A bill for an act
relating to capital investment; authorizing the issuance of redevelopment
appropriation bonds for areas damaged by civil unrest; appropriating money;
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 legislature recognizes the civil unrest that occurred in Minnesota in May and
June of 2020. While the immediate cause of the unrest was the apparent murder of George
Floyd by an officer of the Minneapolis Police Department, it was compounded by other
long-standing structural systems of inequality and racism within the city, state, and nation.
The legislature further recognizes that some acts of protest and civil disobedience, occurring
among a small minority of participants, led to severe damage or destruction to small
businesses and other private property in Minneapolis and St. Paul.
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(b) The financing provided by Minnesota Statutes, section 16A.962, is for the public
purpose of redeveloping the areas damaged by the civil unrest. The public purpose of
redevelopment is to help support enterprise development and wealth creation for persons
adversely affected by long-standing structural racial discrimination and poverty and prevent
displacement of low-income residents, homes, and small businesses owned by people of
color and indigenous people.
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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, paragraph (a);
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(2) proceeds of the sale of obligations described in subdivision 2, paragraph (a);
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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) "City" means Minneapolis or St. Paul, or an agency of Minneapolis or St. Paul.
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(d) "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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(e) "Eligible area" means an area in Minneapolis or St. Paul adversely affected by civil
unrest during the peacetime emergency declared in Emergency Executive Order 20-64.
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(f) "Redevelopment" may include the acquisition of real property; site preparation;
predesign, design, engineering, repair, or renovation of facilities damaged during the civil
unrest and construction of buildings, infrastructure, and related site amenities; landscaping;
street-scaping; land-banking for future development or redevelopment; or financing any of
these activities taken on by a private party pursuant to an agreement with the city.
Redevelopment does not include project costs eligible for compensation or assistance
available through insurance policies or from other organizations or government agencies.
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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, including for the purposes of capitalizing
an account in the city of Minneapolis' community property development fund and an account
in the St. Paul housing and redevelopment authority's funds to pay for redevelopment in
the eligible areas. Appropriation bonds may be sold and issued in amounts that, in the
opinion of the commissioner, are necessary to provide sufficient money to the commissioner
of administration under subdivision 7, not to exceed $....... net of costs of issuance, for the
purposes as provided under this subdivision; to pay debt service including capitalized
interest, costs of issuance, and costs of credit enhancement; or to make payments under
other agreements entered into under paragraph (d).
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(b) Proceeds of the appropriation bonds must be credited to a special appropriation
redevelopment bond proceeds fund in the state treasury. All income from investment of the
bond proceeds is appropriated to the commissioner for the payment of principal and interest
on the appropriation bonds.
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(c) 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 from the date of issuance, and
may be includable in or excludable from the gross income of the owners for federal income
tax purposes.
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(d) 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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(e) 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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(f) 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 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 issued under subdivision 2 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, at 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 redevelopment 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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