2007 Minnesota Statutes

37.31 ISSUANCE OF BONDS.
    Subdivision 1. Bonding authority. The society may issue negotiable bonds in a principal
amount that the society determines necessary to provide sufficient money for achieving its
purposes, including the payment of interest on bonds of the society, the establishment of reserves
to secure its bonds, the payment of fees to a third party providing credit enhancement, and the
payment of all other expenditures of the society incident to and necessary or convenient to carry
out its corporate purposes and powers. Bonds of the society may be issued as bonds or notes or in
any other form authorized by law. The principal amount of bonds issued and outstanding under
this section at any time may not exceed $20,000,000, excluding bonds for which refunding bonds
or crossover refunding bonds have been issued.
    Subd. 2. Refunding of bonds. The society may issue bonds to refund outstanding bonds of
the society, to pay any redemption premiums on those bonds, and to pay interest accrued or to
accrue to the redemption date next succeeding the date of delivery of the refunding bonds. The
society may apply the proceeds of any refunding bonds to the purchase or payment at maturity of
the bonds to be refunded, or to the redemption of outstanding bonds on the redemption date next
succeeding the date of delivery of the refunding bonds and may, pending the application, place the
proceeds in escrow to be applied to the purchase, retirement, or redemption of the bonds. Pending
use, escrowed proceeds may be invested and reinvested in obligations issued or guaranteed by the
state or the United States or by any agency or instrumentality of the state or the United States, or
in certificates of deposit or time deposits secured in a manner determined by the society, maturing
at a time appropriate to assure the prompt payment of the principal and interest and redemption
premiums, if any, on the bonds to be refunded. The income realized on any investment may also
be applied to the payment of the bonds to be refunded. After the terms of the escrow have been
fully satisfied, any balance of the proceeds and any investment income may be returned to the
society for use by it in any lawful manner. All refunding bonds issued under this subdivision must
be issued and secured in the manner provided by resolution of the society.
    Subd. 3. Kind of bonds. Bonds issued under this section must be negotiable investment
securities within the meaning and for all purposes of the Uniform Commercial Code, subject only
to the provisions of the bonds for registration. The bonds issued must be limited obligations of the
society not secured by its full faith and credit and payable solely from specified sources or assets.
    Subd. 4. Resolution and terms of sale. The bonds of the society must be authorized by a
resolution or resolutions adopted by the society. The bonds must bear the date or dates, mature at
the time or times, bear interest at a fixed or variable rate, including a rate varying periodically
at the time or times and on the terms determined by the society, or any combination of fixed
and variable rates, be in the denominations, be in the form, carry the registration privileges, be
executed in the manner, be payable in lawful money of the United States, at the place or places
within or without the state, and be subject to the terms of redemption or purchase before maturity
as the resolutions or certificates provide. If, for any reason existing at the date of issue of the
bonds or existing at the date of making or purchasing any loan or securities from the proceeds
or after that date, the interest on the bonds is or becomes subject to federal income taxation,
this fact does not affect the validity or the provisions made for the security of the bonds. The
society may make covenants and take or have taken actions that are in its judgment necessary or
desirable to comply with conditions established by federal law or regulations for the exemption
of interest on its obligations. The society may refrain from compliance with those conditions if
in its judgment this would serve the purposes and policies set forth in this chapter with respect
to any particular issue of bonds, unless this would violate covenants made by the society. The
maximum maturity of a bond, whether or not issued for the purpose of refunding, must be 30
years from its date. The bonds of the society may be sold at public or private sale, at a price or
prices determined by the society; provided that:
(1) the aggregate price at which an issue of bonds is initially offered by underwriters to
investors, as stated in the society's official statement with respect to the offering, must not
exceed by more than three percent the aggregate price paid by the underwriters to the society at
the time of delivery;
(2) the commission paid by the society to an underwriter for placing an issue of bonds with
investors must not exceed three percent of the aggregate price at which the issue is offered to
investors as stated in the society's offering statement; and
(3) the spread or commission must be an amount determined by the society to be reasonable
in light of the risk assumed and the expenses of issuance, if any, required to be paid by the
underwriters.
    Subd. 5. Exemption. The notes and bonds of the society are not subject to sections 16C.03,
subdivision 4 , and 16C.05.
    Subd. 6. Reserves; funds; accounts. The society may establish reserves, funds, or accounts
necessary to carry out the purposes of the society or to comply with any agreement made by or
any resolution passed by the society.
    Subd. 7. Approval; commissioner of finance. Before issuing bonds under this section, the
society must obtain the approval, in writing, of the commissioner of finance.
    Subd. 8. Expiration. The authority to issue bonds, other than bonds to refund outstanding
bonds, under this section expires July 1, 2009.
History: 2003 c 127 art 12 s 1; 1Sp2003 c 21 art 10 s 11; 2004 c 228 art 1 s 15