A bill for an act
relating to capital investment; authorizing the sale and issuance of appropriation
bonds to fund a wastewater industrial pretreatment facility in the city of Litchfield;
proposing coding for new law in Minnesota Statutes, chapter 16A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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(a) The definitions in this subdivision apply to this section.
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(b) "Appropriation bond" or "bond" means a bond, note, or other similar instrument of
the state payable during a biennium from one or more of the following sources:
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(1) money appropriated by law from the general fund in any biennium for debt service
due with respect to obligations described in subdivision 2;
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(2) proceeds of the sale of obligations described in subdivision 2;
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(3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and
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(4) investment earnings on amounts in clauses (1) to (3).
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(c) "Debt service" means the amount payable in any biennium of principal, premium, if
any, and interest on appropriation bonds, and the fees, charges, and expenses related to the
bonds.
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(a) Subject to the limitations of
this subdivision, the commissioner may sell and issue appropriation bonds of the state under
this section for public purposes as provided by law.
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(b) The appropriation bonds may be issued and sold in amounts that, in the opinion of
the commissioner, are necessary to provide sufficient money to the Public Facilities Authority
under subdivision 7, not to exceed $16,500,000 net of costs of issuance, for the purposes
under this subdivision, and to pay debt service including capitalized interest, costs of issuance,
costs of credit enhancement, or make payments under other agreements entered into under
paragraph (d). The bonds authorized by this subdivision are for the purpose of funding the
cost of design, engineering, construction, equipping, and furnishing of a new wastewater
industrial pretreatment facility in the city of Litchfield with a processing capacity of up to
1,750,000 gallons per day of high strength wastewater, a biosolids handling process, and
renewable gas production, in addition to prior appropriations for the same purpose.
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(c) Proceeds of the appropriation bonds must be credited to a special appropriation
wastewater industrial pretreatment facility bond proceeds fund in the state treasury. All
income from investment of the bond proceeds, as estimated by the commissioner, is
appropriated to the commissioner for the payment of principal and interest on the
appropriation bonds.
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(d) Appropriation bonds may be issued in one or more issues or series on the terms and
conditions the commissioner determines to be in the best interests of the state, but the term
on any series of appropriation bonds may not exceed 21 years. The appropriation bonds of
each issue and series thereof shall be dated and bear interest, and may be includable in or
excludable from the gross income of the owners for federal income tax purposes.
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(e) At the time of, or in anticipation of, issuing the appropriation bonds, and at any time
thereafter, so long as the appropriation bonds are outstanding, the commissioner may enter
into agreements and ancillary arrangements relating to the appropriation bonds, including
but not limited to trust indentures, grant agreements, lease or use agreements, operating
agreements, management agreements, liquidity facilities, remarketing or dealer agreements,
letter of credit agreements, insurance policies, guaranty agreements, reimbursement
agreements, indexing agreements, or interest exchange agreements. Any payments made
or received according to the agreement or ancillary arrangement shall be made from or
deposited as provided in the agreement or ancillary arrangement. The determination of the
commissioner included in an interest exchange agreement that the agreement relates to an
appropriation bond shall be conclusive.
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(f) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with or facilitate the issuance of
appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c 2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized by
the order or resolution.
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(g) The appropriation bonds are not subject to chapter 16C.
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(a) Appropriation bonds may be issued in the form of bonds,
notes, or other similar instruments, and in the manner provided in section 16A.672. In the
event that any provision of section 16A.672 conflicts with this section, this section shall
control.
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(b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
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(c) Appropriation bonds may be sold at either public or private sale upon such terms as
the commissioner shall determine are not inconsistent with this section and may be sold at
any price or percentage of par value. Any bid received may be rejected.
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(d) Appropriation bonds must bear interest at a fixed or variable rate.
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(e) Notwithstanding any other law, appropriation bonds issued under this section shall
be fully negotiable.
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The commissioner may issue appropriation bonds for the
purpose of refunding any appropriation bonds then outstanding, including the payment of
any redemption premiums on the bonds, any interest accrued or to accrue to the redemption
date, and costs related to the issuance and sale of the refunding bonds. The proceeds of any
refunding bonds may, in the discretion of the commissioner, be applied to the purchase or
payment at maturity of the appropriation bonds to be refunded, to the redemption of the
outstanding appropriation bonds on any redemption date, or to pay interest on the refunding
bonds and may, pending application, be placed in escrow to be applied to the purchase,
payment, retirement, or redemption. Any escrowed proceeds, pending such use, may be
invested and reinvested in obligations that are authorized investments under section 11A.24.
The income earned or realized on the investment may also be applied to the payment of the
appropriation bonds to be refunded or interest or premiums on the refunded appropriation
bonds, or to pay interest on the refunding bonds. After the terms of the escrow have been
fully satisfied, any balance of the proceeds and any investment income may be returned to
the general fund or, if applicable, the special appropriation wastewater industrial pretreatment
facility bond proceeds fund for use in any lawful manner. All refunding bonds issued under
this subdivision must be prepared, executed, delivered, and secured by appropriations in
the same manner as the appropriation bonds to be refunded.
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Any of the following entities may
legally invest any sinking funds, money, or other funds belonging to them or un