Skip to main content
Find a Lawyer

Minnesota Statutes Public Debt; Local Government Aid (Ch. 474-477A) § 475.522. Grant anticipation financing of transportation or transit projects

Current as of January 01, 2023 | Updated by FindLaw Staff

Subdivision 1. Definitions. For purposes of this section, the term “political subdivision” means a county or a statutory or home rule charter city, and the term “issuing political subdivision” means a political subdivision that issues obligations under subdivision 2.

Subd. 2. Authorization. An issuing political subdivision may enter into agreements with any other political subdivision of the state, within or without its jurisdiction, and any state agency, with respect to federal grants for transportation or transit projects to be received directly or indirectly by or on behalf of the political subdivision or agency, under an executed grant agreement with the relevant federal agency. The agreements may provide that the political subdivision or agency will pledge to the issuing political subdivision all or a specified portion of the federal grants received by or on behalf of the political subdivision or agency for a specified period of years, or until all obligations issued by the issuing political subdivision under subdivision 3 with respect to those federal grants have been paid or legally defeased. If the issuing political subdivision issues obligations under subdivision 3, the agreements must provide the method by which the proceeds of the obligations will be used to pay or reimburse the costs of the transportation or transit projects relating to the federal grants described in the executed federal grant agreement.

Subd. 3. Issuance of obligations. In anticipation of any federal grants for transportation or transit projects to be received directly or indirectly by any political subdivision or agency as specified in subdivision 1, or by an issuing political subdivision with respect to any transportation or transit projects within its jurisdiction, an issuing political subdivision may issue its obligations payable from the collections of those federal grants. The obligations may be issued in the principal amount the issuing political subdivision determines provided that the estimated collections of the federal grants under the relevant executed federal grant agreement in each year in which the obligations will be outstanding must be at least equal to:

(1) if the obligations are to be issued as revenue obligations, 150 percent of the maximum annual debt service on the obligations; or

(2) if the obligations are to be issued as general obligations, 110 percent of the maximum annual debt service on the obligations.

Except as otherwise provided in this section, the issuing political subdivision shall provide for the issuance, sale, and security of the obligations as provided in chapter 475, and has the same powers and duties as a municipality issuing bonds under that law, except that no election is required and the net debt limitations in chapter 475 do not apply to the obligations. The issuing political subdivision may determine to issue the obligations as revenue obligations, payable solely from the collections of the federal grants anticipated, or may pledge its full faith and credit to the payment of the obligations.

Subd. 4. Use of proceeds. The proceeds of the obligations must be used:

(1) to pay or reimburse the costs of the transportation or transit projects relating to the federal grants being anticipated;

(2) to pay the costs of issuance of the obligations, including credit enhancement;

(3) to pay interest on the obligations for a period not exceeding three years from their date of issue; and

(4) if the full faith and credit of the issuing political subdivision is not pledged to the payment of the obligations, to fund a debt service reserve fund for the obligations.

Back to chapter list
Previous part of code Next part of code
Back to chapter list

Cite this article: FindLaw.com - Minnesota Statutes Public Debt; Local Government Aid (Ch. 474-477A) § 475.522. Grant anticipation financing of transportation or transit projects - last updated January 01, 2023 | https://codes.findlaw.com/mn/public-debt-local-government-aid-ch-474-477a/mn-st-sect-475-522/

Read this complete Minnesota Statutes Public Debt; Local Government Aid (Ch. 474-477A) § 475.522. Grant anticipation financing of transportation or transit projects on Westlaw. Westlaw subscription required.

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.

Was this helpful?

Search all Minnesota Codes

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About the Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to find an attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

Copied to clipboard