1.1 	A bill for an act
1.2 	relating to public finance; providing terms and conditions related to the issuance 
1.3 	of obligations; defining terms; providing for authorization of interfund loans;
1.4 	amending Minnesota Statutes 2004, sections 103E.635, subdivision 7; 162.18, 
1.5 	subdivision 1; 162.181, subdivision 1; 273.032; 365A.08; 365A.095; 373.45, 
1.6 	subdivision 1; 469.035; 469.103, subdivision 2; Minnesota Statutes 2005 
1.7 	Supplement, sections 469.178, subdivision 7; 475.521, subdivision 4.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 103E.635, subdivision 7, is amended to 
1.10 	read:
1.11 		Subd. 7.Sale of definitive drainage bonds. The board must sell and negotiate the 
1.12 	definitive drainage bonds for at least their par value. The definitive bonds must be sold
1.13 	in accordance with section according to sections 475.56 and 475.60. 

1.14 	Sec. 2. Minnesota Statutes 2004, section 162.18, subdivision 1, is amended to read:
1.15 		Subdivision 1.Limitation on amount. Any city having a population of 5,000 or 
1.16 	more may in accordance with chapter 475, except as otherwise provided herein, issue and 
1.17 	sell its obligations for the purpose of establishing, locating, relocating, constructing, 
1.18 	reconstructing, and improving municipal state-aid streets therein. In the resolution 
1.19 	providing for the issuance of the obligations, the governing body of the municipality 
1.20 	shall irrevocably pledge and appropriate to the sinking fund from which the obligations 
1.21 	are payable, an amount of the moneys allotted or to be allotted to the municipality from 
1.22 	its account in the municipal state-aid street fund sufficient to pay the principal of and the 
1.23 	interest on the obligations as they respectively come due. The obligations shall be issued 
1.24 	in amounts and on terms such that the average annual amount of principal and interest due 
2.1 	in all subsequent calendar years on the obligations, including any similar obligations of 
2.2 	the municipality which are outstanding, shall not exceed 50 90  percent of the amount of 
2.3 	the last annual allotment preceding the bond issue received by the municipality from the 
2.4 	construction account in the municipal state-aid street fund; except that the municipality 
2.5 	may issue general obligation bonds for said purpose, to be purchased by it for the account 
2.6 	of any one or more of its own funds, including debt redemption funds, in which case such 
2.7 	bonds shall mature in not exceeding five years from their respective dates of issue, in 
2.8 	principal amounts not exceeding in any calendar year, with the principal amount of all 
2.9 	other municipal state-aid street obligations maturing in such year, the total amount of the 
2.10 	last annual allotment preceding the bond issue received by the municipality from the 
2.11 	construction account in the municipal state-aid street fund. All interest on the obligations 
2.12 	shall be paid out of the municipality's normal maintenance account in the municipal 
2.13 	state-aid street fund. Any such obligations may be made general obligations, but if 
2.14 	moneys of the municipality other than moneys received from the municipal state-aid street 
2.15 	fund, are used for payment of the obligations, the moneys so used shall be restored to the 
2.16 	appropriate fund from the moneys next received by the municipality from the construction 
2.17 	or maintenance account in the municipal state-aid street fund which are not required to be 
2.18 	paid into a sinking fund for obligations.

2.19 	Sec. 3. Minnesota Statutes 2004, section 162.181, subdivision 1, is amended to read:
2.20 		Subdivision 1.Limitation on amount. Except as otherwise provided herein, any 
2.21 	county may, in accordance with chapter 475, issue and sell its obligations, the total 
2.22 	amount thereof not to exceed the total of the preceding two years state-aid allotments, 
2.23 	for the purpose of establishing, locating, relocating, constructing, reconstructing, and 
2.24 	improving county state-aid highways and constructing buildings and other facilities for 
2.25 	maintaining county state-aid highways. In the resolution providing for the issuance of the 
2.26 	obligations, the county board of the county shall irrevocably pledge and appropriate to the 
2.27 	sinking fund from which the obligations are payable, an amount of the money allotted 
2.28 	or to be allotted to the county from its account in the county state-aid highway fund 
2.29 	sufficient to pay the principal of and the interest on the obligations as they respectively 
2.30 	come due. The obligations shall be issued in the amounts and on terms such that the 
2.31 	amount of principal and interest due in any calendar year on the obligations, including 
2.32 	any similar obligations of the county which are outstanding, shall not exceed 50 90 
2.33 	 percent of the amount of the last annual allotment preceding the bond issue received 
2.34 	by the county from the construction account in the county state-aid highway fund. All 
2.35 	interest on the obligations shall be paid out of the county's normal maintenance account 
3.1 	in the county state-aid highway fund. The obligations may be made general obligations, 
3.2 	but if money of the county other than money received from the county state-aid highway 
3.3 	fund, is used for payment of the obligations, the money so used shall be restored to the 
3.4 	appropriate fund from the money next received by the county from the construction or 
3.5 	maintenance account in the county state-aid highway fund which is not required to be 
3.6 	paid into a sinking fund for obligations.

3.7 	Sec. 4. Minnesota Statutes 2004, section 273.032, is amended to read:
3.8 	273.032 MARKET VALUE DEFINITION.
3.9 	For the purpose of determining any property tax levy limitation based on market 
3.10 	value, any net debt limit based on market value, any limit on the issuance of bonds, 
3.11 	certificates of indebtedness, or capital notes based on market value, any qualification 
3.12 	to receive state aid based on market value, or any state aid amount based on market 
3.13 	value, the terms "market value," "taxable market value," and "market valuation," whether 
3.14 	equalized or unequalized, mean the total taxable market value of property within the local 
3.15 	unit of government before any adjustments for tax increment, fiscal disparity, powerline 
3.16 	credit, or wind energy values, but after the limited market adjustments under section  
3.17 	273.11, subdivision 1a, and after the market value exclusions of certain improvements to 
3.18 	homestead property under section  273.11, subdivision 16. Unless otherwise provided, 
3.19 	"market value," "taxable market value," and "market valuation" refer to mean  the taxable 
3.20 	market value for the previous assessment year as last finally equalized. 

3.21 	Sec. 5. Minnesota Statutes 2004, section 365A.08, is amended to read:
3.22 	365A.08 FINANCING.
3.23 	Following the creation of a subordinate service district, a town may, without 
3.24 	regard to the election requirement under section 475.58, subdivision 1, issue and sell 
3.25 	general obligations for street reconstruction as defined in section 475.58, subdivision 3b. 
3.26 	Obligations issued under this section are subject to the debt limit of the town and are not 
3.27 	excluded from net debt under section 475.51, subdivision 4. Upon adoption of the next 
3.28 	annual budget following the creation of a subordinate service district the town board shall 
3.29 	include in the budget appropriate provisions for the operation of the district including either 
3.30 	a property tax levied only on property of the users of the service within the boundaries of 
3.31 	the district or a levy of a service charge against the users of the service within the district, 
3.32 	or a combination of a property tax and a service charge on the users of the service.
3.33 	A tax or service charge or a combination of them may be imposed to finance a 
3.34 	function or service in the district that the town ordinarily provides throughout the town 
4.1 	only to the extent that there is an increase in the level of the function or service provided 
4.2 	in the service district over that provided throughout the town. In that case, in addition 
4.3 	to the townwide tax levy, an amount necessary to pay for the increase in the level of the 
4.4 	function or service may be imposed in the district.

4.5 	Sec. 6. Minnesota Statutes 2004, section 365A.095, is amended to read:
4.6 	365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
4.7 	Except when obligations are outstanding under section 365A.08, a petition signed by 
4.8 	at least 75 percent of the property owners in the territory of the subordinate service district 
4.9 	requesting the removal of the district may be presented to the town board. Within 30 days 
4.10 	after the town board receives the petition, the town clerk shall determine the validity of the 
4.11 	signatures on the petition. If the requisite number of signatures are certified as valid, the 
4.12 	town board must hold a public hearing on the petitioned matter. Within 30 days after the 
4.13 	end of the hearing, the town board must decide whether to discontinue the subordinate 
4.14 	service district, continue as it is, or take some other action with respect to it.

4.15 	Sec. 7. Minnesota Statutes 2004, section 373.45, subdivision 1, is amended to read:
4.16 		Subdivision 1.Definitions. (a) As used in this section, the following terms have 
4.17 	the meanings given.
4.18 	(b) "Authority" means the Minnesota Public Facilities Authority.
4.19 	(c) "Commissioner" means the commissioner of finance.
4.20 	(d) "Debt obligation" means a general obligation bond issued by a county, a bond to 
4.21 	which the general obligation of a county is pledged under section 469.034, subdivision 2, 
4.22 	or a bond payable from a county lease obligation under section  641.24, to provide funds 
4.23 	for the construction of: 
4.24 	(1) jails;
4.25 	(2) correctional facilities;
4.26 	(3) law enforcement facilities;
4.27 	(4) social services and human services facilities; or
4.28 	(5) solid waste facilities; or
4.29 	(6) qualified housing development projects as defined in section 469.034, subdivision 
4.30 	2.

4.31 	Sec. 8. Minnesota Statutes 2004, section 469.035, is amended to read:
4.32 	469.035 MANNER OF BOND ISSUANCE; SALE.
5.1 	Bonds of an authority shall be authorized by its resolution. They may be issued in 
5.2 	one or more series and shall bear the date or dates, mature at the time or times, bear interest 
5.3 	at the rate or rates, be in the denomination or denominations, be in the form either coupon 
5.4 	or registered, carry the conversion or registration privileges, have the rank or priority, be 
5.5 	executed in the manner, be payable in the medium of payment at the place or places, and 
5.6 	be subject to the terms of redemption with or without premium, as the resolution, its trust 
5.7 	indenture or mortgage provides. The bonds may be sold at public or private sale at not 
5.8 	less than par in the manner and for the price that the authority determines to be in the best 
5.9 	interest of the authority. Notwithstanding any other law, bonds issued pursuant to sections  
5.10 	469.001 to  469.047 shall be fully negotiable. In any suit, action, or proceedings involving 
5.11 	the validity or enforceability of any bonds of an authority or the security for the bonds, 
5.12 	any bond reciting in substance that it has been issued by the authority to aid in financing a 
5.13 	project shall be conclusively deemed to have been issued for that purpose, and the project 
5.14 	shall be conclusively deemed to have been planned, located, and carried out in accordance 
5.15 	with the purposes and provisions of sections  469.001 to  469.047. 
5.16 	In cities of the first class, the governing body of the city must approve all notes 
5.17 	executed with the Minnesota Housing Finance Agency pursuant to this section if the 
5.18 	interest rate on the note exceeds seven percent.

5.19 	Sec. 9. Minnesota Statutes 2004, section 469.103, subdivision 2, is amended to read:
5.20 		Subd. 2.Form. The bonds of each series issued by the authority under this section 
5.21 	shall bear interest at a rate or rates, shall mature at the time or times within 20 30  years 
5.22 	from the date of issuance, and shall be in the form, whether payable to bearer, registrable 
5.23 	as to principal, or fully registrable, as determined by the authority. Section  469.102, 
5.24 	subdivision 6, applies to all bonds issued under this section, and the bonds and their 
5.25 	coupons, if any, when payable to bearer, shall be negotiable instruments. 

5.26 	Sec. 10. Minnesota Statutes 2005 Supplement, section 469.178, subdivision 7, is 
5.27 	amended to read:
5.28 		Subd. 7.Interfund loans. The authority or municipality may advance or loan 
5.29 	money to finance expenditures under section 469.176, subdivision 4, from its general 
5.30 	fund or any other fund under which it has legal authority to do so. The loan or advance 
5.31 	must be authorized, by resolution of the governing body or of the authority, whichever 
5.32 	has jurisdiction over the fund from which the advance or loan is made, before money 
5.33 	is transferred, advanced, or spent, whichever is earliest. The resolution may generally 
5.34 	grant to the authority the power to make interfund loans under one or more tax increment 
6.1 	financing plans or for one or more districts. The terms and conditions for repayment of 
6.2 	the loan must be provided in writing and include, at a minimum, the principal amount, 
6.3 	the interest rate, and maximum term. The maximum rate of interest permitted to be 
6.4 	charged is limited to the greater of the rates specified under section 270C.40 or 549.09
6.5 	as of the date or advance is made, unless the written agreement states that the maximum 
6.6 	interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09
6.7 	are from time to time adjusted.

6.8 	Sec. 11. Minnesota Statutes 2005 Supplement, section 475.521, subdivision 4, is 
6.9 	amended to read:
6.10 		Subd. 4.Limitations on amount. A municipality may not issue bonds under this 
6.11 	section if the maximum amount of principal and interest to become due in any year on 
6.12 	all the outstanding bonds issued under this section, including the bonds to be issued, 
6.13 	will equal or exceed (1) 0.16 percent of the taxable market value of property in the 
6.14 	municipality, or (2) $100,000, whichever is greater. Calculation of the limit must be 
6.15 	made using the taxable market value for the taxes payable year in which the obligations 
6.16 	are issued and sold. In the case of a municipality with a population of 2,500 or more, the 
6.17 	bonds are subject to the net debt limits under section 475.53. In the case of a shared facility 
6.18 	in which more than one municipality participates, upon compliance by each participating 
6.19 	municipality with the requirements of subdivision 2, the limitations in this subdivision and 
6.20 	the net debt represented by the bonds shall be allocated to each participating municipality 
6.21 	in proportion to its required financial contribution to the financing of the shared facility, as 
6.22 	set forth in the joint powers agreement relating to the shared facility. This section does not 
6.23 	limit the authority to issue bonds under any other special or general law.