Sears site road and utility infrastructure funding provided, bonds issued, and money appropriated.

A bill for an act

relating to capital investment; appropriating money for road and utility infrastructure

for the Sears site; authorizing the sale and issuance of appropriation bonds;

proposing coding for new law in Minnesota Statutes, chapter 16A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin

[16A.9645] SEARS SITE APPROPRIATION BONDS.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Definitions.

new text end

new text begin

(a) The definitions in this subdivision apply to this section.

new text end

new text begin

(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:

new text end

new text begin

(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);

new text end

new text begin

(2) proceeds of the sale of obligations described in subdivision 2, paragraph (a);

new text end

new text begin

(3) payments received for that purpose under agreements and ancillary arrangements

described in subdivision 2, paragraph (d); and

new text end

new text begin

(4) investment earnings on amounts in clauses (1) to (3).

new text end

new text begin

(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.

new text end

new text begin

(d) "Infrastructure for the Sears site" means sanitary sewer and clean water systems,

public utility infrastructure, streets, sidewalks, and lighting, and streetscape improvements

within the public right-of-way to support development on the Sears site.

new text end

new text begin

(e) "Sears site" means the area in the city of St. Paul that is bounded by Marion Street

on the west, Aurora Avenue on the north, Rice Street on the east, and Rondo Avenue on

the south.

new text end

new text begin

Subd. 2.

new text end

new text begin

Authorization to issue appropriation bonds.

new text end

new text begin

(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 financing

the predesign, design, demolition of existing pavement and structures, environmental

remediation, construction, and equipping of infrastructure for the Sears site. 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 $95,000,000 net of costs of issuance, for the purposes as

provided 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). Notwithstanding section
129D.155
, any money repaid to the

commissioner of administration upon a sale or other disposition of property secured by the

funds under this section shall be transferred to the commissioner and applied toward principal

and interest on outstanding bonds.

new text end

new text begin

(b) Proceeds of the appropriation bonds must be credited to the Sears site appropriation

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.

new text end

new text begin

(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, and may be includable in or

excludable from the gross income of the owners for federal income tax purposes.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(f) The appropriation bonds are not subject to chapter 16C.

new text end

new text begin

Subd. 3.

new text end

new text begin

Form; procedure.

new text end

new text begin

(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.

new text end

new text begin

(b) Every appropriation bond shall include a conspicuous statement of the limitation

established in subdivision 6.

new text end

new text begin

(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.

new text end

new text begin

(d) Appropriation bonds must bear interest at a fixed or variable rate.

new text end

new text begin

(e) Notwithstanding any other law, appropriation bonds issued under this section shall

be fully negotiable.

new text end

new text begin

Subd. 4.

new text end

new text begin

Refunding bonds.

new text end

new text begin

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, 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 Sears site appropriation 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.

new text end

new text begin

Subd. 5.

new text end

new text begin

Appropriation bonds as legal investments.

new text end

new text begin

Any of the following entities may

legally invest any sinking funds, money, or other funds belonging to them or under their

control in any appropriation bonds issued under this section:

new text end

new text begin

(1) the state, the investment board, public officers, municipal corporations, political

subdivisions, and public bodies;

new text end

new text begin

(2) banks and bankers, savings and loan associations, credit unions, trust companies,

savings banks and institutions, investment companies, insurance companies, insurance

associations, and other persons carrying on a banking or insurance business; and

new text end

new text begin

(3) personal representatives, guardians, trustees, and other fiduciaries.

new text end

new text begin

Subd. 6.

new text end

new text begin

No full faith and credit; state not required to make appropriations.

new text end

new text begin

The

appropriation bonds are not public debt of the state, and the full faith, credit, and taxing

powers of the state are not pledged to the payment of the appropriation bonds or to any

payment that the state agrees to make under this section. Appropriation bonds shall not be

obligations paid directly, in whole or in part, from a tax of statewide application on any

class of property, income, transaction, or privilege. Appropriation bonds shall be payable

in each fiscal year only from amounts that the legislature may appropriate for debt service

for any fiscal year, provided that nothing in this section shall be construed to require the

state to appropriate money sufficient to make debt service payments with respect to the

appropriation bonds in any fiscal year. Appropriation bonds shall be canceled and shall no

longer be outstanding on the earlier of (1) the first day of a fiscal year for which the

legislature shall not have appropriated amounts sufficient for debt service, or (2) the date

of final payment of the principal of and interest on the appropriation bonds.

new text end

new text begin

Subd. 7.

new text end

new text begin

Appropriation of proceeds.

new text end

new text begin

The proceeds of appropriation bonds issued under

subdivision 2, paragraph (a), and interest credited to the Sears site appropriation bond

proceeds fund are appropriated as follows:

new text end

new text begin

(1) to the Metropolitan Council for one or more grants to the city of St. Paul or Rondo

Community Land Trust for predesign, design, demolition of existing pavement and structures,

environmental remediation, construction, and equipping infrastructure for the Sears site;

and

new text end

new text begin

(2) to the commissioner for debt service on the bonds including capitalized interest,

nonsalary costs of issuance of the bonds, costs of credit enhancement of the bonds, and

payments under any agreements entered into under subdivision 2, paragraph (d), as permitted

by state and federal law.

new text end

new text begin

Subd. 8.

new text end

new text begin

Appropriation for debt service and other purposes.

new text end

new text begin

An amount needed to

pay principal and interest on appropriation bonds issued under subdivision 2, paragraph (a),

is appropriated each fiscal year from the general fund to the commissioner, subject to repeal,

unallotment under section
16A.152
, or cancellation, otherwise pursuant to subdivision 6,

for deposit into the bond payments account established for such purpose in the Sears site

appropriation bond proceeds fund.

new text end

new text begin

Subd. 9.

new text end

new text begin

Waiver of immunity.

new text end

new text begin

The waiver of immunity by the state provided for by

section
3.751, subdivision 1
, shall be applicable to the appropriation bonds and any ancillary

contracts to which the commissioner is a party.

new text end