475A.04 DEBT SERVICE DEFICIENCY LOANS.
    Subdivision 1. Procedure. In the event that funds sufficient to pay all of the principal and
interest due on any guaranteed bond are not in the hands of the municipal treasurer or the paying
agent at least 15 days before the due date, the treasurer or agent shall report the amount of the
deficiency to the paying agent and the auditor who shall grant a loan to the issuer in this amount
and shall certify to the issuer, the paying agent, and the auditor and treasurer of each county in
which property subject to taxation by the issuer is situated, the amount of the loan and interest to
accrue thereon to the due date of the loan, and the commissioner of finance shall issue a warrant
for the principal amount and shall remit it to the paying agent on or before the due date. If the
municipal treasurer fails to deposit funds with the paying agent sufficient to pay all principal and
interest due on any guaranteed bond on any date, without having previously given the notice
herein required, the paying agent may report the amount of the deficiency to the commissioner
of finance, who shall forthwith grant a loan to the issuer for this amount plus interest to accrue
thereon for one month at the rate represented by the coupons then due, and the loan shall be
certified and remitted as provided above. The paying agent may advance its own funds for the
payment of any guaranteed bonds and interest due for which it has not received sufficient funds
from the municipality, and may contract with the municipality to make such advances, and shall
be entitled to reimbursement therefor from the proceeds of the loan, with interest at the rate
represented by the coupons due. The issuing municipality shall give a receipt to the commissioner
of finance for the amount of the loan and interest.
    Subd. 2. Due date; interest; prepayment. Each loan shall become due on December 31
in the year following the year when a tax is levied for its payment as provided in subdivision 3,
and shall bear interest from the date of its disbursement until paid, at a rate determined by the
commissioner of finance, not less than the average annual rate payable on state municipal aid
bonds most recently issued before such disbursement, and in no event less than 3-1/2 percent
per annum. Any loan may be prepaid at any time with interest to the date of prepayment, by
remittance to the commissioner of finance, who shall deposit the prepayment to the credit of the
municipal bond guarantee fund and shall issue a receipt to the municipality with a copy to the
treasurer of each county in which taxable property within the municipality is situated. Interest on
loans not prepaid shall be due at the same time as principal.
    Subd. 3. Levy. Before October 1 in each year the state auditor shall certify to the county
auditor and treasurer of each county containing taxable property situated within any municipality
having an outstanding loan, and to the municipality, the amount, if any, necessary to be levied to
produce the total amount of principal and interest to become due in the next ensuing year on such
loan plus the amount of any guaranty fee unpaid. After receipt of the certification each county
auditor, upon ascertaining the current year's net tax capacity of all taxable property within the
municipality which is situated within that county, and upon ascertaining from the county auditors
of other counties the net tax capacity of any such property situated within their counties, shall
extend upon the tax rolls an ad valorem tax upon all such property within that county, in an amount
equal to that proportion of the total amount certified by the secretary which the net tax capacity of
such property bears to the net tax capacity of all taxable property within the municipality.
    Subd. 4. First lien. Each loan shall be a first lien and charge on all collections of taxes levied
on property by the municipality to which the loan is granted, which are due and payable on and
after October 31 in the year in which the loan is due. Unless a receipt for the prepayment thereof
has theretofore been filed with the treasurer of each county in which property taxable by the
municipality to which the loan was granted is situated, each such treasurer shall deduct from the
first such taxes to be distributed to the municipality the full amount of the tax extended pursuant
to subdivision 3, and shall remit the same to the commissioner of finance, who shall deposit the
remittance to the credit of the municipal bond guaranty fund and shall issue a receipt to the
municipality with a copy to the county treasurer.
History: 1971 c 856 s 4; Ex1971 c 46 s 4; 1973 c 492 s 14; 1986 c 444; 1988 c 719 art 5 s
84; 1989 c 329 art 13 s 20; 2003 c 112 art 2 s 44