HF 2506

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  amended through 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, and the 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 bonds or 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, 1997 
  3.26  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  $37,000,000 of which 31 percent of the adjusted allocation is 
  3.33  reserved until the day after the first last Monday in February 
  3.34  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 previous 
  4.17  year 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 issuers may also use their allocations 
  4.29  for public facility bonds, and may 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.  
  5.14  Application fees for projects of entitlement issuers must be 
  5.15  submitted to the commissioner with the notice of issuance of 
  5.16  bonds, notice of use of mortgage credit certificates, and notice 
  5.17  of 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 certificates by July 15 and 
  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 issuer for the current calendar year.  Any 
  6.3   amount deducted from an entitlement issuer's allocation under 
  6.4   this subdivision shall be reallocated through the unified pool.  
  6.5   An entitlement issuer must permanently issue all carryforward 
  6.6   authority or enact a resolution electing to use all carryforward 
  6.7   authority for mortgage credit certificates prior to issuing any 
  6.8   current year authority of that entitlement issuer in 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 shall provide 
  6.18  to each entitlement issuer a written notice of the amount of its 
  6.19  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; and 
  7.16     (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 meets one of the following requirements: 
  8.5      (1) the proposed project is a single room occupancy project 
  8.6   and all the units of the project will be occupied by individuals 
  8.7   whose incomes at the time of their initial residency in the 
  8.8   project are 50 percent or less of the greater of the statewide 
  8.9   or county median income adjusted for household size as 
  8.10  determined by the federal Department of Housing and Urban 
  8.11  Development; 
  8.12     (2) the proposed project is a multifamily project where at 
  8.13  least 75 percent of the units have two or more bedrooms and at 
  8.14  least one-third of the 75 percent have three or more bedrooms; 
  8.15  or 
  8.16     (3) the proposed project is a multifamily project that 
  8.17  meets the following requirements: 
  8.18     (i) the proposed project is the rehabilitation of an 
  8.19  existing building which meets the requirements for minimum 
  8.20  rehabilitation expenditures in sections 42(e)(2) and 42(e)(3)(A) 
  8.21  of the Internal Revenue Code; 
  8.22     (ii) the proposed project involves participation by the 
  8.23  Minnesota housing finance agency or a local unit of government 
  8.24  in the financing of the acquisition or rehabilitation of the 
  8.25  project.  For purposes of this subdivision, "participation" 
  8.26  means an activity other than the issuance of the bonds; and 
  8.27     (iii) the proposed project must be occupied by individuals 
  8.28  or families whose incomes at the time of their initial residency 
  8.29  in the project meet the requirements of section 42(g) of the 
  8.30  Internal 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 occupancy 
  9.4   unit under paragraph (a), clause (1), is 30 percent of the 
  9.5   amount equal to 30 percent of the greater of the statewide or 
  9.6   county median income for a one-member household as determined by 
  9.7   the federal Department of Housing and Urban Development.  The 
  9.8   maximum rent for at least 75 percent of the units of a 
  9.9   multifamily project under paragraph (a), clause (2), is 30 
  9.10  percent of the amount equal to 50 percent of the greater of the 
  9.11  statewide or county median income as determined by the federal 
  9.12  Department of Housing and Urban Development based on a household 
  9.13  size 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.  The Such 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 of all residents of the project income-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 the project income-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 first 
 11.26  business day that falls on a Monday of the calendar year and the 
 11.27  first Monday in February Commencing on the second Tuesday in 
 11.28  January and continuing on each Monday through July 15, the 
 11.29  commissioner shall allocate available bonding authority in from 
 11.30  the housing pool to applications received by on or before the 
 11.31  Monday of the previous preceding week for residential rental 
 11.32  projects that are not restricted to persons who are 55 years of 
 11.33  age or older and that meet the eligibility criteria under 
 11.34  section 474A.047, except that allocations may be made to 
 11.35  projects that are restricted to persons who are 55 years of age 
 11.36  or older, if the project preserves existing federally subsidized 
 12.1   housing.  Projects that preserve existing federally subsidized 
 12.2   housing shall be allocated available bonding authority in the 
 12.3   housing pool for residential rental projects prior to the 
 12.4   allocation of available bonding authority to other eligible 
 12.5   residential 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) After February January 1, and through February January 
 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. 
 13.11     The Minnesota housing finance agency may accept 
 13.12  applications from June 15 through June 30 from cities for 
 13.13  single-family housing programs which meet program requirements 
 13.14  specified under clauses (1) to (4) if bonding authority is 
 13.15  available in the housing pool.  Applications will be accepted 
 13.16  from June 15 to June 30 only from cities that received an 
 13.17  allotment in the same calendar year and used at least 75 percent 
 13.18  of 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  among applicant cities on whose behalf the Minnesota housing 
 13.28  finance agency issues bonds.  The agency must allot available 
 13.29  bonding 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 application and application deposit 
 14.26  checks to the commissioner with 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 the first Monday second 
 15.2   Tuesday in February January and through the last Monday in July, 
 15.3   but may request an allocation no later than the last Monday in 
 15.4   July.  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.  The commissioner 
 15.9   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 agreement or may use bonding authority 
 15.15  for mortgage credit certificates and 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 than 14 days before 
 15.28  the unified pool is created pursuant to section 474A.091, 
 15.29  subdivision 1 the last Monday in July.  On and after the first 
 15.30  Monday 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 first 
 16.36  Monday in January that is a business day through the last Monday 
 17.1   in July Commencing 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 pool on Monday of each week to applications received 
 17.5   on or before the Monday of the preceding week for manufacturing 
 17.6   projects and enterprise zone facility projects.  From the first 
 17.7   Monday in January that is a business day second 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 are 
 17.29  eligible for all of the proposed allocation.  Proposed projects 
 17.30  that receive less than 50 points are eligible to receive a 
 17.31  proportionally reduced share of the proposed authority, based 
 17.32  upon 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 the 
 18.15  first Monday in January that is a business day through the last 
 18.16  Monday in July Commencing 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 pool on Monday of each week to 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 the 
 19.30  Minnesota housing finance agency or the Minnesota rural finance 
 19.31  authority.  
 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 not apply for receive an allocation for mortgage 
 20.31  bonds under this section until after prior to the last first 
 20.32  Monday in August.  Notwithstanding the restrictions imposed on 
 20.33  unified pool allocations after September 1 under subdivision 3, 
 20.34  paragraph (c)(2), the Minnesota housing finance agency October, 
 20.35  but may be awarded allocations for mortgage bonds from the 
 20.36  unified pool on or after September 1 the 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 awarded 
 21.17  from 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 manufacturing 
 21.20  projects; 
 21.21     (3) applications for small issue bonds for agricultural 
 21.22  development bond loan projects; 
 21.23     (4) applications for residential rental project bonds; 
 21.24     (5) applications for public facility projects funded by 
 21.25  public facility bonds; 
 21.26     (6) applications for redevelopment bonds; 
 21.27     (7) applications for mortgage bonds; and 
 21.28     (8) applications for governmental bonds. 
 21.29     Allocations for residential rental projects may only be 
 21.30  made during the first allocation in August.  The amount of 
 21.31  allocation provided to an issuer for a specific manufacturing 
 21.32  project will be based on the number of points received for the 
 21.33  proposed project under the scoring system under section 474A.045.
 21.34  Proposed manufacturing projects that receive 50 points or more 
 21.35  are eligible for all of the proposed allocation.  Proposed 
 21.36  manufacturing projects that receive less than 50 points under 
 22.1   section 474A.045 are only eligible to receive a proportionally 
 22.2   reduced share of the proposed authority, based upon the number 
 22.3   of 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 first 
 23.30  Monday in September through the last Monday in November, 
 23.31  $2,500,000 of bonding authority or an amount equal to the total 
 23.32  annual amount of bonding authority allocated to the public 
 23.33  facilities pool under section 474A.03, subdivision 1, less the 
 23.34  amount allocated to issuers from the public facilities pool for 
 23.35  that year, whichever is less, is reserved within the unified 
 23.36  pool for public facility bonds to the extent such amounts are 
 24.1   available 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. 
 24.7      An allocation for mortgage bonds may be used for mortgage 
 24.8   credit certificates. 
 24.9      (d) After September 1, allocations shall be awarded from 
 24.10  the unified pool only for the following types of qualified bonds:
 24.11  small issue bonds, public facility bonds to finance publicly 
 24.12  owned facility projects, residential rental project bonds, and 
 24.13  enterprise 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 BONDS REMAINING 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.
 28.23  This subdivision does not apply to the Minnesota housing finance 
 28.24  agency, 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 agency in accordance with 
 28.33  section 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; and 
 29.8      (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 
 30.5   Monday of business 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 shall publish in the State Register a 
 30.12  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 shall publish in the State Register a provide 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.