HF 1461

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to the financing of state government; 
  1.3             authorizing the issuance of revenue bonds and the 
  1.4             appropriation of bond proceeds to pay a judgment; 
  1.5             requiring state and national banks to purchase the 
  1.6             bonds; authorizing the commissioner of finance to 
  1.7             determine the terms of the bonds; proposing coding for 
  1.8             new law in Minnesota Statutes, chapter 16A. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [16A.67] [JUDGMENT BONDS.] 
  1.11     Subdivision 1.  [AUTHORIZATION.] The commissioner of 
  1.12  finance, upon request of the governor, is authorized to sell and 
  1.13  issue state bonds to fund the judgment against the state 
  1.14  affirmed by the Minnesota supreme court in Cambridge State Bank 
  1.15  et. al. v. James, 514 N.W. 2d 565, on April 1, 1994, and 
  1.16  interest accrued thereon to fund any bond reserve determined to 
  1.17  be necessary, and to pay costs of issuance of the bonds.  The 
  1.18  proceeds of the bonds are appropriated for these purposes.  The 
  1.19  principal amount of the bonds shall be determined as provided in 
  1.20  subdivision 2.  The bonds shall be sold and issued upon such 
  1.21  terms and in such manner as the commissioner shall determine to 
  1.22  be in the best interests of the state.  The final maturity of 
  1.23  the bonds shall be determined by the commissioner as provided in 
  1.24  subdivision 2, but shall not exceed 40 years. 
  1.25     Subd. 2.  [PURCHASE OF BONDS BY BANKS.] For the privilege 
  1.26  of doing business in the state of Minnesota, each national or 
  1.27  state bank must purchase an equitable amount of the bonds 
  2.1   authorized in subdivision 1.  The commissioner of finance, with 
  2.2   the assistance of the commissioner of commerce, must determine 
  2.3   the equitable amount for each bank, in proportion to the net 
  2.4   assets of the bank as of December 31, 1994.  The total amount 
  2.5   purchased by all banks must, at least, equal the judgment 
  2.6   described in subdivision 1.  The commissioner of finance must 
  2.7   determine the equitable amount for each bank and notify the bank 
  2.8   of its amount within 60 days of final enactment of this 
  2.9   section.  Each bank must purchase the bonds within 60 days of 
  2.10  receipt of notification of its equitable amount.  The 
  2.11  commissioner of finance shall establish the principal, the 
  2.12  repayment terms, the maturity dates, and the net interest rate 
  2.13  of the bonds, which may be a rate of zero, so that the net 
  2.14  present value cost to the state treasury of the judgment and the 
  2.15  bonds, including issuance costs, is zero over the term of the 
  2.16  bonds, assuming a reasonable rate of return on bond proceeds 
  2.17  held and invested by the state.  In performing the duties 
  2.18  assigned under this section, the commissioner of finance is 
  2.19  exempt from chapter 14. 
  2.20     Subd. 3.  [SECURITY; BONDS NOT PUBLIC DEBT.] The bonds and 
  2.21  the interest thereon shall be payable solely from and secured by 
  2.22  the revenues appropriated to the debt service fund established 
  2.23  for this purpose in subdivision 4 and investment income thereon, 
  2.24  and any bond reserve established for the bonds.  The bonds are 
  2.25  not public debt, and the full faith, credit, and taxing powers 
  2.26  of the state are not pledged for their payment.  The bonds and 
  2.27  the interest thereon shall not be paid, directly or indirectly, 
  2.28  in whole or in part, from a tax of statewide application on any 
  2.29  class of property, income, transaction, or privilege. 
  2.30     Subd. 4.  [DEBT SERVICE FUND.] There is established in the 
  2.31  state treasury a separate and special judgment and debt service 
  2.32  fund.  There shall be credited to the fund net proceeds of the 
  2.33  bonds authorized in this section.  Money appropriated to the 
  2.34  fund and investment income thereon on hand or required to be 
  2.35  credited to the fund shall be used and are irrevocably 
  2.36  appropriated for the payment of (1) the principal of and 
  3.1   interest on the bonds when due, and (2) the payment of the 
  3.2   judgment described in subdivision 1.  
  3.3      Subd. 5.  [COVENANTS; AGREEMENTS.] The commissioner may, 
  3.4   for and on behalf of the state, enter into such covenants and 
  3.5   agreements not inconsistent with subdivisions 1 to 4 as may be 
  3.6   necessary or desirable to facilitate the sale and issuance of 
  3.7   the bonds on terms favorable to the state, including, but not 
  3.8   limited to, covenants and agreements relating to the payment of 
  3.9   and security for the bonds, tax-exemption, and disclosure of 
  3.10  information required by federal and state securities laws.  The 
  3.11  provisions of sections 16A.672 and 16A.675 are applicable to the 
  3.12  bonds.  
  3.13     Sec. 2.  [EFFECTIVE DATE.] 
  3.14     Section 1 is effective the day following final enactment.