1.1                          A bill for an act 
  1.2             relating to taxation; authorizing housing and 
  1.3             redevelopment authorities to pledge the full faith and 
  1.4             credit of a governmental unit to bonds issued to 
  1.5             finance certain housing development projects; amending 
  1.6             Minnesota Statutes 2002, section 469.034, subdivision 
  1.7             2. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 469.034, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [GENERAL OBLIGATION REVENUE BONDS.] (a) An 
  1.12  authority may pledge the general obligation of the general 
  1.13  jurisdiction governmental unit as additional security for bonds 
  1.14  payable from income or revenues of the project or the 
  1.15  authority.  The authority must find that the pledged revenues 
  1.16  will equal or exceed 110 percent of the principal and interest 
  1.17  due on the bonds for each year.  The proceeds of the bonds must 
  1.18  be used for a qualified housing development project or 
  1.19  projects.  The obligations must be issued and sold in the manner 
  1.20  and following the procedures provided by chapter 475, except the 
  1.21  obligations are not subject to approval by the electors and the 
  1.22  maturities may extend to not more than 30 years from the 
  1.23  estimated date of completion of the project.  The authority is 
  1.24  the municipality for purposes of chapter 475.  
  1.25     (b) The principal amount of the issue must be approved by 
  1.26  the governing body of the general jurisdiction governmental unit 
  2.1   whose general obligation is pledged.  Public hearings must be 
  2.2   held on issuance of the obligations by both the authority and 
  2.3   the general jurisdiction governmental unit.  The hearings must 
  2.4   be held at least 15 days, but not more than 120 days, before the 
  2.5   sale of the obligations. 
  2.6      (c) The maximum amount of general obligation bonds that may 
  2.7   be issued and outstanding under this section equals the greater 
  2.8   of (1) one-half of one percent of the taxable market value of 
  2.9   the general jurisdiction governmental unit whose general 
  2.10  obligation which includes a tax on property is pledged, or (2) 
  2.11  $3,000,000.  In the case of county or multicounty general 
  2.12  obligation bonds, the outstanding general obligation bonds of 
  2.13  all cities in the county or counties issued under this 
  2.14  subdivision must be added in calculating the limit under clause 
  2.15  (1). 
  2.16     (d) "General jurisdiction governmental unit" means the city 
  2.17  in which the housing development project is located.  In the 
  2.18  case of a county or multicounty authority, the county or 
  2.19  counties may act as the general jurisdiction governmental unit.  
  2.20  In the case of a multicounty authority, the pledge of the 
  2.21  general obligation is a pledge of a tax on the taxable property 
  2.22  in each of the counties. 
  2.23     (e) "Qualified housing development project" means a housing 
  2.24  development project providing housing either for the elderly or 
  2.25  for individuals and families with incomes not greater than 80 
  2.26  percent of the median family income as estimated by the United 
  2.27  States Department of Housing and Urban Development for the 
  2.28  standard metropolitan statistical area or the nonmetropolitan 
  2.29  county in which the project is located~~, and will~~.  The project 
  2.30  must be owned for the term of the bonds either by the authority 
  2.31  ~~for the term of the bonds~~ or by a limited partnership or other 
  2.32  entity in which the authority or another entity under the sole 
  2.33  control of the authority is the sole general partner and the 
  2.34  partnership or other entity must receive an allocation from the 
  2.35  Department of Finance or an entitlement issuer of tax-exempt 
  2.36  bonding authority for the project and a preliminary 
  3.1   determination by the Minnesota Housing Finance Agency or the 
  3.2   applicable suballocator of tax credits that the project will 
  3.3   qualify for four percent low-income housing tax credits.  A 
  3.4   qualified housing development project may admit nonelderly 
  3.5   individuals and families with higher incomes if: 
  3.6      (1) three years have passed since initial occupancy; 
  3.7      (2) the authority finds the project is experiencing 
  3.8   unanticipated vacancies resulting in insufficient revenues, 
  3.9   because of changes in population or other unforeseen 
  3.10  circumstances that occurred after the initial finding of 
  3.11  adequate revenues; and 
  3.12     (3) the authority finds a tax levy or payment from general 
  3.13  assets of the general jurisdiction governmental unit will be 
  3.14  necessary to pay debt service on the bonds if higher income 
  3.15  individuals or families are not admitted. 
  3.16     <b>[EFFECTIVE DATE.]</b> This section is effective for bonds 
  3.17  issued after the day following final enactment.