Aggregate bond limitation applicable to the allocation of private activity bonds for qualifying residential rental projects reduced.

This bill reduces the maximum amount of private activity bonds that can be allocated to qualifying residential rental projects in Minnesota. It directly affects developers and investors involved in residential rental real estate financing by changing how bond limits are calculated. The key change replaces the previous 55 percent limit with a new calculation based on either 30 percent of the project's expected value or the maximum supportable debt, whichever is higher, but capped at 40 percent of the project's value. These adjustments will take effect on January 1, 2027, potentially limiting the amount of tax-advantaged financing available for certain rental housing developments.