Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1998, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 363-H.F.No. 3145
An act relating to bond allocations; providing for
certain applications, housing pool allocations,
scoring systems, deadlines, procedures, the carrying
forward of bond allocations, and the review of
allocations and compliance monitoring; amending
Minnesota Statutes 1996, sections 462A.223, by adding
subdivisions; 474A.045; 474A.061, subdivisions 1, 2a,
and 6; Minnesota Statutes 1997 Supplement, section
474A.091, subdivisions 3 and 6; repealing Minnesota
Statutes 1996, section 474A.061, subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1996, section 462A.223, is
amended by adding a subdivision to read:
Subd. 3. [SUBMISSION DEADLINES.] In order to assist the
Minnesota housing finance agency to comply with the reporting
requirements of section 42 of the Internal Revenue Code of 1986,
as amended, cities and counties to which low-income housing tax
credits are reserved under section 462A.222, subdivision 1,
shall submit required documents relating to compliance,
allocation or commitment, carryover, issuance, and audit or
review and shall return unused tax credits to the Minnesota
housing finance agency by the deadlines established in the
agency's qualified allocation plan. Cities and counties to
which low-income housing tax credits are reserved under section
462A.222 that fail to meet the deadlines established by the
agency for the submission of required documents relating to
allocation or commitment, carryover, issuance, and allocation
reporting shall pay the fees established in the agency's
qualified allocation plan. Pursuant to the qualified allocation
plan, the agency may waive fees imposed for failure to meet the
deadlines for submission of required documents.
Sec. 2. Minnesota Statutes 1996, section 462A.223, is
amended by adding a subdivision to read:
Subd. 4. [REVIEW OF ALLOCATIONS, COMPLIANCE
MONITORING.] The agency may review the allocation and compliance
monitoring processes established by a city or county to which
low-income tax credits are reserved under section 462A.222,
subdivision 1, and may review documentation related to the
allocations made to and the compliance monitoring of projects
allocated credits from a city or county to which low-income tax
credits are reserved under section 462A.222, subdivision 1.
Sec. 3. Minnesota Statutes 1996, section 474A.045, is
amended to read:
474A.045 [SCORING SYSTEM FOR MANUFACTURING PROJECTS.]
The following criteria must be used in determining the
allocation of small issue bonds for manufacturing projects. The
issuer must prepare and submit to the commissioner a public
purpose scoring worksheet that presents the data and methods
used in determining the total score under this section. The
total score is the sum of the following:
(1) the number of net direct new jobs in the state
generated by the proposed project for the next two years per
$100,000 of proposed allocation multiplied by 15;
(2) the number of direct jobs retained in the state due to
the proposed project per $100,000 of proposed allocation
multiplied by 15;
(3) the quotient of the total increase in net payroll
generated in the state by the proposed project divided by the
proposed bond allocation, multiplied by 100;
(4) the quotient of the estimated total net increase in
property taxes generated in the state by the project in the
first full year of operation divided by the proposed bond
allocation, multiplied by 500; and
(5) the seasonally unadjusted unemployment rate in the
community where the proposed project is located measured as a
percent of the state's unemployment rate, multiplied by ten.
The community seasonally unadjusted unemployment rate used
in determining the points under clause (5) must be the rate for
the county in which the proposed project is located unless an
accurate rate may be estimated for a smaller geographic area or
census tract. The commissioner of economic security must
approve the rate used when an unemployment rate other than that
for a county is used.
If the manufacturing project will retain jobs and the total
score includes points calculated under clause (2), the issuer
must certify to the commissioner that the proceeds of the small
issue bonds are required to retain those jobs. The commissioner
shall submit the information relating to the retaining of jobs
to the commissioner of trade and economic development. The
commissioner of trade and economic development must verify that
the proceeds of the small issue bonds are required to retain the
jobs referred to in the certification prior to the awarding of
any points under this section.
Sec. 4. Minnesota Statutes 1996, 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 July, or
in the amount of two percent of the requested allocation on or
after the last Monday in July, and (5) a public purpose scoring
worksheet for manufacturing project applications, and (6) a
statement from the applicant or bond counsel as to whether the
project preserves existing federally subsidized housing for
residential rental project applications. The issuer must pay
the application deposit by a check made payable to the
department of finance. The Minnesota housing finance agency,
the Minnesota rural finance authority, and the Minnesota higher
education services office 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. 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.
(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. 5. Minnesota Statutes 1996, 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 the
first Monday in February, 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 are not restricted to persons who are 55
years of age or older and that meet the eligibility criteria
under section 474A.047, except that allocations may be made to
projects that are restricted to persons who are 55 years of age
or older, if the project preserves existing federally subsidized
housing. Projects that preserve existing federally subsidized
housing shall be allocated available bonding authority in the
housing pool for residential rental projects prior to the
allocation of available bonding authority to other eligible
residential rental projects. 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.
(b) After February 1, and through February 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 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 the federal
price limits for housing up to a maximum of $95,000; 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 $95,000.;
(iii) for new construction housing affordability
initiatives located in the metropolitan area, as defined by
section 473.121, subdivision 2, the lesser of the federal price
limits or the amount determined by the metropolitan council as
the maximum affordable house price under the Metropolitan
Livable Communities Act. New construction housing affordability
initiatives in the metropolitan area must meet one or more of
the following criteria:
(A) the initiative provides financial resources unrelated
to the costs of completion of the mortgage revenue bond sale to
reduce the cost of the housing or to improve the terms of the
mortgage loans provided through the bond sale. A financial
contribution must be equal to or exceeding ten percent of the
purchase price of each newly constructed home to be financed;
(B) the initiative provides that the local unit of
government in the jurisdiction in which the housing is to be
constructed takes affirmative steps to change local regulations
in order to improve housing affordability. The steps must
demonstrably reduce the cost of the housing by at least ten
percent. The financial contribution and the affirmative steps
to change regulation may be combined to meet the ten percent
requirement; or
(C) the initiative supports the efforts of housing groups
that support self-help or owner-built housing initiatives in
which at least 15 percent of the labor or materials or both
needed to complete the new housing is acquired or donated
through the efforts of such groups; or
(iv) for a community revitalization initiative for existing
housing in the metropolitan area, as defined by section 473.121,
subdivision 2, the federal price limits for existing housing,
provided the community revitalization initiative meets the
following criteria:
(A) the community revitalization initiative is targeted to
a specific geographic area within the community which is less
than the entire community;
(B) the community revitalization initiative is located in a
community in which the most recently available data establishes
that the median purchase price for an existing home in the
community exceeds the agency house price limits; and
(C) the community revitalization initiative provides
financial resources unrelated to the costs of completion of the
mortgage revenue bond sale to reduce the cost of the housing or
to improve the terms of the mortgage loans provided through the
bond sale. A financial contribution must be equal to or
exceeding ten percent of the purchase price of each existing
home to be financed.
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; and
(4) an application deposit equal to one percent of the
requested allocation must be submitted before the agency
forwards the list specifying the amounts allocated to the
commissioner under paragraph (c). The agency shall submit the
city's application 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.
The Minnesota housing finance agency may accept
applications from June 15 through June 30 from cities for
single-family housing programs which meet program requirements
specified under clauses (1) to (4) if bonding authority is
available in the housing pool. Applications will be accepted
from June 15 to June 30 only from cities that received an
allotment in the same calendar year and used at least 75 percent
of their allotment by June 1. Allocations will be made loan by
loan, on a first come, first served basis among applicant
cities. The agency must allot available bonding authority. For
purposes of paragraphs (a) to (g), "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) 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 a list specifying the amounts allotted
to each application and application deposit checks to the
commissioner.
(d) 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 first Monday in February and
through the last Monday in July, but may request an allocation
no later than the last Monday in July. The commissioner 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
(c).
(e) A city may choose to issue bonds on its own behalf or
through a joint powers agreement or may use bonding authority
for mortgage credit certificates 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 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 (c) has been forwarded to the commissioner. A city
must request an allocation from the commissioner no later than
14 days before the unified pool is created pursuant to section
474A.091, subdivision 1. On and after the first Monday in
February and through the last Monday in 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.
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.
(f) No entitlement city or county or city in an entitlement
county may apply for or be allocated authority to issue bonds or
use mortgage credit certificates from the housing pool.
(g) A city that does not use at least 50 percent of their
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 or receive an
allotment from the housing pool in the succeeding two calendar
years. Each local government unit in a consortium must meet the
requirements of this paragraph.
Sec. 6. Minnesota Statutes 1996, section 474A.061,
subdivision 6, is amended to read:
Subd. 6. [DEADLINE FOR ISSUANCE OF SMALL ISSUE QUALIFIED
BONDS.] If an issuer fails to notify the department before the
last Monday in December of issuance of obligations pursuant to
an allocation received for a small issue any qualified bond
project, the allocation is canceled and the bonding authority is
allocated to the department of finance for reallocation under
section 474A.091, subdivision 6.
Sec. 7. Minnesota Statutes 1997 Supplement, 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 for manufacturing
projects;
(3) applications for small issue bonds for agricultural
development bond loan projects;
(4) applications for residential rental project bonds;
(4) (5) applications for public facility projects funded by
public facility bonds;
(5) (6) applications for redevelopment bonds;
(6) (7) applications for mortgage bonds; and
(7) (8) 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) From the first Monday in August 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.
(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. 8. Minnesota Statutes 1997 Supplement, 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 shall be carried
forward into the next calendar year by the Minnesota housing
finance agency in accordance with section 474A.131, subdivision
2.
Sec. 9. [REPEALER.]
Minnesota Statutes 1996, section 474A.061, subdivision 3,
is repealed.
Presented to the governor April 3, 1998
Signed by the governor April 6, 1998, 3:05 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes