1998 Minnesota Statutes

     475.56 Interest rate. 

    (a) Any municipality issuing obligations under any law may 
 issue obligations bearing interest at a single rate or at rates 
 varying from year to year which may be lower or higher in later 
 years than in earlier years.  Such higher rate for any period 
 prior to maturity may be represented in part by separate coupons 
 designated as additional coupons, extra coupons, or B coupons, 
 but the highest aggregate rate of interest contracted to be so 
 paid for any period shall not exceed the maximum rate authorized 
 by law.  Such higher rate may also be represented in part by the 
 issuance of additional obligations of the same series, over and 
 above but not exceeding two percent of the amount otherwise 
 authorized to be issued, and the amount of such additional 
 obligations shall not be included in the amount required by 
 section 475.59 to be stated in any bond resolution, notice, or 
 ballot, or in the sale price required by section 475.60 or any 
 other law to be paid; but if the principal amount of the entire 
 series exceeds its cash sale price, such excess shall not, when 
 added to the total amount of interest payable on all obligations 
 of the series to their stated maturity dates, cause the average 
 annual rate of such interest to exceed the maximum rate 
 authorized by law.  This section does not authorize a provision 
 in any such obligations for the payment of a higher rate of 
 interest after maturity than before. 

    (b) Any obligation of an issue of obligations otherwise 
 subject to section 475.55, subdivision 1, may bear interest at a 
 rate varying periodically at the time or times and on the terms, 
 including convertibility to a fixed rate of interest, determined 
 by the governing body of the municipality, but the rate of 
 interest for any period shall not exceed the maximum rate of 
 interest for the obligations determined in accordance with 
 section 475.55, subdivision 1.  For purposes of section 475.61, 
 subdivisions 1 and 3, the interest payable on variable rate 
 obligations for their term shall be determined as if their rate 
 of interest is the maximum rate permitted for the obligations 
 under section 475.55, subdivision 1, or the lesser maximum rate 
 of interest payable on the obligations in accordance with their 
 terms, but if the interest rate is subsequently converted to a 
 fixed rate the levy may be modified to provide at least five 
 percent in excess of amounts necessary to pay principal of and 
 interest at the fixed rate on the obligations when due.  For 
 purposes of computing debt service or interest pursuant to 
 section 475.67, subdivision 12, interest throughout the term of 
 bonds issued pursuant to this subdivision is deemed to accrue at 
 the rate of interest first borne by the bonds.  The provisions 
 of this paragraph do not apply to obligations issued by a 
 statutory or home rule charter city with a population of less 
 than 7,500, as defined in section 477A.011, subdivision 3, or to 
 obligations that are not rated A or better, or an equivalent 
 subsequently established rating, by Standard and Poor's 
 Corporation, Moody's Investors Service or other similar 
 nationally recognized rating agency, except that any statutory 
 or home rule charter city, regardless of population or bond 
 rating, may issue variable rate obligations as a participant in 
 a bond pooling program established by the league of Minnesota 
 cities that meets this bond rating requirement. 

    HIST: (1938-2 1/2) 1933 c 171; 1949 c 682 s 6; 1959 c 36 s 1; 
 1963 c 829 s 1; 1967 c 481 s 3; 1974 c 380 s 7; 1Sp1985 c 14 art 
 8 s 52; 1986 c 465 art 2 s 20; 1987 c 344 s 30