as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to finance; updating and changing the 1.3 Minnesota Bond Allocation Act; amending Minnesota 1.4 Statutes 2000, sections 474A.02, subdivisions 8, 13a, 1.5 22a, 22b, 23a; 474A.03, subdivisions 1, 2a, 4; 1.6 474A.04, subdivisions 1a, 5; 474A.045; 474A.047, 1.7 subdivisions 1, 2; 474A.061, subdivisions 1, 2a, 2b, 1.8 2c, 4; 474A.091, subdivisions 2, 3, 4, 5, 6, by adding 1.9 a subdivision; 474A.131, subdivisions 1, 2, by adding 1.10 a subdivision; 474A.14; proposing coding for new law 1.11 in Minnesota Statutes, chapter 474A; repealing 1.12 Minnesota Statutes 2000, section 474A.061, subdivision 1.13 6. 1.14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.15 Section 1. Minnesota Statutes 2000, section 474A.02, 1.16 subdivision 8, is amended to read: 1.17 Subd. 8. [FEDERAL TAX LAW.] "Federal tax law" means those 1.18 provisions of the Internal Revenue Code of 1986, as 1.19 amendedthrough December 31, 1990, that limit the aggregate 1.20 amount of obligations of a specified type or types which may be 1.21 issued by an issuer during a calendar year whose interest is 1.22 excluded from gross income for purposes of federal income 1.23 taxation. 1.24 Sec. 2. Minnesota Statutes 2000, section 474A.02, 1.25 subdivision 13a, is amended to read: 1.26 Subd. 13a. [SMALL ISSUE POOL.] "Small issue pool" means 1.27 the amount of the annual volume cap allocated under section 1.28 474A.061, that is available for the issuance of enterprise zone 1.29 facility bonds authorized under Public Law Number 103-66, 2.1 section 13301, small issue bonds to finance manufacturing 2.2 projects,andthe agricultural development bond beginning farmer 2.3 and agricultural business enterprise loan program authorized in 2.4 sections 41C.01 to 41C.13, and student loan bonds issued by the 2.5 Minnesota higher education services office. 2.6 Sec. 3. Minnesota Statutes 2000, section 474A.02, 2.7 subdivision 22a, is amended to read: 2.8 Subd. 22a. [PUBLIC FACILITIES POOL.] "Public facilities 2.9 pool" means the amount of the annual volume cap allocated under 2.10 section 474A.061, which is available for the issuance of public 2.11 facility bondsor student loan bonds. 2.12 Sec. 4. Minnesota Statutes 2000, section 474A.02, 2.13 subdivision 22b, is amended to read: 2.14 Subd. 22b. [PUBLIC FACILITIES PROJECT.] "Public facilities 2.15 project" means any publicly owned facility, or facility owned by 2.16 a nonprofit organization that is used for district heating or 2.17 cooling, that is eligible to be financed with the proceeds of 2.18 public facilities bonds as defined under section 474A.02, 2.19 subdivision 23a. 2.20 Sec. 5. Minnesota Statutes 2000, section 474A.02, 2.21 subdivision 23a, is amended to read: 2.22 Subd. 23a. [QUALIFIED BONDS.] "Qualified bonds" means the 2.23 specific type or types of obligations that are subject to the 2.24 annual volume cap. Qualified bonds include the following types 2.25 of obligations as defined in federal tax law: 2.26 (a) "public facility bonds" means "exempt facility bonds" 2.27 as defined in federal tax law, except for residential rental 2.28 project bonds, which are those obligations issued to finance 2.29 airports, docks and wharves, mass commuting facilities, 2.30 facilities for the furnishing of water, sewage facilities, solid 2.31 waste disposal facilities, facilities for the local furnishing 2.32 of electric energy or gas, local district heating or cooling 2.33 facilities, and qualified hazardous waste facilities. New bonds 2.34 and other obligations are ineligible to receive state 2.35 allocations or entitlement authority for public facility 2.36 projects under this section if they have been issued: 3.1 (1) for the purpose of refinancing, refunding, or otherwise 3.2 defeasing existing debt; and 3.3 (2) more than one calendar year prior to the date of 3.4 application; 3.5 (b) "residential rental project bonds" which are those 3.6 obligations issued to finance qualified residential rental 3.7 projects; 3.8 (c) "mortgage bonds"; 3.9 (d) "small issue bonds" issued to finance manufacturing 3.10 projects and the acquisition or improvement of agricultural real 3.11 or personal property under sections 41C.01 to 41C.13; 3.12 (e) "student loan bonds" issued by or on behalf of the 3.13 Minnesota higher education services office; 3.14 (f) "redevelopment bonds"; 3.15 (g) "governmental bonds" with a nonqualified amount in 3.16 excess of $15,000,000 as set forth in section 141(b)5 of federal 3.17 tax law; and 3.18 (h) "enterprise zone facility bonds" issued to finance 3.19 facilities located within empowerment zones or enterprise 3.20 communities, as authorized under Public Law Number 103-66, 3.21 section 13301. 3.22 Sec. 6. Minnesota Statutes 2000, section 474A.03, 3.23 subdivision 1, is amended to read: 3.24 Subdivision 1. [UNDER FEDERAL TAX LAW; ALLOCATIONS.] At 3.25 the beginning of each calendar year after December 31,19973.26 2001, the commissioner shall determine the aggregate dollar 3.27 amount of the annual volume cap under federal tax law for the 3.28 calendar year, and of this amount the commissioner shall make 3.29 the following allocation: 3.30 (1)$63,000,000$74,530,000 to the small issue pool; 3.31 (2)$59,000,000$122,060,000 to the housing pool, 3.32$37,000,000of which 31 percent of the adjusted allocation is 3.33 reserved until theday after the firstlast Monday inFebruary3.34 July for single-family housing programs; 3.35 (3)$10,500,000$12,750,000 to the public facilities pool; 3.36 and 4.1 (4) amounts to be allocated as provided in subdivision 2a. 4.2 If the annual volume cap is greater or less than the amount 4.3 of bonding authority allocated under clauses (1) to (4) and 4.4 subdivision 2a, paragraph (a), clauses (1) to (4), the 4.5 allocation must be adjusted so that each adjusted allocation is 4.6 the same percentage of the annual volume cap as each original 4.7 allocation is of the total bonding authority originally 4.8 allocated. 4.9 Sec. 7. Minnesota Statutes 2000, section 474A.03, 4.10 subdivision 2a, is amended to read: 4.11 Subd. 2a. [ENTITLEMENT ISSUER ALLOCATION.] (a) The 4.12 commissioner shall make the following allocation to the 4.13 Minnesota housing finance agency and the following cities and 4.14 county: 4.15 (1)$53,750,000$84,940,000 per year to the Minnesota 4.16 housing finance agency, less any amount received in the previous4.17year under section 474A.091, subdivision 6; 4.18 (2)$21,000,000$33,190,000 per year to the city of 4.19 Minneapolis; 4.20 (3)$15,750,000$24,890,000 per year to the city of Saint 4.21 Paul; and 4.22 (4)$10,500,000$16,600,000 per year to the Dakota county 4.23 community development agency for the county of Dakota and all 4.24 political subdivisions located within the county. 4.25 (b) Entitlement allocations provided under this subdivision 4.26 must be used for mortgage bonds, mortgage credit certificates, 4.27 public facility bonds, or residential rental project bonds, 4.28 except that entitlement issuersmay also use their allocations4.29for public facility bonds, andmay carry forward their 4.30 allocations for any qualified bond as defined under section 4.31 474A.02, subdivision 23a. 4.32 (c) Data on the home purchase price amount, mortgage 4.33 amount, income, household size, and race of the households 4.34 served with the proceeds of mortgage revenue bonds and mortgage 4.35 credit certificates in the previous year must be submitted by 4.36 each entitlement issuer to the Minnesota housing finance agency 5.1 by December 31 of each year. Compliance by the Minnesota 5.2 housing finance agency with the provisions of section 462A.073, 5.3 subdivision 5, shall be deemed compliance with the reporting 5.4 requirements of this subdivision. 5.5 Sec. 8. Minnesota Statutes 2000, section 474A.03, 5.6 subdivision 4, is amended to read: 5.7 Subd. 4. [APPLICATION FEE.] Every entitlement issuer and 5.8 other issuer shall pay to the commissioner a nonrefundable 5.9 application fee to offset the state cost of program 5.10 administration. The application fee is $20 for each $100,000 of 5.11 entitlement or allocation requested, with the request rounded to 5.12 the nearest $100,000. The minimum fee is $20. Fees received by 5.13 the commissioner must be credited to the general fund. 5.14Application fees for projects of entitlement issuers must be5.15submitted to the commissioner with the notice of issuance of5.16bonds, notice of use of mortgage credit certificates, and notice5.17of carry forward.Each entitlement issuer must pay its 5.18 application fee in full for that calendar year to the 5.19 commissioner no later than when the first notice of issuance of 5.20 bonds, notice of use of mortgage credit certificates, or notice 5.21 of carry forward is submitted to the commissioner by that issuer. 5.22 Sec. 9. Minnesota Statutes 2000, section 474A.04, 5.23 subdivision 1a, is amended to read: 5.24 Subd. 1a. [ENTITLEMENT RESERVATIONS; CARRYFORWARD; 5.25 DEDUCTION.] Any amount returned by an entitlement issuer before 5.26 July 15 shall be reallocated through the housing pool. Any 5.27 amount returned on or after July 15 shall be reallocated through 5.28 the unified pool. An amount returned after the last Monday in 5.29 November shall be reallocated to the Minnesota housing finance 5.30 agency. Any amount of bonding authority that an entitlement 5.31 issuer carries forward under federal tax law that is not 5.32 permanently issued or for which the governing body of the 5.33 entitlement issuer has not enacted a resolution electing to use 5.34 the authority for mortgage credit certificatesby July 15and 5.35 has not provided a notice of issue to the commissioner before 5.36 4:30 p.m. on the last business day in December of the succeeding 6.1 calendar year shall be deducted from the entitlement allocation 6.2 for that entitlement issuerfor the current calendar year. Any6.3amount deducted from an entitlement issuer's allocation under6.4this subdivision shall be reallocated through the unified pool.6.5An entitlement issuer must permanently issue all carryforward6.6authority or enact a resolution electing to use all carryforward6.7authority for mortgage credit certificates prior to issuing any6.8current year authority of that entitlement issuerin the next 6.9 succeeding calendar year. Any amount deducted from an 6.10 entitlement issuer's allocation under this subdivision shall be 6.11 reallocated to other entitlement issuers, the housing pool, the 6.12 small issue pool, and the public facilities pool on a 6.13 proportional basis consistent with section 474A.03. 6.14 Sec. 10. Minnesota Statutes 2000, section 474A.04, 6.15 subdivision 5, is amended to read: 6.16 Subd. 5. [NOTICE OF ENTITLEMENT ALLOCATION.] As soon as 6.17 possible in each calendar year, the commissioner shallprovide6.18to each entitlement issuer a written notice of the amount of its6.19 post on the department's Web site the amount of each entitlement 6.20 allocation. 6.21 Sec. 11. Minnesota Statutes 2000, section 474A.045, is 6.22 amended to read: 6.23 474A.045 [SCORING SYSTEM FOR ENTERPRISE ZONE FACILITY 6.24 PROJECTS AND MANUFACTURING PROJECTS.] 6.25 The following criteria must be used in determining the 6.26 allocation of enterprise zone facility bonds and small issue 6.27 bonds for manufacturing projects. The issuer must prepare and 6.28 submit to the commissioner a public purpose scoring worksheet 6.29 that presents the data and methods used in determining the total 6.30 score under this section. The total score is the sum of the 6.31 following: 6.32 (1) the number of direct new jobs in the state generated by 6.33 the proposed project for the next two years per $100,000 of 6.34 proposed allocation multiplied by 15; 6.35 (2) the number of direct existing jobs in the state 6.36 multiplied by .625 due to the proposed project for the next two 7.1 years per $100,000 of proposed allocation multiplied by 15; 7.2 (3) the average hourly wage paid to employees by the 7.3 proposed project for the next two years, exclusive of benefits 7.4 mandated by law, based on the following scale: 7.5 Wages paid per hour $ 8 $10 $12 $15 7.6 Non-Metro area points awarded 10 15 20 20 7.7 Seven-County Metro Area 7.8 points awarded 0 10 15 20 7.9 For purposes of this section, the seven-county metropolitan 7.10 area includes Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, 7.11 and Washington counties; 7.12 (4) the quotient of the estimated total net increase in 7.13 property taxes generated in the state by the project in the 7.14 first full year of operation divided by the proposed bond 7.15 allocation, multiplied by 500;and7.16 (5) the seasonally unadjusted unemployment rate in the 7.17 community where the proposed project is located measured as a 7.18 percent of the state's unemployment rate, multiplied by ten. 7.19 The community seasonally unadjusted unemployment rate used 7.20 in determining the points under clause (5) must be the most 7.21 recent rate for the city or county in which the proposed project 7.22 is located, as provided by the commissioner of economic security. 7.23 (6) 20 points for projects that locate in an incorporated 7.24 area or a planned urban growth area as defined by section 7.25 462.352, subdivision 18; 7.26 (7) 20 points for brownfield projects located in a state or 7.27 federal Superfund site, a voluntary investigation and cleanup 7.28 site, or a brownfield site, all as defined by the Minnesota 7.29 pollution control agency; and 7.30 (8) 20 points for projects with favorable environmental 7.31 citizenship as evidenced by no nonforgivable or combination 7.32 administrative penalty orders, stipulation agreements, consent 7.33 decrees, or other enforcement orders containing a monetary 7.34 penalty by the Minnesota pollution control agency over the past 7.35 three years or pending at the time of application. 7.36 Sec. 12. Minnesota Statutes 2000, section 474A.047, 8.1 subdivision 1, is amended to read: 8.2 Subdivision 1. [ELIGIBILITY.] (a) An issuer may only use 8.3 the proceeds from residential rental bonds if the proposed 8.4 project meetsone ofthe following requirements: 8.5(1) the proposed project is a single room occupancy project8.6and all the units of the project will be occupied by individuals8.7whose incomes at the time of their initial residency in the8.8project are 50 percent or less of the greater of the statewide8.9or county median income adjusted for household size as8.10determined by the federal Department of Housing and Urban8.11Development;8.12(2) the proposed project is a multifamily project where at8.13least 75 percent of the units have two or more bedrooms and at8.14least one-third of the 75 percent have three or more bedrooms;8.15or8.16(3) the proposed project is a multifamily project that8.17meets the following requirements:8.18(i) the proposed project is the rehabilitation of an8.19existing building which meets the requirements for minimum8.20rehabilitation expenditures in sections 42(e)(2) and 42(e)(3)(A)8.21of the Internal Revenue Code;8.22(ii) the proposed project involves participation by the8.23Minnesota housing finance agency or a local unit of government8.24in the financing of the acquisition or rehabilitation of the8.25project. For purposes of this subdivision, "participation"8.26means an activity other than the issuance of the bonds; and8.27(iii) the proposed project must be occupied by individuals8.28or families whose incomes at the time of their initial residency8.29in the project meet the requirements of section 42(g) of the8.30Internal Revenue Code.8.31 (1) the proposed residential rental project meets the 8.32 requirements of section 142(d) of the Internal Revenue Code 8.33 regarding the incomes of the occupants of the housing; and 8.34 (2) the maximum rent for at least 20 percent of the units 8.35 in the proposed residential rental project do not exceed the 8.36 area fair market rent or exception fair market rents for 9.1 existing housing, if applicable, as established by the federal 9.2 Department of Housing and Urban Development. 9.3 (b)The maximum rent for a proposed single room occupancy9.4unit under paragraph (a), clause (1), is 30 percent of the9.5amount equal to 30 percent of the greater of the statewide or9.6county median income for a one-member household as determined by9.7the federal Department of Housing and Urban Development. The9.8maximum rent for at least 75 percent of the units of a9.9multifamily project under paragraph (a), clause (2), is 309.10percent of the amount equal to 50 percent of the greater of the9.11statewide or county median income as determined by the federal9.12Department of Housing and Urban Development based on a household9.13size with 1.5 persons per bedroom.9.14(c)The proceeds from residential rental bonds may be used 9.15 for a project for which project-based federal rental assistance 9.16 payments are made only if: 9.17 (1) the owner of the project enters into a binding 9.18 agreement with the Minnesota housing finance agency under which 9.19 the owner is obligated to extend any existing low-income 9.20 affordability restrictions and any contract or agreement for 9.21 rental assistance payments for the maximum term permitted, 9.22 including any renewals thereof; and 9.23 (2) the Minnesota housing finance agency certifies that 9.24 project reserves will be maintained at closing of the bond issue 9.25 and budgeted in future years at the lesser of: 9.26 (i) the level described in Minnesota Rules, part 4900.0010, 9.27 subpart 7, item A, subitem (2), effective May 1, 1997; or 9.28 (ii) the level of project reserves available prior to the 9.29 bond issue, provided that additional money is available to 9.30 accomplish repairs and replacements needed at the time of bond 9.31 issue. 9.32 Sec. 13. Minnesota Statutes 2000, section 474A.047, 9.33 subdivision 2, is amended to read: 9.34 Subd. 2. [15-YEAR AGREEMENT.] Prior to the issuance of 9.35 residential rental bonds, the developer of the project for which 9.36 the bond proceeds will be used must enter into a 15-year 10.1 agreement with the issuer that specifies the maximum rental 10.2 rates of the rent-restricted units in the project and the income 10.3 levels of the residents of the project occupying 10.4 income-restricted units.TheSuch rental rates and income 10.5 levels must be within the limitations established under 10.6 subdivision 1. The developer must annually certify to the 10.7 issuer over the term of the agreement that the rental rates for 10.8 the rent-restricted units are within the limitations under 10.9 subdivision 1. The issuer may request individual certification 10.10 of the income ofallresidents of theprojectincome-restricted 10.11 units. The commissioner may request from the issuer a copy of 10.12 the annual certification prepared by the developer. The 10.13 commissioner may require the issuer to request individual 10.14 certification of all residents of theprojectincome-restricted 10.15 units. 10.16 Sec. 14. Minnesota Statutes 2000, section 474A.061, 10.17 subdivision 1, is amended to read: 10.18 Subdivision 1. [APPLICATION.] (a) An issuer may apply for 10.19 an allocation under this section by submitting to the department 10.20 an application on forms provided by the department, accompanied 10.21 by (1) a preliminary resolution, (2) a statement of bond counsel 10.22 that the proposed issue of obligations requires an allocation 10.23 under this chapter and the Internal Revenue Code, (3) the type 10.24 of qualified bonds to be issued, (4) an application deposit in 10.25 the amount of one percent of the requested allocation before the 10.26 last Monday in July, or in the amount of two percent of the 10.27 requested allocation on or after the last Monday in July, (5) a 10.28 public purpose scoring worksheet for manufacturing project and 10.29 enterprise zone facility project applications, and (6) for 10.30 residential rental projects, a statement from the applicant or 10.31 bond counsel as to whether the project preserves existing 10.32 federally subsidized housing for residential rental project 10.33 applications and whether the project is restricted to persons 10.34 who are 55 years of age or older. The issuer must pay the 10.35 application deposit by a check made payable to the department of 10.36 finance. The Minnesota housing finance agency, the Minnesota 11.1 rural finance authority, and the Minnesota higher education 11.2 services office may apply for and receive an allocation under 11.3 this section without submitting an application deposit. 11.4 (b) An entitlement issuer may not apply for an allocation 11.5 from the housing pool or from the public facilities pool unless 11.6 it has either permanently issued bonds equal to the amount of 11.7 its entitlement allocation for the current year plus any amount 11.8 of bonding authority carried forward from previous years or 11.9 returned for reallocation all of its unused entitlement 11.10 allocation. For purposes of this subdivision, its entitlement 11.11 allocation includes an amount obtained under section 474A.04, 11.12 subdivision 6. This paragraph does not apply to an application 11.13 from the Minnesota housing finance agency for an allocation 11.14 under subdivision 2a for cities who choose to have the agency 11.15 issue bonds on their behalf. 11.16 (c) If an application is rejected under this section, the 11.17 commissioner must notify the applicant and return the 11.18 application deposit to the applicant within 30 days unless the 11.19 applicant requests in writing that the application be 11.20 resubmitted. The granting of an allocation of bonding authority 11.21 under this section must be evidenced by a certificate of 11.22 allocation. 11.23 Sec. 15. Minnesota Statutes 2000, section 474A.061, 11.24 subdivision 2a, is amended to read: 11.25 Subd. 2a. [HOUSING POOL ALLOCATION.] (a)On the first11.26business day that falls on a Monday of the calendar year and the11.27first Monday in FebruaryCommencing on the second Tuesday in 11.28 January and continuing on each Monday through July 15, the 11.29 commissioner shall allocate available bonding authorityinfrom 11.30 the housing pool to applications receivedbyon or before the 11.31 Monday of thepreviouspreceding week for residential rental 11.32 projectsthat are not restricted to persons who are 55 years of11.33age or older andthat meet the eligibility criteria under 11.34 section 474A.047, except that allocations may be made to11.35projects that are restricted to persons who are 55 years of age11.36or older, if the project preserves existing federally subsidized12.1housing. Projects that preserve existing federally subsidized12.2housing shall be allocated available bonding authority in the12.3housing pool for residential rental projects prior to the12.4allocation of available bonding authority to other eligible12.5residential rental projects. Allocations of available bonding 12.6 authority from the housing pool for eligible residential rental 12.7 projects shall be awarded in the following order of priority: 12.8 (1) projects that preserve existing federally subsidized 12.9 housing; (2) projects that are not restricted to persons who are 12.10 55 years of age or older; and (3) other residential rental 12.11 projects. Prior to May 15, no allocation shall be made to a 12.12 project restricted to persons who are 55 years of age or older. 12.13 If an issuer that receives an allocation under this paragraph 12.14 does not issue obligations equal to all or a portion of the 12.15 allocation received within 120 days of the allocation or returns 12.16 the allocation to the commissioner, the amount of the allocation 12.17 is canceled and returned for reallocation through the housing 12.18 pool or to the unified pool after July 15. 12.19 (b) AfterFebruaryJanuary 1, and throughFebruaryJanuary 12.20 15, the Minnesota housing finance agency may accept applications 12.21 from cities for single-family housing programs which meet 12.22 program requirements as follows: 12.23 (1) the housing program must meet a locally identified 12.24 housing need and be economically viable; 12.25 (2) the adjusted income of home buyers may not exceed 80 12.26 percent of the greater of statewide or area median income as 12.27 published by the Department of Housing and Urban Development, 12.28 adjusted for household size; 12.29 (3) house price limits may not exceed the federal price 12.30 limits established for mortgage revenue bond programs. Data on 12.31 the home purchase price amount, mortgage amount, income, 12.32 household size, and race of the households served in the 12.33 previous year's single-family housing program, if any, must be 12.34 included in each application; and 12.35 (4) for applicants who choose to have the agency issue 12.36 bonds on their behalf, an application fee pursuant to section 13.1 474A.03, subdivision 4, and an application deposit equal to one 13.2 percent of the requested allocation must be submitted to the 13.3 Minnesota housing finance agency before the agency forwards the 13.4 list specifying the amounts allocated to the commissioner under 13.5 paragraph(c)(d). The agency shall submit the city's 13.6 application fee and application deposit to the commissioner when 13.7 requesting an allocation from the housing pool. 13.8 Applications by a consortium shall include the name of each 13.9 member of the consortium and the amount of allocation requested 13.10 by each member. 13.11The Minnesota housing finance agency may accept13.12applications from June 15 through June 30 from cities for13.13single-family housing programs which meet program requirements13.14specified under clauses (1) to (4) if bonding authority is13.15available in the housing pool. Applications will be accepted13.16from June 15 to June 30 only from cities that received an13.17allotment in the same calendar year and used at least 75 percent13.18of their allotment by June 1.13.19 (c) Any amounts remaining in the housing pool after July 15 13.20 are available for single-family housing programs for cities that 13.21 applied in January and received an allocation under this section 13.22 in the same calendar year. For a city that chooses to issue 13.23 bonds on its own behalf or pursuant to a joint powers agreement, 13.24 the agency must allot available bonding authority based on the 13.25 formula in paragraphs (d) and (f). Allocations will be made 13.26 loan by loan, on a first come, first served basis 13.27 amongapplicantcities on whose behalf the Minnesota housing 13.28 finance agency issues bonds.The agency must allot available13.29bonding authority.13.30 Any city that received an allocation pursuant to paragraph 13.31 (f) in the same calendar year that wishes to issue bonds on its 13.32 own behalf or pursuant to a joint powers agreement for an amount 13.33 becoming available for single-family housing programs after July 13.34 15 shall notify the Minnesota housing finance agency by July 13.35 15. The Minnesota housing finance agency shall notify each city 13.36 making a request of the amount of its allocation within three 14.1 business days after July 15. The city must comply with 14.2 paragraph (f). 14.3 For purposes of paragraphs (a) to(g)(h), "city" means a 14.4 county or a consortium of local government units that agree 14.5 through a joint powers agreement to apply together for 14.6 single-family housing programs, and has the meaning given it in 14.7 section 462C.02, subdivision 6. "Agency" means the Minnesota 14.8 housing finance agency. 14.9(c)(d) The total amount of allocation for mortgage bonds 14.10 for one city is limited to the lesser of: (i) the amount 14.11 requested, or (ii) the product of the total amount available for 14.12 mortgage bonds from the housing pool, multiplied by the ratio of 14.13 each applicant's population as determined by the most recent 14.14 estimate of the city's population released by the state 14.15 demographer's office to the total of all the applicants' 14.16 population, except that each applicant shall be allocated a 14.17 minimum of $100,000 regardless of the amount requested or the 14.18 amount determined under the formula in clause (ii). If a city 14.19 applying for an allocation is located within a county that has 14.20 also applied for an allocation, the city's population will be 14.21 deducted from the county's population in calculating the amount 14.22 of allocations under this paragraph. 14.23 Upon determining the amount of each applicant's allocation, 14.24 the agency shall forward to the commissioner a list specifying 14.25 the amounts allotted to each applicationand application deposit14.26checks to the commissionerwith all application fees and 14.27 deposits from applicants who choose to have the agency issue 14.28 bonds on their behalf. 14.29 Total allocations from the housing pool for single-family 14.30 housing programs may not exceed 31 percent of the adjusted 14.31 allocation to the housing pool until after July 15. 14.32(d)(e) The agency may issue bonds on behalf of 14.33 participating cities. The agency shall request an allocation 14.34 from the commissioner for all applicants who choose to have the 14.35 agency issue bonds on their behalf and the commissioner shall 14.36 allocate the requested amount to the agency. The agency may 15.1 request an allocation at any time after thefirst Mondaysecond 15.2 Tuesday inFebruaryJanuary and through the last Monday in July,15.3but may request an allocation no later than the last Monday in15.4July. After awarding an allocation and receiving a notice of 15.5 issuance for the mortgage bonds issued on behalf of the 15.6 participating cities, the commissioner shall transfer the 15.7 application deposits to the Minnesota housing finance agency to 15.8 be returned to the participating cities. Thecommissioner15.9 Minnesota housing finance agency shall return any application 15.10 deposit to a city that paid an application deposit under 15.11 paragraph (b), clause (4), but was not part of the list 15.12 forwarded to the commissioner under paragraph(c)(d). 15.13(e)(f) A city may choose to issue bonds on its own behalf 15.14 or through a joint powers agreementor may use bonding authority15.15for mortgage credit certificatesand may request an allocation 15.16 from the commissioner by forwarding an application with an 15.17 application fee pursuant to section 474A.03, subdivision 4, and 15.18 a one percent application deposit to the commissioner no later 15.19 than the Monday of the week preceding an allocation. If the 15.20 total amount requested by all applicants exceeds the amount 15.21 available in the pool, the city may not receive a greater 15.22 allocation than the amount it would have received under the list 15.23 forwarded by the Minnesota housing finance agency to the 15.24 commissioner. No city may request or receive an allocation from 15.25 the commissioner until the list under paragraph(c)(d) has been 15.26 forwarded to the commissioner. A city must request an 15.27 allocation from the commissioner no later than14 days before15.28the unified pool is created pursuant to section 474A.091,15.29subdivision 1the last Monday in July.On and after the first15.30Monday in February and through the last Monday in July,No city 15.31 may receive an allocation from the housing pool for mortgage 15.32 bonds which has not first applied to the Minnesota housing 15.33 finance agency. The commissioner shall allocate the requested 15.34 amount to the city or cities subject to the limitations under 15.35 this paragraph. 15.36 If a city issues mortgage bonds from an allocation received 16.1 under this paragraph, the issuer must provide for the recycling 16.2 of funds into new loans. If the issuer is not able to provide 16.3 for recycling, the issuer must notify the commissioner in 16.4 writing of the reason that recycling was not possible and the 16.5 reason the issuer elected not to have the Minnesota housing 16.6 finance agency issue the bonds. "Recycling" means the use of 16.7 money generated from the repayment and prepayment of loans for 16.8 further eligible loans or for the redemption of bonds and the 16.9 issuance of current refunding bonds. 16.10(f)(g) No entitlement city or county or city in an 16.11 entitlement county may apply for or be allocated authority to 16.12 issue mortgage bonds or use mortgage credit certificates from 16.13 the housing pool. 16.14(g)(h) A city that does not use at least 50 percent of its 16.15 allotment by the date applications are due for the first 16.16 allocation that is made from the housing pool for single-family 16.17 housing programs in the immediately succeeding calendar year may 16.18 not apply to the housing pool for a single-family mortgage bond 16.19 or mortgage credit certificate program allocation that exceeds 16.20 the amount of its allotment for the preceding year that was used 16.21 by the city in the immediately preceding year or receive an 16.22 allotment from the housing pool in the succeeding calendar year 16.23 that exceeds the amount of its allotment for the preceding year 16.24 that was used in the preceding year. The minimum allotment is 16.25 $100,000 for an allocation made prior to July 15, regardless of 16.26 the amount used in the preceding calendar year, except that a 16.27 city whose allocation in the preceding year was the minimum 16.28 amount of $100,000 and who did not use at least 50 percent of 16.29 its allocation from the preceding year is ineligible for an 16.30 allocation in the immediate succeeding calendar year. Each 16.31 local government unit in a consortium must meet the requirements 16.32 of this paragraph. 16.33 Sec. 16. Minnesota Statutes 2000, section 474A.061, 16.34 subdivision 2b, is amended to read: 16.35 Subd. 2b. [SMALL ISSUE POOL ALLOCATION.]On the first16.36Monday in January that is a business day through the last Monday17.1in JulyCommencing on the second Tuesday in January and 17.2 continuing on each Monday through the last Monday in July, the 17.3 commissioner shall allocate available bonding authority from the 17.4 small issue poolon Monday of each weekto applications received 17.5 on or before the Monday of the preceding week for manufacturing 17.6 projects and enterprise zone facility projects. From thefirst17.7Monday in January that is a business daysecond Tuesday in 17.8 January through the last Monday in July, the commissioner shall 17.9 reserve $5,000,000 of the available bonding authority from the 17.10 small issue pool for applications for agricultural development 17.11 bond loan projects of the Minnesota rural finance authority. 17.12 Beginning in calendar year 2002, on the second Tuesday in 17.13 January through the last Monday in July, the commissioner shall 17.14 reserve $10,000,000 of available bonding authority in the small 17.15 issue pool for applications for student loan bonds of or on 17.16 behalf of the Minnesota higher education services office. The 17.17 total amount of allocations for student loan bonds from the 17.18 small issue pool may not exceed $10,000,000 per year. 17.19 The commissioner shall reserve $10,000,000 until the day 17.20 after the last Monday in February, $10,000,000 until the day 17.21 after the last Monday in April, and $10,000,000 until the day 17.22 after the last Monday in June in the small issue pool 17.23 for enterprise zone facility projects and manufacturing 17.24 projects. The amount of allocation provided to an issuer for a 17.25 specific enterprise zone facility project or manufacturing 17.26 project will be based on the number of points received for the 17.27 proposed project under the scoring system under section 17.28 474A.045.Proposed projects that receive 50 points or more are17.29eligible for all of the proposed allocation. Proposed projects17.30that receive less than 50 points are eligible to receive a17.31proportionally reduced share of the proposed authority, based17.32upon the number of points received.17.33 If there are two or more applications for manufacturing and 17.34 enterprise zone facility projects from the small issue pool and 17.35 there is insufficient bonding authority to provide allocations 17.36 for all projects in any one week, the available bonding 18.1 authority shall be awarded based on the number of points awarded 18.2 a project under section 474A.045, with those projects receiving 18.3 the greatest number of points receiving allocation first. If 18.4 two or more applications receive an equal number of points, 18.5 available bonding authority shall be awarded by lot unless 18.6 otherwise agreed to by the respective issuers. 18.7 Sec. 17. Minnesota Statutes 2000, section 474A.061, 18.8 subdivision 2c, is amended to read: 18.9 Subd. 2c. [PUBLIC FACILITIES POOL ALLOCATION.] From the 18.10 beginning of the calendar year and continuing for a period of 18.11 120 days, the commissioner shall reserve$5,000,000$3,000,000 18.12 of the available bonding authority from the public facilities 18.13 pool for applications for public facilities projects to be 18.14 financed by the Western Lake Superior Sanitary District.On the18.15first Monday in January that is a business day through the last18.16Monday in JulyCommencing on the second Tuesday in January and 18.17 continuing on each Monday through the last Monday in July, the 18.18 commissioner shall allocate available bonding authority from the 18.19 public facilities poolon Monday of each weekto applications 18.20 for eligible public facilities projects received on or before 18.21 the Monday of the preceding week. If there are two or more 18.22 applications for public facilities projects from the pool and 18.23 there is insufficient available bonding authority to provide 18.24 allocations for all projects in any one week, the available 18.25 bonding authority shall be awarded by lot unless otherwise 18.26 agreed to by the respective issuers. 18.27 Sec. 18. Minnesota Statutes 2000, section 474A.061, 18.28 subdivision 4, is amended to read: 18.29 Subd. 4. [RETURN OF ALLOCATION; DEPOSIT REFUND.] (a) If an 18.30 issuer that receives an allocation under this section determines 18.31 that it will not issue obligations equal to all or a portion of 18.32 the allocation received under this section within 120 days of 18.33 allocation or within the time period permitted by federal tax 18.34 law, whichever is less, the issuer must notify the department. 18.35 If the issuer notifies the department or the 120-day period 18.36 since allocation has expired prior to the last Monday in July, 19.1 the amount of allocation is canceled and returned for 19.2 reallocation through the pool from which it was originally 19.3 allocated. If the issuer notifies the department or the 120-day 19.4 period since allocation has expired on or after the last Monday 19.5 in July, the amount of allocation is canceled and returned for 19.6 reallocation through the unified pool. If the issuer notifies 19.7 the department after the last Monday in November, the amount of 19.8 allocation is canceled and returned for reallocation to the 19.9 Minnesota housing finance agency. To encourage a competitive 19.10 application process, the commissioner shall reserve, for new 19.11 applications, the amount of allocation that is canceled and 19.12 returned for reallocation under this section for a minimum of 19.13 seven calendar days. 19.14 (b) An issuer that returns for reallocation all or a 19.15 portion of an allocation received under this section within 120 19.16 days of allocation shall receive within 30 days a refund equal 19.17 to: 19.18 (1) one-half of the application deposit for the amount of 19.19 bonding authority returned within 30 days of receiving 19.20 allocation; 19.21 (2) one-fourth of the application deposit for the amount of 19.22 bonding authority returned between 31 and 60 days of receiving 19.23 allocation; and 19.24 (3) one-eighth of the application deposit for the amount of 19.25 bonding authority returned between 61 and 120 days of receiving 19.26 allocation. 19.27 (c) No refund shall be available for allocations returned 19.28 120 or more days after receiving the allocation or beyond the 19.29 last Monday in November.This subdivision does not apply to the19.30Minnesota housing finance agency or the Minnesota rural finance19.31authority.19.32 Sec. 19. [474A.062] [HESO 120-DAY ISSUANCE EXEMPTION.] 19.33 The Minnesota higher education services office is exempt 19.34 from the 120-day issuance requirements in this chapter and may 19.35 carry forward allocations for student loan bonds into three 19.36 successive calendar years, subject to carryforward notice 20.1 requirements of section 474A.131, subdivision 2. The maximum 20.2 cumulative carryforward is limited to $25,000,000. 20.3 Sec. 20. Minnesota Statutes 2000, section 474A.091, 20.4 subdivision 2, is amended to read: 20.5 Subd. 2. [APPLICATION.] Issuers may apply for an 20.6 allocation under this section by submitting to the department an 20.7 application on forms provided by the department accompanied by 20.8 (1) a preliminary resolution, (2) a statement of bond counsel 20.9 that the proposed issue of obligations requires an allocation 20.10 under this chapter and the Internal Revenue Code, (3) the type 20.11 of qualified bonds to be issued, (4) an application deposit in 20.12 the amount of two percent of the requested allocation,and(5) a 20.13 public purpose scoring worksheet for manufacturing and 20.14 enterprise zone applications, and (6) for residential rental 20.15 projects, a statement from the applicant or bond counsel as to 20.16 whether the project preserves existing federally subsidized 20.17 housing and whether the project is restricted to persons who are 20.18 55 years of age or older. The issuer must pay the application 20.19 deposit by check. An entitlement issuer may not apply for an 20.20 allocation for public facility bonds, residential rental project 20.21 bonds, or mortgage bonds under this section unless it has either 20.22 permanently issued bonds equal to the amount of its entitlement 20.23 allocation for the current year plus any amount carried forward 20.24 from previous years or returned for reallocation all of its 20.25 unused entitlement allocation. For purposes of this 20.26 subdivision, its entitlement allocation includes an amount 20.27 obtained under section 474A.04, subdivision 6. 20.28 Notwithstanding the restrictions imposed on entitlement 20.29 issuers under this subdivision, the Minnesota housing finance 20.30 agency may notapply forreceive an allocation for mortgage 20.31 bonds under this sectionuntil afterprior to thelastfirst 20.32 Monday inAugust. Notwithstanding the restrictions imposed on20.33unified pool allocations after September 1 under subdivision 3,20.34paragraph (c)(2), the Minnesota housing finance agencyOctober, 20.35 but may be awarded allocations for mortgage bonds from the 20.36 unified pool on or afterSeptember 1the first Monday in 21.1 October. The Minnesota housing finance agency, the Minnesota 21.2 higher education services office, and the Minnesota rural 21.3 finance authority may apply for and receive an allocation under 21.4 this section without submitting an application deposit. 21.5 Sec. 21. Minnesota Statutes 2000, section 474A.091, 21.6 subdivision 3, is amended to read: 21.7 Subd. 3. [ALLOCATION PROCEDURE.] (a) The commissioner 21.8 shall allocate available bonding authority under this section on 21.9 the Monday of every other week beginning with the first Monday 21.10 in August through and on the last Monday in November. 21.11 Applications for allocations must be received by the department 21.12 by 4:30 p.m. on the Monday preceding the Monday on which 21.13 allocations are to be made. If a Monday falls on a holiday, the 21.14 allocation will be made or the applications must be received by 21.15 the next business day after the holiday. 21.16(b) On or before September 1, allocations shall be awarded21.17from the unified pool in the following order of priority:21.18(1) applications for enterprise zone facility bonds;21.19(2) applications for small issue bonds for manufacturing21.20projects;21.21(3) applications for small issue bonds for agricultural21.22development bond loan projects;21.23(4) applications for residential rental project bonds;21.24(5) applications for public facility projects funded by21.25public facility bonds;21.26(6) applications for redevelopment bonds;21.27(7) applications for mortgage bonds; and21.28(8) applications for governmental bonds.21.29Allocations for residential rental projects may only be21.30made during the first allocation in August. The amount of21.31allocation provided to an issuer for a specific manufacturing21.32project will be based on the number of points received for the21.33proposed project under the scoring system under section 474A.045.21.34Proposed manufacturing projects that receive 50 points or more21.35are eligible for all of the proposed allocation. Proposed21.36manufacturing projects that receive less than 50 points under22.1section 474A.045 are only eligible to receive a proportionally22.2reduced share of the proposed authority, based upon the number22.3of points received.22.4 (b) Prior to October 1, only the following applications 22.5 shall be awarded allocations from the unified pool. Allocations 22.6 shall be awarded in the following order of priority: 22.7 (1) applications for residential rental project bonds; 22.8 (2) applications for small issue bonds for manufacturing 22.9 projects; and 22.10 (3) applications for small issue bonds for agricultural 22.11 development bond loan projects. 22.12 (c) On the first Monday in October through the last Monday 22.13 in November, allocations shall be awarded from the unified pool 22.14 in the following order of priority: 22.15 (1) applications for student loan bonds issued by or on 22.16 behalf of the Minnesota higher education services office; 22.17 (2) applications for mortgage bonds; 22.18 (3) applications for public facility projects funded by 22.19 public facility bonds; 22.20 (4) applications for small issue bonds for manufacturing 22.21 projects; 22.22 (5) applications for small issue bonds for agricultural 22.23 development bond loan projects; 22.24 (6) applications for residential rental project bonds; 22.25 (7) applications for enterprise zone facility bonds; 22.26 (8) applications for governmental bonds; and 22.27 (9) applications for redevelopment bonds. 22.28 (d) If there are two or more applications for manufacturing 22.29 projects from the unified pool and there is insufficient bonding 22.30 authority to provide allocations for all manufacturing projects 22.31 in any one allocation period, the available bonding authority 22.32 shall be awarded based on the number of points awarded a project 22.33 under section 474A.045 with those projects receiving the 22.34 greatest number of points receiving allocation first. If two or 22.35 more applications for manufacturing projects receive an equal 22.36 amount of points, available bonding authority shall be awarded 23.1 by lot unless otherwise agreed to by the respective issuers. 23.2 (e) If there are two or more applications for enterprise 23.3 zone facility projects from the unified pool and there is 23.4 insufficient bonding authority to provide allocations for all 23.5 enterprise zone facility projects in any one allocation period, 23.6 the available bonding authority shall be awarded based on the 23.7 number of points awarded a project under section 474A.045 with 23.8 those projects receiving the greatest number of points receiving 23.9 allocation first. If two or more applications for enterprise 23.10 zone facility projects receive an equal amount of points, 23.11 available bonding authority shall be awarded by lot unless 23.12 otherwise agreed to by the respective issuers. 23.13 (f) If there are two or more applications for residential 23.14 rental projects from the unified pool and there is insufficient 23.15 bonding authority to provide allocations for all residential 23.16 rental projects in any one allocation period, the available 23.17 bonding authority shall be awarded in the following order of 23.18 priority: (1) projects that preserve existing federally 23.19 subsidized housing; (2) projects that are not restricted to 23.20 persons who are 55 years of age or older; and (3) other 23.21 residential rental projects. 23.22(c)(1)(g) From the first Monday in August through the last 23.23 Monday in November, $20,000,000 of bonding authority or an 23.24 amount equal to the total annual amount of bonding authority 23.25 allocated to the small issue pool under section 474A.03, 23.26 subdivision 1, less the amount allocated to issuers from the 23.27 small issue pool for that year, whichever is less, is reserved 23.28 within the unified pool for small issue bonds to the extent such 23.29 amounts are available within the unified pool.On the first23.30Monday in September through the last Monday in November,23.31$2,500,000 of bonding authority or an amount equal to the total23.32annual amount of bonding authority allocated to the public23.33facilities pool under section 474A.03, subdivision 1, less the23.34amount allocated to issuers from the public facilities pool for23.35that year, whichever is less, is reserved within the unified23.36pool for public facility bonds to the extent such amounts are24.1available within the unified pool.24.2(2)(h) The total amount of allocations for mortgage bonds 24.3 from the housing pool and the unified pool may not exceed: 24.4(i)(1) $10,000,000 for any one city; or 24.5(ii)(2) $20,000,000 for any number of cities in any one 24.6 county. 24.7An allocation for mortgage bonds may be used for mortgage24.8credit certificates.24.9(d) After September 1, allocations shall be awarded from24.10the unified pool only for the following types of qualified bonds:24.11small issue bonds, public facility bonds to finance publicly24.12owned facility projects, residential rental project bonds, and24.13enterprise zone facility bonds.24.14 (i) The total amount of allocations for student loan bonds 24.15 from the unified pool may not exceed $10,000,000 per year. 24.16 (j) If there is insufficient bonding authority to fund all 24.17 projects within any qualified bond category other than 24.18 enterprise zone facility projects, manufacturing projects, and 24.19 residential rental projects, allocations shall be awarded by lot 24.20 unless otherwise agreed to by the respective issuers. 24.21 (k) If an application is rejected, the commissioner must 24.22 notify the applicant and return the application deposit to the 24.23 applicant within 30 days unless the applicant requests in 24.24 writing that the application be resubmitted. 24.25 (l) The granting of an allocation of bonding authority 24.26 under this section must be evidenced by issuance of a 24.27 certificate of allocation. 24.28 Sec. 22. Minnesota Statutes 2000, section 474A.091, is 24.29 amended by adding a subdivision to read: 24.30 Subd. 3a. [MORTGAGE BONDS.] (a) Bonding authority 24.31 remaining in the unified pool on October 1 is available for 24.32 single-family housing programs for cities that applied in 24.33 January and received an allocation under section 474A.061, 24.34 subdivision 2a, in the same calendar year. The Minnesota 24.35 housing finance agency shall receive an allocation for mortgage 24.36 bonds pursuant to this section, minus any amounts for a city or 25.1 consortium that intends to issue bonds on its own behalf under 25.2 paragraph (c). 25.3 (b) The agency may issue bonds on behalf of participating 25.4 cities. The agency shall request an allocation from the 25.5 commissioner for all applicants who choose to have the agency 25.6 issue bonds on their behalf and the commissioner shall allocate 25.7 the requested amount to the agency. Allocations shall be 25.8 awarded by the commissioner each Monday commencing on the first 25.9 Monday in October through the last Monday in November for 25.10 applications received by 4:30 p.m. on the Monday of the week 25.11 preceding an allocation. 25.12 For cities who choose to have the agency issue bonds on 25.13 their behalf, allocations will be made loan by loan, on a first 25.14 come, first served basis among the cities. The agency shall 25.15 submit an application fee pursuant to section 474A.03, 25.16 subdivision 4, and an application deposit equal to two percent 25.17 of the requested allocation to the commissioner when requesting 25.18 an allocation from the unified pool. After awarding an 25.19 allocation and receiving a notice of issuance for mortgage bonds 25.20 issued on behalf of the participating cities, the commissioner 25.21 shall transfer the application deposit to the Minnesota housing 25.22 finance agency. 25.23 For purposes of paragraphs (a) to (d), "city" means a 25.24 county or a consortium of local government units that agree 25.25 through a joint powers agreement to apply together for 25.26 single-family housing programs, and has the meaning given it in 25.27 section 462C.02, subdivision 6. "Agency" means the Minnesota 25.28 housing finance agency. 25.29 (c) Any city that received an allocation pursuant to 25.30 section 474A.061, subdivision 2a, paragraph (f), in the current 25.31 year that wishes to receive an additional allocation from the 25.32 unified pool and issue bonds on its own behalf or pursuant to a 25.33 joint powers agreement shall notify the Minnesota housing 25.34 finance agency by the third Monday in September. The total 25.35 amount of allocation for mortgage bonds for a city choosing to 25.36 issue bonds on its own behalf or through a joint powers 26.1 agreement is limited to the lesser of: (i) the amount 26.2 requested, or (ii) the product of the total amount available for 26.3 mortgage bonds from the unified pool, multiplied by the ratio of 26.4 the population of each city that applied in January and received 26.5 an allocation under section 474A.061, subdivision 2a, in the 26.6 same calendar year, as determined by the most recent estimate of 26.7 the city's population released by the state demographer's office 26.8 to the total of the population of all the cities that applied in 26.9 January and received an allocation under section 474A.061, 26.10 subdivision 2a, in the same calendar year. If a city choosing 26.11 to issue bonds on its own behalf or through a joint powers 26.12 agreement is located within a county that has also chosen to 26.13 issue bonds on its own behalf or through a joint powers 26.14 agreement, the city's population will be deducted from the 26.15 county's population in calculating the amount of allocations 26.16 under this paragraph. 26.17 The Minnesota housing finance agency shall notify each city 26.18 choosing to issue bonds on its own behalf or pursuant to a joint 26.19 powers agreement of the amount of its allocation by October 15. 26.20 Upon determining the amount of the allocation of each choosing 26.21 to issue bonds on its own behalf or through a joint powers 26.22 agreement, the agency shall forward a list specifying the 26.23 amounts allotted to each city. 26.24 A city that chooses to issue bonds on its own behalf or 26.25 through a joint powers agreement may request an allocation from 26.26 the commissioner by forwarding an application with an 26.27 application fee pursuant to section 474A.03, subdivision 4, and 26.28 an application deposit equal to two percent of the requested 26.29 amount to the commissioner no later than 4:30 p.m. on the Monday 26.30 of the week preceding an allocation. Allocations to cities that 26.31 choose to issue bonds on their own behalf shall be awarded by 26.32 the commissioner on the first Monday after October 15 through 26.33 the last Monday in November. No city may receive an allocation 26.34 from the commissioner after the last Monday in November. The 26.35 commissioner shall allocate the requested amount to the city or 26.36 cities subject to the limitations under this subdivision. 27.1 If a city issues mortgage bonds from an allocation received 27.2 under this paragraph, the issuer must provide for the recycling 27.3 of funds into new loans. If the issuer is not able to provide 27.4 for recycling, the issuer must notify the commissioner in 27.5 writing of the reason that recycling was not possible and the 27.6 reason the issuer elected not to have the Minnesota housing 27.7 finance agency issue the bonds. "Recycling" means the use of 27.8 money generated from the repayment and prepayment of loans for 27.9 further eligible loans or for the redemption of bonds and the 27.10 issuance of current refunding bonds. 27.11 (d) No entitlement city or county or city in an entitlement 27.12 county may apply for or be allocated authority to issue mortgage 27.13 bonds or use mortgage credit certificates from the unified pool. 27.14 (e) An allocation awarded to the agency for mortgage bonds 27.15 under this section may be carried forward by the agency into the 27.16 next succeeding calendar year subject to notice requirements 27.17 under section 474A.131 and is available until the last business 27.18 day in December of that succeeding calendar year. 27.19 Sec. 23. Minnesota Statutes 2000, section 474A.091, 27.20 subdivision 4, is amended to read: 27.21 Subd. 4. [MORTGAGE BONDSREMAINING BONDING AUTHORITY.] All 27.22 remaining bonding authority available for allocation under this 27.23 section on December 1, is allocated to the Minnesota housing 27.24 finance agency. 27.25 Sec. 24. Minnesota Statutes 2000, section 474A.091, 27.26 subdivision 5, is amended to read: 27.27 Subd. 5. [RETURN OF ALLOCATION; DEPOSIT REFUND.] (a) If an 27.28 issuer that receives an allocation under this section determines 27.29 that it will not issue obligations equal to all or a portion of 27.30 the allocation received under this section within 120 days of 27.31 the allocation or within the time period permitted by federal 27.32 tax law, whichever is less, the issuer must notify the 27.33 department. If the issuer notifies the department or the 27.34 120-day period since allocation has expired prior to the last 27.35 Monday in November, the amount of allocation is canceled and 27.36 returned for reallocation through the unified pool. If the 28.1 issuer notifies the department on or after the last Monday in 28.2 November, the amount of allocation is canceled and returned for 28.3 reallocation to the Minnesota housing finance agency. To 28.4 encourage a competitive application process, the commissioner 28.5 shall reserve, for new applications, the amount of allocation 28.6 that is canceled and returned for reallocation under this 28.7 section for a minimum of seven calendar days. 28.8 (b) An issuer that returns for reallocation all or a 28.9 portion of an allocation received under this section within 120 28.10 days of the allocation shall receive within 30 days a refund 28.11 equal to: 28.12 (1) one-half of the application deposit for the amount of 28.13 bonding authority returned within 30 days of receiving the 28.14 allocation; 28.15 (2) one-fourth of the application deposit for the amount of 28.16 bonding authority returned between 31 and 60 days of receiving 28.17 the allocation; and 28.18 (3) one-eighth of the application deposit for the amount of 28.19 bonding authority returned between 61 and 120 days of receiving 28.20 the allocation. 28.21 (c) No refund of the application deposit shall be available 28.22 for allocations returned on or after the last Monday in November. 28.23This subdivision does not apply to the Minnesota housing finance28.24agency, or the Minnesota rural finance authority.28.25 Sec. 25. Minnesota Statutes 2000, section 474A.091, 28.26 subdivision 6, is amended to read: 28.27 Subd. 6. [FINAL ALLOCATION; CARRYFORWARD.] Notwithstanding 28.28 the notice requirements of section 474A.131, subdivision 2, any 28.29 bonding authority remaining unissued by the Minnesota housing 28.30 finance agency on the last business day in December shall be 28.31 carried forward into the next calendar year by the commissioner 28.32 for the Minnesota housing finance agencyin accordance with28.33section 474A.131, subdivision 2. 28.34 Sec. 26. Minnesota Statutes 2000, section 474A.131, 28.35 subdivision 1, is amended to read: 28.36 Subdivision 1. [NOTICE OF ISSUE.] Each issuer that issues 29.1 bonds with an allocation received under this chapter shall 29.2 provide a notice of issue to the department on forms provided by 29.3 the department stating: 29.4 (1) the date of issuance of the bonds; 29.5 (2) the title of the issue; 29.6 (3) the principal amount of the bonds; 29.7 (4) the type of qualified bonds under federal tax law;and29.8 (5) the dollar amount of the bonds issued that were subject 29.9 to the annual volume cap; and 29.10 (6) for entitlement issuers, whether the allocation is from 29.11 current year entitlement authority or is from carry forward 29.12 authority. 29.13 For obligations that are issued as a part of a series of 29.14 obligations, a notice must be provided for each series. A 29.15 penalty of one-half of the amount of the application deposit not 29.16 to exceed $5,000 shall apply to any issue of obligations for 29.17 which a notice of issue is not provided to the department within 29.18 five business days after issuance or before the last Monday in 29.19 December, whichever occurs first. Within 30 days after receipt 29.20 of a notice of issue the department shall refund a portion of 29.21 the application deposit equal to one percent of the amount of 29.22 the bonding authority actually issued if a one percent 29.23 application deposit was made, or equal to two percent of the 29.24 amount of the bonding authority actually issued if a two percent 29.25 application deposit was made, less any penalty amount. 29.26 Sec. 27. Minnesota Statutes 2000, section 474A.131, is 29.27 amended by adding a subdivision to read: 29.28 Subd. 1b. [DEADLINE FOR ISSUANCE OF QUALIFIED BONDS.] If 29.29 an issuer fails to notify the department before 4:30 p.m. on the 29.30 last business day in December of issuance of obligations 29.31 pursuant to an allocation received for any qualified bond 29.32 project or issuance of an entitlement allocation, the allocation 29.33 is canceled and the bonding authority is allocated to the 29.34 Minnesota housing finance agency for carryforward by the 29.35 commissioner under section 474A.091, subdivision 6. 29.36 Sec. 28. Minnesota Statutes 2000, section 474A.131, 30.1 subdivision 2, is amended to read: 30.2 Subd. 2. [CARRYFORWARD NOTICE.] If an issuer intends to 30.3 carry forward an allocation received under this chapter, it must 30.4 notify the department in writing before 4:30 p.m. on the last 30.5Monday ofbusiness day in December. This notice requirement 30.6 does not apply to the Minnesota housing finance agency for the 30.7 carryforward of unallocated unified pool balances. 30.8 Sec. 29. Minnesota Statutes 2000, section 474A.14, is 30.9 amended to read: 30.10 474A.14 [NOTICE OF AVAILABLE AUTHORITY.] 30.11 The department shallpublish in the State Register a30.12 provide at its official Web site a written notice of the amount 30.13 of bonding authority in the housing, small issue, and public 30.14 facilities pools as soon after January 1 as possible. The 30.15 department shallpublish in the State Register aprovide at its 30.16 official Web site a written notice of the amount of bonding 30.17 authority available for allocation in the unified pool as soon 30.18 after August 1 as possible. 30.19 Sec. 30. [REPEALER.] 30.20 Minnesota Statutes 2000, section 474A.061, subdivision 6, 30.21 is repealed. 30.22 Sec. 31. [EFFECTIVE DATE.] 30.23 This act is effective the day after final enactment except 30.24 that paragraph (c) added by amendment in this act to section 30.25 474A.03, subdivision 2a, is effective to require submissions by 30.26 December 31, 2002, and annually thereafter.