Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 586-H.F.No. 2117 
           An act relating to public finance; providing 
          conditions of local and state government debt 
          financing; allocating bonding authority subject to a 
          volume cap under federal tax law; amending Minnesota 
          Statutes 1987 Supplement, sections 474A.04, 
          subdivision 1a; 474A.061, subdivisions 2 and 4; and 
          474A.091; repealing Minnesota Statutes 1987 
          Supplement, section 474A.061, subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1987 Supplement, section 
474A.04, subdivision 1a, is amended to read:  
    Subd. 1a.  [ENTITLEMENT RESERVATIONS; CARRYFORWARD; 
DEDUCTION.] An entitlement issuer may retain any unused portion 
of its entitlement allocation after the first Monday in 
September if it has submitted to the department before the first 
Monday in September a letter stating its intent to issue 
obligations pursuant to its entitlement allocation before the 
end of the calendar year or within the time permitted under 
federal tax law.  Except as provided in Laws 1987, chapter 268, 
article 16, section 41, subdivision 2, paragraph (a), any amount 
returned by an entitlement issuer before the last Monday in 
October August shall be reallocated through the multifamily 
housing pool.  Any amount returned on or after the last Monday 
in October August shall be reallocated under section 474A.091 
through the unified pool.  An amount returned after the last 
Monday in November shall be reallocated to the Minnesota housing 
finance agency.  Beginning with entitlement allocations received 
in 1987 under Minnesota Statutes 1986, section 474A.08, 
subdivision 1, paragraphs (2) and (3), there shall be deducted 
from an entitlement issuer's allocation for the subsequent year 
an amount equal to the entitlement allocation under which bonds 
are either not issued or carried forward under federal tax law.  
Except for the Minnesota housing finance agency, any amount of 
bonding authority that an entitlement issuer carries forward 
under federal tax law that is not permanently issued by the end 
of the succeeding calendar year shall be deducted from the 
entitlement allocation for that entitlement issuer for the next 
succeeding calendar year.  Any amount deducted from an 
entitlement issuer's allocation under this subdivision shall be 
divided equally for allocation through the manufacturing pool 
and the multifamily housing pool. 
    Sec. 2.  Minnesota Statutes 1987 Supplement, section 
474A.061, subdivision 2, is amended to read:  
    Subd. 2.  [ALLOCATION PROCEDURE.] From the beginning of the 
calendar year until the last Monday in October August, the 
commissioner shall allocate available bonding authority under 
this section on Monday of each week to applications received on 
or before the Monday of the preceding week.  
    (a) If there are two or more applications for residential 
rental project bonds from the multifamily housing pool and there 
is insufficient bonding authority to provide allocations for all 
projects in any one week after all eligible bonding authority 
has been transferred as provided in section 474A.081, the 
available bonding authority shall be awarded by lot unless 
otherwise agreed to by the respective issuers.  
    (b) If there are two or more applications for manufacturing 
projects from the manufacturing pool and there is insufficient 
bonding authority to provide allocations for all projects in any 
one week after all eligible bonding authority has been 
transferred as provided in section 474A.081, the available 
bonding authority shall be awarded by lot unless otherwise 
agreed to by the respective issuers. 
    (c) If there are two or more applications for public 
facility bonds from the public facilities pool and there is 
insufficient 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. 
    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.  The granting of an 
allocation of bonding authority under this section must be 
evidenced by a certificate of allocation. 
    Sec. 3.  Minnesota Statutes 1987 Supplement, section 
474A.061, subdivision 4, is amended to read:  
    Subd. 4.  [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 by the end of the 
current year or within the time period permitted by federal tax 
law, the issuer must notify the department.  If the issuer 
notifies the department prior to the last Monday in 
October August, the amount of allocation returned must be 
reallocated through the pool from which it was originally 
allocated.  If the issuer notifies the department on or after 
the last Monday in October August, the amount of allocation 
returned must be reallocated through the unified pool.  If the 
issuer notifies the department after the last Monday in 
November, the amount of allocation returned must be reallocated 
to the Minnesota housing finance agency. 
    (b) An issuer that returns for reallocation all or a 
portion of an allocation received under this section shall 
receive within 30 days a refund of its application deposit equal 
to:  
    (1) one-half of the amount on deposit for the amount of 
bonding authority returned before the first Monday in December 
November; 
    (2) one-fourth of the amount on deposit for the amount of 
bonding authority returned on or after the first Monday in 
December November and before the third Monday in December 
November; and 
    (3) one-eighth of the amount on deposit for the amount of 
bonding authority returned on or after the third Monday in 
December November and before the last Monday in December 
November. 
    No refund shall be available for allocations returned on or 
after the last Monday in December November. 
    Sec. 4.  Minnesota Statutes 1987 Supplement, section 
474A.091, is amended to read:  
    474A.091 [ALLOCATION OF UNIFIED POOL.] 
    Subdivision 1.  [UNIFIED POOL AMOUNT.] On the day after the 
last Monday in October August any bonding authority remaining 
unallocated from the manufacturing pool, the multifamily housing 
pool, and the public facilities pool is transferred to the 
unified pool and must be reallocated as provided in this section.
    Subd. 2.  [APPLICATION.] 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, (3) the type of qualified bonds to be 
issued, and (4) an application deposit in the amount of two 
percent of the requested allocation.  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.
    The Minnesota housing finance agency may not apply for an 
allocation for mortgage bonds under this section until after the 
last Monday in September.  Notwithstanding the restrictions 
imposed on unified pool allocations after October 1 under 
subdivision 3, paragraph (c)(2), the Minnesota housing finance 
agency may be awarded allocations for mortgage bonds from the 
unified pool after October 1. 
    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 November September through and on the last Monday in December 
November.  Applications for allocations must be received by the 
department by the Monday preceding the Monday on which 
allocations are to be made.  
    (b) On or before October 1, allocations shall be awarded 
from the unified pool in the following order of priority: 
    (1) applications for small issue bonds, with preference 
given to projects to be located in distressed counties 
designated under section 297A.257; 
    (2) applications for residential rental project bonds; 
    (3) applications for public facility bonds; 
    (4) applications for redevelopment bonds; 
    (5) applications for mortgage bonds; and 
    (6) applications for governmental bonds. 
    (c)(1) On the first Monday in October, $20,000,000 of 
bonding authority or an amount equal to the total annual amount 
of bonding authority allocated to the manufacturing pool under 
section 474A.03, subdivision 1, less the amount allocated to 
issuers from the manufacturing pool for that year, whichever is 
less, is reserved within the unified pool for small issue 
bonds.  On the first Monday in October, $5,000,000 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 facility 
bonds.  If sufficient bonding authority is not available to 
reserve the required amounts for both small issue bonds and 
public facility bonds, three-fourths of the remaining available 
bonding authority is reserved for small issue bonds and 
one-fourth of the remaining available bonding authority is 
reserved for public facility bonds. 
    (2) Allocations for mortgage bonds from the unified pool 
may not exceed:  
    (a) (i) $10,000,000 for any one city; 
    (b) (ii) $20,000,000 for any number of cities in any one 
county; or 
    (c) (iii) 40 60 percent of the amount initially allocated 
to the unified pool.  
    An allocation for mortgage bonds may be used for mortgage 
credit certificates. 
    After October 1, allocations shall be awarded from the 
unified pool only for the following types of qualified bonds:  
small issue bonds, with preference given to manufacturing 
projects to be located in distressed counties designated under 
section 297A.257, public facility bonds, and residential rental 
project bonds. 
    (d) If there is insufficient bonding authority to fund all 
projects within any qualified bond category, allocations shall 
be awarded by lot unless otherwise agreed to by the respective 
issuers.  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.  The granting of an 
allocation of bonding authority under this section must be 
evidenced by issuance of a certificate of allocation. 
    Subd. 4.  [MORTGAGE BOND SUNSET.] If federal tax law is not 
amended to permit the issuance of tax-exempt mortgage bonds 
after December 31, 1988, all remaining bonding authority 
available for allocation under this section on December 1, 1988, 
is allocated to the Minnesota housing finance agency, of which 
at least.  For purposes of this subdivision, "city" has the 
meaning given it in section 462C.02, subdivision 6.  The 
Minnesota housing finance agency shall reallocate at least 50 
percent must be reallocated of the remaining bonding authority 
available for allocation to cities requesting an allocation on 
or before November 1, 1988, for the issuance of mortgage bonds.  
A city may apply for an allocation under this subdivision by 
submitting to the Minnesota housing finance agency an 
application on or before November 1, 1988, on forms provided by 
the agency.  After December 1, 1988, any unallocated bonding 
authority remaining after all city requests are filled is 
reallocated to the Minnesota housing finance agency for issuance 
by the agency or for reallocation to a city requesting an 
allocation on or before November 1, 1988.  
    Subd. 4a.  [NOTIFICATION OF ISSUANCE.] If an issuer that 
receives an allocation for mortgage bonds under this subdivision 
4 fails to notify the department of energy and economic 
development before the last Monday in December of issuance of 
obligations pursuant to all or a portion of the allocation, any 
remaining allocation pursuant to which obligations have not been 
issued is canceled and the bonding authority is allocated to the 
department of finance for reallocation under subdivision 6. 
    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 by the end of the 
current year or within the time period permitted by federal tax 
law, the issuer must notify the department.  If the issuer 
notifies the department prior to the last Monday in 
December November, the amount of allocation returned must be 
reallocated through the unified pool. 
    (b) An issuer that returns for reallocation all or a 
portion of an allocation received under this section shall 
receive within 30 days a refund of its application deposit equal 
to:  
    (1) one-half of the amount on deposit for the amount of 
bonding authority returned before the first Monday in December 
November; 
    (2) one-fourth of the amount on deposit for the amount of 
bonding authority returned on or after the first Monday in 
December November and before the third Monday in December 
November; and 
    (3) one-eighth of the amount on deposit for the amount of 
bonding authority returned on or after the third Monday in 
December November and before the last Monday in December 
November. 
    No refund of the application deposit shall be available for 
allocations returned on or after the last Monday in December 
November. 
    Subd. 6.  [FINAL ALLOCATION; CARRYFORWARD.] $20,000,000 or 
any bonding authority remaining unallocated from the unified 
pool after the last Monday in December, whichever is less, is 
allocated to the higher education coordinating board.  Any 
bonding authority remaining unissued by the Minnesota housing 
finance agency after the deduction for the higher education 
coordinating board allocation last Monday in December is 
allocated to the department of finance for reallocation for 
qualified bonds eligible to be carried forward under federal tax 
law. 
    Sec. 5.  [REPEALER.] 
    Minnesota Statutes 1987 Supplement, section 474A.061, 
subdivision 5, is repealed. 
    Approved April 21, 1988