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41.62 GENERAL OBLIGATION BONDS.
    Subdivision 1. Procedure. Upon request of the commissioner of agriculture, the
commissioner of finance is authorized to issue general obligation bonds of the state in a principal
amount not exceeding $20,000,000 to acquire public lands by providing money to be paid by the
commissioner of agriculture from the special account established by section 41.61 to pay lenders
for defaulted loans and to purchase the rights of first lienholders at mortgage foreclosure sales.
The bonds shall be secured as provided in the Minnesota Constitution, article XI, section 7, and,
except as provided in this section, shall be issued and secured as provided in section 16A.641.
The proceeds of the bonds, except any premium and accrued interest, shall be deposited in the
special account established in section 41.61 and used solely for the purposes specified above and
in section 16A.641, subdivision 8. The premium and accrued interest, if any, shall be deposited in
the state family farm security program bond account in the state bond fund. The commissioner
shall issue only the amount of bonds as from time to time the commissioner determines are
necessary for the purposes specified in this section.
    Subd. 2. Terms of bonds. The commissioner of finance may fix the terms of the bonds in any
manner permitted for bonds of a municipality under chapter 475, and may enter into, on behalf
of the state, all agreements deemed necessary for this purpose, including those authorized to be
entered into by municipalities in chapter 475.
    Subd. 3. Sale of bonds. If determined by the commissioner of finance to be necessary in
order to reduce costs of issuance, to secure a favorable prevailing interest rate, or to receive the
bond proceeds by a specified date, or if the terms of the bonds are fixed as provided in sections
475.54, subdivision 5a, and 475.56, paragraph (b), the bonds may be sold by negotiation and
without solicitation of sealed bids.
    Subd. 4. Bond fund account. The commissioner of finance shall maintain in the state bond
fund a separate bookkeeping account that shall be designated as the state family farm security
program bond account, to record receipts and disbursements of money transferred to the fund to
pay bonds issued under this section and to record income from the investment of the money. The
income shall be credited to the account in each fiscal year in an amount equal to the approximate
average return that year on all funds invested by the commissioner of finance, as determined by
the commissioner of finance, times the average balance in the account that year.
    Subd. 5. Transfers, appropriation. In addition to the money required to be transferred to
the state family farm security program bond account under section 41.56, subdivision 4b, and in
order to reduce the amount of taxes otherwise required by the Minnesota Constitution to be levied
for the state bond fund, the commissioner of finance shall transfer from the general fund to the
state family farm security program bond account, on December 1 in each year, a sum of money
sufficient in amount, when added to the balance then on hand in that account, to pay all bonds
issued under this section and the interest on them due and to become due to and including July 1
in the second ensuing year. All money to be so credited and all income from its investment is
annually appropriated for the payment of the bonds and interest on them, and shall be available
in the state family farm security program bond account before the levy of the tax in any year
required by the Minnesota Constitution, article XI, section 7. The legislature may also appropriate
to the state family farm security program bond account any other money in the state treasury
not otherwise appropriated, for the security of bonds issued under this section in the event that
sufficient money should not be available in the account from the appropriation in this section,
before the levy of the tax in any year. The commissioner of finance shall make the appropriate
entries in the accounts of the respective funds.
    Subd. 6. Constitutional levy. On or before December 1 in each year the state auditor shall
levy on all taxable property within the state whatever tax may be necessary to produce an amount
sufficient, with all money then in the state family farm security program bond account, to pay
the entire amount of principal and interest due then or earlier and principal and interest to
become due on or before July 1 in the second year thereafter on bonds issued under this section.
This tax shall be levied upon all real property used for a homestead, as well as other taxable
property, notwithstanding section 273.13, subdivisions 6 and 7. The tax must not be limited in
rate or amount until all the bonds and interest on them are fully paid. The proceeds of this tax are
appropriated and shall be credited to the state bond fund, and the principal and interest on the
bonds are payable from all the proceeds. As much of the proceeds as is necessary, is appropriated
for the payments. If at any time there is insufficient money from the proceeds of the taxes to pay
the principal and interest when due on the bonds, the principal and interest must be paid out of the
general fund in the state treasury, and the amount necessary for the payment is appropriated.
    Subd. 7. Compliance with federal law. The commissioner of finance is authorized to
covenant and agree with the holders of the bonds issued under this section that the state will
comply, insofar as possible, with the provisions of the United States Internal Revenue Code now
or hereafter enacted that are applicable to the bonds and that establish conditions under which the
interest to be paid on the bonds will not be includable in gross income for federal tax purposes.
    Subd. 8. Taxability of interest. The bonds authorized by this section may be issued without
regard to whether the interest to be paid on them is includable in gross income for federal tax
purposes.
History: 1Sp1986 c 2 art 1 s 5

Official Publication of the State of Minnesota
Revisor of Statutes