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Minnesota Legislature

Office of the Revisor of Statutes

398A.07 BONDS.
    Subdivision 1. Authorization. An authority may from time to time issue bonds, or other
obligations however designated, in principal amounts as it shall deem necessary to fulfill its
purpose and to exercise any of its powers, to provide funds for operating expenses in anticipation
of revenues of the current year, or for capital expenditures in anticipation of the issuance of long
term bonds or the receipt of a grant or loan of state or federal funds, to refund the principal of
or interest or redemption premiums on outstanding bonds whether or not the amounts refunded
have become due and payable, to establish or increase reserves to secure the payment of bonds or
interest on them, and to pay costs and expenses of the issuance of the bonds.
    Subd. 2. Security. Bonds may be made payable exclusively from the revenues from one or
more projects, or from one or more revenue producing contracts, or from the authority's revenues
generally, including but not limited to specified taxes which the authority may levy or which a
particular municipality may agree to levy for a specified purpose, and may be additionally secured
by a pledge of any grant, subsidy, or contribution from any public agency, including but not limited
to a participating municipality, or any income or revenues from any source. They may be secured
by a mortgage or deed of trust of the whole or any part of the property of the authority. They shall
be payable solely from the revenues, funds, and property pledged or mortgaged for their payment.
No commissioner, officer, employee, agent, or trustee of the authority shall be liable personally
on its bonds or be subject to any personal liability or accountability by reason of their issuance.
Neither the state nor a county or other municipality except the authority may pledge its faith and
credit or taxing power or shall be obligated in any manner for the payment of the bonds or interest
on them, except as specifically provided by agreement under section 398A.06; but nothing herein
shall affect the obligation of the state or municipality to perform any contract made by it with the
authority, and when the authority's rights under a contract with the state or a municipality are
pledged by the authority for the security of its bonds, the holders or a bond trustee may enforce
the rights as a third party beneficiary. All bonds shall be negotiable within the meaning and for the
purposes of the Uniform Commercial Code, subject only to any registration requirement.
    Subd. 3. Bond resolution or indenture. Bonds of the authority shall be authorized by
resolutions of its board of commissioners which may set forth, or may authorize and direct the
execution of an indenture or security agreement with a corporate trustee setting forth, the terms
and conditions thereof, the covenants and agreements entered into by the authority for their
security, the real and personal property, if any, which is mortgaged or pledged for their further
security, the rights and duties of the trustee, if any, and the manner of and conditions for adoption
of amending or supplemental resolutions or indentures. Covenants may be made regarding:
(a) the custody, collection, securing, investment, reinvestment, and disbursement of bond
proceeds and any revenues with respect to which the authority has any right or interest;
(b) the purposes to which the proceeds shall be applied, and the pledge of the proceeds, until
so applied, to secure the payment of the bonds and interest thereon;
(c) the rentals, rates, or charges to be established for use and availability of the authority's
property or service;
(d) the establishment of funds or accounts for the disbursement of proceeds, the segregation
of revenues, and the debt service and reserve requirements of the bonds;
(e) the conditions for the issuance of any additional bonds and the refunding of outstanding
bonds and the terms upon which additional bonds may be issued and secured;
(f) the priority of any bonds with respect to any pledge of revenues, mortgage, or security
interest;
(g) the operation and maintenance of any property, the revenues of which are pledged;
(h) the custody of any of the authority's property or investments, its safekeeping, the kinds of
securities in which funds may be invested and reinvested, the insurance to be carried on property
and against liability, and the use and disposition of insurance proceeds;
(i) the vesting in a corporate trustee, within or outside the state, and successors and
individual cotrustees as may be provided for, of funds and properties and trust rights and powers
as the authority may determine, and the limitation of the rights, powers, duties, and obligations
of the trustees;
(j) the appointment of any paying agent within or outside the state; and
(k) any other matter reasonably related to the security of the bonds.
    Subd. 4. Sale. Bonds may be issued and sold in one or more series, at public and private sale,
at the price, bearing the date or dates, maturing at the time or times, bearing interest at the rate
or rates, in the denominations, in the form whether coupon or registered, with the privileges of
conversion, exchange, and registration of transfer, having the rank or priority, to be executed on
behalf of the authority by the officers and other persons, to be subject to the terms of redemption
with or without premium, and to contain or be subject to the other terms the resolution, indenture,
or security agreement may provide, and shall not be restricted by any other law limiting the
amount, maturities, interest rates, purchase price, or other terms of obligations of public agencies
or municipalities.
    Subd. 5. Recitals. The authority shall be estopped to deny the correctness of any recital in
any bond or any certificate given by direction of the authority, that it has been issued pursuant
to the provisions and for the purposes of the Regional Railroad Authorities Act, and that all
conditions precedent to the issuance exist or have been performed.
    Subd. 6. Bonds as investments and security for deposits. Notwithstanding any other
law, the state of Minnesota and all its public officers, governmental units, agencies, and
instrumentalities, all banks, trust companies, savings banks and institutions, savings associations,
investment companies, and other persons carrying on a banking business, all insurance companies,
insurance associations, and other persons carrying on an insurance business, and all executors,
administrators, guardians, trustees and other fiduciaries may legally invest any sinking funds,
money, or other funds belonging to them or within their control in any bonds or other obligations
issued pursuant to this section, and the bonds or obligations may be pledged as security for
any public deposits.
History: 1980 c 616 s 7; 1983 c 326 s 15; 1995 c 202 art 1 s 25