SF 5512

as introduced - 93rd Legislature (2023 - 2024) Posted on 05/07/2024 09:04am

A bill for an act
relating to economic development; modifying the annual volume cap allocations
and allocation procedure for public facility projects funded by public facility bonds;
amending Minnesota Statutes 2022, sections 474A.03, subdivision 1; 474A.091,
subdivisions 2a, 3.

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

Section 1.

Minnesota Statutes 2022, 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) deleted text begin $74,530,000 deleted text end new text begin $25,500,000 new text end to the small issue pool;

(2) $122,060,000 to the housing pool, of which 27 percent of the adjusted allocation is
reserved until the last Monday in June each year until 2021 for single-family housing
programs, after which 31 percent of the adjusted allocation is reserved until the last Monday
in June for single-family programs;

(3) deleted text begin $12,750,000 deleted text end new text begin $61,780,000 new text end 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. 2.

Minnesota Statutes 2022, section 474A.091, subdivision 2a, is amended to read:

Subd. 2a.

Application for all other types of qualified bonds.

(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 to the Department of Management and Budget.
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.

(b) An issuer that receives an allocation under this subdivision must permanently issue
obligations equal to all or a portion of the allocation received on or before deleted text begin 120 deleted text end new text begin 180 new text end days of
the allocation. If an issuer that receives an allocation under this subdivision does not
permanently 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.

(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, 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.

Sec. 3.

Minnesota Statutes 2022, 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 July 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) new text begin applications for public facility projects funded by public facility bonds;
new text end

new text begin (3) new text end applications for small issue bonds for manufacturing projects; and

deleted text begin (3) deleted text end new text begin (4) new text end 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;

deleted text begin (3) applications for public facility projects funded by public facility bonds;
deleted text end

deleted text begin (4) deleted text end new text begin (3) new text end applications for small issue bonds for manufacturing projects;

deleted text begin (5) deleted text end new text begin (4) new text end applications for small issue bonds for agricultural development bond loan projects;

deleted text begin (6) deleted text end new text begin (5) new text end applications for residential rental project bonds;

deleted text begin (7) deleted text end new text begin (6) new text end applications for enterprise zone facility bonds;

deleted text begin (8) deleted text end new text begin (7) new text end applications for governmental bonds; and

deleted text begin (9) deleted text end new text begin (8) new text end 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) preservation projects; (2) 30 percent AMI residential
rental projects; (3) 50 percent AMI residential rental projects for which the amount of bonds
requested in their respective applications do not exceed the aggregate bond limitations; (4)
100 percent LIHTC projects; (5) 20 percent LIHTC projects; and (6) other residential rental
projects. 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 next successive housing pool or the
next successive unified pool for an 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.

(g) From the first Monday in July 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 the amounts are available within
the unified pool.

new text begin (h) From the first Monday in July through the last Monday in November, $50,000,000
of bonding authority or an amount equal to the total annual amount of bonding authority
allocated to the public facilities pool under section 474A.03, subdivision 1, less the amount
allocated to issuers from the public facilities pool for that year, whichever is less, is reserved
within the unified pool for public facilities bonds to the extent the amounts are available
within the unified pool.
new text end

deleted text begin (h) deleted text end new text begin (i) new text end 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.

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

deleted text begin (j) deleted text end new text begin (k) new text end 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.

deleted text begin (k) deleted text end new text begin (l) new text end 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.

deleted text begin (l) deleted text end new text begin (m) new text end The granting of an allocation of bonding authority under this section must be
evidenced by issuance of a certificate of allocation.