2006 Minnesota Statutes

446A.15 BOND FUND.
    Subdivision 1. Creation and contents. The authority may establish a special fund or funds
for the security of one or more or all series of its bonds. The funds must be known as debt service
reserve funds. The authority may pay into each debt service reserve fund:
(1) any money appropriated by the state only for the purposes of the fund;
(2) the proceeds of sale of bonds to the extent provided in the resolution or indenture
authorizing the issuance of them;
(3) funds directed to be transferred by the authority to the debt service reserve fund; and
(4) other money made available to the authority from any other source only for the purpose
of the fund.
    Subd. 2. Use of funds. Except as provided in this section, the money credited to each debt
service reserve fund must be used only for the payment of the principal of bonds of the authority
as they mature, the purchase of the bonds, the payment of interest on them, or the payment of any
premium required when the bonds are redeemed before maturity. Money in a debt service reserve
fund must not be withdrawn at a time and in an amount that reduces the amount of the fund to less
than the amount the authority determines to be reasonably necessary for the purposes of the fund.
However, money may be withdrawn to pay principal or interest due on bonds secured by the fund
if other money of the authority is not available.
    Subd. 3. Investment. Money in a debt service reserve fund not required for immediate use
may be invested in accordance with section 446A.11, subdivision 9, paragraph (b).
    Subd. 4. Minimum amount of reserve at issuance. If the authority establishes a debt
service reserve fund for the security of any series of bonds, it shall not issue additional bonds
that are similarly secured if the amount of any of the debt service reserve funds at the time of
issuance does not equal or exceed the minimum amount required by the resolution creating the
fund, unless the authority deposits in each fund at the time of issuance, from the proceeds of
the bonds, or otherwise, an amount that when added together with the amount then in the fund
will be at least the minimum amount required.
    Subd. 5. Transfer of excess. To the extent consistent with the resolutions and indentures
securing outstanding bonds, the authority may at the close of a fiscal year transfer to any other
fund or account from any debt service reserve fund any excess in that reserve fund over the
amount determined by the authority to be reasonably necessary for the purpose of the reserve fund.
    Subd. 6. Certification and budget request. To assure the payment of the principal of and
interest on bonds of the authority issued prior to January 1, 1994, and the continued maintenance
of all debt service reserve funds created and established for that payment, the authority shall
annually determine and certify to the governor, on or before December 1, the following amounts:
(1) the amount then needed to restore each debt service reserve fund securing in whole or in
part the payment of principal of and interest on bonds of the authority issued prior to January
1, 1994, to the minimum amount required by the resolution or indenture establishing the fund,
but not exceeding the maximum amount of principal and interest to become due and payable in
any later year on all bonds issued prior to January 1, 1994, that are then outstanding and secured
by the fund; and
(2) the amount determined by the authority to be needed in the immediately ensuing fiscal
year, with other funds pledged and estimated to be received during that year, for the payment of
the principal and interest due and payable in that year on all then outstanding bonds secured by a
debt service reserve fund securing in whole or in part the payment of principal of and interest on
bonds of the authority issued prior to January 1, 1994, the amount of which is then less than the
minimum amount agreed, but not exceeding the maximum amount of principal and interest to
become due and payable in the immediately ensuing fiscal year on bonds prior to January 1, 1994.
The governor shall include in the proposed biennial budget for the following fiscal year, or in
a supplemental budget if the biennial budget has previously been approved, the amounts certified
by the authority in accordance with this subdivision.
History: 1988 c 546 s 8; 1994 c 632 art 2 s 53