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SF 4982

Lease-purchase agreement and the sale and issuance of certificates of participation to fund improvements to or replacement of the state's MAXIS system authorization provision and appropriation

2025-2026 Regular Session Introduced by Amanda Hemmingsen-Jaeger and 1 co-sponsor

The bill authorizes Minnesota to finance MAXIS system upgrades through a lease-purchase arrangement, issuing certificates of participation funded by annually appropriated general f

Author added Maye Quade
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Bill Summary · SF 4982

Summary of SF 4982 (2025-2026) – Minnesota: MAXIS Improvements Lease-Purchase Financing

Purpose and intent

  • Authorizes the state to finance improvements or replacement of the MAXIS information system through a lease-purchase arrangement.
  • Enables the sale and issuance of certificates of participation (CoPs) to fund the MAXIS project.
  • Establishes governing coding for a new Minnesota Statutes chapter, 16A, dedicated to MAXIS lease-purchase financing.
  • Provides a dedicated appropriation mechanism to make lease-purchase payments and outlines related financial and administrative provisions.

Key provisions and changes

Section 1: MAXIS Improvements Lease-Purchase Financing (16A.83)

  • Definitions
    • Lease-purchase agreement: a contract for leasing and installment purchase of the MAXIS project between the state (via the commissioner) and a vendor/financing source.
    • MAXIS lease-purchase guidelines: policies and requirements established by the commissioner for MAXIS financing.
    • MAXIS project: modernization, development, acquisition, installation, and implementation of a MAXIS system upgrade or replacement.
  • Financing authorization
    • The commissioner may enter into a lease-purchase agreement and authorize the sale/issuance of CoPs to fund the MAXIS project, subject to specific conditions:
    • The MAXIS project must be legally authorized to be funded via lease-purchase.
    • The lease-purchase term (including CoPs) must not exceed the lesser of the expected useful life of the MAXIS project or 10 years from issuance.
    • Principal amount must cover costs of issuance, capitalized interest, credit enhancement, or reserves as required.
    • Money for lease payments must be committed in the authorizing legislation for the fiscal year during which the agreement is entered, with no obligation to appropriate funds in future years.
    • Planned expenditures must comply with MAXIS lease-purchase guidelines.
  • Covenants
    • The state may covenant typical lease-purchase terms, including:
    • Maintaining insurance.
    • Responsibility for liabilities related to the MAXIS project and costs from defaults.
    • Lessor rights in the event of default or non-appropriation, including liquidated damages provisions.
  • Proceeds and funds
    • Proceeds and CoPs are to be credited to the MAXIS lease project fund in the state treasury; net investment income credited to appropriate MAXIS accounts.
    • Funds are appropriated for purposes described in authorizing law for the MAXIS project.
  • Transfer of funds
    • Before proceeds are received, the commissioner may transfer up to the expected proceeds from the general fund to the MAXIS fund, with a requirement to return those transfers when proceeds are received.
  • Administrative expenses
    • Reasonable expenses related to sale, printing, execution, and delivery of the lease-purchase agreement may be paid from the lease-purchase proceeds.
  • Residual funds
    • Proceeds remaining after project completion or abandonment must be transferred to the general fund.
  • Public debt treatment
    • Lease-purchase does not create general or moral debt of the state beyond appropriated funds; payments during the current term are a current expense.
  • Tax treatment
    • Property purchased under lease-purchase is not subject to local personal property taxes; purchases are not subject to state sales tax for the purchaser, but the state remains subject to certain state taxes on property acquired under the agreement.
  • Refunding certificates
    • The commissioner may issue new lease-purchase agreements and refunding CoPs to refinance outstanding obligations, with proceeds used to purchase, redeem, or pay interest as appropriate; escrow investments and income may be applied to refunding obligations.
    • Escrow proceeds and investment income may be returned to the general fund or MAXIS fund after obligations are satisfied.

Section 2: MAXIS Lease-Purchase Appropriation (16A.835)

  • Annual appropriations to the commissioner for lease-purchase payments related to MAXIS modernization/replacement:
    • $10,000,000 in Fiscal Year (FY) 2027
    • $10,000,000 in FY 2028
    • $10,000,000 in each of FY 2029 through FY 2036
  • Conditions
    • Appropriations are from the general fund and do not create an obligation to fund future years beyond the stated period.
    • Unexpended amounts cancel to the general fund at the end of each biennium.
    • The section expires June 30, 2037.

Who/what is affected

  • The Minnesota state government, specifically the MAXIS system program, its modernization/replacement projects, and the Office of the Commissioner responsible for MAXIS financing.
  • The state treasury and general fund, through the creation of the MAXIS lease project fund and related transfers and appropriations.
  • Lenders/financing entities that would purchase certificates of participation and participate in lease-purchase arrangements.
  • Potentially affected entities include vendors and service providers contracted to implement MAXIS improvements.

Procedural and timeline aspects

  • Referral: Capital Investment Committee (April 2026).
  • Authorized by the Senate (SF 4982) with co-sponsors Hemmingsen-Jaeger and Maye Quade (Quade added 04/20/2026).
  • Fiscal applicability anticipated FY 2027 onward, with an expiration framework in 2037 for the appropriation section.
  • Section 2 establishes a multi-year appropriation schedule (FY 2027–FY 2036) and a 2037 expiration.

Notes

  • The measure emphasizes flexibility in funding MAXIS improvements while avoiding a general debt obligation beyond appropriated funds.
  • It includes standard lease-purchase covenants and refunding provisions to manage refinancing options if beneficial.

Compiled from official sources — confirm details with the bill’s official record.

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