Laws of Minnesota 1986 

                        CHAPTER 400-S.F.No. 1725 
           An act relating to public administration; authorizing 
          home rule charter or statutory cities to establish 
          economic development districts; granting powers to 
          cities and authorities;  amending Minnesota Statutes 
          1984, sections 116D.04, subdivision 1a; 117.521, 
          subdivision 3; 272.01, subdivision 2; 273.72; 273.73, 
          subdivisions 2 and 8; 273.86, subdivision 1; 355.11, 
          subdivision 5; 462C.02, subdivisions 6 and 9; 471.88, 
          subdivisions 1, 9, and 11; 474.02, subdivision 3; and 
          474.16, subdivision 2; Minnesota Statutes 1985 
          Supplement, section 273.75, subdivision 4; 353.01, 
          subdivision 2a; 395.08; 462C.12, subdivision 2; and 
          472B.04; proposing coding for new law in Minnesota 
          Statutes, chapter 458; and proposing coding for new 
          law as Minnesota Statutes, chapter 458C. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 116D.04, 
subdivision 1a, is amended to read: 
    Subd. 1a.  For the purposes of sections 116D.01 to 116D.07, 
the following terms have the meanings given to them in this 
subdivision.  
    (a) "Natural resources" has the meaning given it in section 
116B.02, subdivision 4.  
    (b) "Pollution, impairment or destruction" has the meaning 
given it in section 116B.02, subdivision 5.  
    (c) "Environmental assessment worksheet" means a brief 
document which is designed to set out the basic facts necessary 
to determine whether an environmental impact statement is 
required for a proposed action.  
    (d) "Governmental action" means activities, including 
projects wholly or partially conducted, permitted, assisted, 
financed, regulated or approved by units of government including 
the federal government.  
    (e) "Governmental unit" means any state agency and any 
general or special purpose unit of government in the state 
including, but not limited to, watershed districts organized 
under chapter 112, counties, towns, cities, port 
authorities and, housing authorities, and economic development 
authorities established under sections 13 to 33, but not 
including courts, school districts and regional development 
commissions other than the metropolitan council.  
    Sec. 2.  Minnesota Statutes 1984, section 117.521, 
subdivision 3, is amended to read: 
    Subd. 3.  The provisions of subdivisions 1 and 2 shall not 
apply to the acquisition of properties situated wholly or in 
part within any district for development authorized under Laws 
1971, Chapters 548 or 677; or Laws 1973, Chapters 196, 761, or 
764; or Laws 1974, Chapter 485; or Minnesota Statutes, Chapters 
462, or 458; or sections 13 to 33. 
     Sec. 3.  Minnesota Statutes 1984, section 272.01, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) When any real or personal property which for 
any reason is exempt from ad valorem taxes, and taxes in lieu 
thereof, is leased, loaned, or otherwise made available and used 
by a private individual, association or corporation in 
connection with a business conducted for profit, there shall be 
imposed a tax, for the privilege of so using or possessing such 
real or personal property, in the same amount and to the same 
extent as though the lessee or user was the owner of such 
property. 
    (b) The tax imposed by this subdivision shall not apply to 
(1) property leased or used by way of a concession in or 
relative to the use in whole or part of a public park, market, 
fair grounds, port authority, economic development authority 
established under sections 13 to 33, municipal auditorium, 
airport owned by a city, town, county or group thereof but not 
the metropolitan airports commission, municipal museum or 
municipal stadium or (2) property constituting or used as a 
public pedestrian ramp, concourse, passenger check-in area or 
ticket sale counter, boarding area or luggage claim area in 
connection with a public airport; provided that real estate 
which is owned by a municipality in connection with the 
operation of a public airport and which is leased or used for 
agricultural purposes shall not be exempt. 
    (c) Taxes imposed by this subdivision shall be due and 
payable as in the case of personal property taxes and such taxes 
shall be assessed to such lessees or users of real or personal 
property in the same manner as taxes assessed to owners of real 
or personal property, except that such taxes shall not become a 
lien against the property.  When due, the taxes shall constitute 
a debt due from the lessee or user to the state, township, city, 
county and school district for which the taxes were assessed and 
shall be collected in the same manner as personal property 
taxes.  If property subject to the tax imposed by this 
subdivision is leased or used jointly by two or more persons, 
each lessee or user shall be jointly and severally liable for 
payment of the tax. 
    Sec. 4.  Minnesota Statutes 1984, section 273.72, is 
amended to read: 
    273.72 [STATEMENT OF PURPOSE.] 
    The statutes governing the use of tax increment financing 
in Minnesota have evolved over a long period of time and exist 
in several different special and general laws.  These laws are 
sometimes inconsistent and provide varying procedures which 
render them difficult to administer.  It is the intent of the 
legislature, by enacting the Minnesota tax increment financing 
act, to ratify and confirm the findings, declarations and 
determinations made by the legislature in connection with 
chapters 362A, 458, sections 13 to 33, 462, 472A and 474 and to 
establish a uniform set of standards and procedures to be 
followed when using this method of financing.  
    Sec. 5.  Minnesota Statutes 1984, section 273.73, 
subdivision 2, is amended to read: 
    Subd. 2.  [AUTHORITY.] "Authority" means a rural 
development financing authority created pursuant to chapter 
362A, a housing and redevelopment authority created pursuant to 
chapter 462; a port authority created pursuant to chapter 
458; an economic development authority created pursuant to 
sections 13 to 33; a redevelopment agency as defined by chapter 
474; a municipality which is administering a development 
district created pursuant to chapter 472A or any special law, a 
municipality which undertakes a project pursuant to chapter 474; 
or a municipality which exercises the powers of a port authority 
pursuant to any general or special law.  
    Sec. 6.  Minnesota Statutes 1984, section 273.73, 
subdivision 8, is amended to read: 
    Subd. 8.  [PROJECT.] "Project" means a project as defined 
in section 362A.01; an industrial development district as 
defined in section 458.191, subdivision 1; an economic 
development district as defined in section 25, subdivision 1; a 
project as defined in section 462.421, subdivision 14; a 
development district as defined in chapter 472A or any special 
law; or a project as defined in section 474.02, subdivisions 1, 
1a or 1b. 
     Sec. 7.  Minnesota Statutes 1985 Supplement, section 
273.75, subdivision 4, is amended to read: 
    Subd. 4.  [LIMITATION ON USE OF TAX INCREMENT.] All 
revenues derived from tax increment shall be used in accordance 
with the tax increment financing plan.  The revenues shall be 
used solely for the following purposes:  (a) to pay the 
principal of and interest on bonds issued to finance a project; 
(b) by a rural development financing authority for the purposes 
stated in section 362A.01, subdivision 2, by a port authority or 
municipality exercising the powers of a port authority to 
finance or otherwise pay the cost of redevelopment pursuant to 
chapter 458, by an economic development authority to finance or 
otherwise pay the cost of redevelopment pursuant to sections 13 
to 33, by a housing and redevelopment authority or economic 
development authority to finance or otherwise pay public 
redevelopment costs pursuant to chapter 462, by a 
municipality or economic development authority to finance or 
otherwise pay the capital and administration costs of a 
development district pursuant to chapter 472A, by a municipality 
or redevelopment agency to finance or otherwise pay premiums for 
insurance or other security guaranteeing the payment when due of 
principal of and interest on the bonds pursuant to chapters 
462C, 474, or both chapters, or to accumulate and maintain a 
reserve securing the payment when due of the principal of and 
interest on the bonds pursuant to chapters 462C, 474, or both 
chapters, which revenues in the reserve shall not exceed, 
subsequent to the fifth anniversary of the date of issue of the 
first bond issue secured by the reserve, an amount equal to 20 
percent of the aggregate principal amount of the outstanding and 
nondefeased bonds secured by the reserve.  Revenues derived from 
tax increment may be used to finance the costs of an interest 
reduction program operated pursuant to section 462.445, 
subdivisions 10 to 13, or pursuant to other law granting 
interest reduction authority and power by reference to those 
subdivisions only under the following conditions:  (a) tax 
increments may not be collected for a program for a period in 
excess of 12 years after the date of the first interest rate 
reduction payment for the program, (b) tax increments may not be 
used for an interest reduction program, if the proceeds of bonds 
issued pursuant to section 273.77 after December 31, 1985, have 
been or will be used to provide financial assistance to the 
specific project which would receive the benefit of the interest 
reduction program, and (c) not more than 50 percent of the 
estimated tax increment derived from a project may be used to 
finance an interest reduction program for owner-occupied 
single-family dwellings unless a project is located either in an 
area which would qualify as a redevelopment district or within a 
city designated as an enterprise zone pursuant to section 
273.1312, subdivision 4, clause (c)(3).  These revenues shall 
not be used to circumvent existing levy limit law.  No revenues 
derived from tax increment shall be used for the construction or 
renovation of a municipally owned building used primarily and 
regularly for conducting the business of the municipality; this 
provision shall not prohibit the use of revenues derived from 
tax increments for the construction or renovation of a parking 
structure, a commons area used as a public park or a facility 
used for social, recreational or conference purposes and not 
primarily for conducting the business of the municipality.  
    Sec. 8.  Minnesota Statutes 1984, section 273.86, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICATION.] A developer proposing to 
construct improvements on property located within an industrial 
development district as defined in section 458.191, subdivision 
1; an economic development district as defined in section 25, 
subdivision 1; a development district as defined in section 
472A.02, subdivision 3, or any special law; or a redevelopment 
project as defined in section 462.421, subdivision 14 may apply 
to the governing body of the city or municipality in which the 
property is located to obtain deferral of property tax on the 
improved property, stating the nature and location of the 
proposed improvement, its estimated cost, and the projected 
length of construction time.  If the governing body finds that 
the proposed development is consistent with the requirements of 
the above referred sections, it may approve the application.  If 
the application is approved by June 30, the tax exemption shall 
be in effect for taxes paid the following year; if it is 
approved later than June 30, the exemption shall be in effect 
for taxes paid in the second subsequent taxable year.  
    Sec. 9.  Minnesota Statutes 1985 Supplement, section 
353.01, subdivision 2a, is amended to read: 
    Subd. 2a.  [INCLUDED EMPLOYEES.] The following persons are 
included in the meaning of "public employee": 
    (a) Elected or appointed officers and employees of elected 
officers. 
    (b) District court reporters. 
    (c) Officers and employees of the public employees 
retirement association. 
    (d) Employees of the League of Minnesota Cities. 
    (e) Officers and employees of public hospitals, owned or 
operated by or an integral part of, any governmental subdivision 
or governmental subdivisions. 
    (f) Employees of a school district who receive separate 
salaries for driving their own buses. 
    (g) Employees of the Association of Minnesota Counties. 
    (h) Employees of the Metropolitan Inter-County Association. 
    (i) Employees of the Minnesota Municipal Utilities 
Association. 
    (j) Employees of the metropolitan airports commission if 
employment initially commences on or after July 1, 1979. 
    (k) Employees of the Minneapolis employees retirement fund, 
if employment initially commences on or after July 1, 1979. 
    (l) Employees of the Range Association of Municipalities 
and Schools. 
    (m) Employees of the soil and water conservation districts. 
    (n) Employees of a county historical society.  
    (o) Employees of an economic development authority created 
under sections 13 to 33. 
    Sec. 10.  Minnesota Statutes 1984, section 355.11, 
subdivision 5, is amended to read: 
    Subd. 5.  "Employing unit" means any municipal housing and 
redevelopment authorities organized pursuant to sections 462.415 
to 462.705 and any soil and water conservation district 
organized pursuant to chapter 40 or any port authority organized 
pursuant to chapter 458, or any economic development authority 
organized pursuant to sections 13 to 33, or any hospital 
district organized or reorganized pursuant to sections 447.31 to 
447.37. 
    Sec. 11.  Minnesota Statutes 1985 Supplement, section 
395.08, is amended to read: 
    395.08 [ECONOMIC AND AGRICULTURAL DEVELOPMENT.] 
    A county board may appropriate not more than 
$25,000 $50,000 annually out of the general revenue fund of the 
county to be paid to any incorporated development society or 
organization of this state which, in the board's opinion, will 
use the money for the best interests of the county in promoting, 
advertising, improving, or developing the economic and 
agricultural resources of the county. 
    Sec. 12.  [458.101] [NO STATE BAILOUT OF PORT AUTHORITIES.] 
    State appropriations or credit of the state must not be 
used to pay or guarantee the payment of the debt of a port 
authority. 
    Sec. 13.  [458C.01] [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] In sections 13 to 33, the terms 
defined in this section have the meaning given them. 
    Subd. 2.  [AUTHORITY.] "Authority" means an economic 
development authority, unless specified otherwise.  
    Subd. 3.  [CITY.] "City" means a home rule charter or 
statutory city. 
    Subd. 4.  [DEVELOPMENT.] "Development" includes 
redevelopment, and developing includes redeveloping. 
    Subd. 5.  [COST OF REDEVELOPMENT.] "Cost of redevelopment" 
means, with respect to an economic development district project, 
the cost of: 
    (a) acquiring property, whether by purchase, lease, 
condemnation, or otherwise; 
    (b) demolishing or removing structures or other 
improvements on acquired properties; 
    (c) correcting soil deficiencies necessary to develop or 
use the property for an appropriate use as determined by the 
authority; 
    (d) constructing or installing public improvements, 
including streets, roads, and utilities; 
    (e) providing relocation benefits to the occupants of 
acquired properties; 
    (f) planning, engineering, legal and other services 
necessary to carry out the functions listed in clauses (a) to 
(e); and 
    (g) the allocated administrative expenses of the authority 
for the project. 
    Sec. 14.  [458C.03] [ECONOMIC DEVELOPMENT AUTHORITY; 
ESTABLISHMENT.] 
    A city may, by adopting an enabling resolution in 
compliance with the procedural requirements of section 16, 
establish an economic development authority that, subject to 
section 15, has the powers contained in sections 13 to 33 and a 
housing and redevelopment authority under chapter 462 or other 
law, and a city under chapter 472A or other law.  If the 
economic development authority exercises the powers of a housing 
and redevelopment authority contained in chapter 462 or other 
law, the city shall exercise the powers relating to a housing 
and redevelopment authority granted to a city by chapter 462 or 
other law. 
    Sec. 15.  [458C.04] [LIMIT OF POWERS.] 
    Subdivision 1.  [RESOLUTION.] The enabling resolution may 
impose the following limits upon the actions of the authority: 
    (1) that the authority must not exercise any specified 
powers contained in sections 13 to 33, chapters 462 and 472A or 
that the authority must not exercise any powers without the 
prior approval of the city council; 
    (2) that, except when previously pledged by the authority, 
the city council may, by resolution, require the authority to 
transfer any portion of the reserves generated by activities of 
the authority that the city council determines is not necessary 
for the successful operation of the authority, to the debt 
service fund of the city, to be used solely to reduce tax levies 
for bonded indebtedness of the city; 
    (3) that the sale of all bonds or obligations issued by the 
authority be approved by the city council before issuance; 
    (4) that the authority follow the budget process for city 
departments as provided by the city and as implemented by the 
city council and mayor; 
    (5) that all official actions of the authority must be 
consistent with the adopted comprehensive plan of the city, and 
any official controls implementing the comprehensive plan; 
    (6) that the authority submit all planned activities for 
influencing the action of any other governmental agency, 
subdivision, or body to the city council for approval; 
    (7) that the authority submit its administrative structure 
and management practices to the city council for approval; and 
    (8) any other limitation or control established by the city 
council by the enabling resolution. 
    Subd. 2.  [MODIFICATION OF RESOLUTION.] The enabling 
resolution may be modified at any time, subject to subdivision 
5, and provided that any modification is made in accordance with 
section 15. 
    Subd. 3.  [REPORT ON RESOLUTION.] Without limiting the 
right of the authority to petition the city council at any time, 
each year, within 60 days of the anniversary date of the first 
adoption of the enabling resolution, the authority shall submit 
to the city council a report stating whether and how the 
enabling resolution should be modified.  Within 30 days of 
receipt of the recommendation, the city council shall review the 
enabling resolution, consider the recommendations of the 
authority, and make any modification it considers appropriate. 
Modifications must be made in accordance with the procedural 
requirements of section 16. 
    Subd. 4.  [COMPLIANCE.] The city council's determination 
that the authority has complied with the limitations imposed 
under this section is conclusive. 
    Subd. 5.  [LIMITS; SECURITY.] Limits imposed under this 
section must not be applied in a manner that impairs the 
security of any bonds issued or contracts executed before the 
limit is imposed.  The city council must not modify any limit in 
effect at the time any bonds or obligations are issued or 
contracts executed to the detriment of the holder of the bonds 
or obligations or any contracting party. 
    Sec. 16.  [458C.05] [PROCEDURAL REQUIREMENT.] 
    Subdivision 1.  [ENABLING RESOLUTION.] The creation of an 
authority by a city must be by written resolution known as the 
enabling resolution.  Before adopting the enabling resolution, 
the city council shall conduct a public hearing.  Notice of the 
time and place of hearing, a statement of the purpose of the 
hearing, and a summary of the resolution must be published in a 
newspaper of general circulation within the city once a week for 
two consecutive weeks.  The first publication must appear not 
more than 30 days from the date of the public hearing. 
    Subd. 2.  [MODIFICATIONS.] All modifications to the 
enabling resolution must be by written resolution and must be 
adopted after notice is given and a public hearing conducted as 
required for the original adoption of the enabling resolution. 
    Sec. 17.  [458C.06] [TRANSFER OF AUTHORITY.] 
    Subdivision 1.  [ECONOMIC DEVELOPMENT, HOUSING, 
REDEVELOPMENT POWERS.] The city may, by ordinance, divide any 
economic development, housing, and redevelopment powers granted 
under chapter 462 and this chapter between the economic 
development authority and any other authority or commission 
established under statute or city charter for economic 
development, housing, or redevelopment. 
    Subd. 2.  [PROJECT CONTROL, AUTHORITY, OPERATION.] The city 
may, by resolution, transfer the control, authority, and 
operation of any project as defined in section 273.73, 
subdivision 8, or any other program or project authorized by 
chapter 462 or 472A located within the city, from the 
governmental agency or subdivision that established the project 
to the economic development authority.  The city council may 
also require acceptance of control, authority, and operation of 
the project by the economic development authority.  The economic 
development authority may exercise all of the powers that the 
governmental unit establishing the project could exercise with 
respect to the project. 
    When a project or program is transferred to the economic 
development authority, the authority shall covenant and pledge 
to perform the terms, conditions, and covenants of the bond 
indenture or other agreements executed for the security of any 
bonds issued by the governmental subdivision that initiated the 
project or program.  The economic development authority may 
exercise all of the powers necessary to perform the terms, 
conditions, and covenants of any indenture or other agreements 
executed for the security of the bonds and shall become 
obligated on the bonds when the project or program is 
transferred as provided in this subdivision. 
     Subd. 3.  [TRANSFER OF PERSONNEL.] Notwithstanding any 
other law or charter provision to the contrary, the city council 
may, by resolution, place any employees of the housing and 
redevelopment authority under the direction, supervision, or 
control of the economic development authority.  The placement of 
any employees under the direction, supervision, or control of 
the economic development authority does not affect the rights of 
any employees of the housing and redevelopment authority, 
including any rights existing under a collective bargaining 
agreement or fringe benefit plan.  The employees shall become 
employees of the economic development authority. 
    Sec. 18.  [458C.07] [ECONOMIC DEVELOPMENT AUTHORITY.] 
    An economic development authority is a public body 
corporate and politic and a political subdivision of the state 
with the right to sue and be sued in its own name.  An authority 
carries out an essential governmental function when it exercises 
its power, but the authority is not immune from liability 
because of this. 
    Sec. 19.  [458C.08] [COMMISSIONERS; APPOINTMENT, TERMS, 
VACANCIES, PAY, REMOVAL.] 
    Subdivision 1.  [COMMISSIONERS.] Except as provided in 
subdivision 2, clause (d), an economic development authority 
shall consist of either three, five, or seven commissioners who 
shall be appointed after the enabling resolution provided for in 
section 16 becomes effective.  The resolution must indicate the 
number of commissioners constituting the authority. 
    Subd. 2.  [APPOINTMENT, TERMS; VACANCIES.] (a) Three-member 
authority:  the commissioners constituting a three-member 
authority, one of whom must be a member of the city council, 
shall be appointed by the mayor with the approval of the city 
council.  Those initially appointed shall be appointed for terms 
of two, four, and six years, respectively.  Thereafter all 
commissioners shall be appointed for six-year terms. 
    (b) Five-member authority:  the commissioners constituting 
a five-member authority, two of whom must be members of the city 
council, shall be appointed by the mayor with the approval of 
the city council.  Those initially appointed shall be appointed 
for terms of two, three, four, and five years respectively and 
one member for six years.  Thereafter all commissioners shall be 
appointed for six-year terms. 
    (c) Seven-member authority:  the commissioners constituting 
a seven-member authority, two of whom must be members of the 
city council, shall be appointed by the mayor with the approval 
of the city council.  Those initially appointed shall be 
appointed for terms of one, two, three, four, and five years 
respectively and two members for six years.  Thereafter all 
commissioners shall be appointed for six-year terms. 
    (d) The enabling resolution may provide that the members of 
the city council shall serve as the commissioners. 
    (e) The enabling resolution may provide for the appointment 
of members of the city council in excess of the number required 
in clauses (a), (b), and (c). 
    (f) A vacancy is created in the membership of an authority 
when a city council member of the authority ends council 
membership.  A vacancy for this or another reason must be filled 
for the balance of the unexpired term, in the manner in which 
the original appointment was made.  The city council may set the 
term of the commissioners who are members of the city council to 
coincide with their term of office as members of the city 
council. 
    Subd. 3.  [INCREASE IN COMMISSION MEMBERS.] An authority 
may be increased from three to five or seven members, or from 
five to seven members by a resolution adopted by the city 
council following the procedure provided for modifying the 
enabling resolution in section 16. 
    Subd. 4.  [COMPENSATION AND REIMBURSEMENT.] A commissioner, 
including the president, shall be paid for attending each 
regular or special meeting of the authority in an amount to be 
determined by the city council.  In addition to receiving pay 
for meetings, the commissioners may be reimbursed for actual 
expenses incurred in doing official business of the authority.  
All money paid for compensation or reimbursement must be paid 
out of the authority's budget. 
    Subd. 5.  [REMOVAL FOR CAUSE.] A commissioner may be 
removed by the city council for inefficiency, neglect of duty, 
or misconduct in office.  A commissioner shall be removed only 
after a hearing.  A copy of the charges must be given to the 
commissioner at least ten days before the hearing.  The 
commissioner must be given an opportunity to be heard in person 
or by counsel at the hearing.  When written charges have been 
submitted against a commissioner, the city council may 
temporarily suspend the commissioner.  If the city council finds 
that those charges have not been substantiated, the commissioner 
shall be immediately reinstated.  If a commissioner is removed, 
a record of the proceedings, together with the charges and 
findings, shall be filed in the office of the city clerk. 
    Sec. 20.  [458C.09] [OFFICERS; DUTIES; ORGANIZATIONAL 
MATTERS.] 
    Subdivision 1.  [BYLAWS, RULES, SEAL.] An authority may 
adopt bylaws and rules of procedure and shall adopt an official 
seal. 
    Subd. 2.  [OFFICERS.] An authority shall elect a president, 
a vice president, a treasurer, a secretary, and an assistant 
treasurer.  The authority shall elect the president, treasurer, 
and secretary annually.  A commissioner must not serve as 
president and vice president at the same time.  The other 
offices may be held by the same commissioner.  The offices of 
secretary and assistant treasurer need not be held by a 
commissioner. 
    Subd. 3.  [DUTIES AND POWERS.] The officers have the usual 
duties and powers of their offices.  They may be given other 
duties and powers by the authority. 
    Subd. 4.  [TREASURER'S DUTIES.] The treasurer: 
    (1) shall receive and is responsible for authority money; 
    (2) is responsible for the acts of the assistant treasurer; 
    (3) shall disburse authority money by check only; 
    (4) shall keep an account of the source of all receipts, 
and the nature, purpose, and authority of all disbursements; and 
    (5) shall file the authority's detailed financial statement 
with its secretary at least once a year at times set by the 
authority. 
    Subd. 5.  [ASSISTANT TREASURER.] The assistant treasurer 
has the powers and duties of the treasurer if the treasurer is 
absent or disabled. 
    Subd. 6.  [TREASURER'S BOND.] The treasurer shall give bond 
to the state conditioned for the faithful discharge of official 
duties.  The bond must be approved as to form and surety by the 
authority and filed with the secretary.  The bond must be for 
twice the amount of money probably on hand at any one time, as 
determined at least annually by the authority.  However, the 
bond must not exceed $300,000. 
    Subd. 7.  [PUBLIC MONEY.] Authority money is public money. 
    Subd. 8.  [CHECKS.] An authority check must be signed by 
the treasurer and one other officer named by the authority in a 
resolution.  The check must state the name of the payee and the 
nature of the claim that the check is issued for. 
    Subd. 9.  [FINANCIAL STATEMENT.] The authority's detailed 
financial statement must show all receipts and disbursements, 
their nature, the money on hand, the purposes to which the money 
on hand is to be applied, the authority's credits and assets, 
and its outstanding liabilities in a form required for the 
city's financial statements.  The authority shall examine the 
statement together with the treasurer's vouchers.  If the 
authority finds that the statement and vouchers are correct, it 
shall approve them by resolution and enter the resolution in its 
records. 
    Sec. 21.  [458C.10] [EMPLOYEES; SERVICES; SUPPLIES.] 
    Subdivision 1.  [EMPLOYEES.] An economic development 
authority may employ an executive director, a chief engineer, 
other technical experts and agents, and other employees as it 
may require, and determine their duties, qualifications, and 
compensation. 
    Subd. 2.  [CONTRACT FOR SERVICES.] The authority may 
contract for the services of consultants, agents, public 
accountants, and other persons needed to perform its duties and 
exercise its powers. 
    Subd. 3.  [LEGAL SERVICES.] The authority may use the 
services of the city attorney or hire a general counsel for its 
legal needs.  The city attorney or general counsel, as 
determined by the authority, is its chief legal advisor. 
    Subd. 4.  [SUPPLIES.] The authority may purchase the 
supplies and materials it needs to carry out sections 13 to 33. 
    Subd. 5.  [CITY PURCHASING.] An authority may use the 
facilities of its city's purchasing department in connection 
with construction work and to purchase equipment, supplies, or 
materials. 
    Subd. 6.  [CITY FACILITIES, SERVICES.] A city may furnish 
offices, structures and space, and stenographic, clerical, 
engineering, or other assistance to its authority. 
    Subd. 7.  [DELEGATION POWER.] The authority may delegate to 
one or more of its agents or employees powers or duties as it 
may deem proper. 
    Sec. 22.  [458C.11] [CONFLICT OF INTEREST.] 
    Except as authorized in section 471.88 a commissioner, 
officer, or employee of an authority must not acquire any 
financial interest, direct or indirect, in any project or in any 
property included or planned to be included in any project, nor 
shall the person have any financial interest, direct or 
indirect, in any contract or proposed contract for materials or 
service to be furnished or used in connection with any project. 
    Sec. 23.  [458C.12] [DEPOSITORIES; DEFAULT; COLLATERAL.] 
    Subdivision 1.  [NAMED; BOND.] Every two years an authority 
shall name national or state banks within the state as 
depositories.  Before acting as a depository, a named bank shall 
give the authority a bond approved as to form and surety by the 
authority.  The bond must be conditioned for the safekeeping and 
prompt repayment of deposits.  The amount of bond must be at 
least equal to the maximum sums expected to be deposited at any 
one time. 
    Subd. 2.  [ONE BANK ACCOUNT.] An authority may deposit all 
its money from any source in one bank account. 
    Subd. 3.  [DEFAULT; COLLATERAL.] When authority funds are 
deposited by the treasurer in a bonded depository, the treasurer 
and the surety on the treasurer's official bond are exempt from 
liability for the loss of the deposits because of the failure, 
bankruptcy, or other act or default of the depository.  However, 
an authority may accept assignments of collateral from its 
depository to secure deposits just as assignments of collateral 
are permitted by law to secure deposits of the authority's city. 
    Sec. 24.  [458C.13] [OBLIGATIONS.] 
    Subdivision 1.  [TAXES AND ASSESSMENTS PROHIBITED.] An 
authority must not levy a tax or special assessment, except as 
otherwise provided in sections 13 to 33, pledge the credit of 
the state or the state's municipal corporations or other 
subdivisions, or incur an obligation enforceable on property not 
owned by the authority. 
    Subd. 2.  [BUDGET TO CITY.] Annually, at a time fixed by 
charter, resolution, or ordinance of the city, an authority 
shall send its budget to its city's council.  The budget must 
include a detailed written estimate of the amount of money that 
the authority expects to need from the city to do authority 
business during the next fiscal year.  The needed amount is what 
is needed in excess of any expected receipts from other sources. 
    Subd. 3.  [FISCAL YEAR.] The fiscal year of the authority 
must be the same as the fiscal year of its city. 
    Subd. 4.  [REPORT TO CITY.] Annually, at a time and in a 
form fixed by the city council, the authority shall make a 
written report to the council giving a detailed account of its 
activities and of its receipts and expenditures during the 
preceding calendar year, together with additional matters and 
recommendations it deems advisable for the economic development 
of the city. 
    Subd. 5.  [AUDITS.] The financial statements of the 
authority must be prepared, audited, filed, and published or 
posted in the manner required for the financial statements of 
the city that established the authority.  The financial 
statements must permit comparison and reconciliation with the 
city's accounts and financial reports.  The report must be filed 
with the state auditor by June 30 of each year.  The auditor 
shall review the report and may accept it or, in the public 
interest, audit the books of the authority. 
    Subd. 6.  [COMPLIANCE EXAMINATIONS.] At the request of the 
city or upon the auditor's initiative, the state auditor may 
make a legal compliance examination of the authority for that 
city.  Each authority examined must pay the total cost of the 
examination, including the salaries paid to the examiners while 
actually engaged in making the examination.  The state auditor 
may bill monthly or at the completion of the audit.  All 
collections received must be deposited in the revolving fund of 
the state auditor. 
    Sec. 25.  [458C.14] [ECONOMIC DEVELOPMENT DISTRICTS; 
SCHEDULE OF POWERS.] 
    Subdivision 1.  [ESTABLISHMENT.] An economic development 
authority may create and define the boundaries of economic 
development districts at any place or places within the city if 
the district satisfies the requirements of section 273.73, 
subdivision 10, except that the district boundaries must be 
contiguous, and may use the powers granted in sections 13 to 33 
to carry out its purposes.  First the authority must hold a 
public hearing on the matter.  At least ten days before the 
hearing, the authority shall publish notice of the hearing in a 
daily newspaper of general circulation in the city.  Also, the 
authority shall find that an economic development district is 
proper and desirable to establish and develop within the city. 
    Subd. 2.  [ACQUIRE PROPERTY.] The economic development 
authority may acquire by lease, purchase, gift, devise, or 
condemnation proceedings the needed right, title, and interest 
in property to create economic development districts.  It shall 
pay for the property out of money it receives under sections 13 
to 33.  It may hold and dispose of the property subject to the 
limits and conditions in sections 13 to 33.  The title to 
property acquired by condemnation or purchase must be in fee 
simple, absolute.  The authority may accept an interest in 
property acquired in another way subject to any condition of the 
grantor or donor.  The condition must be consistent with the 
proper use of the property under sections 13 to 33.  Property 
acquired, owned, leased, controlled, used, or occupied by the 
authority for any of the purposes of this section is for public 
governmental and municipal purposes and is exempt from taxation 
by the state or by its political subdivisions.  The exemption 
applies only while the authority holds property for its own 
purpose.  The exemption is subject to the provisions of section 
272.02, subdivision 5.  When property is sold it begins to be 
taxed again.  
    Subd. 2a.  [OPTIONS.] The economic development authority 
may sign options to purchase, sell, or lease property.  
    Subd. 3.  [EMINENT DOMAIN.] The economic development 
authority may use eminent domain under chapter 117, or under its 
city's charter to acquire property it is authorized to acquire 
by condemnation.  The authority may acquire in this way property 
acquired by its owner by eminent domain or property already 
devoted to a public use only if its city's council approves.  
The authority may possess property to be condemned after it 
files a petition in condemnation proceedings describing the 
property.  The authority may abandon the condemnation before 
taking possession. 
    Subd. 4.  [CONTRACTS.] The economic development authority 
may make contracts for the purpose of economic development 
within the powers given it in sections 13 to 33.  The authority 
may contract or arrange with the federal government, or any of 
its departments, with persons, public corporations, the state, 
or any of its political subdivisions, commissions, or agencies, 
for separate or joint action, on any matter related to using the 
authority's powers or doing its duties.  The authority may 
contract to purchase and sell real and personal property.  
However, an obligation or expense must not be incurred except 
when existing appropriations together with the reasonable 
expected revenue of the authority from other sources are 
sufficient to discharge the obligation or pay the expense when 
due.  The state and its municipal subdivisions are not liable on 
the obligations. 
    Subd. 4a.  [LIMITED PARTNER.] The economic development 
authority may be a limited partner in a partnership whose 
purpose is consistent with the authority's purpose.  
    Subd. 5.  [RIGHTS; EASEMENTS.] The economic development 
authority may acquire rights or an easement for a term of years 
or perpetually for development of an economic development 
district. 
    Subd. 6.  [SUPPLIES; MATERIALS.] The economic development 
authority may buy the supplies and materials it needs to carry 
out this section.  
    Subd. 7.  [RECEIVE PUBLIC PROPERTY.] The economic 
development authority may accept land, money, or other 
assistance, whether by gift, loan or otherwise, in any form from 
the federal or state government, or an agency of either, or a 
local subdivision of state government to carry out sections 13 
to 33 and to acquire and develop an economic development 
district and its facilities under this section.  
    Subd. 8.  [DEVELOPMENT DISTRICT AUTHORITY.] The economic 
development authority may sell or lease land held by it for 
economic development in economic development districts.  The 
authority may acquire, sell, or lease single or multiple tracts 
of land regardless of size, to be developed as a part of the 
economic development of the district under sections 13 to 33.  
    Subd. 9.  [FOREIGN TRADE ZONE.] The economic development 
authority may apply to the board defined in United States Code, 
title 19, section 81a, for the right to use the powers provided 
in United States Code, title 19, sections 81a to 81u.  If the 
right is granted, the authority may use the powers.  One 
authority may apply with another authority. 
    Subd. 10.  [RELATION TO CHAPTER 474.] The economic 
development authority may exercise powers and duties of a 
redevelopment agency under chapter 474, for a purpose in 
sections 13 to 33 or 462.411 to 462.705.  The authority may also 
use the powers and duties in sections 13 to 33 and 462.411 to 
462.705 for a purpose in chapter 474. 
    Subd. 11.  [PUBLIC FACILITIES.] The authority may operate 
and maintain a public parking facility or other public facility 
to promote development in an economic development district. 
    Sec. 26.  [458C.15] [GENERAL OBLIGATION BONDS.] 
    Subdivision 1.  [AUTHORITY; PROCEDURE.] An economic 
development authority may issue general obligation bonds in the 
principal amount authorized by two-thirds majority vote of its 
city's council.  The bonds may be issued in anticipation of 
income from any source.  The bonds may be issued:  (1) to secure 
funds needed by the authority to pay for acquired property or 
(2) for other purposes in sections 13 to 33.  The bonds must be 
in the amount and form and bear interest at the rate set by the 
city council.  The authority shall sell the bonds to the highest 
bidder.  The authority shall publish notice of the time and the 
place for receiving bids, once at least two weeks before the bid 
deadline.  Sections 13 to 33 govern issuance of the bonds.  When 
those sections are silent, chapter 475 governs.  The authority 
when issuing the bonds is a municipal corporation under chapter 
475, and issuance of the bonds is subject to the provisions of 
chapter 475. 
    Subd. 2.  [DETAIL; MATURITY.] The authority with the 
consent of its city's council shall set the date, denominations, 
place of payment, form, and details of the bonds.  The bonds 
must mature serially.  The first installment is due in not more 
than three years and the last in not more than 20 years from the 
date of issuance.  
    Subd. 3.  [SIGNATURES; COUPONS; LIABILITY.] The bonds must 
be signed by the president of the authority, be attested by its 
secretary, and be countersigned by its treasurer; the signatures 
may be facsimile signatures.  The interest coupons if any, must 
be attached to the bonds.  The coupons must be executed and 
authenticated by the printed, engrossed, or lithographed 
facsimile signature of the authority's president and secretary.  
The bonds do not impose any personal liability on a member of 
the authority. 
    Subd. 4.  [PLEDGE.] The bonds must be secured by the pledge 
of the full faith, credit, and resources of the issuing 
authority's city.  The authority may pledge the full faith, 
credit, and resources of the city only if the city specifically 
authorizes the authority to do so.  The city council must first 
decide whether the issuance of the bonds by the authority is 
proper in each case and if so, what amount of bonds to issue.  
The city council shall give specific consent in an ordinance to 
the pledge of the city's full faith, credit, and resources.  The 
authority shall pay the principal amount of the bonds and the 
interest on it from taxes levied under this section to make the 
payment or from authority income from any source.  
    Subd. 5.  [TAX LEVY.] An authority that issues bonds under 
this section, shall, before issuing them, levy a tax for each 
year on the taxable property in the authority's city.  The tax 
must be for at least five percent more than the amount required 
to pay the principal and interest on the bonds as the principal 
and interest mature.  The tax must be levied annually until the 
principal and interest are paid in full.  After the bonds have 
been delivered to the purchasers, the tax must not be repealed 
until the debt is paid.  After the bonds are issued, the 
authority need not take any more action to authorize extending, 
assessing, and collecting the tax.  The authority's secretary 
shall immediately send a certified copy of the levy to the 
county auditor.  The secretary shall send with the copy full 
information on the bonds for which the tax is levied.  The 
county auditor shall extend and assess the levied tax annually 
until the principal and interest are paid in full.  The 
authority shall transfer the surplus from the excess levy in 
this section to a sinking fund after the principal and interest 
for which the tax was levied and collected is paid.  The 
authority may direct its secretary to send a certificate to the 
county auditor before October 15 in a year.  The certificate 
must state how much available income including the amount in the 
sinking fund the authority will use to pay principal or interest 
or both on each specified issue of the authority's bonds.  The 
auditor shall then reduce the bond levy for that year by that 
amount.  The authority shall then set aside the certified amount 
and may not use it for any purpose except to pay the principal 
and interest on the bonds.  The taxes in this section shall be 
collected and sent to the authority by the county treasurer 
under the law on collection of other taxes.  The taxes must be 
used only to pay the bonds when due.  
    Subd. 6.  [AUTHORIZED SECURITIES.] Bonds legally issued 
under this chapter are authorized securities under section 
50.14.  A savings bank, trust company, or insurance company may 
invest in them.  A public or municipal corporation may invest 
its sinking funds in them.  The bonds may be pledged by a bank 
or trust company as security for the deposit of public money in 
place of a surety bond. 
    The authority's bonds are instrumentalities of a public 
governmental agency. 
    Sec. 27.  [458C.16] [REVENUE BONDS; PLEDGE; COVENANTS.] 
    Subdivision 1.  [AUTHORITY.] An economic development 
authority may decide by resolution to issue its revenue bonds 
either at one time or in series from time to time.  The revenue 
bonds may be issued to provide money to pay to acquire land 
needed to operate the authority, to purchase or construct 
facilities, to purchase, construct, install, or furnish capital 
equipment to operate a facility for economic development of any 
kind within the city, or to pay to extend, enlarge, or improve a 
project under its control.  The issued bonds may include the 
amount the authority considers necessary to establish an initial 
reserve to pay principal and interest on the bonds.  The 
authority shall state in a resolution how the bonds and their 
attached interest coupons are to be executed.  
    Subd. 2.  [FORM.] The bonds of each series issued by the 
authority under this section shall bear interest at a rate or 
rates, shall mature at the time or times within 20 years from 
the date of issuance and shall be in the form, whether payable 
to bearer, registrable as to principal, or fully registrable, as 
may be determined by the authority.  Section 26, subdivision 6, 
applies to all bonds issued under this section, and the bonds 
and their coupons, if any, when payable to bearer, shall be 
negotiable instruments. 
    Subd. 3.  [SALE.] The sale of revenue bonds issued by the 
authority shall be at public or private sale.  The bonds may be 
sold in the manner and for the price that the authority 
determines to be for the best interest of the authority.  The 
bonds may be made callable, and if so issued, may be refunded. 
    Subd. 4.  [AGREEMENTS.] The authority may by resolution 
make an agreement or covenant with the bondholders or their 
trustee.  The authority must first decide that the agreement or 
covenant is needed or desirable to do what the authority may do 
under this section and to assure that the revenue bonds are 
marketable and promptly paid. 
    Subd. 5.  [REVENUE PLEDGE.] In issuing general obligation 
or revenue bonds, the authority may secure the payment of the 
principal and the interest on the bonds by a pledge of and lien 
on authority revenue.  The revenue must come from the facility 
to be acquired, constructed, or improved with the bond proceeds 
or from other facilities named in the bond-authorizing 
resolutions.  The authority also may secure the payment with its 
promise to impose, maintain, and collect enough rentals, rates 
and charges, for the use and occupancy of the facilities and for 
services furnished in connection with the use and occupancy, to 
pay its current expenses to operate and maintain the named 
facilities, and to produce and put enough net revenue in a 
special fund to meet the interest and principal requirements of 
the bonds, and to collect and keep any more money required by 
the resolutions.  The authority shall decide what is current 
expense under this subdivision based on what is normal and 
reasonable under accepted accounting principles.  Revenues 
pledged by the authority must not be used or pledged for any 
other authority purpose or to pay any other bonds issued under 
this section or under section 26, unless the other use or pledge 
is specifically authorized in the bond-authorizing resolutions. 
    Subd. 6.  [NOT CITY DEBT.] Revenue bonds issued under this 
section are not a debt of the authority's city nor a pledge of 
that city's full faith and credit.  The bonds are payable only 
from project revenue as described in this section.  A revenue 
bond must contain on its face a statement to the effect that the 
economic development authority and its named city do not have to 
pay the bond or the interest on it except from revenue and that 
the faith, credit, and taxing power of the city are not pledged 
to pay the principal of or the interest on the bond. 
    Subd. 7.  [NOT APPLICABLE.] Sections 474.01, subdivisions 
7a, 7b, and 8 and 474.02, subdivision 1d, do not apply to 
revenue bonds issued under this section and chapter 474 if the 
interest on the revenue bonds is subject to both state and 
federal income tax or if the revenue bond proceeds are not 
loaned by the authority to a private person.  
    Subd. 8.  [TAX INCREMENT BONDS.] Obligations secured or 
payable from tax increment revenues and issued pursuant to this 
section or section 26 are subject to the provisions of section 
273.77. 
    Sec. 28.  [458C.17] [SECTIONS THAT APPLY IF FEDERAL LIMIT 
APPLIES.] 
    Sections 474.16 to 474.23 apply to obligations issued under 
sections 13 to 33 that are limited by a federal limitation act 
defined in section 474.16, subdivision 5. 
    Sec. 29.  [458C.18] [ADDITIONAL POWERS.] 
    Subdivision 1.  [AS AGENT.] An economic development 
authority may cooperate with or act as agent for the federal or 
the state government, or a state public body, or an agency or 
instrumentality of a government or a public body to carry out 
sections 13 to 33 or any other related federal, state or local 
law in the area of economic development district improvement. 
    Subd. 2.  [STUDIES, ANALYSIS, RESEARCH.] An authority may 
study and analyze economic development needs in the city, and 
ways to meet the needs.  An authority may study the desirable 
patterns for land use for economic development and community 
growth and other factors affecting local economic development in 
the city and make the result of the studies available to the 
public and to industry in general.  An authority may engage in 
research and give out information on economic development within 
the city. 
     Subd. 3.  [PUBLIC RELATIONS.] To further an authorized 
purpose an authority may (1) join an official, industrial, 
commercial, or trade association, or another organization 
concerned with the purpose, (2) have a reception of officials 
who may contribute to advancing the city and its economic 
development, and (3) carry out other public relations activities 
to promote the city and its economic development.  Activities 
under this subdivision have a public purpose. 
    Subd. 4.  [ACCEPT PUBLIC LAND.] An authority may accept 
conveyances of land from all other public agencies, commissions 
or other units of government, if the land can be properly used 
by the authority in an economic development district, to carry 
out the purposes of sections 13 to 33. 
    Subd. 5.  [ECONOMIC DEVELOPMENT.] An authority may carry 
out the law on economic development districts to develop and 
improve the lands in an economic development district to make it 
suitable and available for economic development uses and 
purposes.  An authority may fill, grade, and protect the 
property and do anything necessary and expedient, after 
acquiring the property, to make it suitable and attractive as a 
tract for economic development.  An authority may lease some or 
all of its lands or property and may set up local improvement 
districts in all or part of an economic development district. 
    In general, with respect to an economic development 
district, an authority may use all the powers given an economic 
development authority by law. 
    Subd. 6.  [AS BORROWER.] An authority after authorizing 
bonds under section 26 or 27 may borrow to provide money 
immediately required for the bond purpose.  The loans must not 
exceed the amount of the bonds.  The authority shall by 
resolution decide the terms of the loans.  The loans must be 
evidenced by negotiable notes due in not more than 12 months 
from the date of the loan payable to the order of the lender or 
to bearer, to be repaid with interest from the proceeds of the 
bonds when the bonds are issued and delivered to the bond 
purchasers.  The loan must not be obtained from any commissioner 
of the authority or from any corporation, association, or other 
institution of which an authority commissioner is a stockholder 
or officer. 
    Subd. 7.  [AS LENDER.] The proceeds of obligations issued 
by an authority under section 27 and temporary loans obtained 
under this section may be used to make or purchase loans for 
economic development facilities that the authority believes will 
require financing.  To make or purchase the loans, the authority 
may enter into loan and related agreements, both before and 
after issuing the obligations, with persons, firms, public or 
private corporations, federal or state agencies, and 
governmental units under terms and conditions the authority 
considers appropriate.  A governmental unit in the state may 
apply, contract for, and receive the loans.  Chapter 475 does 
not apply to the loans. 
    Subd. 8.  [MINED SPACE DEVELOPMENT.] Upon delegation by a 
municipality as provided in section 472B.08, an authority may 
exercise any of the delegated powers in connection with mined 
underground space development under sections 472B.03 to 472B.07. 
    Subd. 9.  [CITY FACILITIES, SERVICES.] An authority city 
may furnish offices, structures, and space, stenographic, 
clerical, engineering, or other assistance to its authority. 
    Sec. 30.  [458C.19] [SALE OF PROPERTY.] 
    Subdivision 1.  [POWER.] An economic development authority 
may sell and convey property owned by it within the city or an 
economic development district.  First, the authority must decide 
that the sale and conveyance are in the best interests of the 
city or district and its people, and that the transaction 
furthers its general plan of economic development.  This section 
is not limited by other law on powers of economic development 
authorities.  
    Subd. 2.  [NOTICE; HEARING.] An authority shall hold a 
hearing on the sale.  At the hearing a taxpayer may testify for 
or against the sale.  At least ten, but not more than 20, days 
before the hearing the authority shall publish notice of the 
hearing on the proposed sale in a newspaper.  The newspaper must 
be published and have general circulation in the authority's 
county and city.  The notice must describe the property to be 
sold and state the time and place of the hearing.  The notice 
must also state that the public may see the terms and conditions 
of the sale at the authority's office and that at the hearing 
the authority will meet to decide if the sale is advisable.  
    Subd. 3.  [DECISION; APPEAL.] The authority shall make its 
findings and decision on whether the sale is advisable and enter 
its decision on its records within 30 days of the hearing.  A 
taxpayer may appeal the decision.  The appeal is made by filing 
a notice of appeal with the district court in the city or 
economic development district's county and serving the notice on 
the secretary of the authority, within 20 days after the 
decision is entered.  The only ground for appeal is that the 
action of the authority was arbitrary, capricious, or contrary 
to law.  
    Subd. 4.  [TERMS.] The terms and conditions of sale of the 
property must include the use that the bidder will be allowed to 
make of it.  The authority may require the purchaser to file 
security to assure that the property will be given that use.  In 
deciding the sale terms and conditions the authority may 
consider the nature of the proposed use and the relation of the 
use to the improvement of the authority's city and the business 
and the facilities of the authority in general.  The sale must 
be made on the authority's terms and conditions.  The authority 
may publish an advertisement for bids on the property at the 
same time and in the same manner as the notice of hearing 
required in this section.  The authority may award the sale to 
the bid considered by it to be most favorable considering the 
price and the specified intended use.  The authority may also 
sell the property at private sale at a negotiated price if after 
its hearing the authority considers that sale to be in the 
public interest and to further the aims and purposes of sections 
13 to 33. 
    Subd. 5.  [ONE-YEAR DEADLINE.] The purchaser shall, within 
one year from the date of purchase, devote the property to its 
intended use, or shall begin work on the improvements to the 
property to devote it to that use.  If the purchaser fails to do 
so, the authority may cancel the sale and title to the property 
shall return to it.  The authority may extend the time to comply 
with a condition if the purchaser has good cause.  The terms of 
sale may contain other provisions that the authority considers 
necessary and proper to protect the public interest.  A 
purchaser must not transfer title to the property within one 
year of purchase without the consent of the authority.  
    Subd. 6.  [COVENANT RUNNING WITH THE LAND.] A sale made 
under this section must incorporate in the deed as a covenant 
running with the land the conditions of sections 13 to 33 
relating to the use of the land.  If the covenant is violated 
the authority may declare a breach of the covenant and seek a 
judicial decree from the district court declaring a forfeiture 
and a cancellation of the deed.  
    Subd. 7.  [PLANS; SPECIFICATIONS.] A conveyance must not be 
made until the purchaser gives the authority plans and 
specifications to develop the property sold.  The authority must 
approve the plans and specifications in writing.  The 
preparation of final plans and specifications before the hearing 
on the sale is not required by this subdivision but the 
authority may make that requirement. 
    Sec. 31.  [458C.20] [ADVANCES BY AUTHORITY.] 
    An authority may advance its general fund money or its 
credit, or both, without interest, for the objects and purposes 
of sections 13 to 33.  The advances must be repaid from the sale 
or lease, or both, of developed or redeveloped lands.  If the 
money advanced for the development or redevelopment was obtained 
from the sale of the authority's general obligation bonds, then 
the advances must have not less than the average annual interest 
rate that is on the authority's general obligation bonds that 
are outstanding at the time the advances are made.  The 
authority may advance repaid money for more objects and purposes 
of sections 13 to 33 subject to repayment in the same manner.  
The authority must still use rentals of lands acquired with 
advanced money to collect and maintain reserves to secure the 
payment of principal and interest on revenue bonds issued to 
finance economic development facilities, if the rentals have 
been pledged for that purpose under section 27.  Advances made 
to acquire lands and to construct facilities for recreation 
purposes if authorized by law need not be reimbursed under this 
section.  Sections 13 to 33 do not exempt lands leased from the 
authority to a private person, or entity from assessments or 
taxes against the leased property while the lessee is liable for 
the assessments or taxes under the lease. 
    Sec. 32.  [458C.22] [CITY MAY LEVY TAXES FOR ECONOMIC 
DEVELOPMENT AUTHORITY.] 
    Subdivision 1.  [CITY TAX LEVY.] A city may, at the request 
of the authority, levy a tax in any year for the benefit of the 
authority.  The tax must be for not more than .75 mill times the 
assessed valuation of taxable property in the city.  The tax may 
be levied beyond levy limits in law.  The amount levied must be 
paid by the city treasurer to the treasurer of the authority, to 
be spent by the authority. 
    Subd. 2.  [REVERSE REFERENDUM.] A city may increase its 
levy for economic development authority purposes under 
subdivision 1 in the following way.  Its city council must first 
pass a resolution stating the proposed amount of levy increase.  
The city must then publish the resolution together with a notice 
of public hearing on the resolution for two successive weeks in 
its official newspaper or if none exists in a newspaper of 
general circulation in the city.  The hearing must be held two 
to four weeks after the first publication.  After the hearing, 
the city council may decide to take no action or may adopt a 
resolution authorizing the proposed increase or a lesser 
increase.  A resolution authorizing an increase must be 
published in the city's official newspaper or if none exists in 
a newspaper of general circulation in the city.  The resolution 
is not effective if a petition requesting a referendum on the 
resolution is filed with the city clerk within 30 days of 
publication of the resolution.  The petition must be signed by 
voters equaling five percent of the votes cast in the city in 
the last general election.  The election must be held pursuant 
to the procedure specified in section 275.58. 
    Sec. 33.  [458C.23] [SPECIAL LAW; OPTIONAL USE.] 
    A city that has established a port authority by special law 
or that has been granted the power to establish a port authority 
by special law, or a city whose city council has been authorized 
to exercise the powers of a port authority by special law may 
elect to use the powers granted in sections 13 to 33.  If the 
election is made, the powers and duties set forth in sections 13 
to 33 supersede the special law and the special law must not be 
used anymore.  The use of powers under sections 13 to 33 by a 
city described in this section does not impair the security of 
any obligations issued or contracts or agreements executed under 
the special law.  Control, authority, and operation of any 
project may be transferred to the authority in the manner 
provided in section 17. 
    Sec. 34.  [LEGISLATIVE FINDINGS.] 
    The statement of policy and the findings of the legislature 
in enacting Laws 1957, chapter 812, are confirmed and apply 
equally to the exercise of powers by economic development 
authorities and statutory or home rule charter cities pursuant 
to sections 13 to 33. 
    Sec. 35.  Minnesota Statutes 1984, section 462C.02, 
subdivision 6, is amended to read: 
    Subd. 6.  "City" means any statutory or home rule charter 
city, or any public body which (a) is the housing and 
redevelopment authority in and for a city, or the port authority 
of a city, or an economic development authority of a city 
established under sections 13 to 33, and (b) is authorized by 
ordinance to exercise, on behalf of a city, the powers conferred 
by sections 462C.01 to 462C.08.  
    Sec. 36.  Minnesota Statutes 1984, section 462C.02, 
subdivision 9, is amended to read: 
    Subd. 9.  "Targeted area" means 
    (a) a development district established pursuant to section 
472A.03, 
    (b) a development district established pursuant to Laws 
1971, Chapter 677 as amended, 
    (c) a redevelopment project established pursuant to section 
462.521, 
    (d) an industrial development district established pursuant 
to section 458.191, 
    (e) a census tract in which 70 percent or more of the 
families have income which is 80 percent or less of the 
statewide median family income as estimated by the United States 
department of housing and urban development, or 
    (f) an area of chronic economic distress designated by the 
Minnesota housing finance agency, or 
    (g) an economic development district established pursuant 
to section 25. 
    Sec. 37.  Minnesota Statutes 1985 Supplement, section 
462C.12, subdivision 2, is amended to read: 
    Subd. 2.  [POWERS.] The board is granted the following 
powers:  
    (a) The board may issue obligations and other forms of 
indebtedness under this section, subject to the terms and 
conditions set forth in the joint powers agreement, as may be 
from time to time amended. 
    (b) The board is authorized to exercise the powers 
conferred upon the cities of Minneapolis and St. Paul and their 
designated housing and redevelopment authorities, or the powers 
of an agency exercising the powers of a housing and 
redevelopment authority by this chapter and chapter 462 and any 
other general or special law of the state of Minnesota relating 
to housing or housing finance.  The powers which may be 
exercised by the board include, without limitation, the power to 
undertake and implement projects, developments, or programs, the 
power to issue and sell obligations and other forms of 
indebtedness payable exclusively from the revenues of the 
programs, projects, or developments undertaken by the board, or 
any of the powers the Minnesota housing finance agency may 
exercise under chapter 462A, provided that the obligations and 
other forms of indebtedness may be sold upon terms and 
conditions as the board may from time to time determine.  The 
board may exercise the powers conferred by this section only 
with respect to projects, programs, or developments within the 
corporate limits of the cities of Minneapolis and St. Paul, 
except as may be otherwise provided in a joint powers agreement 
entered into under section 471.59 between the board and any 
other city, housing and redevelopment authority, or port 
authority or economic development authority established under 
sections 13 to 33 in the state of Minnesota.  
    (c) For the purposes of section 462C.09, the board may be 
authorized by the cities of Minneapolis and St. Paul, or by any 
other city with which the board enters into a joint powers 
agreement, to issue revenue bonds or obligations in an amount 
not to exceed the amount of bonds allocated by general or 
special law to such cities, or the board may issue mortgage 
credit certificates in lieu thereof.  
    Sec. 38.  Minnesota Statutes 1984, section 471.88, 
subdivision 1, is amended to read: 
    Subdivision 1.  The governing body of any port authority, 
seaway port authority, economic development authority, town, 
school district, hospital district, county, or city, by 
unanimous vote, may contract for goods or services with an 
interested officer of the governmental unit in any of the 
following cases. 
    Sec. 39.  Minnesota Statutes 1984, section 471.88, 
subdivision 9, is amended to read: 
    Subd. 9.  When a port authority commissioner or economic 
development authority commissioner is engaged in or employed by 
a firm engaged in the business of importing or exporting or 
general trade, it shall be lawful for the authority to do 
business with the commissioner or his employer provided that in 
the fixing of any rates affecting shippers or users of the 
terminal facility, said commissioner shall not vote thereon. 
    Sec. 40.  Minnesota Statutes 1984, section 471.88, 
subdivision 11, is amended to read: 
    Subd. 11.  When a commissioner of any public housing or, 
port authority, or economic development authority is employed by 
a bank engaged in making loans or performing trust services 
involving real or personal property affected by any plan or such 
housing or port authority, no restriction shall apply to any 
such loans made or trust services performed by said bank if the 
commissioner shall disclose the nature of such loans or trust 
services of which he has personal knowledge, which disclosure 
shall be entered upon the minutes of such authority. 
    Sec. 41.  Minnesota Statutes 1985 Supplement, section 
472B.04, is amended to read: 
    472B.04 [POWERS OF MUNICIPALITY.] 
    A municipality may, to accomplish the purposes of this 
chapter: 
    (1) exercise any or all powers enumerated in chapter 458, 
but only if the municipality has been granted authority to 
exercise the powers enumerated in sections 13 to 33, chapters 
458, 462, 472, 472A, and 474, in conjunction with the powers 
granted by this chapter; 
    (2) provide public facilities pursuant to chapters 429, 
430, and any charter provision or any special law; 
    (3) acquire, by lease, purchase, gift, condemnation, or 
otherwise, land or interests in land, and convey land or 
interests in land.  A municipality is empowered to acquire by 
condemnation any property, property right or interest in 
property, corporate or incorporeal, within its boundaries which 
may be needed by it for a project, for access, including surface 
and subsurface access, for ventilation, or for any other purpose 
which it finds by resolution to be needed by it in connection 
with mined underground space development; and the fact that the 
property or interest in property so needed has been acquired by 
the owner under the power of eminent domain, or is already 
devoted to a public use, or is owned by the University of 
Minnesota, any city, county, school district, town, other 
municipality, or other governmental subdivision, railroad, or 
public or private utility, shall not prevent its acquisition by 
the municipality by the exercise of the right of eminent domain 
hereby conferred, provided the existing use thereof is not 
impaired; the necessity of the taking of any property or 
interest in property by the municipality shall be determined by 
resolution duly adopted by the governing body of the 
municipality, which shall describe the property or interest as 
nearly as it may be described and state the use and purpose to 
which it is to be devoted; except as otherwise provided in this 
chapter, the right of eminent domain shall be exercised in 
accordance with chapter 117, provided that any exercise of the 
right of eminent domain hereby conferred shall not be for the 
purpose of preventing the development, mining, and use of 
mineral resources; 
    (4) acting alone or with others, acquire, purchase, 
construct, lease, mortgage, maintain, operate, and convey 
projects; 
    (5) borrow money to carry out the purposes of this chapter; 
    (6) enter into contracts, sue and be sued and do or 
accomplish all other acts and things necessary or convenient to 
carry out the purposes and policies of this chapter; and 
    (7) exercise bonding authority as provided in section 
472B.05.  
    Sec. 42.  Minnesota Statutes 1984, section 474.02, 
subdivision 3, is amended to read: 
    Subd. 3.  "Redevelopment agency" means any port authority 
referred to in chapter 458, or any city authorized by general or 
special law to exercise the powers of a port authority; any 
economic development authority referred to in sections 13 to 33; 
any housing and redevelopment authority referred to in chapter 
462 or any body authorized to exercise the powers of a housing 
and redevelopment authority; and any area or municipal 
redevelopment agency referred to in chapter 472. 
    Sec. 43.  Minnesota Statutes 1984, section 474.16, 
subdivision 2, is amended to read: 
    Subd. 2.  "Local issuer" means any home rule charter or 
statutory city, any town, any housing and redevelopment 
authority referred to in chapter 462 or any body authorized to 
exercise the powers of a housing and redevelopment authority, 
any port authority referred to in chapter 458, any economic 
development authority referred to in sections 13 to 33, or any 
body authorized to exercise the powers of a port authority, any 
area or municipal redevelopment agency referred to in chapter 
472, any county, or any other municipal authority or agency 
established pursuant to special law other than the iron range 
resources and rehabilitation board, acting as an issuer of 
obligations pursuant to law. 
    Sec. 44.  [DOWNTOWN TAXING AREA.] 
    If a bill is enacted into law in the 1986 legislative 
session which authorizes the city of Minneapolis to issue bonds 
and expend certain funds including taxes to finance the 
acquisition and betterment of a convention center and related 
facilities, which authorizes certain taxes to be levied in a 
downtown taxing area, then, notwithstanding the provisions of 
that law "downtown taxing area" shall mean the geographic area 
bounded by the portion of the Mississippi River between I-35W 
and Washington Avenue, the portion of Washington Avenue between 
the river and I-35W, the portion of I-35W between Washington 
Avenue and 8th Street South, the portion of 8th Street South 
between I-35W and Portland Avenue South, the portion of Portland 
Avenue South between 8th Street South and I-94, the portion of 
I-94 from the intersection of Portland Avenue South to the 
intersection of I-94 and the Burlington Northern Railroad 
tracks, the portion of the Burlington Northern Railroad tracks 
from I-94 to Main Street and including Nicollet Island, and the 
portion of Main Street to Hennepin Avenue and the portion of 
Hennepin Avenue between Main Street and 2nd Street S.E., and the 
portion of 2nd Street S.E. between Main Street and Bank Street, 
and the portion of Bank Street between 2nd Street S.E. and 
University Avenue S.E., and the portion of University Avenue 
S.E. between Bank Street and I-35W, and by I-35W from University 
Avenue S.E., to the river.  
    Sec. 45.  [EFFECTIVE DATE.] 
    This act is effective the day following final enactment. 
    Approved March 24, 1986