09/11/85 - Laserfiche WebLink

Home

-37- Because the entitlement portion of the ~tloc~tim ~s Imsed m cities'. historical use of IRBs, scme cities were entitled to large --~u~ts ar~ others had little ~r no entitl_~nt. The cities of Becket and Silver Bay which had used large issues in the p~st were in 1984 entitled to large peroentages of the limited IRB -1location which they may ~r may ~ot have needed. Cities that did have a need for mcxe IRBs than their entitlement allowed in 1984, would cc~tact those cities with the large entitlements in an attempt to buy ~r bc~row part of the IRB entitlement. F(= this reasc~ '.tradirg'. of IRB allocation between cities became .Proposed charges.--~ 1985 Mirnesota legislature modified the IRB distribution. Aocc~dir~ to this plan the f~CB, LRRKB an~ f~fD still receive an ~llotment. Entitlement issuers are defined differently: cities of the first class are entitled to an allotment of $200 per capita, ar~ the largest city in a standard metropolitan statistical area without a city of the first class is entitled to a flat $5 million allotment. ~he r-m~inir~ -llouati(m would go into a pool to be distributed c~ an application basis arour~ the state. Applicatiorm for manufacturing projects will receive first priority for the bonds. Second priority goes to pollution control projects or waste management projects, ar~ third priority goes to cu~ercial rede~_loi~ment projects. To fur~ focus the IRBs on m~f~cturirg project~, th~ Legislature set l~m~ts c~ what share of the pool can be allocated to pollution o~ntrol ar~ ~rcial redevelop~e__-nt projects. The a~mt allocated to pollution control arzl waste ~t projects may not exceed 35 percent of the total pool, ar~ _~>.._,;ercial redeve~__nt projects may not e~=eed 20 percent of the total pool amount. ~he amount a~ilable for o'~ercial rede%~_lopment may increase to 30 peroent if by Jur~ 30 the autl~)rity available f~r commercial projects has been allocated and 45 peroent of tl~ total pool still ~---,~irs available. Where IRBs are used.--According to data f~ the Minnesota fbuse of Bepresentatives Besearch staff, in 1984 the c~mm~/ties outside the seven oounty metropolitan area appro~ approximately 14 percent of tb~ total amount of bonds issued for tl~ year. The dr~-~tic increase in the use of IRBs and the shift in use of IRBs towards o_.....ercial de~_lq~ent sir~e 1977 has been mostly in the Twin Cities area. In 1984 Minneapolis and Saint Paul issued 'about 20 percent of the total amount of IRBs issued b~ metropolitan area jurisdictions. With the exception of 1983, more use w~s made of IRBs in the rapidly growirg sub~rbe of the Twin Cities than in tl~ tw~ central cities. Of the ~362 million of IRSs approved in the metropolitan region during 1983, half was approved by the suburbs ar~ half by the central cities. ]~ow ~ mon~ is in~l~=d? Mimesota is a leadirg user of IRBs: Acoordirg to Mark [myron, cu~.,,issior~r of the Mimesota D~mrtment of R~rgy and De%~.l~ent, in 1981 (the last year for which oc~parative data axe available) Minnesota 'ranked fifth highest in the nation in ~RB dollars authorized for sale. During that year Minnesota local governments appr~ $949 million of IRBs to finance 82 projects. ~n 1982, Mimesota cities approved just u~der $670 million of IRB b0~ds, and in 1983, local gove~'~ents appr~ a reoord $1.3 billion of IRB issues. After the federal government imposed a limit ~n the amount of private activity bo~ds to be issued, Mir~--~ issued about $1.1 billion of total IRBs in 1984.