Issuance of emergency shelter facility appropriation bonds authorized, and money appropriated.

A bill for an act

relating to capital investment; authorizing the issuance of emergency shelter facility

appropriation bonds; appropriating money; proposing coding for new law in

Minnesota Statutes, chapter 16A.

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

Section 1.

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[16A.9691] EMERGENCY SHELTER FACILITY APPROPRIATION

BONDS.

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Subdivision 1.

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Definitions.

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

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(b) "Appropriation 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) "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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(d) "Eligible applicant" means a Tribal government, not-for-profit corporation under

section 501(c)(3) of the Internal Revenue Code, statutory or home rule charter city, county,

or housing and redevelopment authority established under section 469.003.

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(e) "Emergency shelter facility" means a facility that provides a safe, sanitary, accessible,

and suitable emergency shelter for individuals and families experiencing homelessness,

regardless of whether the facility provides emergency shelter during the day, overnight, or

both.

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Subd. 2.

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Authorization to issue appropriation 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, including for the purpose of funding

grants for emergency shelter facilities. 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 $47,000,000 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

emergency shelter facility 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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Subd. 3.

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Form; procedure.

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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 govern.

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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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Subd. 4.

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Refunding bonds.

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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 emergency shelter 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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Subd. 5.

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Appropriation bonds as legal investments.

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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:

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

subdivisions, and public bodies;

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(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

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

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Subd. 6.

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

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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.

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Subd. 7.

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Appropriation of proceeds.

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The proceeds of appropriation bonds issued under

subdivision 2, paragraph (a), and interest credited to the special appropriation emergency

shelter facility bond proceeds fund are appropriated as follows:

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(1) to the commissioner of human services for grants to eligible applicants that improve

or expand emergency shelter facility options by:

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(i) adding additional emergency shelter facilities by renovating existing facilities not

currently operating as emergency shelter facilities;

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(ii) adding additional emergency shelter facility beds by renovating existing emergency

shelter facilities, including major projects that address an accumulation of deferred

maintenance or repair or replacement of mechanical, electrical, and safety systems and

components in danger of failure;

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(iii) adding additional emergency shelter facility beds through acquisition and construction

of new emergency shelter facilities; and

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(iv) improving the safety, sanitation, accessibility, and habitability of existing emergency

shelter facilities, including major projects that address an accumulation of deferred

maintenance or repair or replacement of mechanical, electrical, and safety systems, and

components in danger of failure; and

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(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.

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Subd. 8.

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Additional grant limitations and requirements.

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(a) The requirements of this

subdivision apply to grants under subdivision 7, paragraph (a), clause (1).

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(b) A grant may be used to pay for 100 percent of total project capital expenditures or

a specified project phase, up to $1,000,000 per project.

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(c) All projects funded with a grant must meet all applicable state and local building

codes at the time of project completion.

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(d) An eligible applicant may enter into a lease or management agreement for operation

of the emergency shelter facility, subject to section 16A.695.

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(e) The commissioner of human services must use a competitive request for proposal

process to identify potential projects and eligible applicants on a statewide basis. At least

40 percent of the proceeds of appropriation bonds issued under this section must be awarded

to projects located in greater Minnesota. If the commissioner of human services does not

receive sufficient eligible funding requests from greater Minnesota to award at least 40

percent of the proceeds of appropriation bonds under this section to projects in greater

Minnesota, the commissioner of human services may award the remaining money to other

eligible projects.

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(f) For emergency shelter facility projects under subdivision 7, paragraph (a), clause (1),

item (iii), the commissioner of human services must give priority to projects in which the

eligible applicant will provide at least ten percent of total project funding.

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Subd. 9.

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Appropriation for debt service and other purposes.

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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 special

appropriation emergency shelter facility bond proceeds fund. The appropriation is available

beginning in fiscal year 2027 and remains available through fiscal year 2048.

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Subd. 10.

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Waiver of immunity.

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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.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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