1.1 A bill for an act
1.2 relating to economic development; modifying the annual volume cap allocations
1.3 and allocation procedure for public facility projects funded by public facility bonds;
1.4 amending Minnesota Statutes 2024, sections 474A.03, subdivision 1; 474A.091,
1.5 subdivisions 2a, 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 474A.03, subdivision 1, is amended to read:
1.8 Subdivision 1.Under federal tax law; allocations.At the beginning of each calendar
1.9year after December 31, 2001, the commissioner shall determine the aggregate dollar amount
1.10of the annual volume cap under federal tax law for the calendar year, and of this amount
1.11the commissioner shall make the following allocation:
1.12 (1) $74,530,000 $25,500,000 to the small issue pool;
1.13 (2) $122,060,000 to the housing pool, of which 27 percent of the adjusted allocation is
1.14reserved until the last Monday in June each year until 2021 for single-family housing
1.15programs, after which 31 percent of the adjusted allocation is reserved until the last Monday
1.16in June for single-family programs;
1.17 (3) $12,750,000 $61,780,000 to the public facilities pool; and
1.18 (4) amounts to be allocated as provided in subdivision 2a.
1.19 If the annual volume cap is greater or less than the amount of bonding authority allocated
1.20under clauses (1) to (4) and subdivision 2a, paragraph (a), clauses (1) to (4), the allocation
1.21must be adjusted so that each adjusted allocation is the same percentage of the annual volume
1.22cap as each original allocation is of the total bonding authority originally allocated.
1Section 1.
25-02695 as introduced01/22/25 REVISOR JSK/AC
SENATE
STATE OF MINNESOTA
S.F. No. 2862NINETY-FOURTH SESSION
(SENATE AUTHORS: PUTNAM)
OFFICIAL STATUSD-PGDATE
Introduction and first reading03/20/2025
Referred to Jobs and Economic Development 2.1 Sec. 2. Minnesota Statutes 2024, section 474A.091, subdivision 2a, is amended to read:
2.2 Subd. 2a.Application for all other types of qualified bonds.(a) Issuers may apply
2.3for an allocation for all types of qualified bonds other than residential rental bonds under
2.4this section by submitting to the department an application on forms provided by the
2.5department accompanied by:
2.6 (1) a preliminary resolution;
2.7 (2) a statement of bond counsel that the proposed issue of obligations requires an
2.8allocation under this chapter and the Internal Revenue Code;
2.9 (3) the type of qualified bonds to be issued;
2.10 (4) an application deposit in the amount of two percent of the requested allocation; and
2.11 (5) a public purpose scoring worksheet for manufacturing and enterprise zone
2.12applications.
2.13The issuer must pay the application deposit to the Department of Management and Budget.
2.14An entitlement issuer may not apply for an allocation for public facility bonds or mortgage
2.15bonds under this section unless it has either permanently issued bonds equal to the amount
2.16of its entitlement allocation for the current year plus any amount carried forward from
2.17previous years or returned for reallocation all of its unused entitlement allocation. For
2.18purposes of this subdivision, an entitlement allocation includes an amount obtained under
2.19section 474A.04, subdivision 6.
2.20 (b) An issuer that receives an allocation under this subdivision must permanently issue
2.21obligations equal to all or a portion of the allocation received on or before 120 180 days of
2.22the allocation. If an issuer that receives an allocation under this subdivision does not
2.23permanently issue obligations equal to all or a portion of the allocation received within the
2.24time period provided in this paragraph or returns the allocation to the commissioner, the
2.25amount of the allocation is canceled and returned for reallocation through the unified pool.
2.26 (c) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
2.27the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
2.28under this section prior to the first Monday in October, but may be awarded allocations for
2.29mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
2.30Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
2.31Rural Finance Authority may apply for and receive an allocation under this section without
2.32submitting an application deposit.
2Sec. 2.
25-02695 as introduced01/22/25 REVISOR JSK/AC 3.1 Sec. 3. Minnesota Statutes 2024, section 474A.091, subdivision 3, is amended to read:
3.2 Subd. 3.Allocation procedure.(a) The commissioner shall allocate available bonding
3.3authority under this section on the Monday of every other week beginning with the first
3.4Monday in July through and on the last Monday in November. Applications for allocations
3.5must be received by the department by 4:30 p.m. on the Monday preceding the Monday on
3.6which allocations are to be made. If a Monday falls on a holiday, the allocation will be made
3.7or the applications must be received by the next business day after the holiday.
3.8 (b) Prior to October 1, only the following applications shall be awarded allocations from
3.9the unified pool. Allocations shall be awarded in the following order of priority:
3.10 (1) applications for residential rental project bonds;
3.11 (2) applications for public facility projects funded by public facility bonds;
3.12 (3) applications for small issue bonds for manufacturing projects; and
3.13 (3) (4) applications for small issue bonds for agricultural development bond loan projects.
3.14 (c) On the first Monday in October through the last Monday in November, allocations
3.15shall be awarded from the unified pool in the following order of priority:
3.16 (1) applications for student loan bonds issued by or on behalf of the Minnesota Office
3.17of Higher Education;
3.18 (2) applications for mortgage bonds;
3.19 (3) applications for public facility projects funded by public facility bonds;
3.20 (4) (3) applications for small issue bonds for manufacturing projects;
3.21 (5) (4) applications for small issue bonds for agricultural development bond loan projects;
3.22 (6) (5) applications for residential rental project bonds;
3.23 (7) (6) applications for enterprise zone facility bonds;
3.24 (8) (7) applications for governmental bonds; and
3.25 (9) (8) applications for redevelopment bonds.
3.26 (d) If there are two or more applications for manufacturing projects from the unified
3.27pool and there is insufficient bonding authority to provide allocations for all manufacturing
3.28projects in any one allocation period, the available bonding authority shall be awarded based
3.29on the number of points awarded a project under section 474A.045 with those projects
3.30receiving the greatest number of points receiving allocation first. If two or more applications
3Sec. 3.
25-02695 as introduced01/22/25 REVISOR JSK/AC 4.1for manufacturing projects receive an equal amount of points, available bonding authority
4.2shall be awarded by lot unless otherwise agreed to by the respective issuers.
4.3 (e) If there are two or more applications for enterprise zone facility projects from the
4.4unified pool and there is insufficient bonding authority to provide allocations for all enterprise
4.5zone facility projects in any one allocation period, the available bonding authority shall be
4.6awarded based on the number of points awarded a project under section 474A.045 with
4.7those projects receiving the greatest number of points receiving allocation first. If two or
4.8more applications for enterprise zone facility projects receive an equal amount of points,
4.9available bonding authority shall be awarded by lot unless otherwise agreed to by the
4.10respective issuers.
4.11 (f) If there are two or more applications for residential rental projects from the unified
4.12pool and there is insufficient bonding authority to provide allocations for all residential
4.13rental projects in any one allocation period, the available bonding authority shall be awarded
4.14in the following order of priority: (1) preservation projects; (2) 30 percent AMI residential
4.15rental projects; (3) 50 percent AMI residential rental projects for which the amount of bonds
4.16requested in their respective applications do not exceed the aggregate bond limitations; (4)
4.17100 percent LIHTC projects; (5) 20 percent LIHTC projects; and (6) other residential rental
4.18projects. If there are two or more applications for residential rental projects at the same
4.19priority level and there is insufficient bonding authority to provide allocations for all the
4.20projects in any one allocation period, available bonding authority shall be randomly awarded
4.21by lot but only for projects that can receive the full amount of their respective requested
4.22allocations. If a residential rental project does not receive any of its requested allocation
4.23pursuant to this paragraph and the project applies in the next successive housing pool or the
4.24next successive unified pool for an allocation of bonds, the project shall be fully funded up
4.25to its original application request for bonding authority before any new project, applying
4.26in the same allocation period, that has an equal priority shall receive bonding authority.
4.27 (g) From the first Monday in July through the last Monday in November, $20,000,000
4.28of bonding authority or an amount equal to the total annual amount of bonding authority
4.29allocated to the small issue pool under section 474A.03, subdivision 1, less the amount
4.30allocated to issuers from the small issue pool for that year, whichever is less, is reserved
4.31within the unified pool for small issue bonds to the extent the amounts are available within
4.32the unified pool.
4.33 (h) From the first Monday in July through the last Monday in November, $50,000,000
4.34of bonding authority or an amount equal to the total annual amount of bonding authority
4.35allocated to the public facilities pool under section 474A.03, subdivision 1, less the amount
4Sec. 3.
25-02695 as introduced01/22/25 REVISOR JSK/AC 5.1allocated to issuers from the public facilities pool for that year, whichever is less, is reserved
5.2within the unified pool for public facilities bonds to the extent the amounts are available
5.3within the unified pool.
5.4 (h) (i) The total amount of allocations for mortgage bonds from the housing pool and
5.5the unified pool may not exceed:
5.6 (1) $10,000,000 for any one city; or
5.7 (2) $20,000,000 for any number of cities in any one county.
5.8 (i) (j) The total amount of allocations for student loan bonds from the unified pool may
5.9not exceed $25,000,000 per year.
5.10 (j) (k) If there is insufficient bonding authority to fund all projects within any qualified
5.11bond category other than enterprise zone facility projects, manufacturing projects, and
5.12residential rental projects, allocations shall be awarded by lot unless otherwise agreed to
5.13by the respective issuers.
5.14 (k) (l) If an application is rejected, the commissioner must notify the applicant and return
5.15the application deposit to the applicant within 30 days unless the applicant requests in writing
5.16that the application be resubmitted.
5.17 (l) (m) The granting of an allocation of bonding authority under this section must be
5.18evidenced by issuance of a certificate of allocation.
5Sec. 3.
25-02695 as introduced01/22/25 REVISOR JSK/AC