2025 Session Last amended: 1965 session

§ 16A.673 — Certificates of Indebtedness Issued by State, Negotiability

Plain-Language Summary

State certificates of indebtedness—short-term borrowing instruments that the state issues in anticipation of collecting taxes—and their interest coupons are legally treated as negotiable instruments under the Uniform Commercial Code. This means they can be freely transferred and traded like other commercial paper even though they are payable only from specific tax revenue funds. This classification allows these state instruments to participate fully in commercial markets.

16A.673 CERTIFICATES OF INDEBTEDNESS ISSUED BY STATE, NEGOTIABILITY.

Certificates of indebtedness and interest coupons appurtenant thereto, heretofore or hereafter issued by the state of Minnesota in anticipation of the collection of taxes and payable as to principal and interest exclusively from the proceeds of such taxes, shall be negotiable instruments within the meaning and for all purposes of the Uniform Commercial Code, notwithstanding that they may be payable from a particular fund.

History:

1959 c 1 s 1; 1965 c 812 s 27

History: History: 1959 c 1 s 1; 1965 c 812 s 27

Practical Notes

This provision gives state tax anticipation notes the same legal standing as commercial paper, making them more attractive to investors and lenders. It allows the state to borrow money in anticipation of tax revenue by issuing instruments that banks and investors can treat as standard negotiable instruments. This is relevant to financial institutions, investors, and government finance professionals who deal in state debt instruments.

Source: Minnesota Office of the Revisor of Statutes