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SF 1789

as introduced - 90th Legislature (2017 - 2018) Posted on 03/07/2017 09:19am

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

Current Version - as introduced

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A bill for an act
relating to housing finance; providing for housing project bonding authority
allocations; amending Minnesota Statutes 2016, sections 474A.02, by adding
subdivisions; 474A.03, subdivision 1; 474A.061, subdivisions 1, 2a; 474A.091,
subdivisions 2, 3, 3a, by adding a subdivision.

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. 1a. new text end

new text begin Aggregate bond limitation. new text end

new text begin "Aggregate bond limitation" means 55 percent
of the reasonably expected aggregate basis of the project and the land on which the project
is located.
new text end

Sec. 2.

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


new text begin Subd. 1b. new text end

new text begin AMI. new text end

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

Sec. 3.

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 Workforce housing. new text end

new text begin "Workforce housing" means a multifamily housing
project in which, for a period of at least 15 years following completion, at least 80 percent
of rental units are occupied or held for occupancy by persons or families whose adjusted
income does not exceed 60 percent of AMI and at least 80 percent of rental units in the
project are rent restricted in an amount of 30 percent of 60 percent of AMI.
new text end

Sec. 4.

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 pooldeleted text begin , of which 31 percent of the adjusted allocation is
reserved until the last Monday in July for single-family housing programs
deleted text end ;

(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. 5.

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


Subdivision 1.

Allocation application.

(a) 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) 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
July, or in the amount of two percent of the requested allocation on or after the last Monday
in July, (5) a public purpose scoring worksheet for manufacturing project and enterprise
zone facility project applications, and (6) for residential rental projects, a statement from
the applicant or bond counsel as tonew text begin : (i)new text end whether the project preserves existing federally
subsidized housing deleted text begin fordeleted text end new text begin ; (ii) whether the project owner intends to apply for and receive
low-income housing tax credits for the project under section 42 of the Internal Revenue
Code of 1986, as amended, from the applicable allocating agency; (iii) whether the
new text end residential
rental project deleted text begin applications and whether the project is restricted to persons who are 55 years
of age or older
deleted text end new text begin meets the definition of workforce housing; and (iv) whether the aggregate
of the amount of tax-exempt bonds previously allocated to a project, if any, and the amount
of bonds requested in the application for that same project exceeds the aggregate bond
limitation
new text end .

new text begin (b)new 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.

deleted text begin (b)deleted text end new text begin (c)new text end An entitlement issuer may not apply for an allocation from the public facilities
pool 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. 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 begin (c)deleted text end new text begin (d)new text end 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. 6.

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 July 15, 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.047new text begin , and after the second Tuesday in January through July 15, for single
housing programs
new text end . Allocations of available bonding authority from the housing pool for
eligible deleted text begin residential rental projectsdeleted text end new text begin usesnew text end shall be awarded in the following order of priority:
(1)new text begin residential rentalnew text end projects that preserve existing federally subsidized housingnew text begin and the
aggregate amount of bonds requested in the application and any previous allocation of bonds
do not exceed the aggregate bond limitation
new text end ; deleted text begin (2) projects that are not restricted to persons
who are 55 years of age or older; and (3)
deleted text end new text begin (2) residential rental projects that: (i) intend to
apply for and receive low-income housing tax credits under section 42 of the Internal
Revenue Code and meet the definition of workforce housing; and (ii) the aggregate amount
of bonds requested in the application and any previous allocation of bonds to the project do
not exceed the aggregate bond limitation; (3)
new text end other residential rental projectsdeleted text begin . Prior to May
15, no allocation shall be made to a project restricted to persons who are 55 years of age or
older.
deleted text end new text begin that intend to apply for and receive low-income housing tax credits under Section 42
of the Internal Revenue Code; (4) single-family housing programs described in paragraph
(b); and (5) other residential rental projects. If there are two or more applications for
residential rental projects from the housing pool with equal priority 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 by lot including a partial allocation
until all remaining bonding authority is allocated unless otherwise agreed to by the respective
issuers. If a residential rental project receives some, but less than the requested amount of
allocation contained in its application, and the project applies in the future to the housing
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 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 120 days of the allocation 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 15.

(b) After January 1, and through January 15, new text begin subject to paragraph (a), new text end 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 of the greater of
statewide or area median income as published by the Department of Housing and Urban
Development, adjusted for household size;

(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 15 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 15 shall notify
the Minnesota Housing Finance Agency by July 15. The Minnesota Housing Finance Agency
shall notify each city making a request of the amount of its allocation within three business
days after July 15. 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 15.

(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 July. 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 July. 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 15, 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. 7.

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


Subd. 2.

Application.

new text begin (a) new text end Issuers 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 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 tonew text begin : (i)new text end whether the project preserves
existing federally subsidized housing deleted text begin and whether the project is restricted to persons who
are 55 years of age or older.
deleted text end new text begin ; (ii) whether the project owner intends to apply for and receive
low-income housing tax credits under Section 42 of the Internal Revenue Code for the
project from the applicable allocating agency; (iii) whether the proposed residential rental
project meets the definition of workforce housing; and (iv) whether the aggregate of the
amount of tax-exempt bonds previously allocated under this section, if any, to a project and
the amount of bonds requested in the application for that same project exceeds the aggregate
bond limitation.
new text end

new text begin (b) new text end 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.

new text begin (c) new text end 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. 8.

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 August 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)new text begin residential rentalnew text end projects that preserve existing federally
subsidized housingnew text begin and the aggregate amount of bonds requested in the application and any
previous allocation of bonds do not exceed the aggregate bond limitation
new text end ; deleted text begin (2) projects that
are not restricted to persons who are 55 years of age or older; and (3) other
deleted text end new text begin (2)new text end residential
rental projectsdeleted text begin .deleted text end new text begin that: (i) intend to apply for and receive low-income housing tax credits under
section 42 of the Internal Revenue Code and meet the definition of workforce housing; and
(ii) the aggregate amount of bonds requested in the application and any previous allocation
of bonds to that same project do not exceed the aggregate bond limitation; (3) other residential
rental projects that intend to apply for and receive low-income housing tax credits under
section 42 of the Internal Revenue Code; and (4) other residential rental projects. If there
are two or more applications for residential rental projects from the unified pool with equal
priority 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
by lot including a partial allocation until all remaining bonding authority is allocated unless
otherwise agreed to by the respective issuers. If a residential rental project receives some,
but less than the requested amount of allocation contained in its application, and the project
applies in the future to 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
residential 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 August through the last Monday in deleted text begin Novemberdeleted text end new text begin Octobernew text end ,
$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 such 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. 9.

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


Subd. 3a.

Mortgage bonds.

(a) Bonding authority remaining in the unified pool on
October 1 is available for single-family housing programsnew text begin onlynew text end for cities that applied in
January and received an allocation under section 474A.061, subdivision 2a, in the same
calendar year. The Minnesota Housing Finance Agency shall receive an allocation for
mortgage bonds pursuant to this section, minus any amounts for a city or consortium that
intends to issue bonds on its own behalf under paragraph (c).

(b) 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. Allocations shall be awarded by the commissioner each Monday commencing on
the first Monday in October through the last Monday in November for applications received
by 4:30 p.m. on the Monday of the week preceding an allocation.

For cities who choose to have the agency issue bonds on their behalf, allocations will
be made loan by loan, on a first-come, first-served basis among the cities. The agency shall
submit an application fee pursuant to section 474A.03, subdivision 4, and an application
deposit equal to two percent of the requested allocation to the commissioner when requesting
an allocation from the unified pool. After awarding an allocation and receiving a notice of
issuance for mortgage bonds issued on behalf of the participating cities, the commissioner
shall transfer the application deposit to the Minnesota Housing Finance Agency.

For purposes of paragraphs (a) to (d), "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.

(c) Any city that received an allocation pursuant to section 474A.061, subdivision 2a,
paragraph (f)
, in the current year that wishes to receive an additional allocation from the
unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement shall
notify the Minnesota Housing Finance Agency by the third Monday in September. The total
amount of allocation for mortgage bonds for a city choosing to issue bonds on its own behalf
or through a joint powers agreement is limited to the lesser of: (i) the amount requested, or
(ii) the product of the total amount available for mortgage bonds from the unified pool,
multiplied by the ratio of the population of each city that applied in January and received
an allocation under section 474A.061, subdivision 2a, in the same calendar year, as
determined by the most recent estimate of the city's population released by the state
demographer's office to the total of the population of all the cities that applied in January
and received an allocation under section 474A.061, subdivision 2a, in the same calendar
year. If a city choosing to issue bonds on its own behalf or through a joint powers agreement
is located within a county that has also chosen to issue bonds on its own behalf or through
a joint powers agreement, the city's population will be deducted from the county's population
in calculating the amount of allocations under this paragraph.

The Minnesota Housing Finance Agency shall notify each city choosing to issue bonds
on its own behalf or pursuant to a joint powers agreement of the amount of its allocation
by October 15. Upon determining the amount of the allocation of each choosing to issue
bonds on its own behalf or through a joint powers agreement, the agency shall forward a
list specifying the amounts allotted to each city.

A city that chooses to issue bonds on its own behalf or through a joint powers agreement
may request an allocation from the commissioner by forwarding an application with an
application fee pursuant to section 474A.03, subdivision 4, and an application deposit equal
to two percent of the requested amount to the commissioner no later than 4:30 p.m. on the
Monday of the week preceding an allocation. Allocations to cities that choose to issue bonds
on their own behalf shall be awarded by the commissioner on the first Monday after October
15 through the last Monday in November. No city may receive an allocation from the
commissioner after the last Monday in November. The commissioner shall allocate the
requested amount to the city or cities subject to the limitations under this subdivision.

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.

(d) 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
unified pool.

(e) An allocation awarded to the agency for mortgage bonds under this section may be
carried forward by the agency subject to notice requirements under section 474A.131.

Sec. 10.

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


new text begin Subd. 7. new text end

new text begin Allocation plan. new text end

new text begin (a) By January 15 of each year, the commissioner of the
Minnesota Housing Finance Agency shall annually prepare a tax-exempt bond allocation
plan that identifies:
new text end

new text begin (1) the amount of tax-exempt bonds allocated to the Minnesota Housing Finance Agency
during the previous calendar year;
new text end

new text begin (2) whether or not the Minnesota Housing Finance Agency intends to carry forward
such bonds not otherwise allocated in the previous year as qualified residential rental bonds
or qualified mortgage bonds or mortgage credit certificates consistent with the requirements
of Internal Revenue Service Form 8328; and
new text end

new text begin (3) the carryforward balance of any tax-exempt bonds allocated to the Minnesota Housing
Finance Agency including those bonds carried forward as qualified residential rental bonds
and qualified mortgage bonds or mortgage credit certificates.
new text end

new text begin (b) Prior to January 15 of each year, the Minnesota Housing Finance Agency must post
on its official Web site the plan under paragraph (a) and invite public comment until February
1. The Minnesota Housing Finance Agency shall not file the Internal Revenue Service Form
8328 until the public comment period has closed on February 1 unless otherwise required
by federal law.
new text end