1.1    .................... moves to amend H. F. No. 886, the delete everything amendment,
1.2as follows:
1.3Page .., after line .., insert:

1.4    "Sec. .... Minnesota Statutes 2006, section 16A.695, subdivision 2, is amended to read:
1.5    Subd. 2. Leases and management contracts. (a) A public officer or agency that is
1.6authorized by law to lease or enter into a management contract with respect to state bond
1.7financed property shall comply with this subdivision.
1.8    (b) The lease or management contract may be entered into for the express purpose of
1.9carrying out a governmental program established or authorized by law and established by
1.10official action of the contracting public officer or agency, in accordance with orders of the
1.11commissioner intended to ensure the legality and tax-exempt status of bonds issued to
1.12finance the property, and with the approval of the commissioner. A lease or management
1.13contract, including any renewals that are solely at the option of the lessee, must be for a
1.14term substantially less than the useful life of the property, but may allow renewal beyond
1.15that term upon a determination by the lessee provided that the lessee demonstrates to the
1.16lessor that the use continues to carry out the governmental program. In the event that the
1.17lessor and lessee do not renew the lease or management contract and if the lessee has
1.18contributed to the land and the capital improvements on the state bond financed property,
1.19the lessor may agree to reimburse the lessee for its investment in the land and capital
1.20improvements by purchasing the lessee's interest in the property or otherwise, which
1.21amount may be paid, at the option of the lessor and lessee, at the time of nonrenewal
1.22without a requirement of a prior escrow for funds or at such later date and additional
1.23terms as are agreed to by the lessor and the lessee. A lease or management contract must
1.24be terminable by the contracting public officer or agency if the other contracting party
1.25defaults under the contract or if the governmental program is terminated or changed, and
1.26must provide for program oversight by the contracting public officer or agency. Money
1.27received by the public officer or agency under the lease or management contract that is
2.1not needed to pay and not authorized to be used to pay operating costs of the property,
2.2or to pay the principal, interest, redemption premiums, and other expenses when due on
2.3debt related to the property other than state bonds, must be:
2.4    (1) paid to the commissioner in the same proportion as the state bond financing is
2.5to the total public debt financing for the property, excluding debt issued by a unit of
2.6government for which it has no financial liability;
2.7    (2) deposited in the state bond fund; and
2.8    (3) used to pay or redeem or defease bonds issued to finance the property in
2.9accordance with the commissioner's order authorizing their issuance.
2.10    The money paid to the commissioner is appropriated for this purpose.
2.11    (c) With the approval of the commissioner, a lease or management contract between
2.12a city and a nonprofit corporation under section 471.191, subdivision 1, need not require
2.13the lessee to pay rentals sufficient to pay the principal, interest, redemption premiums,
2.14and other expenses when due with respect to state bonds issued to acquire and better
2.15the facilities.
2.16EFFECTIVE DATE.This section is effective retroactively from January 1, 2006,
2.17and applies to lease or management agreements entered into on or after that date.

2.18    Sec. .... Minnesota Statutes 2006, section 16A.695, subdivision 3, is amended to read:
2.19    Subd. 3. Sale of property. A public officer or agency shall not sell any state bond
2.20financed property unless the public officer or agency determines by official action that
2.21the property is no longer usable or needed by the public officer or agency to carry out
2.22the governmental program for which it was acquired or constructed, the sale is made as
2.23authorized by law, the sale is made for fair market value, and the sale is approved by the
2.24commissioner. If any state bonds issued to purchase or better the state bond financed
2.25property that is sold remain outstanding on the date of sale, the net proceeds of sale must
2.26be applied as follows:
2.27    (1) if the state bond financed property was acquired and bettered solely with state
2.28bond proceeds, the net proceeds of sale must be paid to the commissioner, deposited in
2.29the state bond fund, and used to pay or redeem or defease the outstanding state bonds in
2.30accordance with the commissioner's order authorizing their issuance, and the proceeds are
2.31appropriated for this purpose; or
2.32    (2) if the state bond financed property was acquired or bettered partly with state
2.33bond proceeds and partly with other money, the net proceeds of sale must be used: first, to
2.34pay to the state the amount of state bond proceeds used to acquire or better the property;
2.35second, to pay in full any outstanding public or private debt incurred to acquire or better
3.1the property; and third, to pay interested public and private entities, other than any
3.2private lender already paid in full, the amount of monies contributed to the acquisition
3.3or betterment of the property; and fourth, any excess over the amount needed for those
3.4purposes must be divided in proportion to the shares contributed to the acquisition or
3.5betterment of the property and paid to the interested public and private entities, other than
3.6any private lender already paid in full, and the proceeds are appropriated for this purpose.
3.7In calculating the share contributed by each entity, the amount to be attributed to the owner
3.8of the property shall be the fair market value of the property that was bettered by state
3.9bond proceeds at the time the betterment began.
3.10    When all of the net proceeds of sale have been applied as provided in this
3.11subdivision, this section no longer applies to the property.
3.12EFFECTIVE DATE.This section is effective retroactively from January 1, 2006,
3.13and applies to lease or management agreements entered into on or after that date.

3.14    Sec. .... Minnesota Statutes 2006, section 16A.695, is amended by adding a subdivision
3.15to read:
3.16    Subd. 6. Match requirements. Recipients of grants from money appropriated
3.17from the bond proceeds funds may be required to demonstrate a commitment of funds
3.18from nonstate sources. These matching funds may be pledged payments that have been
3.19deposited into a segregated account and/or multiyear pledges that are converted into
3.20cash or cash equivalent through a loan or irrevocable letter of credit from a financial
3.21institution. The loan or irrevocable letter of credit may be secured by a lien on the state
3.22bond financed property.
3.23EFFECTIVE DATE.This section is effective retroactively as of January 1, 2006,
3.24and applies to lease or management agreements entered into on or after that date.

3.25    Sec. .... Minnesota Statutes 2006, section 16A.695, is amended by adding a subdivision
3.26to read:
3.27    Subd. 7. Leased state bond financed property. A public officer or agency may
3.28lease real property and improvements which are to be acquired or improved with state
3.29bond proceeds. The lease shall be for a term equal to or longer than the useful life of the
3.30property. The expiration of the lease upon the end of its term shall not require that the
3.31state be repaid or that the property be sold and upon such expiration the real property and
3.32improvements shall no longer be state bond financed property.
3.33EFFECTIVE DATE.This section is effective retroactively from January 1, 2006,
3.34and applies to lease or management agreements entered into on or after that date."