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HF 4049

as introduced - 90th Legislature (2017 - 2018) Posted on 03/19/2018 03:14pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/19/2018

Current Version - as introduced

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A bill for an act
relating to housing; modifying the Minnesota Bond Allocation Act related to
housing bonds; amending Minnesota Statutes 2016, sections 474A.02, by adding
subdivisions; 474A.03, subdivision 1; 474A.04, subdivision 1a; 474A.061,
subdivisions 1, 2a, 2b, 2c, 4, by adding subdivisions; 474A.062; 474A.091,
subdivisions 1, 2, 3, 5, by adding a subdivision; 474A.131, subdivisions 1, 1b, 2;
474A.14.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 30. new text end

new text begin Preservation project. new text end

new text begin "Preservation project" means any residential rental
project, regardless of whether or not the project is restricted to persons of a certain age or
older that receive federal project-based rental subsidies. In addition, to qualify as a
preservation project, the amount of bonds requested in the application must not exceed the
aggregate bond limitation.
new text end

Sec. 2.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 31. new text end

new text begin 30 percent AMI residential rental project. new text end

new text begin "30 percent AMI residential
rental project" means a residential rental project that does not otherwise qualify as a
preservation project, is expected to generate low-income housing tax credits under section
42 of the Internal Revenue Code from 100 percent of its residential units, and: (1) in which
all the residential units of the project: (i) are reserved for tenants whose income, on average
is 30 percent of AMI or less; (ii) are rent restricted in accordance with section 42(g)(2) of
the Internal Revenue Code; and (iii) are subject to the rent and income restrictions for a
period of not less than 30 years; or (2)(i) is located within a county or metropolitan area
that has a current area median gross income that is less than the statewide area median
income for the state of Minnesota; (ii) all of the units of the project are rent restricted in
accordance with section 42(g)(2) of the Internal Revenue Code; and (iii) all of the units of
the project are subject to the applicable rent and income restrictions for a period of not less
than 30 years. In addition, to qualify as a 30 percent AMI residential rental project, the
amount of bonds requested in the application must not exceed the aggregate bond limitation.
For purposes of this subdivision, "on average" means the average of the applicable income
limitation level for a project determined on a unit-by-unit basis e.g., a project with one-half
of its units subject to income limitations of not greater than 20 percent AMI and one-half
subject to income limitations of not greater than 40 percent AMI would be subject to an
income limitation on average of not greater than 30 percent AMI.
new text end

Sec. 3.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 32. new text end

new text begin 50 percent AMI residential rental project. new text end

new text begin "50 percent AMI residential
rental project" means a residential rental project that does not qualify as a preservation
project or a 30 percent AMI residential rental project, is expected to generate low-income
housing tax credits under section 42 of the Internal Revenue Code from 100 percent of its
residential units, and in which all the residential units of the project: (1) are reserved for
tenants whose income on average is 50 percent of AMI or less; (2) are rent restricted in
accordance with section 42(g)(2) of the Internal Revenue Code; and (3) are subject to the
rent and income restrictions for a period of not less than 30 years. In addition, to qualify as
a 50 percent AMI residential rental project, the amount of bonds requested in the application
must not exceed the aggregate bond limitation. For purposes of this subdivision, "on average"
means the average of the applicable income limitation level for a project determined on a
unit-by-unit basis e.g., a project with one-half of its units subject to income limitations of
not greater than 40 percent AMI and one-half subject to income limitations of not greater
than 60 percent AMI would be subject to an income limitation on average of not greater
than 50 percent AMI.
new text end

Sec. 4.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 33. new text end

new text begin 100 percent LIHTC project. new text end

new text begin "100 percent LIHTC project" means a residential
rental project that is expected to generate low-income housing tax credits under section 42
of the Internal Revenue Code from 100 percent of its residential units and does not otherwise
qualify as a preservation project, a 30 percent AMI residential rental project, or a 50 percent
AMI residential rental project. In addition, to qualify as a 100 percent LIHTC project, the
amount of bonds requested in the application must not exceed the aggregate bond limitation.
new text end

Sec. 5.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 34. new text end

new text begin 20 percent LIHTC project. new text end

new text begin "20 percent LIHTC project" means a residential
rental project that is expected to generate low-income housing tax credits under section 42
of the Internal Revenue Code from at least 20 percent of its residential units and does not
otherwise qualify as a preservation project, a 30 percent AMI residential rental project, a
50 percent AMI residential rental project, or a 100 percent LIHTC project. In addition, to
qualify as a 20 percent LIHTC project, the amount of bonds requested in the application
must not exceed the aggregate bond limitation.
new text end

Sec. 6.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 35. new text end

new text begin AMI. new text end

new text begin "AMI" means the area median income for the applicable county or
metropolitan area as published by the Department of Housing and Urban Development, as
adjusted for household size.
new text end

Sec. 7.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision to
read:


new text begin Subd. 36. new text end

new text begin Aggregate bond limitation. new text end

new text begin "Aggregate bond limitation" means up to 55
percent of the reasonably expected aggregate basis of a residential rental project and the
land on which the project is or will be located.
new text end

Sec. 8.

Minnesota Statutes 2016, section 474A.03, subdivision 1, is amended to read:


Subdivision 1.

Under federal tax law; allocations.

At the beginning of each calendar
year after December 31, 2001, the commissioner shall determine the aggregate dollar amount
of the annual volume cap under federal tax law for the calendar year, and of this amount
the commissioner shall make the following allocation:

(1) $74,530,000 to the small issue pool;

(2) $122,060,000 to the housing pool, of which 31 percent of the adjusted allocation is
reserved until the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end for single-family housing programs;

(3) $12,750,000 to the public facilities pool; and

(4) amounts to be allocated as provided in subdivision 2a.

If the annual volume cap is greater or less than the amount of bonding authority allocated
under clauses (1) to (4) and subdivision 2a, paragraph (a), clauses (1) to (4), the allocation
must be adjusted so that each adjusted allocation is the same percentage of the annual volume
cap as each original allocation is of the total bonding authority originally allocated.

Sec. 9.

Minnesota Statutes 2016, section 474A.04, subdivision 1a, is amended to read:


Subd. 1a.

Entitlement reservations.

Any amount returned by an entitlement issuer
before July deleted text begin15deleted text endnew text begin 1new text end shall be reallocated through the housing pool. Any amount returned on or
after July deleted text begin15deleted text endnew text begin 1new text end shall be reallocated through the unified pool. An amount returned after the
last Monday in November shall be reallocated to the Minnesota Housing Finance Agency.

Sec. 10.

Minnesota Statutes 2016, section 474A.061, subdivision 1, is amended to read:


Subdivision 1.

Allocation applicationnew text begin; small issue pool and public facilities poolnew text end.

(a)
new text begin For any requested allocations from the small issue pool or the public facilities pool, new text endan issuer
may apply for an allocation under this section by submitting to the department an application
on forms provided by the department, accompanied by (1) a preliminary resolution, (2) a
statement of bond counsel that the proposed issue of obligations requires an allocation under
this chapter and the Internal Revenue Code, (3) the type of qualified bonds to be issued, (4)
an application deposit in the amount of one percent of the requested allocation before the
last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, or in the amount of two percent of the requested allocation on or
after the last Monday in deleted text beginJuly,deleted text endnew text begin June; andnew text end (5) a public purpose scoring worksheet for
manufacturing project and enterprise zone facility project applicationsdeleted text begin, and (6) for residential
rental projects, a statement from the applicant or bond counsel as to whether the project
preserves existing federally subsidized housing for residential rental project applications
and whether the project is restricted to persons who are 55 years of age or older
deleted text end. The issuer
must pay the application deposit by a check made payable to the Department of Management
and Budget. The Minnesota Housing Finance Agency, the Minnesota Rural Finance
Authority, and the Minnesota Office of Higher Education may apply for and receive an
allocation under this section without submitting an application deposit.

(b) An entitlement issuer may not apply for an allocation deleted text beginfrom the public facilities pooldeleted text endnew text begin
under this subdivision
new text end unless it has either permanently issued bonds equal to the amount of
its entitlement allocation for the current year plus any amount of bonding authority carried
forward from previous years or returned for reallocation all of its unused entitlement
allocation. new text beginFor purposes of this subdivision, an entitlement allocation includes an amount
obtained under section 474A.04, subdivision 6.
new text end

deleted text begin An entitlement issuer may not apply for an allocation from the housing pool unless it
either has permanently issued bonds equal to any amount of bonding authority carried
forward from a previous year or has returned for reallocation any unused bonding authority
carried forward from a previous year. For purposes of this subdivision, its entitlement
allocation includes an amount obtained under section 474A.04, subdivision 6. This paragraph
does not apply to an application from the Minnesota Housing Finance Agency for an
allocation under subdivision 2a for cities who choose to have the agency issue bonds on
their behalf.
deleted text end

(c) If an application is rejected under this section, the commissioner must notify the
applicant and return the application deposit to the applicant within 30 days unless the
applicant requests in writing that the application be resubmitted. The granting of an allocation
of bonding authority under this section must be evidenced by a certificate of allocation.

Sec. 11.

Minnesota Statutes 2016, section 474A.061, is amended by adding a subdivision
to read:


new text begin Subd. 1a. new text end

new text begin Allocation application; housing pool. new text end

new text begin (a) For any requested allocations from
the housing pool, an issuer may apply for an allocation under this section by submitting to
the department an application on forms provided by the department, accompanied by: (1)
a preliminary resolution; (2) a statement of bond counsel that the proposed issue of
obligations requires an allocation under this chapter and the Internal Revenue Code; (3) an
application deposit in the amount of two percent of the requested allocation; (4) a sworn
statement from the applicant identifying the project as either a preservation project, a 30
percent AMI residential rental project, a 50 percent AMI residential rental project, a 100
percent LIHTC project, a 20 percent LIHTC project, or any other residential rental project;
and (5) a certification from the applicant or the applicant's accountant stating whether the
requested allocation exceeds the aggregate bond limitation. The issuer must pay the
application deposit by a check made payable to the Department of Management and Budget.
The Minnesota Housing Finance Agency may apply for and receive an allocation under this
section without submitting an application deposit.
new text end

new text begin (b) An entitlement issuer may not apply for an allocation from the housing pool unless
it has either permanently issued bonds equal to any amount of bonding authority carried
forward from a previous year or returned for reallocation any unused bonding authority
carried forward from a previous year. For purposes of this subdivision, an entitlement
allocation includes an amount obtained under section 474A.04, subdivision 6. This paragraph
does not apply to an application from the Minnesota Housing Finance Agency for an
allocation under subdivision 2a for cities that choose to have the agency issue bonds on
their behalf.
new text end

new text begin (c) If an application is rejected under this section, the commissioner must notify the
applicant and return the application deposit to the applicant within 30 days unless the
applicant requests in writing that the application be resubmitted. The granting of an allocation
of bonding authority under this section must be evidenced by a certificate of allocation.
new text end

Sec. 12.

Minnesota Statutes 2016, section 474A.061, subdivision 2a, is amended to read:


Subd. 2a.

Housing pool allocation.

(a) Commencing on the second Tuesday in January
and continuing on each Monday through deleted text beginJuly 15deleted text endnew text begin the end of Junenew text end, the commissioner shall
allocate available bonding authority from the housing pool to applications received on or
before the Monday of the preceding week for residential rental projects that meet the
eligibility criteria under section 474A.047. Allocations of available bonding authority from
the housing pool for eligible residential rental projects shall be awarded in the following
order of priority: (1) deleted text beginprojects that preserve existing federally subsidized housing; (2) projects
that are not restricted to persons who are 55 years of age or older; and
deleted text endnew text begin preservation projects;
(2) 30 percent AMI residential rental projects;
new text end (3) new text begin50 percent AMI residential rental projects;
(4) 100 percent LIHTC projects; (5) 20 percent LIHTC projects; and (6)
new text endother residential
rental projects. deleted text beginPrior to May 15, no allocation shall be made to a project restricted to persons
who are 55 years of age or older. If an
deleted text endnew text begin If there are two or more applications for residential
rental projects at the same priority level and there is insufficient bonding authority to provide
allocations for all the projects in any one allocation period, available bonding authority shall
be randomly awarded by lot but only for projects that can receive the full amount of their
respective requested allocations. If a residential rental project does not receive any of its
requested allocation pursuant to this paragraph and the project applies in the future to the
housing pool or unified pool for additional allocation of bonds, the project shall be fully
funded up to its original application request for bonding authority before any new project,
applying in the same allocation period, that has an equal priority shall receive bonding
authority. An
new text end issuer that receives an allocation under this paragraph deleted text begindoes not issue obligations
equal to all or a portion of the allocation received within 120 days of the allocation
deleted text endnew text begin must
issue obligations equal to all or a portion of the allocation received on or before the later of
180 days of the allocation or within 18 months after the allocation date if the applicant
submits an additional application deposit equal to one percent of the allocation amount on
or prior to 180 days after the allocation date. If an issuer that receives an allocation under
this paragraph does not issue obligations equal to all or a portion of the allocation received
within the time period provided in this paragraph
new text end or returns the allocation to the
commissioner, the amount of the allocation is canceled and returned for reallocation through
the housing pool or to the unified pool after July deleted text begin15.deleted text endnew text begin 1. If an issuer that receives an allocation
under this paragraph issues obligations within the time period provided in this paragraph,
the commissioner shall refund 50 percent of any application deposit previously paid within
30 days of the issuance of the obligations and the remaining 50 percent of the application
deposit within 30 days after completion of construction of the project.
new text end

(b) After January 1, and through January 15, the Minnesota Housing Finance Agency
may accept applications from cities for single-family housing programs which meet program
requirements as follows:

(1) the housing program must meet a locally identified housing need and be economically
viable;

(2) the adjusted income of home buyers may not exceed 80 percent deleted text beginof the greater of
statewide or area median income as published by the Department of Housing and Urban
Development, adjusted for household size
deleted text endnew text begin AMInew text end;

(3) house price limits may not exceed the federal price limits established for mortgage
revenue bond programs. Data on the home purchase price amount, mortgage amount, income,
household size, and race of the households served in the previous year's single-family
housing program, if any, must be included in each application; and

(4) for applicants who choose to have the agency issue bonds on their behalf, an
application fee pursuant to section 474A.03, subdivision 4, and an application deposit equal
to one percent of the requested allocation must be submitted to the Minnesota Housing
Finance Agency before the agency forwards the list specifying the amounts allocated to the
commissioner under paragraph (d). The agency shall submit the city's application fee and
application deposit to the commissioner when requesting an allocation from the housing
pool.

Applications by a consortium shall include the name of each member of the consortium
and the amount of allocation requested by each member.

(c) Any amounts remaining in the housing pool after July deleted text begin15deleted text endnew text begin 1new text end are available for
single-family housing programs for cities that applied in January and received an allocation
under this section in the same calendar year. For a city that chooses to issue bonds on its
own behalf or pursuant to a joint powers agreement, the agency must allot available bonding
authority based on the formula in paragraphs (d) and (f). Allocations will be made loan by
loan, on a first-come, first-served basis among cities on whose behalf the Minnesota Housing
Finance Agency issues bonds.

Any city that received an allocation pursuant to paragraph (f) in the same calendar year
that wishes to issue bonds on its own behalf or pursuant to a joint powers agreement for an
amount becoming available for single-family housing programs after July deleted text begin15deleted text endnew text begin 1new text end shall notify
the Minnesota Housing Finance Agency by July deleted text begin15deleted text endnew text begin 1new text end. The Minnesota Housing Finance
Agency shall notify each city making a request of the amount of its allocation within three
business days after July deleted text begin15deleted text endnew text begin 1new text end. The city must comply with paragraph (f).

For purposes of paragraphs (a) to (h), "city" means a county or a consortium of local
government units that agree through a joint powers agreement to apply together for
single-family housing programs, and has the meaning given it in section 462C.02, subdivision
6
. "Agency" means the Minnesota Housing Finance Agency.

(d) The total amount of allocation for mortgage bonds for one city is limited to the lesser
of: (i) the amount requested, or (ii) the product of the total amount available for mortgage
bonds from the housing pool, multiplied by the ratio of each applicant's population as
determined by the most recent estimate of the city's population released by the state
demographer's office to the total of all the applicants' population, except that each applicant
shall be allocated a minimum of $100,000 regardless of the amount requested or the amount
determined under the formula in clause (ii). If a city applying for an allocation is located
within a county that has also applied for an allocation, the city's population will be deducted
from the county's population in calculating the amount of allocations under this paragraph.

Upon determining the amount of each applicant's allocation, the agency shall forward
to the commissioner a list specifying the amounts allotted to each application with all
application fees and deposits from applicants who choose to have the agency issue bonds
on their behalf.

Total allocations from the housing pool for single-family housing programs may not
exceed 31 percent of the adjusted allocation to the housing pool until after July deleted text begin15deleted text endnew text begin 1new text end.

(e) The agency may issue bonds on behalf of participating cities. The agency shall request
an allocation from the commissioner for all applicants who choose to have the agency issue
bonds on their behalf and the commissioner shall allocate the requested amount to the
agency. The agency may request an allocation at any time after the second Tuesday in
January and through the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end. After awarding an allocation and receiving
a notice of issuance for the mortgage bonds issued on behalf of the participating cities, the
commissioner shall transfer the application deposits to the Minnesota Housing Finance
Agency to be returned to the participating cities. The Minnesota Housing Finance Agency
shall return any application deposit to a city that paid an application deposit under paragraph
(b), clause (4), but was not part of the list forwarded to the commissioner under paragraph
(d).

(f) A city may choose to issue bonds on its own behalf or through a joint powers
agreement and may request an allocation from the commissioner by forwarding an application
with an application fee pursuant to section 474A.03, subdivision 4, and a one percent
application deposit to the commissioner no later than the Monday of the week preceding
an allocation. If the total amount requested by all applicants exceeds the amount available
in the pool, the city may not receive a greater allocation than the amount it would have
received under the list forwarded by the Minnesota Housing Finance Agency to the
commissioner. No city may request or receive an allocation from the commissioner until
the list under paragraph (d) has been forwarded to the commissioner. A city must request
an allocation from the commissioner no later than the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end. No city
may receive an allocation from the housing pool for mortgage bonds which has not first
applied to the Minnesota Housing Finance Agency. The commissioner shall allocate the
requested amount to the city or cities subject to the limitations under this paragraph.

If a city issues mortgage bonds from an allocation received under this paragraph, the
issuer must provide for the recycling of funds into new loans. If the issuer is not able to
provide for recycling, the issuer must notify the commissioner in writing of the reason that
recycling was not possible and the reason the issuer elected not to have the Minnesota
Housing Finance Agency issue the bonds. "Recycling" means the use of money generated
from the repayment and prepayment of loans for further eligible loans or for the redemption
of bonds and the issuance of current refunding bonds.

(g) No entitlement city or county or city in an entitlement county may apply for or be
allocated authority to issue mortgage bonds or use mortgage credit certificates from the
housing pool. No city in an entitlement county may apply for or be allocated authority to
issue residential rental bonds from the housing pool or the unified pool.

(h) A city that does not use at least 50 percent of its allotment by the date applications
are due for the first allocation that is made from the housing pool for single-family housing
programs in the immediately succeeding calendar year may not apply to the housing pool
for a single-family mortgage bond or mortgage credit certificate program allocation that
exceeds the amount of its allotment for the preceding year that was used by the city in the
immediately preceding year or receive an allotment from the housing pool in the succeeding
calendar year that exceeds the amount of its allotment for the preceding year that was used
in the preceding year. The minimum allotment is $100,000 for an allocation made prior to
July deleted text begin15deleted text endnew text begin 1new text end, regardless of the amount used in the preceding calendar year, except that a city
whose allocation in the preceding year was the minimum amount of $100,000 and who did
not use at least 50 percent of its allocation from the preceding year is ineligible for an
allocation in the immediate succeeding calendar year. Each local government unit in a
consortium must meet the requirements of this paragraph.

Sec. 13.

Minnesota Statutes 2016, section 474A.061, subdivision 2b, is amended to read:


Subd. 2b.

Small issue pool allocation.

Commencing on the second Tuesday in January
and continuing on each Monday through the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner
shall allocate available bonding authority from the small issue pool to applications received
on or before the Monday of the preceding week for manufacturing projects and enterprise
zone facility projects. From the second Tuesday in January through the last Monday in deleted text beginJulydeleted text endnew text begin
June
new text end, the commissioner shall reserve $5,000,000 of the available bonding authority from
the small issue pool for applications for agricultural development bond loan projects of the
Minnesota Rural Finance Authority.

Beginning in calendar year 2002, on the second Tuesday in January through the last
Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner shall reserve $10,000,000 of available bonding
authority in the small issue pool for applications for student loan bonds of or on behalf of
the Minnesota Office of Higher Education. The total amount of allocations for student loan
bonds from the small issue pool may not exceed $10,000,000 per year.

The commissioner shall reserve $10,000,000 until the day after the last Monday in
February, $10,000,000 until the day after the last Monday in April, and $10,000,000 until
the day after the last Monday in June in the small issue pool for enterprise zone facility
projects and manufacturing projects. The amount of allocation provided to an issuer for a
specific enterprise zone facility project or manufacturing project will be based on the number
of points received for the proposed project under the scoring system under section 474A.045.

If there are two or more applications for manufacturing and enterprise zone facility
projects from the small issue pool and there is insufficient bonding authority to provide
allocations for all projects in any one week, the available bonding authority shall be awarded
based on the number of points awarded a project under section 474A.045, with those projects
receiving the greatest number of points receiving allocation first. If two or more applications
receive an equal number of points, available bonding authority shall be awarded by lot
unless otherwise agreed to by the respective issuers.

Sec. 14.

Minnesota Statutes 2016, section 474A.061, subdivision 2c, is amended to read:


Subd. 2c.

Public facilities pool allocation.

From the beginning of the calendar year and
continuing for a period of 120 days, the commissioner shall reserve $5,000,000 of the
available bonding authority from the public facilities pool for applications for public facilities
projects to be financed by the Western Lake Superior Sanitary District. Commencing on
the second Tuesday in January and continuing on each Monday through the last Monday
in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner shall allocate available bonding authority from the public
facilities pool to applications for eligible public facilities projects received on or before the
Monday of the preceding week. If there are two or more applications for public facilities
projects from the pool and there is insufficient available bonding authority to provide
allocations for all projects in any one week, the available bonding authority shall be awarded
by lot unless otherwise agreed to by the respective issuers.

Sec. 15.

Minnesota Statutes 2016, section 474A.061, subdivision 4, is amended to read:


Subd. 4.

Return of allocation; deposit refundnew text begin for small issue pool or public facilities
pool
new text end.

(a)new text begin For any requested allocations from the small issue pool or the public facilities
pool,
new text end if an issuer that receives an allocation under this section determines that it will not
issue obligations equal to all or a portion of the allocation received under this section within
120 days of allocation or within the time period permitted by federal tax law, whichever is
less, the issuer must notify the department. If the issuer notifies the department or the 120-day
period since allocation has expired prior to the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the amount of
allocation is canceled and returned for reallocation through the pool from which it was
originally allocated. If the issuer notifies the department or the 120-day period since allocation
has expired on or after the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the amount of allocation is canceled
and returned for reallocation through the unified pool. If the issuer notifies the department
after the last Monday in November, the amount of allocation is canceled and returned for
reallocation to the Minnesota Housing Finance Agency. To encourage a competitive
application process, the commissioner shall reserve, for new applications, the amount of
allocation that is canceled and returned for reallocation under this section for a minimum
of seven calendar days.

(b) An issuer that returns for reallocation all or a portion of an allocation received under
this deleted text beginsectiondeleted text endnew text begin subdivisionnew text end within 120 days of allocation shall receive within 30 days a refund
equal to:

(1) one-half of the application deposit for the amount of bonding authority returned
within 30 days of receiving allocation;

(2) one-fourth of the application deposit for the amount of bonding authority returned
between 31 and 60 days of receiving allocation; and

(3) one-eighth of the application deposit for the amount of bonding authority returned
between 61 and 120 days of receiving allocation.

(c) No refund shall be available for allocations returned 120 or more days after receiving
the allocation or beyond the last Monday in November.

Sec. 16.

Minnesota Statutes 2016, section 474A.061, is amended by adding a subdivision
to read:


new text begin Subd. 7. new text end

new text begin Return of allocation; deposit refund for housing pool. new text end

new text begin (a) For any requested
allocations from the housing pool, if an issuer that receives an allocation under this section
determines that it will not issue obligations equal to all or a portion of the allocation received
under this section within the time period provided under section 474A.061, subdivision 2a,
paragraph (a), or within the time period permitted by federal tax law, whichever is less, the
issuer must notify the department. If the issuer notifies the department or the time period
provided under section 474A.061, subdivision 2a, paragraph (a), has expired prior to the
last Monday in June, the amount of allocation is canceled and returned for reallocation
through the pool from which it was originally allocated. If the issuer notifies the department
or the time period provided under section 474A.061, subdivision 2a, paragraph (a), has
expired on or after the last Monday in June, the amount of allocation is canceled and returned
for reallocation through the unified pool. If the issuer notifies the department after the last
Monday in November, the amount of allocation is canceled and returned for reallocation
to the Minnesota Housing Finance Agency. To encourage a competitive application process,
the commissioner shall reserve, for new applications, the amount of allocation that is canceled
and returned for reallocation under this section for a minimum of seven calendar days.
new text end

new text begin (b) An issuer that returns for reallocation all or a portion of an allocation received under
this subdivision within 180 days of allocation shall receive within 30 days a refund equal
to:
new text end

new text begin (1) one-half of the application deposit for the amount of bonding authority returned
within 45 days of receiving allocation;
new text end

new text begin (2) one-fourth of the application deposit for the amount of bonding authority returned
between 46 and 90 days of receiving allocation; and
new text end

new text begin (3) one-eighth of the application deposit for the amount of bonding authority returned
between 91 and 180 days of receiving allocation.
new text end

new text begin (c) No refund shall be available for allocations returned 180 or more days after receiving
the allocation or beyond the last Monday in November.
new text end

Sec. 17.

Minnesota Statutes 2016, section 474A.062, is amended to read:


474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION deleted text begin120-DAYdeleted text end ISSUANCE
EXEMPTION.

The Minnesota Office of Higher Education is exempt from deleted text beginthe 120-daydeleted text endnew text begin any time
limitation on
new text end issuance deleted text beginrequirementsdeleted text endnew text begin of bonds set forthnew text end in this chapter and may carry forward
allocations for student loan bonds, subject to carryforward notice requirements of section
474A.131, subdivision 2.

Sec. 18.

Minnesota Statutes 2016, section 474A.091, subdivision 1, is amended to read:


Subdivision 1.

Unified pool amount.

On the day after the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end any
bonding authority remaining unallocated from the small issue pool, the housing pool, and
the public facilities pool is transferred to the unified pool and must be reallocated as provided
in this section.

Sec. 19.

Minnesota Statutes 2016, section 474A.091, subdivision 2, is amended to read:


Subd. 2.

Applicationnew text begin for residential rental projectsnew text end.

new text begin(a) new text endIssuers may apply for an
allocation deleted text beginunder this section by submitting to the department an application on forms provided
by the department accompanied by (1) a preliminary resolution, (2) a statement of bond
counsel that the proposed issue of obligations requires an allocation under this chapter and
the Internal Revenue Code, (3) the type of qualified bonds to be issued, (4) an application
deposit in the amount of two percent of the requested allocation, (5) a public purpose scoring
worksheet for manufacturing and enterprise zone applications, and (6) for residential rental
projects, a statement from the applicant or bond counsel as to whether the project preserves
existing federally subsidized housing and whether the project is restricted to persons who
are 55 years of age or older. The issuer must pay the application deposit by check. An
entitlement issuer may not apply for an allocation for public facility bonds, residential rental
project bonds, or mortgage bonds under this section unless it has either permanently issued
bonds equal to the amount of its entitlement allocation for the current year plus any amount
carried forward from previous years or returned for reallocation all of its unused entitlement
allocation. For purposes of this subdivision, its entitlement allocation includes an amount
obtained under section 474A.04, subdivision 6.
deleted text end

deleted text begin Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
Rural Finance Authority may apply for and receive an allocation under this section without
submitting an application deposit.
deleted text end new text begin for residential rental bonds under this section by submitting
to the department an application on forms provided by the department accompanied by: (1)
a preliminary resolution; (2) a statement of bond counsel that the proposed issue of
obligations requires an allocation under this chapter and the Internal Revenue Code; (3) an
application deposit in the amount of two percent of the requested allocation; (4) a sworn
statement from the applicant identifying the project as a preservation project, a 30 percent
AMI residential rental project, a 50 percent AMI residential rental project, a 100 percent
LIHTC project, a 20 percent LIHTC project, or any other residential rental project; and (5)
a certification from the applicant or its accountant stating whether the requested allocation
exceeds the aggregate bond limitation. The issuer must pay the application deposit by check.
An entitlement issuer may not apply for an allocation for residential rental bonds under this
section unless it has either permanently issued bonds equal to the amount of its entitlement
allocation for the current year plus any amount carried forward from previous years or
returned for reallocation all of its unused entitlement allocation. For purposes of this
subdivision, an entitlement allocation includes an amount obtained under section 474A.04,
subdivision 6.
new text end

new text begin (b) An issuer that receives an allocation under this subdivision must issue obligations
equal to all or a portion of the allocation received on or before the later of 180 days of the
allocation or within 18 months after the allocation date if the applicant submits an additional
application deposit equal to one percent of the allocation amount on or prior to 180 days
after the allocation date. If an issuer that receives an allocation under this subdivision does
not issue obligations equal to all or a portion of the allocation received within the time
period provided in this paragraph or returns the allocation to the commissioner, the amount
of the allocation is canceled and returned for reallocation through the unified pool. If an
issuer that receives an allocation under this subdivision issues obligations within the time
period provided in this paragraph, the commissioner shall refund 50 percent of any application
deposit previously paid within 30 days of the issuance of the obligations and the remaining
50 percent of the application deposit within 30 days after completion of construction of the
project.
new text end

new text begin (c) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency may apply for and receive an allocation under this section without
submitting an application deposit.
new text end

Sec. 20.

Minnesota Statutes 2016, section 474A.091, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Application for all other types of qualified bonds. new text end

new text begin (a) Issuers may apply
for an allocation for all types of qualified bonds other than residential rental bonds under
this section by submitting to the department an application on forms provided by the
department accompanied by: (1) a preliminary resolution; (2) a statement of bond counsel
that the proposed issue of obligations requires an allocation under this chapter and the
Internal Revenue Code; (3) the type of qualified bonds to be issued; (4) an application
deposit in the amount of two percent of the requested allocation; and (5) a public purpose
scoring worksheet for manufacturing and enterprise zone applications. The issuer must pay
the application deposit by check. An entitlement issuer may not apply for an allocation for
public facility bonds or mortgage bonds under this section unless it has either permanently
issued bonds equal to the amount of its entitlement allocation for the current year plus any
amount carried forward from previous years or returned for reallocation all of its unused
entitlement allocation. For purposes of this subdivision, an entitlement allocation includes
an amount obtained under section 474A.04, subdivision 6.
new text end

new text begin (b) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
Rural Finance Authority may apply for and receive an allocation under this section without
submitting an application deposit.
new text end

Sec. 21.

Minnesota Statutes 2016, section 474A.091, subdivision 3, is amended to read:


Subd. 3.

Allocation procedure.

(a) The commissioner shall allocate available bonding
authority under this section on the Monday of every other week beginning with the first
Monday in deleted text beginAugustdeleted text endnew text begin Julynew text end through and on the last Monday in November. Applications for
allocations must be received by the department by 4:30 p.m. on the Monday preceding the
Monday on which allocations are to be made. If a Monday falls on a holiday, the allocation
will be made or the applications must be received by the next business day after the holiday.

(b) Prior to October 1, only the following applications shall be awarded allocations from
the unified pool. Allocations shall be awarded in the following order of priority:

(1) applications for residential rental project bonds;

(2) applications for small issue bonds for manufacturing projects; and

(3) applications for small issue bonds for agricultural development bond loan projects.

(c) On the first Monday in October through the last Monday in November, allocations
shall be awarded from the unified pool in the following order of priority:

(1) applications for student loan bonds issued by or on behalf of the Minnesota Office
of Higher Education;

(2) applications for mortgage bonds;

(3) applications for public facility projects funded by public facility bonds;

(4) applications for small issue bonds for manufacturing projects;

(5) applications for small issue bonds for agricultural development bond loan projects;

(6) applications for residential rental project bonds;

(7) applications for enterprise zone facility bonds;

(8) applications for governmental bonds; and

(9) applications for redevelopment bonds.

(d) If there are two or more applications for manufacturing projects from the unified
pool and there is insufficient bonding authority to provide allocations for all manufacturing
projects in any one allocation period, the available bonding authority shall be awarded based
on the number of points awarded a project under section 474A.045 with those projects
receiving the greatest number of points receiving allocation first. If two or more applications
for manufacturing projects receive an equal amount of points, available bonding authority
shall be awarded by lot unless otherwise agreed to by the respective issuers.

(e) If there are two or more applications for enterprise zone facility projects from the
unified pool and there is insufficient bonding authority to provide allocations for all enterprise
zone facility projects in any one allocation period, the available bonding authority shall be
awarded based on the number of points awarded a project under section 474A.045 with
those projects receiving the greatest number of points receiving allocation first. If two or
more applications for enterprise zone facility projects receive an equal amount of points,
available bonding authority shall be awarded by lot unless otherwise agreed to by the
respective issuers.

(f) If there are two or more applications for residential rental projects from the unified
pool and there is insufficient bonding authority to provide allocations for all residential
rental projects in any one allocation period, the available bonding authority shall be awarded
in the following order of priority: (1) deleted text beginprojects that preserve existing federally subsidized
housing; (2) projects that are not restricted to persons who are 55 years of age or older; and
(3)
deleted text endnew text begin preservation projects; (2) 30 percent AMI residential rental projects; (3) 50 percent AMI
residential rental projects; (4) 100 percent LIHTC projects; (5) 20 percent LIHTC projects;
and (6)
new text end other residential rental projects.new text begin If there are two or more applications for residential
rental projects at the same priority level and there is insufficient bonding authority to provide
allocations for all the projects in any one allocation period, available bonding authority shall
be randomly awarded by lot but only for projects that received the full amount of their
respective requested allocations. If a residential rental project does not receive any of its
requested allocation pursuant to this paragraph and the project applies in the future to the
housing pool or the unified pool for additional allocation of bonds, the project shall be fully
funded up to its original application request for bonding authority before any new project,
applying in the same allocation period, that has an equal priority shall receive bonding
authority.
new text end

(g) From the first Monday in deleted text beginAugustdeleted text endnew text begin Julynew text end through the last Monday in November,
$20,000,000 of bonding authority or an amount equal to the total annual amount of bonding
authority allocated to the small issue pool under section 474A.03, subdivision 1, less the
amount allocated to issuers from the small issue pool for that year, whichever is less, is
reserved within the unified pool for small issue bonds to the extent deleted text beginsuchdeleted text endnew text begin thenew text end amounts are
available within the unified pool.

(h) The total amount of allocations for mortgage bonds from the housing pool and the
unified pool may not exceed:

(1) $10,000,000 for any one city; or

(2) $20,000,000 for any number of cities in any one county.

(i) The total amount of allocations for student loan bonds from the unified pool may not
exceed $25,000,000 per year.

(j) If there is insufficient bonding authority to fund all projects within any qualified bond
category other than enterprise zone facility projects, manufacturing projects, and residential
rental projects, allocations shall be awarded by lot unless otherwise agreed to by the
respective issuers.

(k) If an application is rejected, the commissioner must notify the applicant and return
the application deposit to the applicant within 30 days unless the applicant requests in writing
that the application be resubmitted.

(l) The granting of an allocation of bonding authority under this section must be evidenced
by issuance of a certificate of allocation.

Sec. 22.

Minnesota Statutes 2016, section 474A.091, subdivision 5, is amended to read:


Subd. 5.

Return of allocation; deposit refund.

(a) If an issuer that receives an allocation
under this section determines that it will not issue obligations equal to all or a portion of
the allocation received under this section within deleted text begin120deleted text endnew text begin the applicable number ofnew text end days deleted text beginofdeleted text endnew text begin afternew text end
the allocation new text beginrequired in this chapter new text endor within the time period permitted by federal tax law,
whichever is less, the issuer must notify the department. If the issuer notifies the department
or the deleted text begin120-daydeleted text end period since allocation has expired prior to the last Monday in November,
the amount of allocation is canceled and returned for reallocation through the unified pool.
If the issuer notifies the department on or after the last Monday in November, the amount
of allocation is canceled and returned for reallocation to the Minnesota Housing Finance
Agency. To encourage a competitive application process, the commissioner shall reserve,
for new applications, the amount of allocation that is canceled and returned for reallocation
under this section for a minimum of seven calendar days.

(b) An issuer that returns for reallocation all or a portion of an allocation new text beginfor all types
of bonds other than residential rental project bonds
new text endreceived under this section within 120
days of the allocation shall receive within 30 days a refund equal to:

(1) one-half of the application deposit for the amount of bonding authority returned
within 30 days of receiving the allocation;

(2) one-fourth of the application deposit for the amount of bonding authority returned
between 31 and 60 days of receiving the allocation; and

(3) one-eighth of the application deposit for the amount of bonding authority returned
between 61 and 120 days of receiving the allocation.

(c) No refund of the application deposit shall be available for allocations returned on or
after the last Monday in November.

new text begin (d) An issuer that returns for reallocation all or a portion of an allocation for residential
rental project bonds received under this section within 180 days of the allocation shall
receive within 30 days a refund equal to:
new text end

new text begin (1) one-half of the application deposit for the amount of bonding authority returned
within 45 days of receiving the allocation;
new text end

new text begin (2) one-fourth of the application deposit for the amount of bonding authority returned
between 46 and 90 days of receiving the allocation; and
new text end

new text begin (3) one-eighth of the application deposit for the amount of bonding authority returned
between 91 and 180 days of receiving the allocation.
new text end

Sec. 23.

Minnesota Statutes 2016, section 474A.131, subdivision 1, is amended to read:


Subdivision 1.

Notice of issue.

Each issuer deleted text beginthat issues bondsdeleted text end with an allocation received
under this chapter shall provide a notice of issue to the department on forms provided by
the department stating:

(1) the date of issuance of the bonds;

(2) the title of the issue;

(3) the principal amount of the bonds;

(4) the type of qualified bonds under federal tax law;

(5) the dollar amount of the bonds issued that were subject to the annual volume cap;
and

(6) for entitlement issuers, whether the allocation is from current year entitlement
authority or is from carryforward authority.

For obligations that are issued as a part of a series of obligations, a notice must be
provided for each series. A penalty of one-half of the amount of the application deposit not
to exceed $5,000 shall apply to any issue of obligations for which a notice of issue is not
provided to the department within five business days after issuance or before 4:30 p.m. on
the last business day in December, whichever occurs first. Within 30 days after receipt of
a notice of issue the department shall refund a portion of the application deposit equal to
one percent of the amount of the bonding authority actually issued if a one percent application
deposit was made, or equal to two percent of the amount of the bonding authority actually
issued if deleted text begina two percentdeleted text endnew text begin the applicablenew text end application deposit was made, less any penalty amount.

Sec. 24.

Minnesota Statutes 2016, section 474A.131, subdivision 1b, is amended to read:


Subd. 1b.

Deadline for issuance of qualified bonds.

new text begin(a) new text endIf an issuer fails to notify the
department before 4:30 p.m. on the last business day in December of issuance of obligations
pursuant to an allocation received for any qualified bond project or issuance of an entitlement
allocationnew text begin other than those involving residential rental bondsnew text end, the allocation is canceled and
the bonding authority is allocated to the Minnesota Housing Finance Agency for carryforward
by the commissioner under section 474A.091, subdivision 6.

new text begin (b) If an issuer for an allocation received for a residential rental project has not issued
the obligations before 4:30 p.m. on the last business day in December and the time period
for issuance of the obligations provided under section 474A.061, subdivision 2a, or 474A.091,
subdivision 2a, as applicable, has not expired, the bonding authority shall be allocated to
the Minnesota Housing Finance Agency for carryforward by the commissioner under section
474A.091, subdivision 6; provided, however, that the allocation shall remain reserved by
the Minnesota Housing Finance Agency for the residential rental project described in the
original application and the Minnesota Housing Finance Agency will have the fiduciary
duty to issue the bonds as intended by the original issuer. In addition, any obligations issued
by the Minnesota Housing Finance Agency for a residential rental project that is subject to
this paragraph shall not be subject to the debt management policies of the Minnesota Housing
Finance Agency, as adopted and amended from time to time.
new text end

Sec. 25.

Minnesota Statutes 2016, section 474A.131, subdivision 2, is amended to read:


Subd. 2.

Carryforward notice.

If an issuer intends to carry forward an allocation received
under this chapter, it must notify the department in writing before 4:30 p.m. on the last
business day in December. This notice requirement does not apply to the Minnesota Housing
Finance Agency for the carryforward of unallocated unified pool balancesnew text begin or for the
carryforward of allocations of residential rental project bonds pursuant to section 474A.131,
subdivision 1b
new text end.

Sec. 26.

Minnesota Statutes 2016, section 474A.14, is amended to read:


474A.14 NOTICE OF AVAILABLE AUTHORITY.

The department shall provide at its official Web site a written notice of the amount of
bonding authority in the housing, small issue, and public facilities pools as soon after January
1 as possible. The department shall provide at its official Web site a written notice of the
amount of bonding authority available for allocation in the unified pool as soon after deleted text beginAugustdeleted text endnew text begin
July
new text end 1 as possible.