the necessary information to the
4.25 	commissioner of revenue for making this determination;
4.26 	(12) to pay for operation of a lake improvement district,
4.27 	as authorized under section 103B.555.  If the county utilizes
4.28 	this special levy, any amount levied by the county in the
4.29 	previous levy year for the purposes specified under this clause
4.30 	and included in the county's previous year's levy limitation
4.31 	computed under section 275.71 shall be deducted from the levy
4.32 	limit base under section 275.71, subdivision 2, when determining
4.33 	the county's current year levy limitation.  The county shall
4.34 	provide the necessary information to the commissioner of revenue
4.35 	for making this determination;
4.36 	(13) to repay a state or federal loan used to fund the
5.1 	direct or indirect required spending by the local government due
5.2 	to a state or federal transportation project or other state or
5.3 	federal capital project.  This authority may only be used if the
5.4 	project is not a local government initiative;
5.5 	(14) to pay for court administration costs as required
5.6 	under section 273.1398, subdivision 4b, less the (i) county's
5.7 	share of transferred fines and fees collected by the district
5.8 	courts in the county for calendar year 2001 and (ii) the aid
5.9 	amount certified to be paid to the county in 2004 under section
5.10 	273.1398, subdivision 4c; however, for taxes levied to pay for
5.11 	these costs in the year in which the court financing is
5.12 	transferred to the state, the amount under this clause is
5.13 	limited to the amount of aid the county is certified to receive
5.14 	under section 273.1398, subdivision 4a; and 
5.15 	(15) to fund a police or firefighters relief association as
5.16 	required under section 69.77 to the extent that the required
5.17 	amount exceeds the amount levied for this purpose in 2001; and 
5.18 	(16) for purposes of a storm sewer improvement district,
5.19 	pursuant to section 444.20.

5.20 	Sec. 4. Minnesota Statutes 2004, section 373.01,
5.21 	subdivision 3, is amended to read:
5.22 		Subd. 3.Capital notes. (a) A county board may, by
5.23 	resolution and without referendum, issue capital notes subject
5.24 	to the county debt limit to purchase capital equipment useful
5.25 	for county purposes that has an expected useful life at least
5.26 	equal to the term of the notes.  The notes shall be payable in
5.27 	not more than five ten years and shall be issued on terms and in
5.28 	a manner the board determines.  A tax levy shall be made for
5.29 	payment of the principal and interest on the notes, in
5.30 	accordance with section 475.61, as in the case of bonds.
5.31 	(b) For purposes of this subdivision, "capital equipment"
5.32 	means:
5.33 	(1) public safety, ambulance, road construction or
5.34 	maintenance, and medical equipment,;and
5.35 	(2) computer hardware and original operating system 
5.36 	software, whether bundled with machinery or equipment or
6.1 	unbundled, together with application development services and
6.2 	training related to the use of the computer or software. The
6.3 	authority to issue capital notes for original operating systems
6.4 	software expires on July 1, 2005.

6.5 	Sec. 5. Minnesota Statutes 2004, section 373.40,
6.6 	subdivision 1, is amended to read:
6.7 		Subdivision 1.Definitions.  For purposes of this
6.8 	section, the following terms have the meanings given.
6.9 	(a) "Bonds" means an obligation as defined under section
6.10 	475.51.
6.11 	(b) "Capital improvement" means acquisition or betterment
6.12 	of public lands, development rights in the form of conservation
6.13 	easements under chapter 84C,buildings, or other improvements
6.14 	within the county for the purpose of a county courthouse,
6.15 	administrative building, health or social service facility,
6.16 	correctional facility, jail, law enforcement center, hospital,
6.17 	morgue, library, park, qualified indoor ice arena, and roads and
6.18 	bridges, and the acquisition of development rights in the form
6.19 	of conservation easements under chapter 84C.  An improvement
6.20 	must have an expected useful life of five years or more to
6.21 	qualify.  "Capital improvement" does not include light rail
6.22 	transit or any activity related to it or a recreation or sports
6.23 	facility building (such as, but not limited to, a gymnasium, ice
6.24 	arena, racquet sports facility, swimming pool, exercise room or
6.25 	health spa), unless the building is part of an outdoor park
6.26 	facility and is incidental to the primary purpose of outdoor
6.27 	recreation.
6.28 	(c) "Commissioner" means the commissioner of employment and
6.29 	economic development.
6.30 	(d) "Metropolitan county" means a county located in the
6.31 	seven-county metropolitan area as defined in section 473.121 or
6.32 	a county with a population of 90,000 or more.
6.33 	(e) "Population" means the population established by the
6.34 	most recent of the following (determined as of the date the
6.35 	resolution authorizing the bonds was adopted):
6.36 	(1) the federal decennial census,
7.1 	(2) a special census conducted under contract by the United
7.2 	States Bureau of the Census, or
7.3 	(3) a population estimate made either by the Metropolitan
7.4 	Council or by the state demographer under section 4A.02.
7.5 	(f) "Qualified indoor ice arena" means a facility that
7.6 	meets the requirements of section 373.43.
7.7 	(g) "Tax capacity" means total taxable market value, but
7.8 	does not include captured market value.

7.9 	Sec. 6. Minnesota Statutes 2004, section 410.32, is
7.10 	amended to read:
7.11 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL
7.12 	EQUIPMENT.
7.13 	(a) Notwithstanding any contrary provision of other law or
7.14 	charter, a home rule charter city may, by resolution and without
7.15 	public referendum, issue capital notes subject to the city debt
7.16 	limit to purchase capital equipment.
7.17 	(b) For purposes of this section, "capital equipment" means:
7.18 	(1) public safety equipment, ambulance and other medical
7.19 	equipment, road construction and maintenance equipment, and
7.20 	other capital equipment;and
7.21 	(2) computer hardware and original operating system 
7.22 	software, provided whether bundled with machinery or equipment
7.23 	or unbundled, together with application development services and
7.24 	training related to the use of the computer or software.
7.25 	(c) The equipment or software has must have an expected
7.26 	useful life at least as long as the term of the notes. The
7.27 	authority to issue capital notes for original operating system
7.28 	software expires on July 1, 2005.
7.29 	(d) The notes shall be payable in not more than five ten 
7.30 	years and be issued on terms and in the manner the city
7.31 	determines.  The total principal amount of the capital notes
7.32 	issued in a fiscal year shall not exceed 0.03 percent of the
7.33 	market value of taxable property in the city for that year.
7.34 	(e) A tax levy shall be made for the payment of the
7.35 	principal and interest on the notes, in accordance with section
7.36 	475.61, as in the case of bonds.
8.1 	(f) Notes issued under this section shall require an
8.2 	affirmative vote of two-thirds of the governing body of the city.
8.3 	(g) Notwithstanding a contrary provision of other law or
8.4 	charter, a home rule charter city may also issue capital notes
8.5 	subject to its debt limit in the manner and subject to the
8.6 	limitations applicable to statutory cities pursuant to section
8.7 	412.301.

8.8 	Sec. 7. Minnesota Statutes 2004, section 412.301, is
8.9 	amended to read:
8.10 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
8.11 	(a) The council may issue certificates of indebtedness or
8.12 	capital notes subject to the city debt limits to
8.13 	purchase capital equipment.
8.14 	(b) For purposes of this section, "capital equipment" means:
8.15 	(1) public safety equipment, ambulance and other medical 
8.16 	equipment, road construction or and maintenance equipment, and
8.17 	other capital equipment;and
8.18 	(2) computer hardware and original operating system 
8.19 	software, provided whether bundled with machinery or equipment
8.20 	or unbundled, together with application development services and
8.21 	training related to the use of the computer or software.
8.22 	(c) The equipment or software has must have an expected
8.23 	useful life at least as long as the terms of the certificates or
8.24 	notes. The authority to issue capital notes for original
8.25 	operating system software expires on July 1, 2005.
8.26 	(d) Such certificates or notes shall be payable in not more
8.27 	than five ten years and shall be issued on such terms and in
8.28 	such manner as the council may determine.
8.29 	(e) If the amount of the certificates or notes to be issued
8.30 	to finance any such purchase exceeds 0.25 percent of the market
8.31 	value of taxable property in the city, they shall not be issued
8.32 	for at least ten days after publication in the official
8.33 	newspaper of a council resolution determining to issue them; and
8.34 	if before the end of that time, a petition asking for an
8.35 	election on the proposition signed by voters equal to ten
8.36 	percent of the number of voters at the last regular municipal
9.1 	election is filed with the clerk, such certificates or notes
9.2 	shall not be issued until the proposition of their issuance has
9.3 	been approved by a majority of the votes cast on the question at
9.4 	a regular or special election.
9.5 	(f) A tax levy shall be made for the payment of the
9.6 	principal and interest on such certificates or notes, in
9.7 	accordance with section 475.61, as in the case of bonds.

9.8 	Sec. 8. Minnesota Statutes 2004, section 428A.101, is
9.9 	amended to read:
9.10 	428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
9.11 	GENERAL LAW.
9.12 	The establishment of a new special service district after
9.13 	June 30, 2005 2009, requires enactment of a special law
9.14 	authorizing the establishment.

9.15 	Sec. 9. Minnesota Statutes 2004, section 428A.21, is
9.16 	amended to read:
9.17 	428A.21 SUNSET.
9.18 	No new housing improvement areas may be established under
9.19 	sections 428A.11 to 428A.20 after June 30, 2005 2009.  After
9.20 	June 30, 2005 2009, a city may establish a housing improvement
9.21 	area, provided that it receives enabling legislation authorizing
9.22 	the establishment of the area.

9.23 	Sec. 10. Minnesota Statutes 2004, section 429.031, is
9.24 	amended by adding a subdivision to read:
9.25 		Subd. 4.Improvements; orderly annexation. An
9.26 	improvement may be made by a municipality in an area that is the
9.27 	subject of an orderly annexation agreement under section
9.28 	414.0325 to which the municipality is a party.  The municipality
9.29 	may subsequently reimburse itself for all or any part of the
9.30 	cost of such an improvement by levying assessments on the
9.31 	property subject to the orderly annexation agreement, when
9.32 	annexed, in the manner provided in section 429.051.

9.33 	Sec. 11. Minnesota Statutes 2004, section 429.051, is
9.34 	amended to read:
9.35 	429.051 APPORTIONMENT OF COST.
9.36 	The cost of any improvement, or any part thereof, may be
10.1 	assessed upon property benefited by the improvement, based upon
10.2 	the benefits received, whether or not the property abuts on the
10.3 	improvement and whether or not any part of the cost of the
10.4 	improvement is paid from the county state-aid highway fund, the
10.5 	municipal state-aid street fund, or the trunk highway fund.  The
10.6 	area assessed may be less than but may not exceed the area
10.7 	proposed to be assessed as stated in the notice of hearing on
10.8 	the improvement, except as provided below.  The municipality may
10.9 	pay such portion of the cost of the improvement as the council
10.10 	may determine from general ad valorem tax levies or from other
10.11 	revenues or funds of the municipality available for the
10.12 	purpose.  The municipality may subsequently reimburse itself for
10.13 	all or any of the portion of the cost of a water, storm sewer,
10.14 	or sanitary sewer an improvement so paid by levying additional
10.15 	assessments upon any properties abutting on but not previously
10.16 	assessed for the improvement, on notice and hearing as provided
10.17 	for the assessments initially made.  To the extent that such an
10.18 	improvement benefits nonabutting properties which may be served
10.19 	by the improvement when one or more later extensions or
10.20 	improvements are made but which are not initially assessed
10.21 	therefor, the municipality may also reimburse itself by adding
10.22 	all or any of the portion of the cost so paid to the assessments
10.23 	levied for any of such later extensions or improvements,
10.24 	provided that notice that such additional amount will be
10.25 	assessed is included in the notice of hearing on the making of
10.26 	such extensions or improvements.  The additional assessments
10.27 	herein authorized may be made whether or not the properties
10.28 	assessed were included in the area described in the notice of
10.29 	hearing on the making of the original improvement.
10.30 	In any city of the fourth class electing to proceed under a
10.31 	home rule charter as provided in this chapter, which charter
10.32 	provides for a board of water commissioners and authorizes such
10.33 	board to assess a water frontage tax to defray the cost of
10.34 	construction of water mains, such board may assess the tax based
10.35 	upon the benefits received and without regard to any charter
10.36 	limitation on the amount that may be assessed for each lineal
11.1 	foot of property abutting on the water main.  The water frontage
11.2 	tax shall be imposed according to the procedure and, except as
11.3 	herein provided, subject to the limitations of the charter of
11.4 	the city.

11.5 	Sec. 12. Minnesota Statutes 2004, section 469.034,
11.6 	subdivision 2, is amended to read:
11.7 		Subd. 2.General obligation revenue bonds.  (a) An
11.8 	authority may pledge the general obligation of the general
11.9 	jurisdiction governmental unit as additional security for bonds
11.10 	payable from income or revenues of the project or the
11.11 	authority.  The authority must find that the pledged revenues
11.12 	will equal or exceed 110 percent of the principal and interest
11.13 	due on the bonds for each year.  The proceeds of the bonds must
11.14 	be used for a qualified housing development project or
11.15 	projects.  The obligations must be issued and sold in the manner
11.16 	and following the procedures provided by chapter 475, except the
11.17 	obligations are not subject to approval by the electors,and the
11.18 	maturities may extend to not more than 30 35 years from the
11.19 	estimated date of completion of the project for obligations sold
11.20 	to finance housing for the elderly and 40 years for other
11.21 	obligations issued under this subdivision.  The authority is the
11.22 	municipality for purposes of chapter 475.
11.23 	(b) The principal amount of the issue must be approved by
11.24 	the governing body of the general jurisdiction governmental unit
11.25 	whose general obligation is pledged.  Public hearings must be
11.26 	held on issuance of the obligations by both the authority and
11.27 	the general jurisdiction governmental unit.  The hearings must
11.28 	be held at least 15 days, but not more than 120 days, before the
11.29 	sale of the obligations.
11.30 	(c) The maximum amount of general obligation bonds that may
11.31 	be issued and outstanding under this section equals the greater
11.32 	of (1) one-half of one percent of the taxable market value of
11.33 	the general jurisdiction governmental unit whose general
11.34 	obligation which includes a tax on property is pledged, or (2)
11.35 	$3,000,000.  In the case of county or multicounty general
11.36 	obligation bonds, the outstanding general obligation bonds of
12.1 	all cities in the county or counties issued under this
12.2 	subdivision must be added in calculating the limit under clause
12.3 	(1).
12.4 	(d) "General jurisdiction governmental unit" means the city
12.5 	in which the housing development project is located.  In the
12.6 	case of a county or multicounty authority, the county or
12.7 	counties may act as the general jurisdiction governmental unit.
12.8 	In the case of a multicounty authority, the pledge of the
12.9 	general obligation is a pledge of a tax on the taxable property
12.10 	in each of the counties.
12.11 	(e) "Qualified housing development project" means a housing
12.12 	development project providing housing either for the elderly or
12.13 	for individuals and families with incomes not greater than 80
12.14 	percent of the median family income as estimated by the United
12.15 	States Department of Housing and Urban Development for the
12.16 	standard metropolitan statistical area or the nonmetropolitan
12.17 	county in which the project is located, and will be owned by the
12.18 	authority for the term of the bonds.  A qualified housing
12.19 	development project may admit nonelderly individuals and
12.20 	families with higher incomes if:
12.21 	(1) three years have passed since initial occupancy;
12.22 	(2) the authority finds the project is experiencing
12.23 	unanticipated vacancies resulting in insufficient revenues,
12.24 	because of changes in population or other unforeseen
12.25 	circumstances that occurred after the initial finding of
12.26 	adequate revenues; and
12.27 	(3) the authority finds a tax levy or payment from general
12.28 	assets of the general jurisdiction governmental unit will be
12.29 	necessary to pay debt service on the bonds if higher income
12.30 	individuals or families are not admitted.

12.31 	Sec. 13. Minnesota Statutes 2004, section 469.158, is
12.32 	amended to read:
12.33 	469.158 MANNER OF ISSUANCE OF BONDS; INTEREST RATE.
12.34 	Bonds authorized under sections 469.152 to 469.165 must be
12.35 	issued in accordance with the provisions of chapter 475 relating
12.36 	to bonds payable from income of revenue producing conveniences,
13.1 	except that public sale is not required, the provisions of
13.2 	sections 475.62 and 475.63 do not apply, and the bonds may
13.3 	mature at the time or times, in the amount or amounts, within 30 
13.4 	40 years from date of issue, and may be sold at a price equal to
13.5 	the percentage of the par value thereof, plus accrued interest,
13.6 	and bearing interest at the rate or rates agreed by the
13.7 	contracting party, the purchaser, and the municipality or
13.8 	redevelopment agency, notwithstanding any limitation of interest
13.9 	rate or cost or of the amounts of annual maturities contained in
13.10 	any other law.  Bonds issued to refund bonds previously issued
13.11 	pursuant to sections 469.152 to 469.165 may be issued in amounts
13.12 	determined by the municipality or redevelopment agency
13.13 	notwithstanding the provisions of section 475.67, subdivision 3.

13.14 	Sec. 14. Minnesota Statutes 2004, section 474A.131,
13.15 	subdivision 1, is amended to read:
13.16 		Subdivision 1.Notice of issue.  Each issuer that issues
13.17 	bonds with an allocation received under this chapter shall
13.18 	provide a notice of issue to the department on forms provided by
13.19 	the department stating:
13.20 	(1) the date of issuance of the bonds;
13.21 	(2) the title of the issue;
13.22 	(3) the principal amount of the bonds;
13.23 	(4) the type of qualified bonds under federal tax law;
13.24 	(5) the dollar amount of the bonds issued that were subject
13.25 	to the annual volume cap; and
13.26 	(6) for entitlement issuers, whether the allocation is from
13.27 	current year entitlement authority or is from carryforward
13.28 	authority.
13.29 	For obligations that are issued as a part of a series of
13.30 	obligations, a notice must be provided for each series.  A
13.31 	penalty of one-half of the amount of the application deposit not
13.32 	to exceed $5,000 shall apply to any issue of obligations for
13.33 	which a notice of issue is not provided to the department within
13.34 	five business days after issuance or before the last Monday 4:30
13.35 	p.m. on the last business day in December, whichever occurs
13.36 	first.  Within 30 days after receipt of a notice of issue the
14.1 	department shall refund a portion of the application deposit
14.2 	equal to one percent of the amount of the bonding authority
14.3 	actually issued if a one percent application deposit was made,
14.4 	or equal to two percent of the amount of the bonding authority
14.5 	actually issued if a two percent application deposit was made,
14.6 	less any penalty amount.

14.7 	Sec. 15. Minnesota Statutes 2004, section 475.51,
14.8 	subdivision 4, is amended to read:
14.9 		Subd. 4.Net debt.  "Net debt" means the amount remaining
14.10 	after deducting from its gross debt the amount of current
14.11 	revenues which are applicable within the current fiscal year to
14.12 	the payment of any debt and the aggregate of the principal of
14.13 	the following:
14.14 	(1) Obligations issued for improvements which are payable
14.15 	wholly or partly from the proceeds of special assessments levied
14.16 	upon property specially benefited thereby, including those which
14.17 	are general obligations of the municipality issuing them, if the
14.18 	municipality is entitled to reimbursement in whole or in part
14.19 	from the proceeds of the special assessments.
14.20 	(2) Warrants or orders having no definite or fixed maturity.
14.21 	(3) Obligations payable wholly from the income from revenue
14.22 	producing conveniences.
14.23 	(4) Obligations issued to create or maintain a permanent
14.24 	improvement revolving fund.
14.25 	(5) Obligations issued for the acquisition, and betterment
14.26 	of public waterworks systems, and public lighting, heating or
14.27 	power systems, and of any combination thereof or for any other
14.28 	public convenience from which a revenue is or may be derived.
14.29 	(6) Debt service loans and capital loans made to a school
14.30 	district under the provisions of sections 126C.68 and 126C.69.
14.31 	(7) Amount of all money and the face value of all
14.32 	securities held as a debt service fund for the extinguishment of
14.33 	obligations other than those deductible under this subdivision.
14.34 	(8) Obligations to repay loans made under section 216C.37.
14.35 	(9) Obligations to repay loans made from money received
14.36 	from litigation or settlement of alleged violations of federal
15.1 	petroleum pricing regulations.
15.2 	(10) Obligations issued to pay pension fund liabilities
15.3 	under section 475.52, subdivision 6, or any charter authority.
15.4 	(11) Obligations issued to pay judgments against the
15.5 	municipality under section 475.52, subdivision 6, or any charter
15.6 	authority.
15.7 	(12) All other obligations which under the provisions of
15.8 	law authorizing their issuance are not to be included in
15.9 	computing the net debt of the municipality.

15.10 	Sec. 16. Minnesota Statutes 2004, section 475.52,
15.11 	subdivision 1, is amended to read:
15.12 		Subdivision 1.Statutory cities.  Any statutory city may
15.13 	issue bonds or other obligations for the acquisition or
15.14 	betterment of public buildings, means of garbage disposal,
15.15 	hospitals, nursing homes, homes for the aged, schools,
15.16 	libraries, museums, art galleries, parks, playgrounds, stadia,
15.17 	sewers, sewage disposal plants, subways, streets, sidewalks,
15.18 	warning systems; for any utility or other public convenience
15.19 	from which a revenue is or may be derived; for a permanent
15.20 	improvement revolving fund; for changing, controlling or
15.21 	bridging streams and other waterways; for the acquisition and
15.22 	betterment of bridges and roads within two miles of the
15.23 	corporate limits;for the acquisition of development rights in
15.24 	the form of conservation easements under chapter 84C; and for
15.25 	acquisition of equipment for snow removal, street construction
15.26 	and maintenance, or fire fighting.  Without limitation by the
15.27 	foregoing the city may issue bonds to provide money for any
15.28 	authorized corporate purpose except current expenses.

15.29 	Sec. 17. Minnesota Statutes 2004, section 475.52,
15.30 	subdivision 3, is amended to read:
15.31 		Subd. 3.Counties.  Any county may issue bonds for the
15.32 	acquisition or betterment of courthouses, county administrative
15.33 	buildings, health or social service facilities, correctional
15.34 	facilities, law enforcement centers, jails, morgues, libraries,
15.35 	parks, and hospitals, for roads and bridges within the county or
15.36 	bordering thereon and for road equipment and machinery and for
16.1 	ambulances and related equipment;for the acquisition of
16.2 	development rights in the form of conservation easements under
16.3 	chapter 84C, and for capital equipment for the administration
16.4 	and conduct of elections providing the equipment is uniform
16.5 	countywide, except that the power of counties to issue bonds in
16.6 	connection with a library shall not exist in Hennepin County.

16.7 	Sec. 18. Minnesota Statutes 2004, section 475.52,
16.8 	subdivision 4, is amended to read:
16.9 		Subd. 4.Towns.  Any town may issue bonds for the
16.10 	acquisition and betterment of town halls, town roads and
16.11 	bridges, nursing homes and homes for the aged, and for
16.12 	acquisition of equipment for snow removal, road construction or
16.13 	maintenance, and fire fighting;for the acquisition of
16.14 	development rights in the form of conservation easements under
16.15 	chapter 84C;and for the acquisition and betterment of any
16.16 	buildings to house and maintain town equipment.

16.17 	Sec. 19. Minnesota Statutes 2004, section 475.521,
16.18 	subdivision 1, is amended to read:
16.19 		Subdivision 1.Definitions.  For purposes of this
16.20 	section, the following terms have the meanings given.
16.21 	(a) "Bonds" mean an obligation defined under section 475.51.
16.22 	(b) "Capital improvement" means acquisition or betterment
16.23 	of public lands, buildings or other improvements for the purpose
16.24 	of a city hall, town hall, library,public safety facility, and
16.25 	public works facility.  An improvement must have an expected
16.26 	useful life of five years or more to qualify.  Capital
16.27 	improvement does not include light rail transit or any activity
16.28 	related to it, or a park, library,road, bridge, administrative
16.29 	building other than a city or town hall, or land for any of
16.30 	those facilities.
16.31 	(c) "City" "Municipality" means a home rule charter or
16.32 	statutory city or a town described in section 368.01,
16.33 	subdivision 1 or 1a.

16.34 	Sec. 20. Minnesota Statutes 2004, section 475.521,
16.35 	subdivision 2, is amended to read:
16.36 		Subd. 2.Election requirement.  (a) Bonds issued by a
17.1 	city municipality to finance capital improvements under an
17.2 	approved capital improvements plan are not subject to the
17.3 	election requirements of section 475.58. The bonds are subject
17.4 	to the net debt limits under section 475.53.The bonds must be
17.5 	approved by an affirmative vote of three-fifths of the members
17.6 	of a five-member city council governing body.  In the case of
17.7 	a city council governing body having more or less than five
17.8 	members, the bonds must be approved by a vote of at least
17.9 	two-thirds of the city council members of the governing body.
17.10 	(b) Before the issuance of bonds qualifying under this
17.11 	section, the city municipality must publish a notice of its
17.12 	intention to issue the bonds and the date and time of the
17.13 	hearing to obtain public comment on the matter.  The notice must
17.14 	be published in the official newspaper of the city municipality 
17.15 	or in a newspaper of general circulation in the city 
17.16 	municipality.  Additionally, the notice may be posted on the
17.17 	official Web site, if any, of the city municipality.  The notice
17.18 	must be published at least 14 but not more than 28 days before
17.19 	the date of the hearing.
17.20 	(c) A city municipality may issue the bonds only after
17.21 	obtaining the approval of a majority of the voters voting on the
17.22 	question of issuing the obligations, if a petition requesting a
17.23 	vote on the issuance is signed by voters equal to five percent
17.24 	of the votes cast in the city municipality in the last general
17.25 	election and is filed with the city clerk within 30 days after
17.26 	the public hearing.  The commissioner of revenue shall prepare a
17.27 	suggested form of the question to be presented at the election.

17.28 	Sec. 21. Minnesota Statutes 2004, section 475.521,
17.29 	subdivision 3, is amended to read:
17.30 		Subd. 3.Capital improvement plan.  (a) A city 
17.31 	municipality may adopt a capital improvement plan.  The plan
17.32 	must cover at least a five-year period beginning with the date
17.33 	of its adoption.  The plan must set forth the estimated
17.34 	schedule, timing, and details of specific capital improvements
17.35 	by year, together with the estimated cost, the need for the
17.36 	improvement, and sources of revenue to pay for the improvement.
18.1 	In preparing the capital improvement plan, the city council 
18.2 	governing body must consider for each project and for the
18.3 	overall plan:
18.4 	(1) the condition of the city's municipality's existing
18.5 	infrastructure, including the projected need for repair or
18.6 	replacement;
18.7 	(2) the likely demand for the improvement;
18.8 	(3) the estimated cost of the improvement;
18.9 	(4) the available public resources;
18.10 	(5) the level of overlapping debt in the city municipality;
18.11 	(6) the relative benefits and costs of alternative uses of
18.12 	the funds;
18.13 	(7) operating costs of the proposed improvements; and
18.14 	(8) alternatives for providing services most efficiently
18.15 	through shared facilities with other cities municipalities or
18.16 	local government units.
18.17 	(b) The capital improvement plan and annual amendments to
18.18 	it must be approved by the city council governing body after
18.19 	public hearing.

18.20 	Sec. 22. Minnesota Statutes 2004, section 475.521,
18.21 	subdivision 4, is amended to read:
18.22 		Subd. 4.Limitations on amount.  A city municipality may
18.23 	not issue bonds under this section if the maximum amount of
18.24 	principal and interest to become due in any year on all the
18.25 	outstanding bonds issued under this section, including the bonds
18.26 	to be issued, will equal or exceed 0.05367 0.16 percent of the 
18.27 	taxable market value of property in the county municipality.
18.28 	Calculation of the limit must be made using the taxable market
18.29 	value for the taxes payable year in which the obligations are
18.30 	issued and sold. In the case of a municipality with a
18.31 	population of 2,500 or more, the bonds are subject to the net
18.32 	debt limits under section 475.53.  In the case of a shared
18.33 	facility in which more than one municipality participates, upon
18.34 	compliance by each participating municipality with the
18.35 	requirements of subdivision 2, the limitations in this
18.36 	subdivision and the net debt represented by the bonds shall be
19.1 	allocated to each participating municipality in proportion to
19.2 	its required financial contribution to the financing of the
19.3 	shared facility, as set forth in the joint powers agreement
19.4 	relating to the shared facility.This section does not limit
19.5 	the authority to issue bonds under any other special or general
19.6 	law.

19.7 	Sec. 23. Minnesota Statutes 2004, section 475.58,
19.8 	subdivision 3b, is amended to read:
19.9 		Subd. 3b.Street reconstruction.  (a) A municipality may,
19.10 	without regard to the election requirement under subdivision 1,
19.11 	issue and sell obligations for street reconstruction, if the
19.12 	following conditions are met:
19.13 	(1) the streets are reconstructed under a street
19.14 	reconstruction plan that describes the streets to be
19.15 	reconstructed, the estimated costs, and any planned
19.16 	reconstruction of other streets in the municipality over the
19.17 	next five years, and the plan and issuance of the obligations
19.18 	has been approved by a vote of all of the members of the
19.19 	governing body following a public hearing for which notice has
19.20 	been published in the official newspaper at least ten days but
19.21 	not more than 28 days prior to the hearing; and
19.22 	(2) if a petition requesting a vote on the issuance is
19.23 	signed by voters equal to five percent of the votes cast in the
19.24 	last municipal general election and is filed with the municipal
19.25 	clerk within 30 days of the public hearing, the municipality may
19.26 	issue the bonds only after obtaining the approval of a majority
19.27 	of the voters voting on the question of the issuance of the
19.28 	obligations.
19.29 	(b) Obligations issued under this subdivision are subject
19.30 	to the debt limit of the municipality and are not excluded from
19.31 	net debt under section 475.51, subdivision 4.
19.32 	(c) For purposes of this subdivision, street reconstruction
19.33 	includes utility replacement and relocation and other activities
19.34 	incidental to the street reconstruction, but turn lanes and
19.35 	other improvements having a substantial public safety function,
19.36 	realignments, other modifications to intersect with state and
20.1 	county roads, and the local share of state and county road
20.2 	projects.
20.3 	(d) Except in the case of turn lanes, safety improvements,
20.4 	realignments, intersection modifications, and the local share of
20.5 	state and county road projects, street reconstruction does not
20.6 	include the portion of project cost allocable to widening a
20.7 	street or adding curbs and gutters where none previously existed.

20.8 	Sec. 24. EFFECTIVE DATE.
 20.9 	This act is effective the day following final enactment.