Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 169-S.F.No. 1697
An act relating to public finance; updating and
clarifying bond allocation provisions; amending
Minnesota Statutes 1996, sections 474A.03,
subdivisions 1 and 2a; 474A.04, subdivision 1a;
474A.047, subdivision 1; 474A.061, subdivision 2b;
474A.091, subdivisions 3 and 6; and 474A.131,
subdivisions 1 and 1a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1996, 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, 1991
1997, 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) $55,000,000 $63,000,000 to the small issue pool;
(2) $56,000,000 $59,000,000 to the housing pool,
$37,000,000 of which is reserved until the day after the first
Monday in February for single-family housing programs;
(3) $10,000,000 $10,500,000 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. 2. Minnesota Statutes 1996, section 474A.03,
subdivision 2a, is amended to read:
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 $53,750,000 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 $21,000,000 per year to the city of
Minneapolis;
(3) $15,000,000 $15,750,000 per year to the city of Saint
Paul; and
(4) $10,000,000 $10,500,000 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, public
facility bonds, or residential rental project bonds, except that
entitlement cities issuers may also use their allocations for
public facility bonds, and may carry forward their allocations
for any qualified bond as defined under section 474A.02,
subdivision 23a.
Sec. 3. Minnesota Statutes 1996, 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 July
15 shall be reallocated through the housing pool. Any amount
returned on or after the last Monday in July 15 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. 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 or for which the governing body of the
entitlement issuer has not enacted a resolution electing to use
the authority for mortgage credit certificates by July 15 of the
end of the succeeding calendar year shall be deducted from the
entitlement allocation for that entitlement issuer for the next
succeeding current calendar year. Any amount deducted from an
entitlement issuer's allocation under this subdivision shall
be divided equally for allocation reallocated through the
manufacturing pool and the housing unified pool. An entitlement
issuer must permanently issue all carryforward authority or
enact a resolution electing to use all carryforward authority
for mortgage credit certificates prior to issuing any current
year authority of that entitlement issuer.
Sec. 4. Minnesota Statutes 1996, section 474A.047,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY.] (a) An issuer may only use
the proceeds from residential rental bonds if the proposed
project meets one of the following:
(a) (1) 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;
(b) (2) the proposed project is a multifamily project where
at least 75 percent of the units have two or more bedrooms and
at least one-third of the 75 percent have three or more
bedrooms; or
(c) (3) the proposed project is a multifamily project that
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 sections 42(e)(2) and
42(e)(3)(A) of the Internal Revenue Code;
(ii) the proposed project involves participation by the
Minnesota housing finance agency or a local unit of government
in the financing of the acquisition or rehabilitation of the
project. For purposes of this subdivision, "participation"
means an activity other than the issuance of the bonds; and
(iii) the proposed project must be occupied by individuals
or families whose incomes at the time of their initial residency
in the project meet the requirements of section 42(g) of the
Internal Revenue Code.
(b) The maximum rent for a proposed single room occupancy
unit under paragraph (a), clause (1), 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) (a), clause (2), 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 1.5 persons per bedroom.
(c) The proceeds from residential rental bonds may be used
for a project for which project-based federal rental assistance
payments are made only if:
(1) the owner of the project enters into a binding
agreement with the Minnesota housing finance agency under which
the owner is obligated to extend any existing low-income
affordability restrictions and any contract or agreement for
rental assistance payments for the maximum term permitted,
including any renewals thereof; and
(2) the Minnesota housing finance agency certifies that
project reserves will be maintained at closing of the bond issue
and budgeted in future years at the lesser of:
(i) the level described in Minnesota Rules, part 4900.0010,
subpart 7, item A, subitem (2), effective May 1, 1997; or
(ii) the level of project reserves available prior to the
bond issue, provided that additional money is available to
accomplish repairs and replacements needed at the time of bond
issue.
Sec. 5. Minnesota Statutes 1996, section 474A.061,
subdivision 2b, is amended to read:
Subd. 2b. [SMALL ISSUE POOL ALLOCATION.] On the first
Monday in January that is a business day through the last Monday
in July, the commissioner shall allocate available bonding
authority from the small issue pool on Monday of each week to
applications received on or before the Monday of the preceding
week. From the first Monday in January that is a business day
through the last Monday in July, the commissioner shall reserve
$5,000,000 of the available bonding authority from the small
issue pool for applications for agricultural development bond
loan projects of the Minnesota rural finance authority. 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 small issue pool and there is insufficient
bonding authority to provide allocations for all projects in any
one week, the available bonding authority shall be awarded based
on the number of points awarded a project under section
474A.045, with those projects receiving the greatest number of
points receiving allocation first. If two or more applications
receive an equal number of points, available bonding authority
shall be awarded by lot unless otherwise agreed to by the
respective issuers.
Sec. 6. Minnesota Statutes 1996, 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 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 September 1, allocations shall be awarded
from the unified pool in the following order of priority:
(1) applications for enterprise zone facility bonds;
(2) applications for small issue bonds;
(3) applications for residential rental project bonds;
(4) applications for public facility projects funded by
public facility bonds;
(5) applications for redevelopment bonds;
(6) applications for mortgage bonds; and
(7) applications for governmental bonds.
Allocations for residential rental projects may only be
made during the first allocation in 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. If two or more applications receive an equal
amount of points, available bonding authority shall be awarded
by lot unless otherwise agreed to by the respective issuers.
(c)(1) On From the first Monday in August, $5,000,000 of
bonding authority is reserved within the unified pool for
agricultural development bond loan projects of the Minnesota
rural finance authority and through the last Monday in
November, $20,000,000 of bonding authority or an amount equal to
the total annual amount of bonding authority allocated to the
small issue pool under section 474A.03, subdivision 1, less the
amount allocated to issuers from the small issue pool for that
year, whichever is less, is reserved within the unified pool for
small issue bonds to the extent such amounts are available
within the unified pool. On the first Monday in September
through the last Monday in November, $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 to the extent such amounts are available within the
unified pool. If sufficient bonding authority is not available
to reserve the required amounts for manufacturing projects and
agricultural development bond loan projects, the remaining
available bonding authority must be distributed between the two
reservations on a pro rata basis, based upon the amounts each
would have received if sufficient authority was available.
(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.
(d) After September 1, allocations shall be awarded from
the unified pool only for the following types of qualified bonds:
small issue bonds, public facility bonds to finance publicly
owned facility projects, residential rental project bonds, and
enterprise zone facility bonds.
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. 7. Minnesota Statutes 1996, section 474A.091,
subdivision 6, is amended to read:
Subd. 6. [FINAL ALLOCATION; CARRYFORWARD.] Any bonding
authority remaining unissued by the Minnesota housing finance
agency after the 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 shall be
carried forward into the next calendar year by the Minnesota
housing finance agency.
Sec. 8. Minnesota Statutes 1996, section 474A.131,
subdivision 1, is amended to read:
Subdivision 1. [NOTICE OF ISSUE.] Each issuer that issues
bonds with an allocation received under this chapter shall
provide a notice of issue to the department on forms provided by
the department stating:
(1) the date of issuance of the bonds;
(2) the title of the issue;
(3) the principal amount of the bonds;
(4) the type of qualified bonds under federal tax law; and
(5) the dollar amount of the bonds issued that were subject
to the annual volume cap.
For obligations that are issued as a part of a series of
obligations, a notice must be provided for each series. A
penalty of one-half of the amount of the application deposit not
to exceed $5,000 shall apply to any issue of obligations for
which a notice of issue is not provided to the department within
five business days after issuance or before the last Monday in
December, whichever occurs first, is deemed not to have received
an allocation under this law or under federal tax law. Within
30 days after receipt of a notice of issue the department shall
refund a portion of the application deposit equal to one percent
of the amount of the bonding authority actually issued if a one
percent application deposit was made, or equal to two percent of
the amount of the bonding authority actually issued if a two
percent application deposit was made, less any penalty amount.
Sec. 9. Minnesota Statutes 1996, section 474A.131,
subdivision 1a, is amended to read:
Subd. 1a. [CERTIFICATE OF NOTICE.] If an allocation
received under this chapter is used for mortgage credit
certificates, a certificate notice must be submitted to the
department on forms provided by the department stating the date
of the filing of the election not to issue bonds as provided
under section 25, paragraph (c), of the Internal Revenue Code
and the amount of allocation authority to be used under the
program.
A penalty of one-half of the amount of the application
deposit not to exceed $5,000 shall apply to any mortgage credit
certificate program for which a certificate notice is not
provided to the department within five days of the date of the
filing of the election not to issue bonds or before the last
Monday in December, whichever occurs first, is considered not to
have received an allocation under this law or under federal tax
law. Within 30 days after receipt of a certificate notice the
department shall refund a portion of the application deposit
equal to one percent of the amount of the bonding authority to
be used for the mortgage credit certificate program, less any
penalty amount.
Presented to the governor May 16, 1997
Signed by the governor May 19, 1997, 1:04 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes