1998 Minnesota Statutes

     474A.061 Allocation of manufacturing, housing, and 
  public facilities pools. 

    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, (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. 

    Subd. 2. Repealed, 1990 c 552 s 24 

    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; 

    (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. 

    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. 

    Subd. 2c.    Public facilities pool allocation.  From 
 the beginning of the calendar year and continuing for a period 
 of 120 days, the commissioner shall reserve $5,000,000 of the 
 available bonding authority from the public facilities pool for 
 applications for public facilities projects to be financed by 
 the Western Lake Superior Sanitary District.  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 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 available bonding authority to 
 provide allocations for all projects in any one week, the 
 available bonding authority shall be awarded by lot unless 
 otherwise agreed to by the respective issuers. 

    Subd. 3. Repealed, 1998 c 363 s 9 

    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 120 
 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 
 120-day period since allocation has expired prior to the last 
 Monday in 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 120-day period since allocation has expired on or after the 
 last Monday in 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 120 
 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 120 days of receiving 
 allocation. 

    (c) No refund shall be available for allocations returned 
 120 or more days after receiving the allocation or beyond the 
 last Monday in November.  This subdivision does not apply to the 
 Minnesota housing finance agency or the Minnesota rural finance 
 authority. 

    Subd. 5. Repealed, 1988 c 586 s 5 

    Subd. 6.    Deadline for issuance of 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 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. 

    HIST: 1987 c 268 art 16 s 27; 1988 c 586 s 2,3; 1Sp1989 c 1 
 art 17 s 16-18; 1990 c 552 s 9-14; 1991 c 332 s 22-25; 1991 c 
 346 s 15-20; 1992 c 545 art 1 s 6,7; 1993 c 164 s 5; 1994 c 527 
 s 7,8; 1995 c 167 s 8-11; 1995 c 186 s 93; 1995 c 212 art 3 s 
 59; 1996 c 362 s 8-10; 1997 c 169 s 5; 1998 c 363 s 4-6