1.1 	A bill for an act
1.2 	relating to public finance; allocating additional tax-exempt bonding authority; 
1.3 	clarifying application of certain rent restrictions;amending Minnesota Statutes 
1.4 	2006, section 474A.047, subdivision 1.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2006, section 474A.047, subdivision 1, is amended to 
1.7 	read:
1.8 		Subdivision 1.Eligibility. (a) An issuer may only use the proceeds from residential 
1.9 	rental bonds if the proposed project meets the following requirements:
1.10 	(1) the proposed residential rental project meets the requirements of section 142(d) 
1.11 	of the Internal Revenue Code regarding the incomes of the occupants of the housing; and
1.12 	(2) the maximum rent for at least 20 percent of the units in the proposed residential 
1.13 	rental project do not exceed the area fair market rent or exception fair market rents for 
1.14 	existing housing, if applicable, as established by the federal Department of Housing and 
1.15 	Urban Development. The rental rates of units in a residential rental project for which 
1.16 	project-based federal assistance payments are made are deemed to be within the rent 
1.17 	limitations of this clause.
1.18 	(b) The proceeds from residential rental bonds may be used for a project for which 
1.19 	project-based federal rental assistance payments are made only if:
1.20 	(1) the owner of the project enters into a binding agreement with the Minnesota 
1.21 	Housing Finance Agency under which the owner is obligated to extend any existing 
1.22 	low-income affordability restrictions and any contract or agreement for rental assistance 
1.23 	payments for the maximum term permitted, including any renewals thereof; and
2.1 	(2) the Minnesota Housing Finance Agency certifies that project reserves will be 
2.2 	maintained at closing of the bond issue and budgeted in future years at the lesser of:
2.3 	(i) the level described in Minnesota Rules, part 4900.0010, subpart 7, item A, 
2.4 	subitem (2), effective May 1, 1997; or
2.5 	(ii) the level of project reserves available prior to the bond issue, provided that 
2.6 	additional money is available to accomplish repairs and replacements needed at the time 
2.7 	of bond issue.

2.8 	Sec. 2. TEMPORARY INCREASE IN ANNUAL VOLUME CAP.
 2.9 		Subdivision 1.Applicability. This section applies if federal tax law is amended 
2.10 	after April 28, 2008, to provide a temporary increase in the annual volume cap for private 
2.11 	activity bonds for housing purposes for calendar year 2008 or 2009, and applies only to the 
2.12 	amount of the annual volume cap attributable to the temporary increase for those purposes.
2.13 		Subd. 2.Definitions. As used in this section, "annual volume cap," "bonding 
2.14 	authority," "commissioner," "federal tax law," and "housing pool" have the meanings given 
2.15 	in Minnesota Statutes, section 474A.02. As used in this section, "agency" and "city" have 
2.16 	the meanings given in Minnesota Statutes, section 474A.061, subdivision 2a, paragraph 
2.17 	(c). As used in this section, "carryforward" means the ability to issue obligations in a year 
2.18 	subsequent to the year in which an allocation of bonding authority was obtained under this 
2.19 	section as provided in section 146(f) of federal tax law.
2.20 		Subd. 3.Allocations. (a) The commissioner shall determine the aggregate dollar 
2.21 	amount attributable to the temporary increase in the annual volume cap for housing 
2.22 	purposes. Of this amount, the commissioner shall make the following allocations for 2008:
2.23 	(1) 43 percent to the housing pool, of which 31 percent of the allocation is reserved 
2.24 	for single-family housing programs for a period ending on the earlier of:
2.25 	(i) October 31, 2008, or October 31, 2009, if the increase is made available for 
2.26 	calendar year 2009; or
2.27 	(ii) 180 days after the allocation by the commissioner of the temporary increase 
2.28 	in the volume cap;
2.29 	(2) 30 percent to the agency;
2.30 	(3) 12 percent to the city of Minneapolis;
2.31 	(4) nine percent to the city of St. Paul; and
2.32 	(5) six percent to the Dakota County Community Development Agency for the 
2.33 	county of Dakota and all political subdivisions located within the county.
2.34 	(b) Allocations provided under this subdivision must be used for mortgage bonds or 
2.35 	residential rental project bonds.
3.1 	(c) Data on the home purchase price amount, mortgage amount, income, household 
3.2 	size, and race of the households served with the proceeds of mortgage bonds and 
3.3 	mortgage credit certificates using an allocation under this section in a calendar year 
3.4 	must be submitted by each issuer to the agency by December 31 of the following year. 
3.5 	Compliance by the agency with the provisions of Minnesota Statutes, section 462A.073, 
3.6 	subdivision 5, shall be deemed to be in compliance by the agency with the reporting 
3.7 	requirements of this paragraph.
3.8 	(d) Any amount allocated under paragraph (a), clause (2), (3), (4), or (5), may be 
3.9 	transferred as provided in Minnesota Statutes, section 474A.04, subdivision 6.
3.10 		Subd. 4.Housing pool. Any amounts allocated to the housing pool under 
3.11 	subdivision 3 that are not reserved for single-family housing programs must be allocated 
3.12 	according to Minnesota Statutes, section 474A.061, subdivisions 2a and 4, subject to 
3.13 	the following conditions:
3.14 	(1) other amounts in the housing pool, if any, must be allocated from the housing 
3.15 	pool before any allocation is made from amounts attributable to the temporary increase in 
3.16 	annual volume cap;
3.17 	(2) any amount of the temporary increase in the annual volume cap remaining in 
3.18 	the housing pool on the last Monday of July 2008, or on the last Monday of July 2009, if 
3.19 	the temporary increase in annual volume cap is made available for calendar year 2009, or 
3.20 	that is allocated to the housing pool under subdivision 3, thereafter shall remain in the 
3.21 	housing pool for allocation until the last Monday in November 2008, or the last Monday 
3.22 	in November 2009, if the temporary increase in the annual volume is made available 
3.23 	for calendar year 2009;
3.24 	(3) any allocation of the temporary increase in the annual volume cap that is 
3.25 	canceled under Minnesota Statutes, section 474A.061, subdivision 4, shall be returned to 
3.26 	the housing pool for reallocation, unless the cancellation occurs after the last Monday in 
3.27 	November 2008, or after the last Monday in November 2009, if the temporary increase in 
3.28 	the annual volume is made available for calendar year 2009, in which case the canceled 
3.29 	allocation is allocated to the agency; and
3.30 	(4) any bonding authority attributable to the temporary increase in the annual 
3.31 	volume cap that has not been allocated on December 1, 2008, or on December 1, 2009, if 
3.32 	the temporary increase in the annual volume is made available for calendar year 2009, is 
3.33 	allocated to the agency.
3.34 		Subd. 5.Single-family housing programs. (a) Bonding authority reserved in the 
3.35 	housing pool for single-family housing programs under subdivision 3 is available for 
3.36 	single-family housing programs for cities that applied in January 2008, and received an 
4.1 	allocation under Minnesota Statutes, section 474A.061, subdivision 2a, in 2008. If the 
4.2 	temporary increase in the annual volume is made available for calendar year 2009, the 
4.3 	bonding authority reserved in the housing pool for single-family housing programs under 
4.4 	subdivision 3 is available for single-family housing programs for cities that applied in 
4.5 	January 2009, and received an allocation under Minnesota Statutes, section 474A.061, 
4.6 	subdivision 2a, in 2009. The agency shall receive an allocation for mortgage bonds 
4.7 	pursuant to this subdivision. For a period of time determined by the agency, the agency 
4.8 	may accept applications from the cities for the volume cap.
4.9 	(b) The agency may issue bonds on behalf of participating cities. The agency shall 
4.10 	request an allocation from the commissioner for all applicants and the commissioner 
4.11 	shall allocate the requested amount to the agency. Allocations shall be awarded by the 
4.12 	commissioner through the last Monday in November 2008 for applications received by 
4.13 	4:30 p.m. on the Monday of the week preceding an allocation. If the temporary increase in 
4.14 	the annual volume is made available for calendar year 2009, the commissioner shall award 
4.15 	allocations through the last Monday in November 2009 for applications received by 4:30 
4.16 	p.m. on the Monday of the week preceding an allocation.
4.17 	Allocations must be made for each loan on a first-come, first-served basis among 
4.18 	the cities. The agency shall submit an application fee under Minnesota Statutes, section 
4.19 	474A.03, subdivision 4, and an application deposit equal to two percent of the requested 
4.20 	allocation to the commissioner when requesting an allocation from the housing pool 
4.21 	under this subdivision. After awarding an allocation and receiving a notice of issuance 
4.22 	for mortgage bonds issued on behalf of the participating cities, the commissioner shall 
4.23 	transfer the application deposit to the agency.
4.24 	(c) Total allocations from the housing pool for single-family housing programs 
4.25 	under this subdivision may not exceed 31 percent of the allocation to the housing pool 
4.26 	under subdivision 3 until November 1, 2008. If the temporary increase in the annual 
4.27 	volume is made available for calendar year 2009, the total allocations from the housing 
4.28 	pool for single-family housing programs under this subdivision may not exceed 31 percent 
4.29 	of the allocation to the housing pool under subdivision 3 until November 1, 2009.
4.30 	(d) An allocation awarded to the agency for mortgage bonds under this subdivision 
4.31 	may be carried forward by the agency as provided in subdivision 6.
4.32 		Subd. 6.Carryforward. Any issuer that receives an allocation under this section 
4.33 	may carry forward the allocation to the extent permitted by federal tax law. The provisions 
4.34 	of Minnesota Statutes, section 474A.04, subdivision 1a, do not apply to the carryforward.

4.35 	Sec. 3. EFFECTIVE DATE.
 5.1 	Sections 1 and 2 are effective the day following final enactment.