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Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1991 

                        CHAPTER 346-H.F.No. 833 
           An act relating to economic development; regulating 
          the use of tax-exempt revenue bonds; amending 
          Minnesota Statutes 1990, sections 474A.02, 
          subdivisions 1, 2b, 7, 8, 19, and by adding 
          subdivisions; 474A.03; 474A.04, subdivision 1a; 
          474A.047, subdivisions 1 and 3; 474A.061, subdivisions 
          1, 2a, 2b, 2c, 3, and 4; 474A.091, subdivisions 1, 2, 
          3 and 5; 474A.131, by adding a subdivision; 474A.15; 
          474A.16; and 474A.17; proposing coding for new law in 
          Minnesota Statutes, chapters 462A and 462C; repealing 
          Minnesota Statutes 1990, sections 474A.048; and 
          474A.081, subdivisions 1, 2, and 4. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [462A.073] [SINGLE-FAMILY MORTGAGE BONDS; 
LIMITATIONS.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the following terms have the meanings given them. 
    (b) "Existing housing" means single-family housing that (i) 
has been previously occupied prior to the first day of the 
origination period; or (ii) has been available for occupancy for 
at least 12 months but has not been previously occupied.  
    (c) "Metropolitan area" means the metropolitan area as 
defined in section 473.121, subdivision 2. 
    (d) "New housing" means single-family housing that has not 
been previously occupied.  
    (e) "Origination period" means the period that loans 
financed with the proceeds of qualified mortgage revenue bonds 
are available for the purchase of single-family housing.  The 
origination period begins when financing actually becomes 
available to the borrowers for loans.  
    (f) "Redevelopment area" means a compact and contiguous 
area within which the agency finds that 70 percent of the 
parcels are occupied by buildings, streets, utilities, or other 
improvements and more than 25 percent of the buildings, not 
including outbuildings, are structurally substandard to a degree 
requiring substantial renovation or clearance. 
    (g) "Single-family housing" means dwelling units eligible 
to be financed from the proceeds of qualified mortgage revenue 
bonds under federal law. 
    (h) "Structurally substandard" means containing defects in 
structural elements or a combination of deficiencies in 
essential utilities and facilities, light, ventilation, fire 
protection including adequate egress, layout and condition of 
interior partitions, or similar factors, which defects or 
deficiencies are of sufficient total significance to justify 
substantial renovation or clearance. 
    Subd. 2.  [LIMITATION; ORIGINATION PERIOD.] During the 
first ten months of an origination period, the agency may make 
loans financed with proceeds of mortgage bonds for the purchase 
of existing housing.  Loans financed with the proceeds of 
mortgage bonds for new housing in the metropolitan area may be 
made during the first ten months of an origination period only 
if at least one of the following conditions is met: 
    (1) the new housing is located in a redevelopment area; 
    (2) the new housing is replacing a structurally substandard 
structure or structures; or 
    (3) the new housing is part of a housing affordability 
initiative, other than those financed with the proceeds from the 
sale of bonds, in which federal, state, or local assistance is 
used to substantially improve the terms of the financing or to 
substantially write down the purchase price of the new housing.  
    Upon expiration of the first ten-month period, the agency 
may make loans financed with the proceeds of mortgage bonds for 
the purchase of new and existing housing.  
    Subd. 3.  [NONMETROPOLITAN AREA.] The agency shall initiate 
steps in the nonmetropolitan areas of the state similar to those 
required for the metropolitan area under subdivision 2 to 
encourage loans for existing housing or for new housing under 
the conditions specified in subdivision 2. 
    Subd. 4.  [LIMITATION; COMMITMENTS AND LOANS TO BUILDERS 
AND DEVELOPERS.] The agency may not make available, provide 
set-asides, or commit to make available proceeds of mortgage 
bonds for the exclusive use of builders or developers for loans 
to eligible purchasers for new housing except for new housing 
described in subdivision 2, clauses (1) and (2).  This 
prohibition is in effect for the total origination period. 
    Subd. 5.  [REPORTING REQUIREMENT.] The agency shall report 
to the chairs of the appropriate housing-related standing 
committees or divisions of the state senate and house of 
representatives by January 1 of each year detailing new housing 
activity financed with the proceeds of mortgage bonds, including 
a description of affordable housing initiatives, the number of 
loans, the average purchase price, average borrower income, and 
steps taken to encourage loan activity as required in 
subdivision 3. 
    Sec. 2.  [462C.071] [SINGLE-FAMILY MORTGAGE BONDS; 
LIMITATIONS.] 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the following terms have the meanings given them. 
    (b) "Existing housing" means single-family housing that (i) 
has been previously occupied prior to the first day of the 
origination period; or (ii) has been available for occupancy for 
at least 12 months but has not been previously occupied.  
    (c) "Metropolitan area" means the metropolitan area as 
defined in section 473.121, subdivision 2. 
    (d) "New housing" means single-family housing that has not 
been previously occupied.  
    (e) "Origination period" means the period that loans 
financed with the proceeds of qualified mortgage revenue bonds 
are available for the purchase of single-family housing.  The 
origination period begins when financing actually becomes 
available to the borrowers for loans. 
    (f) "Redevelopment area" means a compact and contiguous 
area within which the city finds by resolution that 70 percent 
of the parcels are occupied by buildings, streets, utilities, or 
other improvements and more than 25 percent of the buildings, 
not including outbuildings, are structurally substandard to a 
degree requiring substantial renovation or clearance. 
    (g) "Single-family housing" means dwelling units eligible 
to be financed from the proceeds of qualified mortgage revenue 
bonds under federal law. 
    (h) "Structurally substandard" means containing defects in 
structural elements or a combination of deficiencies in 
essential utilities and facilities, light, ventilation, fire 
protection including adequate egress, layout and condition of 
interior partitions, or similar factors, which defects or 
deficiencies are of sufficient total significance to justify 
substantial renovation or clearance. 
    Subd. 2.  [LIMITATION; ORIGINATION PERIOD.] During the 
first ten months of an origination period, a city may make loans 
financed with proceeds of mortgage bonds for the purchase of 
existing housing.  Loans financed with the proceeds of mortgage 
bonds for new housing in the metropolitan area may be made 
during the first ten months of an origination period only if at 
least one of the following conditions is met: 
    (1) the new housing is located in a redevelopment area; 
    (2) the new housing is replacing a structurally substandard 
structure or structures; 
    (3) the new housing is located on a parcel purchased by the 
city or conveyed to the city under section 282.01, subdivision 
1; or 
    (4) the new housing is part of a housing affordability 
initiative, other than those financed with the proceeds from the 
sale of bonds, in which federal, state, or local assistance is 
used to substantially improve the terms of the financing or to 
substantially write down the purchase price of the new housing.  
    Upon expiration of the first ten-month period, a city may 
make loans financed with the proceeds of mortgage bonds for the 
purchase of new and existing housing.  
    Subd. 3.  [NONMETROPOLITAN AREA.] Cities shall initiate 
steps in the nonmetropolitan areas of the state similar to those 
required for the metropolitan area under subdivision 2 to 
encourage loans for existing housing or for new housing under 
the conditions specified in subdivision 2. 
    Subd. 4.  [REDEVELOPMENT AREA.] A city located within the 
metropolitan area must submit to the metropolitan council the 
resolution adopted by the governing body of the city finding an 
area to be a redevelopment area and a map of the redevelopment 
area.  
    Subd. 5.  [LIMITATION; COMMITMENTS AND LOANS TO BUILDERS 
AND DEVELOPERS.] A city may not make available, provide 
set-asides, or commit to make available proceeds of mortgage 
bonds for the exclusive use of builders or developers for loans 
to eligible purchasers for new housing except for new housing 
described in subdivision 2, clauses (1) to (3).  This 
prohibition is in effect for the total origination period. 
    Subd. 6.  [REPORTING REQUIREMENT.] A city that provides 
loans for new housing financed with the proceeds of mortgage 
bonds shall report to the chairs of the appropriate 
housing-related standing committees or divisions of the state 
senate and house of representatives by January 1 of each year 
detailing new housing activity financed with the proceeds of 
mortgage bonds, including a description of affordable housing 
initiatives, the number of loans, the average purchase price, 
average borrower income, and steps taken to encourage loan 
activity as required in subdivision 3. 
    Sec. 3.  Minnesota Statutes 1990, section 474A.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [TERMS DEFINED.] For the purposes of Laws 
1987, chapter 268, article 16, sections 1 to 40 this chapter, 
the terms defined in this section shall have the meanings given 
them. 
    Sec. 4.  Minnesota Statutes 1990, section 474A.02, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [CARRYFORWARD.] "Carryforward" means the ability 
to issue obligations in a year subsequent to the year in which 
an allocation of bonding authority was obtained under Laws 1987, 
chapter 268, article 16, sections 1 to 40 this chapter as 
provided in section 146(f) of federal tax law.  
    Sec. 5.  Minnesota Statutes 1990, section 474A.02, 
subdivision 7, is amended to read: 
    Subd. 7.  [ENTITLEMENT ISSUER.] "Entitlement issuer" means 
an issuer to which an allocation is made under section 474A.03, 
subdivision 2a; and Laws 1987, chapter 268, article 16, section 
41, subdivisions 1, clause (a), and 2. 
    Sec. 6.  Minnesota Statutes 1990, section 474A.02, 
subdivision 8, is amended to read: 
    Subd. 8.  [FEDERAL TAX LAW.] "Federal tax law" means those 
provisions of the Internal Revenue Code of 1986, as amended 
through December 31, 1989 1990, that limit the aggregate amount 
of obligations of a specified type or types which may be issued 
by an issuer during a calendar year whose interest is excluded 
from gross income for purposes of federal income taxation. 
    Sec. 7.  Minnesota Statutes 1990, section 474A.02, is 
amended by adding a subdivision to read: 
    Subd. 8a.  [HOUSING POOL.] "Housing pool" means the amount 
of the annual volume cap allocated under section 474A.061 which 
is available for the issuance of residential rental project 
bonds or mortgage bonds. 
    Sec. 8.  Minnesota Statutes 1990, section 474A.02, 
subdivision 19, is amended to read: 
    Subd. 19.  [OTHER ISSUER.] "Other issuer" means an entity 
other than an entitlement issuer or state issuer which may issue 
obligations subject to an annual volume cap, including the 
University of Minnesota, a city, town, federally recognized 
American Indian tribe or subdivision located in Minnesota, 
housing and redevelopment authority referred to in chapter 462 
sections 469.001 to 469.047, or a body authorized to exercise 
the powers of a housing and redevelopment authority, a port 
authority referred to in chapter 458 sections 469.048 to 
469.089, or a body authorized to exercise the powers of a port 
authority, an economic development authority referred to in 
chapter 458C sections 469.090 to 469.108, an area or municipal 
redevelopment agency referred to in chapter 472 sections 469.109 
to 469.123, a county, or municipal authority or agency 
established under special law, or an entity issuing on behalf of 
the foregoing. 
    Sec. 9.  Minnesota Statutes 1990, section 474A.02, is 
amended by adding a subdivision to read: 
    Subd. 23b.  [RENT.] "Rent" means the total monthly cost of 
occupancy payable directly by the tenant and the cost of any 
utilities, other than telephone.  It does not include a charge 
for a service that is not required as a condition of occupancy. 
    Sec. 10.  Minnesota Statutes 1990, section 474A.02, is 
amended by adding a subdivision to read: 
    Subd. 23c.  [SINGLE-ROOM OCCUPANCY UNIT.] "Single-room 
occupancy unit" means an enclosed dwelling space which does not 
include within the space a separate bedroom and is suitable for 
occupancy by one individual person capable of independent living.
    Sec. 11.  Minnesota Statutes 1990, section 474A.03, is 
amended to read: 
    474A.03 [DETERMINATION OF ANNUAL VOLUME CAP.] 
    Subdivision 1.  [ANNUAL VOLUME CAP UNDER FEDERAL TAX LAW; 
POOL ALLOCATIONS.] At the beginning of each calendar year after 
December 31, 1990, 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) $75,000,000 $65,000,000 to the manufacturing pool; 
    (2) $46,000,000 to the housing pool; 
    (3) $10,000,000 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 (3), 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. 
    Subd. 2a.  [ENTITLEMENT ISSUER ALLOCATION.] (a) The 
commissioner shall make the following allocation to the 
Minnesota housing finance agency and the following cities and 
county:  
    (1) $51,000,000 per year to the Minnesota housing finance 
agency, less any amount received in the previous year under 
section 474A.091, subdivision 6; 
    (2) $20,000,000 per year to the city of Minneapolis; and 
    (3) $15,000,000 per year to the city of Saint Paul; and 
    (4) $10,000,000 per year to the Dakota county housing and 
redevelopment authority for the county of Dakota and all 
political subdivisions located within the county. 
    (b) Allocations provided under this subdivision must be 
used for mortgage bonds, mortgage credit certificates, or 
residential rental project bonds, except that entitlement cities 
may also use their allocations for public facility bonds. 
    Sec. 12.  Minnesota Statutes 1990, section 474A.04, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [ENTITLEMENT RESERVATIONS; CARRYFORWARD; 
DEDUCTION.] 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 
August July shall be reallocated through the multifamily housing 
pool.  Any amount returned on or after the last Monday in August 
July 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.  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, 
returned on or before the last Monday in December, 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. 13.  Minnesota Statutes 1990, section 474A.047, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY.] An issuer may only use the 
proceeds from residential rental bonds if the proposed project 
meets one of the following: 
    (a) The proposed project is a single room occupancy project 
and all the units of the project will be occupied by individuals 
whose incomes at the time of their initial residency in the 
project are 50 percent or less of the greater of the statewide 
or county median income adjusted for household size as 
determined by the federal Department of Housing and Urban 
Development; or 
    (b) The proposed project is a multifamily project where at 
least 75 percent of the units have two or more bedrooms and (1) 
at least one-third of the 75 percent have three or more bedrooms 
or (2) the proposed project meets the following requirements: 
    (i) the proposed project is the rehabilitation of an 
existing multifamily building which meets the requirements for 
minimum rehabilitation expenditures in section 42(e)(2) of the 
Internal Revenue Code; 
    (ii) the developer of the proposed project includes a 
managing general partner which is a nonprofit organization under 
chapter 317A and meets the requirements for a qualified 
nonprofit organization in section 42(h)(5) of the Internal 
Revenue Code; and 
    (iii) the proposed project involves participation by a 
local unit of government in the financing of the acquisition or 
rehabilitation of the project.  At least 75 percent of the units 
of the multifamily project must be occupied by individuals or 
families whose incomes at the time of their initial residency in 
the project are 60 percent or less of the greater of the:  (1) 
statewide median income or (2) county or metropolitan 
statistical area median income, adjusted for household size as 
determined by the federal Department of Housing and Urban 
Development. 
    The maximum rent for a proposed single room occupancy unit 
under paragraph (a) is 30 percent of the amount equal to 30 
percent of the greater of the statewide or county median income 
for a one-member household as determined by the federal 
Department of Housing and Urban Development.  The maximum rent 
for at least 75 percent of the units of a multifamily project 
under paragraph (b) is 30 percent of the amount equal to 50 
percent of the greater of the statewide or county median income 
as determined by the federal Department of Housing and Urban 
Development based on a household size with one person per 
bedroom.  
    Sec. 14.  Minnesota Statutes 1990, section 474A.047, 
subdivision 3, is amended to read: 
    Subd. 3.  [PENALTY.] The issuer shall monitor project 
compliance with the rental rate and income level requirements 
under subdivision 1.  The issuer may issue an order of 
noncompliance if a project is found by the issuer to be out of 
compliance with the rental rate or income level requirements 
under subdivision 1,.  The owner or owners of the project shall 
pay a penalty to the commissioner issuer equal to one-half of 
one percent of the total amount of bonds issued for the project 
under this chapter if the issuer issues an order of 
noncompliance.  For each additional year a project is out of 
compliance, the annual penalty must be increased by one-half of 
one percent of the total amount of bonds issued under this 
chapter for the project.  The commissioner shall deposit any 
penalties collected under this subdivision in the housing trust 
fund account established under section 462A.201.  The issuer may 
waive insubstantial violations. 
    Sec. 15.  Minnesota Statutes 1990, section 474A.061, 
subdivision 1, is amended to read: 
    Subdivision 1.  [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, (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 August 
July, or in the amount of two percent of the requested 
allocation on or after the last Monday in August July, and (5) a 
public purpose scoring worksheet for small issue applications.  
The issuer must pay the application deposit by a check made 
payable to the department of finance.  The Minnesota housing 
finance agency 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 
from the housing pool or 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.  For purposes of this subdivision, its entitlement 
allocation includes an amount obtained under section 474A.04, 
subdivision 6. 
    (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. 16.  Minnesota Statutes 1990, section 474A.061, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [HOUSING POOL ALLOCATION.] (a) On the first 
business day that falls on a Monday of the calendar year and on 
the first Monday in April, the commissioner shall allocate 
available bonding authority in the housing pool to applications 
received by the Monday of the previous week for residential 
rental projects that meet the eligibility criteria under section 
474A.047.  After April 1, and until through April 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 cannot exceed the 
agency's income limits, except in the Minneapolis-St. Paul 
metropolitan statistical area as determined by the United States 
Department of Commerce where the adjusted income limits of home 
buyers may not exceed the greater of the agency's income limits 
or 80 percent of the area median income as published by the 
Department of Housing and Urban Development; 
    (3) house price limits may not exceed: 
    (i) the greater of agency house price limits or 90 percent 
of the median purchase price in the city for which the bonds are 
to be sold up to a maximum of 80 percent of the safe harbor 
limitations for existing housing provided under section 143(e) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1989 1990, except that; or 
    (ii) for a new construction affordability initiative, the 
greater of 115 percent of agency house price limits or 90 
percent of the median purchase price in the city for which the 
bonds are to be sold up to a maximum of 80 percent of the safe 
harbor limitations for existing housing provided under section 
143(e) of the Internal Revenue Code of 1986, as amended through 
December 31, 1990. 
    House price limits may be 80 percent of the safe harbor 
limitation for existing housing if subsidy is used to reduce the 
effective purchase price of the property to the above levels.  
Data establishing the median purchase price in the city must be 
included in the application by a city requesting house price 
limits higher than the housing finance agency's house price 
limits; 
    (4) the housing program meets the requirements of section 
474A.048; and 
    (5) an application deposit equal to one percent of the 
requested allocation must be submitted with the city's 
application.  The agency shall submit the application and 
application deposit to the commissioner when requesting an 
allocation from the housing pool. 
    The Minnesota housing finance agency may accept 
applications from July 1 to through July 15 from cities for 
single-family housing programs which meet program requirements 
specified under clauses (1) to (5) if bonding authority is 
available in the housing pool.  The agency and a representative 
for each applicant shall negotiate the terms of an agreement 
regarding the allocation of available authority among the 
applicants.  The agreement must allot available bonding 
authority among the applicants.  For purposes of paragraphs (a) 
to (d), "city" has the meaning given it in section 462C.02, 
subdivision 6, and "agency" means the Minnesota housing finance 
agency.  
    (b) Upon reaching agreement with participating cities, the 
agency shall forward the agreement and application deposit 
checks to the commissioner the amounts allotted to each 
applicant pursuant to.  The agreement must specify the amounts 
allotted to each applicant.  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 between the 
first Tuesday after the first Monday in April and through the 
last Monday in August July, but may request an allocation no 
later than the last Monday in August July.  The commissioner 
shall return any application deposit to a city that paid an 
application deposit under paragraph (a), clause (5), but was not 
part of the agreement forwarded to the commissioner under this 
paragraph. 
    (c) 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.  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 agreement forwarded by the Minnesota 
housing finance agency to the commissioner.  No city may request 
or receive an allocation from the commissioner until the 
agreement under paragraph (b) has been forwarded to the 
commissioner.  Between On and after the first Monday in April 
and through the last Monday in August July, no city may receive 
an allocation from the housing pool 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.  
    (d) If a city issues mortgage bonds from an allocation 
received under paragraph (c), 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. 
    (e) The total amount of allocation for mortgage bonds for 
one city is limited to the lesser of (i) $4,000,000 or (ii) 20 
percent of the total amount available for allocation for 
mortgage bonds from the housing pool after on the first Tuesday 
after the first Monday in April. 
     (f) No city in an entitlement county may apply for or be 
allocated authority to issue bonds from the housing pool. 
    Sec. 17.  Minnesota Statutes 1990, section 474A.061, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [MANUFACTURING POOL ALLOCATION.] From the 
beginning of the calendar year until through the last Monday in 
August July, the commissioner shall allocate available bonding 
authority from the manufacturing pool on Monday of each week to 
applications received on or before the Monday of the preceding 
week.  The amount of allocation provided to an issuer for a 
specific manufacturing project will be based on the number of 
points received for the proposed project under the scoring 
system under section 474A.045.  Proposed projects that receive 
50 points or more are eligible for all of the proposed 
allocation.  Proposed projects that receive less than 50 points 
are eligible to receive a proportionally reduced share of the 
proposed authority, based upon the number of points received. 
    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. 
    Sec. 18.  Minnesota Statutes 1990, section 474A.061, 
subdivision 2c, is amended to read: 
    Subd. 2c.  [PUBLIC FACILITIES POOL ALLOCATION.] From the 
beginning of the calendar year until through the last Monday in 
August July, the commissioner shall allocate available bonding 
authority from the public facilities pool on Monday of each week 
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 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. 
     Sec. 19.  Minnesota Statutes 1990, section 474A.061, 
subdivision 3, is amended to read: 
    Subd. 3.  [ADDITIONAL DEPOSIT.] An issuer which has 
received an allocation under this section may retain any unused 
portion of the allocation after the first Tuesday in September 
August only if the issuer has submitted to the department before 
the first Tuesday in September August a letter stating its 
intent to issue obligations pursuant to the allocation before 
the end of the calendar year or within the time period permitted 
by federal tax law and a deposit in addition to that provided 
under subdivision 1, equal to one percent of the amount of 
allocation to be retained.  The Minnesota housing finance agency 
may retain an unused portion of an allocation after the first 
Tuesday in September August without submitting an additional 
deposit. 
    Sec. 20.  Minnesota Statutes 1990, 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 within 90 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 90-day period since 
allocation has expired prior to the last Monday in August July, 
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 90-day 
period since allocation has expired on or after the last Monday 
in August July, 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. 
     (b) An issuer that returns for reallocation all or a 
portion of an allocation received under this section within 90 
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 90 days of receiving 
allocation. 
     No refund shall be available for allocations returned 90 or 
more days after receiving the allocation.  This subdivision does 
not apply to the Minnesota housing finance agency. 
    Sec. 21.  Minnesota Statutes 1990, section 474A.091, 
subdivision 1, is amended to read: 
    Subdivision 1.  [UNIFIED POOL AMOUNT.] On the day after the 
last Monday in August July any bonding authority remaining 
unallocated from the manufacturing 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. 22.  Minnesota Statutes 1990, section 474A.091, 
subdivision 2, is amended to read: 
    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, (4) an application deposit in the amount of two percent 
of the requested allocation, and (5) a public purpose scoring 
worksheet for small issue applications.  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.
    The Minnesota housing finance agency may not apply for an 
allocation for mortgage bonds under this section until after the 
last Monday in September August.  Notwithstanding the 
restrictions imposed on unified pool allocations after October 
September 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 September 1.  The 
Minnesota housing finance agency may apply for and receive an 
allocation under this section without submitting an application 
deposit. 
    Sec. 23.  Minnesota Statutes 1990, 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 September August through and on the last Monday in November.  
Applications for allocations must be received by the department 
by 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) On or before October September 1, allocations shall be 
awarded from the unified pool in the following order of priority:
     (1) applications for small issue bonds; 
     (2) applications for residential rental project bonds; 
     (3) applications for public facility projects funded by 
public facility bonds; 
     (4) applications for redevelopment bonds; 
     (5) applications for mortgage bonds; and 
     (6) applications for governmental bonds. 
     Allocations for residential rental projects may only be 
made during the first allocation in September August.  The 
amount of allocation provided to an issuer for a specific 
manufacturing project will be based on the number of points 
received for the proposed project under the scoring system under 
section 474A.045.  Proposed manufacturing projects that receive 
50 points or more are eligible for all of the proposed 
allocation.  Proposed manufacturing projects that receive less 
than 50 points under section 474A.045 are only eligible to 
receive a proportionally reduced share of the proposed 
authority, based upon the number of points received.  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. 
    (c)(1) On the first Monday in October August, $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 September, $2,500,000 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, seven-eighths of the remaining 
available bonding authority is reserved for small issue bonds 
and one-eighth of the remaining available bonding authority is 
reserved for public facility bonds. 
     (2) The total amount of allocations for mortgage bonds from 
the housing pool and the unified pool may not exceed: 
     (i) $10,000,000 for any one city; or 
     (ii) $20,000,000 for any number of cities in any one county.
     An allocation for mortgage bonds may be used for mortgage 
credit certificates. 
    After October September 1, allocations shall be awarded 
from the unified pool only for the following types of qualified 
bonds:  small issue bonds, 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. 
    Sec. 24.  Minnesota Statutes 1990, 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 90 days of the 
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 90-day 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. 
    (b) An issuer that returns for reallocation all or a 
portion of an allocation received under this section within 90 
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 90 days of receiving 
the allocation. 
    No refund of the application deposit shall be available for 
allocations returned on or after the last Monday in November.  
This subdivision does not apply to the Minnesota housing finance 
agency. 
    Sec. 25.  Minnesota Statutes 1990, section 474A.131, is 
amended by adding a subdivision to read: 
    Subd. 3.  [IRREVOCABLE ALLOCATION.] The department may not 
revoke an allocation received under this chapter after receiving 
a notice of issue from the issuer.  
    Sec. 26.  Minnesota Statutes 1990, section 474A.15, is 
amended to read: 
    474A.15 [STATE HELD HARMLESS.] 
    The state is not liable in any manner to any issuer, holder 
of obligations, or other person for carrying out the duties 
imposed on it under Laws 1987, chapter 268, article 16, sections 
1 to 40 this chapter.  
    Sec. 27.  Minnesota Statutes 1990, section 474A.16, is 
amended to read: 
    474A.16 [EXCLUSIVE METHOD OF ALLOCATION.] 
    Laws 1987, chapter 268, article 16, sections 1 to 40 shall 
be This chapter is the exclusive method for allocating authority 
to issue obligations for the purposes of complying with the 
volume limitation of federal tax law.  
    Sec. 28.  Minnesota Statutes 1990, section 474A.17, is 
amended to read: 
    474A.17 [ADMINISTRATIVE PROCEDURE ACT NOT APPLICABLE.] 
    Chapter 14 shall not apply to actions taken by any state 
agency or entity under Laws 1987, chapter 268, article 16, 
sections 1 to 40 this chapter.  
    Sec. 29.  [REPEALER.] 
    Minnesota Statutes 1990, sections 474A.048; and 474A.081, 
subdivisions 1, 2, and 4, are repealed. 
    Presented to the governor May 31, 1991 
    Signed by the governor June 4, 1991, 8:30 p.m.