1.1    .................... moves to amend H. F. No. 1175 as follows:
1.2Page 1, after line 7 insert:

1.3    "Section 1. Minnesota Statutes 2006, section 116R.01, subdivision 6, is amended to
1.4read:
1.5    Subd. 6. Project. "Project" means the facilities or any property described in section
1.6116R.02, subdivision 5 or 6, as applicable.

1.7    Sec. 2. Minnesota Statutes 2006, section 116R.02, subdivision 1, is amended to read:
1.8    Subdivision 1. Sale authorization. The commissioner of finance, upon the request
1.9of the governor, may issue and sell revenue bonds as provided under sections 116R.01 to
1.10116R.16 116R.15 in one or more series or issues for the purposes provided in this section
1.11in the aggregate principal amount of up to $350,000,000, except for refunding bonds.
1.12Proceeds of the bonds and investment income on the proceeds are appropriated in the
1.13amounts and for the purposes specified in subdivisions 2, and 5, and 6 and section 116R.04.

1.14    Sec. 3. Minnesota Statutes 2006, section 116R.02, subdivision 2, is amended to read:
1.15    Subd. 2. Loan, lease, and revenue agreements. (a) The commissioner may loan
1.16the proceeds of the bonds, make other loans or enter into lease agreements or other
1.17revenue agreements for the projects project described in subdivisions 5 and 6 subdivision
1.185. The commissioner may provide for servicing of the loans and agreements, the times
1.19they are payable and the amounts of payments, the amount of the loans and agreements,
1.20their security, and other terms, conditions, and provisions necessary or convenient in
1.21connection with them and may enter into all necessary contracts and security instruments
1.22in connection with them. The commissioner shall seek to obtain the best available terms
1.23and security for the loans or agreements. The terms and security must be reasonably
1.24determined by the commissioner to be adequate and of the kind and degree which would
1.25be required by an investment banking or other financial institution. The facilities described
2.1in subdivisions 5 and 6 subdivision 5 must be pledged as collateral for the loans made and
2.2bonds issued under sections 116R.01 to 116R.16 116R.15.
2.3    (b) To reduce the risk that state general funds will be needed to pay debt service on
2.4the state guaranteed bonds, the commissioner must require that the financing arrangements
2.5include a coverage test satisfactory to the commissioner so that the sum of the value of the
2.6assets and other security pledged to the payment of bonds or the rent due under any lease
2.7of the project and taken into account by the commissioner is no less than 125 percent of
2.8the difference between the outstanding state guaranteed bonds, and any cash collateral
2.9held in a debt service reserve account and pledged to the payment of principal and interest
2.10for the state guaranteed bonds and no other bonds. Assets and other security that may be
2.11taken into account include (1) net unencumbered value of the project and any collateral
2.12or third party guaranty, including a letter of credit, pledged or otherwise furnished by a
2.13user of the project or by a benefited airline company as security for the payment of rent,
2.14(2) bond proceeds, including earnings thereon, and (3) prepayments of rent, after making
2.15such adjustments the commissioner determines to be appropriate to take into account
2.16any outstanding bonds secured by a lien on the project or rent that is prior to the lien
2.17securing the state guaranteed bonds, but excluding any cash collateral deducted from the
2.18outstanding state guaranteed bonds in applying the coverage test. The commissioner may
2.19adopt the method of valuing the assets and other security as the commissioner determines
2.20to be appropriate, including valuation of the project at its original cost less depreciation.

2.21    Sec. 4. Minnesota Statutes 2006, section 116R.02, subdivision 4, is amended to read:
2.22    Subd. 4. Security. (a) If so provided in the commissioner's order or any indenture
2.23authorizing the applicable series of bonds, up to $125,000,000 principal amount of bonds
2.24for the facility described in subdivision 5, up to $50,000,000 principal amount of bonds
2.25for the facility described in subdivision 6, and any bonds issued to refund these bonds may
2.26be secured by either of the following methods:
2.27    (1) upon the occurrence of any deficiency in a debt service reserve fund for a series
2.28of bonds as provided in section 116R.13, subdivision 3, the commissioner shall issue and
2.29sell deficiency bonds in a principal amount not to exceed (i) $125,000,000 for facilities
2.30described in subdivision 5 and (ii) $50,000,000 for the facilities described in subdivision
2.316; or
2.32    (2) the bonds may be directly secured by a pledge of the full faith, credit, and taxing
2.33power of the state and issued as general obligation revenue bonds of the state in accordance
2.34with the Minnesota Constitution, article XI, sections 4 to 7. In no event may the security
2.35provided by this paragraph extend in whole or part to any series of bonds other than the
2.36initial series of bonds so secured and any series of bonds issued to refund these bonds.
3.1    Deficiency bonds and bonds issued under clause (2) must be issued in accordance
3.2with and subject to sections 16A.641, 16A.66, 16A.672, and 16A.675, except for section
3.316A.641, subdivision 5 , except as otherwise provided in Laws 1991, chapter 350, article
3.41, and except that the bonds may be sold at public or private sale at a price or prices
3.5determined by the commissioner as provided in section 116R.13, subdivision 3.
3.6    (b) The commissioner may request St. Louis County to pay or secure payment of
3.7principal and interest due on up to $12,600,000 principal amount of revenue bonds for the
3.8facility described in subdivision 5 and principal and interest due on up to $15,000,000
3.9principal amount of revenue bonds for the facility described in subdivision 6. At the
3.10request of the commissioner, St. Louis County shall, by resolution of its county board,
3.11unconditionally and irrevocably pledge as a general obligation, its full faith, credit, and
3.12taxing power to pay or secure payment of principal and interest due on the principal
3.13amount or amounts requested by the commissioner. The general obligation and pledge of
3.14St. Louis County are not subject to and shall not be taken into account for purposes of any
3.15debt limitation. A levy of taxes for the St. Louis County general obligation is not subject
3.16to and shall not be taken into account for purposes of any levy limitations. The general
3.17obligation and the bonds secured by the general obligation may be issued without an
3.18election. Except for sections 475.61 and 475.64, chapter 475 does not apply to the general
3.19obligation or to the bonds secured by the general obligation.
3.20    (c) The commissioner may request the city of Duluth to pay or secure payment of
3.21principal and interest due on up to $47,600,000 principal amount of revenue bonds for the
3.22facility described in subdivision 5. At the request of the commissioner, the city of Duluth
3.23shall pledge specified revenues of the city, as provided in Laws 1991, chapter 350, article
3.241, section 24, to pay principal and interest due on the principal amount requested by
3.25the commissioner.
3.26    (d) Bonds and deficiency bonds issued under sections 116R.01 to 116R.16 116R.15
3.27and any indenture entered into in connection with the issuance of the bonds are not subject
3.28to section 16B.06. "
3.29Page 2, line 11, strike "116R.16" and insert "116R.15" and strike "116R.16," and
3.30insert "116R.15,"
3.31Page 2, line 15, strike "or 6"
3.32Page 2, line 19, strike "116R.16" and insert "116R.15"
3.33Page 2, line 30, strike "116R.16" and insert "116R.15"
3.34Page 2, line 31, strike "116R.16" and insert "116R.15"
3.35Page 3, after line 2 insert:

3.36    "Sec. 7. Minnesota Statutes 2006, section 116R.05, subdivision 2, is amended to read:
4.1    Subd. 2. Sources of payment. Except as otherwise provided for bonds issued
4.2under section 116R.02, subdivision 4, paragraph (a), the bonds and interest payable
4.3thereon are payable solely from the following sources and are irrevocably appropriated
4.4for that purpose, but only to the extent provided in the order or indenture authorizing or
4.5securing the bonds:
4.6    (1) revenues of any nature derived from the ownership, lease, operation, sale,
4.7foreclosure, or refinancing of a project described in section 116R.02, subdivision 5 or 6;
4.8    (2) repayments of any loans made under sections 116R.01 to 116R.16 116R.15;
4.9    (3) proceeds of any bonds or deficiency bonds;
4.10    (4) amounts in any account or accounts authorized by section 116R.11 or 116R.12;
4.11    (5) amounts paid by St. Louis County under its obligations referred to in section
4.12116R.02, subdivision 4 , and amounts paid under Laws 1991, chapter 350, article 1, section
4.1324 or 25, for the payment of bonds or interest thereon;
4.14    (6) amounts payable under any insurance policy, guaranty, letter of credit, or other
4.15instrument securing the bonds;
4.16    (7) any other revenues which the commissioner may pledge but excluding state
4.17appropriations unless the appropriation was specifically designated for that purpose; and
4.18    (8) investment income on any of the sources specified in clauses (1) to (7).

4.19    Sec. 8. Minnesota Statutes 2006, section 116R.11, subdivision 1, is amended to read:
4.20    Subdivision 1. Funds. The commissioner or any trustee appointed by the
4.21commissioner under sections 116R.01 to 116R.16 116R.15 shall establish and maintain an
4.22aircraft facilities fund for each of the projects the project described in section 116R.02,
4.23subdivisions 5 and 6 subdivision 5 . Except for amounts required by the commissioner to
4.24be deposited in a debt service account, proceeds of each issue of bonds authorized under
4.25section 116R.02, subdivision 1, must be deposited in a separate account, debt service
4.26reserve, or other account designated by the commissioner. Money in the account is
4.27appropriated to the commissioner. The commissioner or the owner of each the project
4.28described in section 116R.02, subdivisions 5 and 6 subdivision 5, may withdraw proceeds
4.29of bonds for application to the appropriated purposes in the manner provided by order
4.30of the commissioner or in any indenture authorized by order of the commissioner. The
4.31commissioner may establish whatever accounts might be necessary to carry out sections
4.32116R.01 to 116R.16 116R.15. All deposits into and disbursements from accounts for the
4.33purposes and from the sources of revenue authorized by sections 116R.01 to 116R.16
4.34116R.15 and provided in an order of the commissioner or an indenture or other agreement
4.35authorized by the commissioner are appropriated for that purpose. "
4.36Page 3, after line 6 insert:

5.1    "Sec. 10. Minnesota Statutes 2006, section 272.01, subdivision 2, is amended to read:
5.2    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
5.3personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
5.4leased, loaned, or otherwise made available and used by a private individual, association,
5.5or corporation in connection with a business conducted for profit, there shall be imposed a
5.6tax, for the privilege of so using or possessing such real or personal property, in the same
5.7amount and to the same extent as though the lessee or user was the owner of such property.
5.8    (b) The tax imposed by this subdivision shall not apply to:
5.9    (1) property leased or used as a concession in or relative to the use in whole
5.10or part of a public park, market, fairgrounds, port authority, economic development
5.11authority established under chapter 469, municipal auditorium, municipal parking facility,
5.12municipal museum, or municipal stadium;
5.13    (2) property of an airport owned by a city, town, county, or group thereof which is:
5.14    (i) leased to or used by any person or entity including a fixed base operator; and
5.15    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
5.16services, or facilities to the airport or general public;
5.17the exception from taxation provided in this clause does not apply to:
5.18    (i) property located at an airport owned or operated by the Metropolitan Airports
5.19Commission or by a city of over 50,000 population according to the most recent federal
5.20census or such a city's airport authority; or
5.21    (ii) hangars leased by a private individual, association, or corporation in connection
5.22with a business conducted for profit other than an aviation-related business; or
5.23    (iii) facilities leased by a private individual, association, or corporation in connection
5.24with a business for profit, that consists of a major jet engine repair facility financed, in
5.25whole or part, with the proceeds of state bonds and located in a tax increment financing
5.26district;
5.27    (3) property constituting or used as a public pedestrian ramp or concourse in
5.28connection with a public airport;
5.29    (4) property constituting or used as a passenger check-in area or ticket sale counter,
5.30boarding area, or luggage claim area in connection with a public airport but not the
5.31airports owned or operated by the Metropolitan Airports Commission or cities of over
5.3250,000 population or an airport authority therein. Real estate owned by a municipality
5.33in connection with the operation of a public airport and leased or used for agricultural
5.34purposes is not exempt;
6.1    (5) property leased, loaned, or otherwise made available to a private individual,
6.2corporation, or association under a cooperative farming agreement made pursuant to
6.3section 97A.135; or
6.4    (6) property leased, loaned, or otherwise made available to a private individual,
6.5corporation, or association under section 272.68, subdivision 4.
6.6    (c) Taxes imposed by this subdivision are payable as in the case of personal property
6.7taxes and shall be assessed to the lessees or users of real or personal property in the same
6.8manner as taxes assessed to owners of real or personal property, except that such taxes
6.9shall not become a lien against the property. When due, the taxes shall constitute a debt
6.10due from the lessee or user to the state, township, city, county, and school district for
6.11which the taxes were assessed and shall be collected in the same manner as personal
6.12property taxes. If property subject to the tax imposed by this subdivision is leased or used
6.13jointly by two or more persons, each lessee or user shall be jointly and severally liable for
6.14payment of the tax.
6.15    (d) The tax on real property of the state or any of its political subdivisions that is
6.16leased by a private individual, association, or corporation and becomes taxable under
6.17this subdivision or other provision of law must be assessed and collected as a personal
6.18property assessment. The taxes do not become a lien against the real property.

6.19    Sec. 11. Minnesota Statutes 2006, section 290.06, subdivision 24, is amended to read:
6.20    Subd. 24. Credit for job creation. (a) A corporation that leases and operates
6.21a heavy maintenance base for aircraft that is owned by the state of Minnesota or one
6.22of its political subdivisions, or an engine repair facility described in section 116R.02,
6.23subdivision 6 , or both, may take a credit against the tax due under this chapter.
6.24    (b) For the first taxable year when the facility has been in operation for at least three
6.25consecutive months, the credit is equal to $5,000 multiplied by the number of persons
6.26employed by the corporation on a full-time basis at the facility on the last day of the taxable
6.27year, not to exceed the number of persons employed by the corporation on a full-time basis
6.28at the facility on the date 90 days before the last day of the taxable year. For each of the
6.29succeeding four taxable years, the credit is equal to $5,000 multiplied by the number of
6.30persons employed by the corporation on a full-time basis at the facility on the last day of
6.31the taxable year, not to exceed the number of persons employed by the corporation on a
6.32full-time basis at the facility on the date 90 days before the last day of the taxable year.
6.33    (c) For the first taxable year in which the credit is allowed for the facility, the credit
6.34must not exceed 80 percent of the wages paid to or incurred for persons employed by the
6.35taxpayer at the facility during the taxable year. For the succeeding four taxable years, the
6.36credit must not exceed 20 percent of the wages paid to or incurred for persons employed
7.1by the taxpayer at the facility during the taxable year. For purposes of this section,
7.2"wages" has the meaning given under section 3121(b) of the Internal Revenue Code,
7.3except the limitation to the contribution and benefit base does not apply.
7.4    (d) If the credit provided under this subdivision exceeds the tax liability of the
7.5corporation for the taxable year, the excess amount of the credit may be carried over to
7.6each of the 20 taxable years succeeding the taxable year. The entire amount of the credit
7.7must be carried to the earliest taxable year to which the amount may be carried. The
7.8unused portion of the credit must be carried to the following taxable year. No credit
7.9may be carried to a taxable year more than 20 years after the taxable year in which the
7.10credit was earned.
7.11    (e) If an unused portion of the credit remains at the end of the carryover period under
7.12paragraph (d), the commissioner shall refund the unused portion to the taxpayer. The
7.13provisions of this paragraph do not apply if the corporation that earned the credit under this
7.14subdivision or a successor in interest to the corporation filed for bankruptcy protection.

7.15    Sec. 12. Minnesota Statutes 2006, section 297A.71, subdivision 10, is amended to read:
7.16    Subd. 10. Aircraft heavy maintenance facility. Materials, equipment, and supplies
7.17used or consumed in constructing a heavy maintenance facility for aircraft that is to be
7.18owned by the state of Minnesota or one of its political subdivisions and leased by an airline
7.19company, or an aircraft engine repair facility described in section 116R.02, subdivision
7.206 , are is exempt. Except for equipment owned or leased by a contractor, all machinery,
7.21equipment, and tools necessary to the construction and equipping of that facility in order
7.22to provide those services are also exempt.

7.23    Sec. 13. Minnesota Statutes 2006, section 360.013, subdivision 39, is amended to read:
7.24     Subd. 39. Airport. "Airport" means any area of land or water, except a restricted
7.25landing area, which is designed for the landing and takeoff of aircraft, whether or not
7.26facilities are provided for the shelter, surfacing, or repair of aircraft, or for receiving or
7.27discharging passengers or cargo, and all appurtenant areas used or suitable for airport
7.28buildings or other airport facilities, including facilities described in section 116R.02,
7.29subdivision 6 , and all appurtenant rights-of-way, whether heretofore or hereafter
7.30established. The operation and maintenance of airports is an essential public service.

7.31    Sec. 14. Minnesota Statutes 2006, section 360.032, subdivision 1, is amended to read:
7.32    Subdivision 1. Acquisition. Every municipality is hereby authorized, through its
7.33governing body, to acquire property, real or personal, for the purpose of establishing,
7.34constructing, and enlarging airports and other air navigation facilities and to acquire,
7.35establish, construct, enlarge, improve, maintain, equip, operate, and regulate such airports
8.1and other air navigation facilities and structures and other property incidental to their
8.2operation, either within or without the territorial limits of such municipality and within
8.3or without this state; to make, prior to any such acquisition, investigations, surveys, and
8.4plans; to construct, install, and maintain airport facilities for the servicing and repair of
8.5aircraft and facilities authorized under section 116R.02, subdivision 6, and for the comfort
8.6and accommodation of air travelers; and to purchase and sell equipment and supplies as
8.7an incident to the operation of its airport properties. It may not acquire, or take over any
8.8airport or other air navigation facility owned or controlled by any other municipality of
8.9the state without the consent of such municipality. It may use for airport purposes any
8.10available property that is now or may at any time hereafter be owned or controlled by it.
8.11Such air navigation facilities as are established on airports shall be supplementary to and
8.12coordinated in design and operation with those established and operated by the federal and
8.13state governments. It may assist other municipalities in the construction of approach roads
8.14leading to any airport or restricted landing area owned or controlled by it. In financing the
8.15facilities authorized under section 116R.02, subdivision 6, it may borrow from the state
8.16or otherwise arrange for financing of the facilities and for that purpose may exercise any
8.17powers vested in a municipality under sections 469.152 to 469.165.

8.18    Sec. 15. Minnesota Statutes 2006, section 360.038, subdivision 4, is amended to read:
8.19    Subd. 4. Leased property. To lease for a term not exceeding 30 years such airports,
8.20or other air navigation facilities or facilities authorized under section 116R.02, subdivision
8.216 , or real property acquired or set apart for airport purposes, to private parties, any
8.22municipal or state government or the national government, or any department of either
8.23thereof, for operation; to lease or assign for a term not exceeding 99 years to private
8.24parties, any municipal or state government, or the national government, or any department
8.25of either thereof, for operation or use consistent with the purposes of sections 360.011 to
8.26360.076 , space, area, improvements, or equipment on such airports; notwithstanding any
8.27other provisions in this subdivision, to lease ground area for a term not exceeding 99 years
8.28to private persons for the construction of structures which in its opinion are essential and
8.29necessary to serve aircraft, persons, and things engaged in or incidental to aeronautics,
8.30including but not limited to shops, hangars, offices, restaurants, hotels, motels, factories,
8.31storage space, and any and all other structures necessary or essential to and consistent with
8.32the purposes of sections 360.011 to 360.076, to sell any part of such airports, other air
8.33navigation facilities, or real property to any municipal or state government, or to the
8.34United States or any department or instrumentality thereof, for aeronautical purposes
8.35incidental thereto, and to confer the privileges of concessions of supplying upon its
9.1airports goods, commodities, things, services, and facilities; provided that in each case in
9.2so doing the public is not deprived of its rightful, equal, and uniform use thereof.

9.3    Sec. 16. REVISOR'S INSTRUCTION.
9.4    The revisor of statutes shall change "116R.01 to 116R.16" to "116R.01 to 116R.15"
9.5wherever it appears in Minnesota Statutes."
9.6Renumber the sections in sequence and correct the internal references
9.7Amend the title accordingly