1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to housing; housing finance agency; 1.3 consolidating supportive housing related programs into 1.4 the housing trust fund program; consolidating 1.5 development and redevelopment programs into the 1.6 economic development and challenge fund program; 1.7 consolidating the full cycle homeownership services 1.8 program and the foreclosure prevention and assistance 1.9 programs; lengthening the time after which a loan 1.10 under the rehabilitation loan program may be forgiven; 1.11 eliminating tenant income limits under the home 1.12 improvement loan program for the owner-occupied rental 1.13 buildings; authorizing project-based rental assistance 1.14 in the bridges program; authorizing the aggregation of 1.15 earnings from investments of moneys appropriated to 1.16 the agency; making technical and conforming changes; 1.17 amending Minnesota Statutes 2000, sections 462A.01; 1.18 462A.03, subdivisions 1, 6, 10, and by adding a 1.19 subdivision; 462A.04, subdivision 6; 462A.05, 1.20 subdivisions 14, 14a, 16, 22, and 26; 462A.06, 1.21 subdivisions 1 and 4; 462A.07, subdivisions 10 and 12; 1.22 462A.073, subdivision 1; 462A.15; 462A.17, subdivision 1.23 3; 462A.20, subdivision 3; 462A.201, subdivisions 2 1.24 and 6; 462A.204, subdivision 3; 462A.205, subdivisions 1.25 4 and 4a; 462A.209; 462A.2091, subdivision 3; 1.26 462A.2093, subdivision 1; 462A.2097; 462A.21, 1.27 subdivisions 5, 10, and by adding subdivisions; 1.28 462A.222, subdivision 1a; 462A.24; and 462A.33, 1.29 subdivisions 1, 2, 3, 5, and by adding a subdivision; 1.30 Laws 2000, chapter 488, article 8, section 2, 1.31 subdivision 6; repealing Minnesota Statutes 2000, 1.32 sections 462A.201, subdivision 4; 462A.207; 462A.209, 1.33 subdivision 4; 462A.21, subdivision 17; 462A.221, 1.34 subdivision 4; 462A.30, subdivision 2; and 462A.33, 1.35 subdivisions 4, 6, and 7. 1.36 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.37 ARTICLE 1 1.38 PROGRAM CONSOLIDATION 1.39 Section 1. Minnesota Statutes 2000, section 462A.201, 1.40 subdivision 2, is amended to read: 2.1 Subd. 2. [LOW-INCOME HOUSING.] (a) The agency may, in2.2consultation with the advisory committee,use money from the 2.3 housing trust fund account to provide loans or grants for: 2.4 (1) projects for the development, construction, 2.5 acquisition, preservation, and rehabilitation of low-income 2.6 rental and limited equity cooperative housing units, including 2.7 temporary and transitional housing, and homes for ownership; 2.8 (2) the costs of operating rental housing, as determined by 2.9 the agency, that are unique to the operation of low-income 2.10 rental housing or supportive housing; and 2.11 (3) rental assistance, either project-based or tenant-based. 2.12 For purposes of this section, "transitional housing"means2.13housing that is provided for a limited duration not exceeding 242.14months, except that up to one-third of the residents may live in2.15the housing for up to 36 monthshas the meaning given by the 2.16 United States Department of Housing and Urban Development. 2.17 Loans or grants for residential housing for migrant farmworkers 2.18 may be made under this section.No more than 20 percent of2.19available funds may be used for home ownership projects.2.20 (b)A rental or limited equity cooperative permanent2.21housing project must meet one of the following income tests:2.22(1) at least 75 percent of the rental and cooperative units2.23must be rented to or cooperatively owned by persons and families2.24whose income does not exceed 30 percent of the median family2.25income for the metropolitan area as defined in section 473.121,2.26subdivision 2; or2.27(2) allThe housing trust fund account must be used for the 2.28 benefit of persons and families whose income, at the time of 2.29 initial occupancy, does not exceed 60 percent of median income 2.30 as determined by the United States Department of Housing and 2.31 Urban Development for the metropolitan area. At least 75 2.32 percent of theunits funded byfunds in the housing trust fund 2.33 account must be used for the benefit of persons and families 2.34 whose income, at the time of initial occupancy, does not exceed 2.35 30 percent of the median family income for the metropolitan area 2.36 as defined in section 473.121, subdivision 2. For purposes of 3.1 this section, a household with a housing assistance voucher 3.2 under section 8 of the United States Housing Act of 1937, as 3.3 amended, is deemed to meet the income requirements of this 3.4 section. 3.5 The median family income may be adjusted for families of 3.6 five or more. 3.7 (c)Homes for ownership must be owned or purchased by3.8persons and families whose income does not exceed 50 percent of3.9the metropolitan area median income, adjusted for family size.3.10(d)Rental assistance under this section must be provided 3.11 by governmental units which administer housing assistance 3.12 supplements or for-profit or by nonprofit organizations 3.13 experienced in housing management. Rental assistance shall be 3.14 limited to households whose income at the time of initial 3.15 receipt of rental assistance does not exceed 60 percent of 3.16 median income, as determined by the United States Department of 3.17 Housing and Urban Development for the metropolitan area. 3.18 Priority among comparable applications for tenant-based rental 3.19 assistance will be given to proposals that will serve households 3.20 whose income at the time of initial application for rental 3.21 assistance does not exceed 30 percent of median income, as 3.22 determined by the United States Department of Housing and Urban 3.23 Development for the metropolitan area. Rental assistance must 3.24 be terminated when it is determined that 30 percent of a 3.25 household's monthly income for two consecutive months equals or 3.26 exceeds the market rent for the unit in which the household 3.27 resides plus utilities for which the tenant is responsible. 3.28 Rental assistance may only be used for rental housing units that 3.29 meet the housing maintenance code of the local unit of 3.30 government in which the unit is located, if such a code has been 3.31 adopted, or the housing quality standards adopted by the United 3.32 States Department of Housing and Urban Development, if no local 3.33 housing maintenance code has been adopted. 3.34 (d) In making the loans or grants, the agency shall 3.35 determine the terms and conditions of repayment and the 3.36 appropriate security, if any, should repayment be required. To 4.1 promote the geographic distribution of grants and loans, the 4.2 agency may designate a portion of the grant or loan awards to be 4.3 set aside for projects located in specified congressional 4.4 districts or other geographical regions specified by the 4.5 agency. The agency may adopt rules for awarding grants and 4.6 loans under this subdivision. 4.7 Sec. 2. Minnesota Statutes 2000, section 462A.201, 4.8 subdivision 6, is amended to read: 4.9 Subd. 6. [REPORT.] The agency shall submit a biennial 4.10 report to the legislature and the governorannuallyon the use 4.11 of the housing trust fund account including the number of loans 4.12 and grants made, the number and types of residential units 4.13 assisted through the account, the number of households for whom 4.14 rental assistance payments were provided, and the number of 4.15 residential units assisted through the account that were rented 4.16 to or cooperatively owned by persons or families at or below 30 4.17 percent of the median family income of the metropolitan area at 4.18 the time of initial occupancy. 4.19 Sec. 3. Minnesota Statutes 2000, section 462A.209, is 4.20 amended to read: 4.21 462A.209 [HOME OWNERSHIPASSISTANCEEDUCATION, COUNSELING, 4.22 AND TRAINING PROGRAM.] 4.23 Subdivision 1. [FULL CYCLE HOME OWNERSHIP SERVICES.] 4.24 Thefull cycle home ownership serviceshomeownership education, 4.25 counseling, and training program shall be used tofundprovide 4.26 funding to community-based nonprofit organizations and political 4.27 subdivisionsproviding, building capacity to provide, or4.28supporting full cycle lending forto assist them in building the 4.29 capacity to provide and providing full cycle home ownership 4.30 services to low and moderate income home buyers and homeowners, 4.31 including seniors. The purpose of the program is to encourage 4.32 private investment in affordable housing and collaboration of 4.33 nonprofit organizations and political subdivisions with each 4.34 other and private lenders in providing full cyclelending4.35 homeownership services. 4.36 Subd. 2. [DEFINITION.] "Full cycle home ownership 5.1 services" means supporting eligible home buyers andowners5.2 homeowners through all phases of purchasing and keeping a home, 5.3 by providing prepurchase home buyer education,; prepurchase 5.4 counseling and credit repair,; prepurchase and postpurchase 5.5 property inspection and technical and financial assistance to 5.6 buyers in rehabilitating the home,; postpurchase counseling, 5.7 including home equity conversion loan counseling, mortgage 5.8 default counseling, postpurchase assistance with home 5.9 maintenance, entry cost assistance,; foreclosure prevention and 5.10 assistance; and access to flexible loan products. 5.11 Subd. 3. [ELIGIBILITY.] The agency shall establish 5.12 eligibility criteria for nonprofit organizations and political 5.13 subdivisions to receive funding under this section. The 5.14 eligibility criteria must require the nonprofit organization or 5.15 political subdivision to provide, to build capacity to provide, 5.16 or support full cycle home ownership services for eligible home 5.17 buyers. The agency may fund a nonprofit organization or 5.18 political subdivision that will provide full cycle home 5.19 ownership services by coordinating with one or more other 5.20 organizations that will provide specific components of full 5.21 cycle home ownership services. The agency may make exceptions 5.22 to providing all components of full cycle lending if justified 5.23 by the application. If there are more applicants requesting 5.24 funding than there are funds available, the agency shall award 5.25 the funds on a competitive basis and also assure an equitable 5.26 geographic distribution of the available funds. The eligibility 5.27 criteria must require the nonprofit organization or political 5.28 subdivision to have a demonstrated involvement in the local 5.29 community and to target the housing affordability needs of the 5.30 local community or to have demonstrated experience with 5.31 counseling older persons on housing, or both. The eligibility 5.32 criteria may include a requirement for specific training 5.33 provided by designated state or national entities. The agency 5.34 may also include an eligibility criteria that requires counselor 5.35 certification or organizational accreditation by specified 5.36 organizations which provide certification or accreditation 6.1 services. Partnerships and collaboration with innovative, grass 6.2 roots, or community-based initiatives shall be encouraged. The 6.3 agency shall give priority to nonprofit organizations and 6.4 political subdivisions thatprovide matching fundshave funding 6.5 from other sources for full cycle home ownership services. 6.6 Applicants for funds under section 462A.057 may also apply funds 6.7 under this program. 6.8 Subd. 4. [ENTRY COST HOME OWNERSHIP OPPORTUNITY PROGRAM.] 6.9 The agency may establish an entry cost home ownership 6.10 opportunity program, on terms and conditions it deems advisable, 6.11 to assist individuals with downpayment and closing costs to 6.12 finance the purchase of a home. 6.13 Subd. 5. [SELECTION CRITERIA.] The agency shall take the 6.14 following criteria into consideration when determining whether 6.15 to award funds to an eligible organization: 6.16 (1) to the extent to which there is an equitable geographic 6.17 distribution of funds among program applicants; 6.18 (2) the prior experience and documented familiarity of the 6.19 organization, as may be applicable, in establishing, 6.20 administering, and maintaining some or all of the components of 6.21 full cycle homeownership services; 6.22 (3) the reasonableness of the proposed budget in meeting 6.23 the program objectives, a demonstrated ability to leverage 6.24 program money with other sources of funding, and the extent of 6.25 the leveraging of other sources of funding; 6.26 (4) the extent to which efforts are targeted towards 6.27 households with incomes that do not exceed 80 percent of the 6.28 state or area median income or underserved segments of the local 6.29 population; and 6.30 (5) the extent to which program funding does not duplicate 6.31 other efforts currently available in the local area and will 6.32 enable, expand, or enhance existing activities. 6.33 Subd. 6. [DESIGNATED AREAS.] A program administrator must 6.34 designate specific areas, communities, or neighborhoods within 6.35 which the program is proposed to be operated for the purpose of 6.36 focusing resources. 7.1 Subd. 7. [ASSISTANCE TO PREVENT MORTGAGE FORECLOSURES.] (a) 7.2 Program assistance and counseling to prevent mortgage 7.3 foreclosures or cancellations of contract for deeds includes 7.4 general information, screening, assessment, referral services, 7.5 case management, advocacy, and financial assistance to borrowers 7.6 who are delinquent on mortgage or contract for deed payments. 7.7 (b) Not more than one-half of funds awarded for foreclosure 7.8 prevention and assistance activities may be used for mortgage or 7.9 financial counseling services. 7.10 (c) Financial assistance consists of payments for 7.11 delinquent mortgage or contract for deed payments, future 7.12 mortgage or contract for deed payments for a period of up to six 7.13 months, property taxes, assessments, utilities, insurance, home 7.14 improvement repairs, future rent payments for a period of up to 7.15 six months, and relocation costs if necessary, or other costs 7.16 necessary to prevent foreclosure. 7.17 (d) An individual or family may receive a maximum of $5,500 7.18 of financial assistance to prevent a mortgage foreclosure or the 7.19 cancellation of a contract for deed. 7.20 (e) The agency may require the recipient of financial 7.21 assistance to enter into an agreement with the agency for 7.22 repayment. The repayment agreement for mortgages or contract 7.23 for deed buyers must provide that in the event the property is 7.24 sold, transferred, or otherwise conveyed, or ceases to be the 7.25 recipient's principal place of residence, the recipient shall 7.26 repay all or a portion of the financial assistance. The agency 7.27 may take into consideration financial hardship in determining 7.28 repayment requirements. The repayment agreement may be secured 7.29 by a lien on the property for the benefit of the agency. 7.30 Subd. 8. [REPORT.] By January 10 of every year, each 7.31 nonprofit organization that delivers services under this section 7.32 must submit a report to the agency that summarizes the number of 7.33 people served and the sources and amounts of nonstate money used 7.34 to fund the services. The agency shall annually submit a report 7.35 to the legislature by February 15. 7.36 Sec. 4. Minnesota Statutes 2000, section 462A.21, is 8.1 amended by adding a subdivision to read: 8.2 Subd. 27. [ECONOMIC DEVELOPMENT AND HOUSING CHALLENGE 8.3 PROGRAM.] The agency may spend money for the purposes of section 8.4 462A.33 and may pay the costs and expenses necessary and 8.5 incidental to the development and operation of the program. 8.6 Sec. 5. Minnesota Statutes 2000, section 462A.33, 8.7 subdivision 1, is amended to read: 8.8 Subdivision 1. [CREATED.] The economic development and 8.9 housing challenge program is created to be administered by the 8.10 agency. 8.11 (a) The program shall provide grants or loans for the 8.12 purpose of construction, acquisition, rehabilitation, demolition 8.13 or removal of existing structures, construction financing, 8.14 permanent financing, interest rate reduction, refinancing, and 8.15 gap financing of housing to support economic development and 8.16 redevelopment activities or job creation or job preservation 8.17 within a community or region by meeting locally identified 8.18 housing needs. 8.19 Gap financing is either: 8.20 (i) the difference between the costs of the property, 8.21 including acquisition, demolition, rehabilitation, and 8.22 construction, and the market value of the property upon sale; or 8.23 (ii) the difference between the cost of the property and 8.24 the amount the targeted household can afford for housing, based 8.25 on industry standards and practices. 8.26 (b) Preference for grants and loans shall be given to 8.27 comparable proposals that include regulatory changes or waivers 8.28 that result in identifiable cost avoidance or cost reductions, 8.29 such as increased density, flexibility in site development 8.30 standards, or zoning code requirements. Preference must also be 8.31 given among comparable proposals to proposals for projects that 8.32 are accessible to transportation systems, jobs, schools, and 8.33 other services. 8.34 (c) If a grant or loan is used for demolition or removal of 8.35 existing structures, the cleared land must be used for the 8.36 construction of housing to be owned or rented by persons who 9.1 meet the income limits of this section or for other 9.2 housing-related purposes that primarily benefit the persons 9.3 residing in the adjacent housing. 9.4 Sec. 6. Minnesota Statutes 2000, section 462A.33, 9.5 subdivision 2, is amended to read: 9.6 Subd. 2. [ELIGIBLE RECIPIENTS.] Challenge grants or loans 9.7 may be made to a city, a private developer, a nonprofit 9.8 organization, or the owner of the housing, including 9.9 individuals. For the purpose of this section, "city" has the 9.10 meaning given it in section 462A.03, subdivision 21.Preference9.11shall be given to challenge grants or loans for home ownership.9.12 To the extent practicable, grants and loans shall be made so 9.13 that an approximately equal number of housing units are financed 9.14 in the metropolitan area, as defined in section 473.121, 9.15 subdivision 2, and in the nonmetropolitan area. 9.16 Sec. 7. Minnesota Statutes 2000, section 462A.33, 9.17 subdivision 3, is amended to read: 9.18 Subd. 3. [CONTRIBUTION REQUIREMENT; REGULATORY9.19FLEXIBILITY.] Fifty percent of the funds appropriated for this 9.20 section must be used for challenge grants or loans which meet 9.21 the requirements of this subdivision. These challenge grants or 9.22 loans must be used for economically viable homeownership or 9.23 rental housing proposals that: 9.24 (1) include a financial or in-kind contribution from an 9.25 area employer and either a unit of local government or a private 9.26 philanthropic, religious, or charitable organization; and 9.27 (2) address the housing needs of the local work force. 9.28 For the purpose of this subdivision, an employer 9.29 contribution may consist partially or wholly of the premium paid 9.30 for federal housing tax credits.Preference for grants and9.31loans shall be given to comparable proposals that include9.32regulatory changes that result in identifiable cost avoidance or9.33cost reductions, such as increased density, flexibility in site9.34development standards, or zoning code requirements.9.35 Preference for grants and loans shall also be given to 9.36 comparable proposals that include a financial or in-kind 10.1 contribution from a unit of local government, an area employer, 10.2 and a private philanthropic, religious, or charitable 10.3 organization. 10.4 Sec. 8. Minnesota Statutes 2000, section 462A.33, 10.5 subdivision 5, is amended to read: 10.6 Subd. 5. [INCOME LIMITS.] Households served through 10.7 challenge grants or loans must not have incomes at the time of 10.8 initial occupancy that exceed, for homeownership projects,115 10.9 percent of the greater of state or area median income as 10.10 determined by the United States Department of Housing and Urban 10.11 Development,and for rental housing projects, 115 percent of the10.12greater of state or area median income as determined by the10.13United States Department of Housing and Urban Developmentexcept 10.14 that the housing developed or rehabilitated with challenge fund 10.15 grants or loans must be affordable to the local work force. 10.16 Preference among comparable proposals shall be given those 10.17 that provide housing opportunities for an expanded range of 10.18 household incomes within a community or that provide housing 10.19 opportunities for a wide range of incomes within the development. 10.20 Sec. 9. Minnesota Statutes 2000, section 462A.33, is 10.21 amended by adding a subdivision to read: 10.22 Subd. 8. [LIMITATION ON RETURN.] The limitations on return 10.23 of eligible mortgagors contained in section 462A.03, subdivision 10.24 13, do not apply to loans or grants for rental housing if the 10.25 loans or grants made by the agency, from all sources, are less 10.26 than 50 percent of the total costs, as determined by the agency. 10.27 Sec. 10. [REPEALER.] 10.28 Minnesota Statutes 2000, sections 462A.201, subdivision 4; 10.29 462A.207; 462A.209, subdivision 4; 462A.21, subdivision 17; and 10.30 462A.33, subdivisions 4, 6, and 7, are repealed. 10.31 ARTICLE 2 10.32 MISCELLANEOUS PROVISIONS 10.33 Section 1. Minnesota Statutes 2000, section 462A.05, 10.34 subdivision 14, is amended to read: 10.35 Subd. 14. [REHABILITATION LOANS.] It may agree to 10.36 purchase, make, or otherwise participate in the making, and may 11.1 enter into commitments for the purchase, making, or 11.2 participation in the making, of eligible loans for 11.3 rehabilitation to persons and families of low and moderate 11.4 income, and to owners of existing residential housing for 11.5 occupancy by such persons and families, for the rehabilitation 11.6 of existing residential housing owned by them. The loans may be 11.7 insured or uninsured and may be made with security, or may be 11.8 unsecured, as the agency deems advisable. The loans may be in 11.9 addition to or in combination with long-term eligible mortgage 11.10 loans under subdivision 3. They may be made in amounts 11.11 sufficient to refinance existing indebtedness secured by the 11.12 property, if refinancing is determined by the agency to be 11.13 necessary to permit the owner to meet the owner's housing cost 11.14 without expending an unreasonable portion of the owner's income 11.15 thereon. No loan for rehabilitation shall be made unless the 11.16 agency determines that the loan will be used primarily to make 11.17 the housing more desirable to live in, to increase the market 11.18 value of the housing, for compliance with state, county or 11.19 municipal building, housing maintenance, fire, health or similar 11.20 codes and standards applicable to housing, or to accomplish 11.21 energy conservation related improvements. In unincorporated 11.22 areas and municipalities not having codes and standards, the 11.23 agency may, solely for the purpose of administering the 11.24 provisions of this chapter, establish codes and standards. 11.25 Except for accessibility improvements under this subdivision and 11.26 subdivisions 14a and 24, clause (1), no secured loan for 11.27 rehabilitation of any property shall be made in an amount which, 11.28 with all other existing indebtedness secured by the property, 11.29 would exceed 110 percent of its market value, as determined by 11.30 the agency. No loan under this subdivision shall be denied 11.31 solely because the loan will not be used for placing the 11.32 residential housing in full compliance with all state, county, 11.33 or municipal building, housing maintenance, fire, health, or 11.34 similar codes and standards applicable to housing. 11.35 Rehabilitation loans shall be made only when the agency 11.36 determines that financing is not otherwise available, in whole 12.1 or in part, from private lenders upon equivalent terms and 12.2 conditions. Accessibility rehabilitation loans authorized under 12.3 this subdivision may be made to eligible persons and families 12.4 without limitations relating to the maximum incomes of the 12.5 borrowers if: 12.6 (1) the borrower or a member of the borrower's family 12.7 requires a level of care provided in a hospital, skilled nursing 12.8 facility, or intermediate care facility for persons with mental 12.9 retardation or related conditions; 12.10 (2) home care is appropriate; and 12.11 (3) the improvement will enable the borrower or a member of 12.12 the borrower's family to reside in the housing. 12.13 The agency may waive any requirement that the housing units in a 12.14 residential housing development be rented to persons of low and 12.15 moderate income if the development consists of four or less 12.16 dwelling units, one of which is occupied by the owner. 12.17 Sec. 2. Minnesota Statutes 2000, section 462A.05, 12.18 subdivision 14a, is amended to read: 12.19 Subd. 14a. [REHABILITATION LOANS; EXISTING OWNER OCCUPIED 12.20 RESIDENTIAL HOUSING.] It may make loans to persons and families 12.21 of low and moderate income to rehabilitate or to assist in 12.22 rehabilitating existing residential housing owned and occupied 12.23 by those persons or families. No loan shall be made unless the 12.24 agency determines that the loan will be used primarily for 12.25 rehabilitation work necessary for health or safety, essential 12.26 accessibility improvements, or to improve the energy efficiency 12.27 of the dwelling. No loan for rehabilitation of owner occupied 12.28 residential housing shall be denied solely because the loan will 12.29 not be used for placing the residential housing in full 12.30 compliance with all state, county or municipal building, housing 12.31 maintenance, fire, health or similar codes and standards 12.32 applicable to housing. The amount of any loan shall not exceed 12.33 the lesser of (a) a maximum loan amount determined under rules 12.34 adopted by the agency not to exceed $20,000, or (b) the actual 12.35 cost of the work performed, or (c) that portion of the cost of 12.36 rehabilitation which the agency determines cannot otherwise be 13.1 paid by the person or family without the expenditure of an 13.2 unreasonable portion of the income of the person or family. 13.3 Loans made in whole or in part with federal funds may exceed the 13.4 maximum loan amount to the extent necessary to comply with 13.5 federal lead abatement requirements prescribed by the funding 13.6 source. In making loans, the agency shall determine the 13.7 circumstances under which and the terms and conditions under 13.8 which all or any portion of the loan will be repaid and shall 13.9 determine the appropriate security for the repayment of the 13.10 loan. Loans pursuant to this subdivision may be made with or 13.11 without interest or periodic payments.Loans made without13.12interest or periodic payments need not be repaid by the borrower13.13if the property for which the loan is made has not been sold,13.14transferred, or otherwise conveyed nor has it ceased to be the13.15principal place of residence of the borrower, within ten years13.16after the date of the loan.13.17 Sec. 3. Minnesota Statutes 2000, section 462A.20, 13.18 subdivision 3, is amended to read: 13.19 Subd. 3. [SEPARATE ACCOUNTS; TRANSFERS; LIMITS.] Whenever 13.20 any money is appropriated by the state to the agency solely for 13.21 a specified purpose or purposes, the agency shall establish a 13.22 separate bookkeeping account or accounts in the housing 13.23 development fund to record the receipt and disbursement of such 13.24 money and of the income, gain, and loss from the investment and 13.25 reinvestment thereof. Earnings from investment of any amounts 13.26 appropriated by the state to the agency for a specified purpose 13.27 or purposes may be aggregated. The costs and expenses necessary 13.28 and incidental to the development and operation of all programs 13.29 funded by state appropriations may be paid from the aggregated 13.30 earnings from investments prior to periodic distributions of 13.31 earnings to separate accounts to be used for the same purpose as 13.32 the respective original appropriation. The agency may transfer 13.33 unencumbered balances from one appropriated account to another, 13.34 provided that no money appropriated for the purpose of agency 13.35 loan programs may be transferred to an account to be used for 13.36 making grants, except that money appropriated for the purpose of 14.1 section 462A.05, subdivision 14a, may be transferred for the 14.2 purpose of section 462A.05, subdivision 15a. 14.3 Sec. 4. Minnesota Statutes 2000, section 462A.2097, is 14.4 amended to read: 14.5 462A.2097 [RENTAL HOUSING.] 14.6 The agency may establish a tenant-based or project-based 14.7 rental housing assistance program for persons of low income or 14.8 for persons with a mental illness or families that include an 14.9 adult family member with a mental illness. Rental assistance 14.10 may be in the form of direct rental subsidies for housing for 14.11 persons or families with incomes, at the time of initial 14.12 occupancy, of up to 50 percent of the area median income as 14.13 determined by the United States Department of Housing and Urban 14.14 Development, adjusted for families of five or more. Housing for 14.15 the mentally ill must be operated in coordination with social 14.16 service providers who provide services requested by tenants. 14.17 Direct rental subsidies must be administered by the agency for 14.18 the benefit of eligible tenants. Financial assistance provided 14.19 under this section must be in the form of vendor payments 14.20 whenever possible. 14.21 Sec. 5. Minnesota Statutes 2000, section 462A.21, 14.22 subdivision 10, is amended to read: 14.23 Subd. 10. [CERTAIN APPROPRIATIONS AVAILABLE UNTIL 14.24 EXPENDED.] Notwithstanding the repeal of section 462A.26 and the 14.25 provisions of section 16A.28 or any other law relating to lapse 14.26 of an appropriation, the appropriations made to the agency by 14.27 the legislature in 1976 and subsequent years are available until 14.28 fully expended, and the allocations provided in the 14.29 appropriations remain in effect. Earnings from investments of 14.30 any of the amounts appropriated to the agency are appropriated 14.31 to the agency to be used for the same purposes as the respective 14.32 original appropriations, after payment of the costs and expenses 14.33 necessary and incidental to the development and operation of the 14.34 programs authorized under this chapter. 14.35 Sec. 6. Minnesota Statutes 2000, section 462A.21, is 14.36 amended by adding a subdivision to read: 15.1 Subd. 28. [FAMILY STABILIZATION DEMONSTRATION 15.2 PROJECT.] The agency may spend money for the purposes of section 15.3 462A.205 and may pay costs and expenses necessary and incidental 15.4 to the development and operation of the project. 15.5 Sec. 7. Laws 2000, chapter 488, article 8, section 2, 15.6 subdivision 6, is amended to read: 15.7 Subd. 6. Economic Support Grants 15.8 30,509,000 25,368,000 15.9 The amounts that may be spent from this 15.10 appropriation for each purpose are as 15.11 follows: 15.12 [ASSISTANCE TO FAMILIES GRANTS TANF 15.13 FORECAST ADJUSTMENT.] The federal 15.14 Temporary Assistance to Needy Families 15.15 (TANF) block grant fund appropriated to 15.16 the commissioner of human services in 15.17 Laws 1999, chapter 245, article 1, 15.18 section 2, subdivision 10, for MFIP 15.19 cash grants are reduced by $37,513,000 15.20 in fiscal year 2000 and $30,217,000 in 15.21 fiscal year 2001. 15.22 [FEDERAL TANF FUNDS.] (1) In addition 15.23 to the Federal Temporary Assistance for 15.24 Needy Families (TANF) block grant funds 15.25 appropriated to the commissioner of 15.26 human services in Laws 1999, chapter 15.27 245, article 1, section 2, subdivision 15.28 10, federal TANF funds are appropriated 15.29 to the commissioner in amounts up to 15.30 $20,000,000 in fiscal year 2000 and 15.31 $80,440,000 in fiscal year 2001. In 15.32 addition to these funds, the 15.33 commissioner may draw or transfer any 15.34 other appropriations of federal TANF 15.35 funds or transfers of federal TANF 15.36 funds that are enacted into state law. 15.37 (2) Of the amounts in clause (1), 15.38 $19,680,000 in fiscal year 2001 is for 15.39 the local intervention grants program 15.40 under Minnesota Statutes, section 15.41 256J.625 and related grant programs and 15.42 shall be expended as follows: 15.43 (a) $500,000 in fiscal year 2001 is for 15.44 a grant to the Southeast Asian MFIP 15.45 services collaborative to replicate in 15.46 a second location an existing model of 15.47 an intensive intervention transitional 15.48 employment training project which 15.49 serves TANF-eligible recipients and 15.50 which moves refugee and immigrant 15.51 welfare recipients unto unsubsidized 15.52 employment and leads to economic 15.53 self-sufficiency. This is a one-time 15.54 appropriation. 15.55 (b) $500,000 in fiscal year 2001 is for 15.56 nontraditional career assistance and 15.57 training programs under Minnesota 15.58 Statutes, section 256K.30, subdivision 16.1 4. This is a one-time appropriation. 16.2 (c) $18,680,000 is for local 16.3 intervention grants for 16.4 self-sufficiency program under 16.5 Minnesota Statutes, section 256J.625. 16.6 For fiscal years 2002 and 2003 the 16.7 commissioner of finance shall ensure 16.8 that the base level funding for the 16.9 local intervention grants program is 16.10 $27,180,000 each year. 16.11 (3) Of the amounts in clause (2), 16.12 paragraph (c) for local intervention 16.13 grants, $7,000,000 in fiscal year 2001 16.14 shall be transferred to the 16.15 commissioner of health for distribution 16.16 to county boards according to the 16.17 formula in Minnesota Statutes, section 16.18 256J.625, subdivision 3, to be used by 16.19 county public health boards to serve 16.20 families with incomes at or below 200 16.21 percent of the federal poverty 16.22 guidelines, in the manner specified by 16.23 Minnesota Statutes, section 145A.16, 16.24 subdivision 3, clauses (2) through 16.25 (6). Training, evaluation and 16.26 technical assistance shall be provided 16.27 in accordance with Minnesota Statutes, 16.28 section 145A.16, subdivisions 5 to 7. 16.29 For fiscal years 2002 and 2003 the 16.30 commissioner of finance shall ensure 16.31 that the base level funding for this 16.32 activity is $7,000,000 each year. 16.33 (4) Of the amounts in clause (1), 16.34 $250,000 in fiscal year 2001 is 16.35 appropriated to the commissioner to 16.36 contract with the board of trustees of 16.37 the Minnesota state colleges and 16.38 universities to provide tuition waivers 16.39 to employees of health care and human 16.40 services providers located in the state 16.41 that are members of qualifying 16.42 consortia operating under Minnesota 16.43 Statutes, sections 116L.10 to 116L.15. 16.44 (5) Of the amounts in clause (1), 16.45 $320,000 in fiscal year 2001 is for 16.46 training job counselors about the MFIP 16.47 program. For fiscal years 2002 and 16.48 2003 the commissioner of finance shall 16.49 ensure that the base level funding for 16.50 employment services includes $320,000 16.51 each year for this activity. The 16.52 appropriations in this clause shall not 16.53 become part of the base for the 16.54 2004-2005 biennium. 16.55 (6) Of the amounts in clause (1), 16.56 $1,000,000 in fiscal year 2001 is for 16.57 out-of-wedlock pregnancy prevention 16.58 funds to serve children in 16.59 TANF-eligible families under Minnesota 16.60 Statutes, section 256K.35. For fiscal 16.61 years 2002 and 2003 the commissioner of 16.62 finance shall ensure that the base 16.63 level funding for this program is 16.64 $1,000,000 each year. The 16.65 appropriations in this clause shall not 16.66 become part of the base for the 17.1 2004-2005 biennium. 17.2 (7) Of the amounts in clause (1), 17.3 $1,000,000 in fiscal year 2001 is to 17.4 provide services to TANF-eligible 17.5 families who are participating in the 17.6 supportive housing and managed care 17.7 pilot project under Minnesota Statutes, 17.8 section 256K.25. For fiscal years 2002 17.9 and 2003 the commissioner of finance 17.10 shall ensure that the base level 17.11 funding for this project is $1,000,000 17.12 each year. The appropriations in this 17.13 clause shall not become part of the 17.14 base for this project for the 2004-2005 17.15 biennium. 17.16 [TANF TRANSFER TO SOCIAL SERVICES.] 17.17 $7,500,000 is transferred from the 17.18 state's federal TANF block grant to the 17.19 state's federal Title XX block grant in 17.20 fiscal year 2001 and in fiscal year 17.21 2002, for purposes of increasing 17.22 services for families with children 17.23 whose incomes are at or below 200 17.24 percent of the federal poverty 17.25 guidelines. Notwithstanding section 6, 17.26 this paragraph expires June 30, 2002. 17.27 [TANF MOE.] (a) In order to meet the 17.28 basic maintenance of effort (MOE) 17.29 requirements of the TANF block grant 17.30 specified under United States Code, 17.31 title 42, section 609(a)(7), the 17.32 commissioner may only report nonfederal 17.33 money expended for allowable activities 17.34 listed in the following clauses as TANF 17.35 MOE expenditures: 17.36 (1) MFIP cash and food assistance 17.37 benefits under Minnesota Statutes, 17.38 chapter 256J; 17.39 (2) the child care assistance programs 17.40 under Minnesota Statutes, sections 17.41 119B.03 and 119B.05, and county child 17.42 care administrative costs under 17.43 Minnesota Statutes, section 119B.15; 17.44 (3) state and county MFIP 17.45 administrative costs under Minnesota 17.46 Statutes, chapters 256J and 256K; 17.47 (4) state, county, and tribal MFIP 17.48 employment services under Minnesota 17.49 Statutes, chapters 256J and 256K; and 17.50 (5) expenditures made on behalf of 17.51 noncitizen MFIP recipients who qualify 17.52 for the medical assistance without 17.53 federal financial participation program 17.54 under Minnesota Statutes, section 17.55 256B.06, subdivision 4, paragraphs (d), 17.56 (e), and (j). 17.57 (b) The commissioner shall ensure that 17.58 sufficient qualified nonfederal 17.59 expenditures are made each year to meet 17.60 the state's TANF MOE requirements. For 17.61 the activities listed in paragraph (a), 17.62 clauses (2) to (6), the commissioner 18.1 may only report expenditures that are 18.2 excluded from the definition of 18.3 assistance under Code of Federal 18.4 Regulations, title 45, section 260.31. 18.5 If nonfederal expenditures for the 18.6 programs and purposes listed in 18.7 paragraph (a) are insufficient to meet 18.8 the state's TANF MOE requirements, the 18.9 commissioner shall recommend additional 18.10 allowable sources of nonfederal 18.11 expenditures to the legislature, if the 18.12 legislature is or will be in session to 18.13 take action to specify additional 18.14 sources of nonfederal expenditures for 18.15 TANF MOE before a federal penalty is 18.16 imposed. The commissioner shall 18.17 otherwise provide notice to the 18.18 legislative commission on planning and 18.19 fiscal policy under paragraph (d). 18.20 (c) If the commissioner uses authority 18.21 granted under Laws 1999, chapter 245, 18.22 article 1, section 10, or similar 18.23 authority granted by a subsequent 18.24 legislature, to meet the state's TANF 18.25 MOE requirements in a reporting period, 18.26 the commissioner shall inform the 18.27 chairs of the appropriate legislative 18.28 committees about all transfers made 18.29 under that authority for this purpose. 18.30 (d) If the commissioner determines that 18.31 nonfederal expenditures for the 18.32 programs under Minnesota Statutes, 18.33 section 256J.025, are insufficient to 18.34 meet TANF MOE expenditure requirements, 18.35 and if the legislature is not or will 18.36 not be in session to take timely action 18.37 to avoid a federal penalty, the 18.38 commissioner may report nonfederal 18.39 expenditures from other allowable 18.40 sources as TANF MOE expenditures after 18.41 the requirements of this paragraph are 18.42 met. 18.43 The commissioner may report nonfederal 18.44 expenditures in addition to those 18.45 specified under paragraph (a) as 18.46 nonfederal TANF MOE expenditures, but 18.47 only ten days after the commissioner of 18.48 finance has first submitted the 18.49 commissioner's recommendations for 18.50 additional allowable sources of 18.51 nonfederal TANF MOE expenditures to the 18.52 members of the legislative commission 18.53 on planning and fiscal policy for their 18.54 review. 18.55 (e) The commissioner of finance shall 18.56 not incorporate any changes in federal 18.57 TANF expenditures or nonfederal 18.58 expenditures for TANF MOE that may 18.59 result from reporting additional 18.60 allowable sources of nonfederal TANF 18.61 MOE expenditures under the interim 18.62 procedures in paragraph (d) into the 18.63 February or November forecasts required 18.64 under Minnesota Statutes, section 18.65 16A.103, unless the commissioner of 18.66 finance has approved the additional 18.67 sources of expenditures under paragraph 19.1 (d). 19.2 (f) The provisions of paragraphs (a) to 19.3 (e) supersede any contrary provisions 19.4 in Laws 1999, chapter 245, article 1, 19.5 section 2, subdivision 10. 19.6 (g) The provisions of Minnesota 19.7 Statutes, section 256.011, subdivision 19.8 3, which require that federal grants or 19.9 aids secured or obtained under that 19.10 subdivision be used to reduce any 19.11 direct appropriations provided by law 19.12 do not apply if the grants or aids are 19.13 federal TANF funds. 19.14 (h) Notwithstanding section 6 of this 19.15 article, paragraphs (a) to (g) expire 19.16 June 30, 2003. 19.17 (i) Paragraphs (a) to (h) are effective 19.18 the day following final enactment. 19.19 (a) Assistance to Families Grants 19.20 9,628,000 (2,305,000) 19.21 (b) Work Grants 19.22 -0- (250,000) 19.23 (c) AFDC and Other Assistance 19.24 20,000,000 30,734,000 19.25 [TRANSFERS TO MINNESOTA HOUSING FINANCE 19.26 AGENCY.] (a) By June 30, 2001, the 19.27 commissioner shall transfer $50,000,000 19.28 of the general funds appropriated under 19.29 this paragraph to the Minnesota housing 19.30 finance agency for transfer to the 19.31 housing development fund. The program 19.32 funded by this transfer shall be known 19.33 as the "Bruce F. Vento Year 2000 19.34 Affordable Housing Program." Up to 19.35 $15,000,000 may be transferred in 19.36 fiscal year 2000. 19.37 (b) Of the funds transferred in 19.38 paragraph (a), $5,000,000 in fiscal 19.39 year 2001 and $15,000,000 in fiscal 19.40 year 2002 is for a loan to Habitat for 19.41 Humanity of Minnesota, Inc. The loan 19.42 shall be an interest-free deferred 19.43 loan. The loan shall become due and 19.44 payable in the event and to the extent 19.45 that Habitat for Humanity of Minnesota, 19.46 Inc. does not invest repayments and 19.47 prepayment of mortgage loans financed 19.48 with this appropriation in new 19.49 mortgages for additional homebuyers 19.50 through Habitat for Humanity of 19.51 Minnesota, Inc. To the extent 19.52 practicable, funding must be allocated 19.53 to Habitat for Humanity chapters on the 19.54 basis of the number of MFIP households 19.55 residing within a chapter's service 19.56 area compared to the statewide total of 19.57 MFIP households and on the basis of a 19.58 chapter's capacity. 20.1 (c) Of the funds transferred in 20.2 paragraph (a), $15,000,000 in fiscal 20.3 year 2001 and $15,000,000 in fiscal 20.4 year 2002 is for the affordable rental 20.5 investment fund program under Minnesota 20.6 Statutes, section 462A.21, subdivision 20.7 8b. To the extent practicable, the 20.8 number of units financed with the 20.9 appropriation under this paragraph 20.10 within a city, county, or region shall 20.11 reflect the number of MFIP households 20.12 residing within the city, county, or 20.13 region compared to the statewide total 20.14 of MFIP households. This appropriation 20.15 must be used to finance rental housing 20.16 units that serve families: 20.17 (1) receiving MFIP benefits under 20.18 Minnesota Statutes, section 256J.01, or 20.19 its successor program; and 20.20 (2) who have lost eligibility for MFIP 20.21due to increased income from employment20.22or due to the collection of child or20.23spousal support under part D of title20.24IV of the Social Security Actfor 20.25 reasons other than disqualification 20.26 from MFIP due to fraud. 20.27 Units produced with this appropriation 20.28 must remain affordable for a 30-year 20.29 period. 20.30 In order to coordinate the availability 20.31 of housing developed with the 20.32 appropriation under this paragraph with 20.33 MFIP families in need of affordable 20.34 housing, the commissioner of the 20.35 Minnesota housing finance agency, with 20.36 the assistance of the commissioner of 20.37 human services, shall establish 20.38 cooperative relationships with county 20.39 agencies as defined in Minnesota 20.40 Statutes, section 256J.08, local 20.41 employment and training service 20.42 providers as defined in Minnesota 20.43 Statutes, section 256J.49, local social 20.44 service agencies, or other 20.45 organizations that provide assistance 20.46 to MFIP households. 20.47 The commissioner of the Minnesota 20.48 housing finance agency shall develop 20.49 strategies to promote occupancy of the 20.50 units financed by the appropriation 20.51 under this paragraph by households most 20.52 in need of subsidized housing. The 20.53 strategies shall include provisions 20.54 that encourage households to move into 20.55 homeownership or unsubsidized housing 20.56 as the household secures stable 20.57 employment and achieves 20.58 self-sufficiency. The commissioner of 20.59 the Minnesota housing finance agency 20.60 shall consult with interested parties 20.61 in developing these strategies. 20.62 (d) The commissioner of the Minnesota 20.63 housing finance agency and the 20.64 commissioner of human services shall 20.65 jointly prepare and submit a report to 21.1 the governor and the legislature on the 21.2 results of the funding provided under 21.3 this section. The report shall include: 21.4 (1) information on the number of units 21.5 produced; 21.6 (2) the household size and income of 21.7 the occupants of the units at initial 21.8 occupancy; and 21.9 (3) to the extent the information is 21.10 available, measures related to the 21.11 occupants' attachment to the workforce 21.12 and public assistance usage, and number 21.13 of occupant moves. 21.14 The report must be submitted annually 21.15 beginning January 15, 2003. 21.16 (e) Section 6, sunset of uncodified 21.17 language, does not apply to paragraphs 21.18 (a) to (d). Paragraphs (a) to (d) are 21.19 effective the day following final 21.20 enactment. 21.21 [WORKING FAMILY CREDIT.] (a) On a 21.22 regular basis, the commissioner of 21.23 revenue, with the assistance of the 21.24 commissioner of human services, shall 21.25 calculate the value of the refundable 21.26 portion of the Minnesota working family 21.27 credits provided under Minnesota 21.28 Statutes, section 290.0671, that 21.29 qualifies for federal reimbursement 21.30 from the temporary assistance to needy 21.31 families block grant. The commissioner 21.32 of revenue shall provide the 21.33 commissioner of human services with 21.34 such expenditure records and 21.35 information as are necessary to support 21.36 draws of federal funds. The 21.37 commissioner of human services shall 21.38 reimburse the commissioner of revenue 21.39 for the costs of providing the 21.40 information required by this paragraph. 21.41 (b) Federal TANF funds, as specified in 21.42 this paragraph, are appropriated to the 21.43 commissioner of human services based on 21.44 calculations under paragraph (a) of 21.45 working family tax credit expenditures 21.46 that qualify for reimbursement from the 21.47 TANF block grant for income tax refunds 21.48 payable in federal fiscal years 21.49 beginning October 1, 1999. The draws 21.50 of federal TANF funds shall be made on 21.51 a regular basis based on calculations 21.52 of credit expenditures by the 21.53 commissioner of revenue. Up to the 21.54 following amounts of federal TANF draws 21.55 are appropriated to the commissioner of 21.56 human services to deposit into the 21.57 general fund: in fiscal year 2000, 21.58 $30,957,000; and in fiscal year 2001, 21.59 $33,895,000. 21.60 (d) General Assistance 21.61 557,000 (3,134,000) 22.1 (e) Minnesota Supplemental Aid 22.2 324,000 323,000 22.3 ARTICLE 3 22.4 TECHNICAL AND CONFORMING CHANGES 22.5 Section 1. Minnesota Statutes 2000, section 462A.01, is 22.6 amended to read: 22.7 462A.01 [CITATION.] 22.8 Sections 462A.01 to462A.24462A.33 shall be known as and 22.9 may be cited as the "Minnesota Housing Finance Agency Law of 22.10 1971." 22.11 Sec. 2. Minnesota Statutes 2000, section 462A.03, 22.12 subdivision 1, is amended to read: 22.13 Subdivision 1. [APPLICATION.] For the purpose ofsections22.14462A.01 to 462A.24this chapter, the terms defined in this 22.15 section have the meanings ascribed to them. 22.16 Sec. 3. Minnesota Statutes 2000, section 462A.03, 22.17 subdivision 6, is amended to read: 22.18 Subd. 6. [AGENCY.] "Agency" means the Minnesota housing 22.19 finance agency created bysections 462A.01 to 462A.24this 22.20 chapter. 22.21 Sec. 4. Minnesota Statutes 2000, section 462A.03, 22.22 subdivision 10, is amended to read: 22.23 Subd. 10. [PERSONS AND FAMILIES OF LOW AND MODERATE 22.24 INCOME.] "Persons and families of low and moderate income" means 22.25 persons and families, irrespective of race, creed, national 22.26 origin, sex, or status with respect to guardianship or 22.27 conservatorship, determined by the agency to require such 22.28 assistance as is made available bysections 462A.01 to 462A.2422.29 this chapter on account of personal or family income not 22.30 sufficient to afford adequate housing. In making such 22.31 determination the agency shall take into account the following: 22.32 (a) The amount of the total income of such persons and families 22.33 available for housing needs, (b) the size of the family, (c) the 22.34 cost and condition of housing facilities available, (d) the 22.35 eligibility of such persons and families to compete successfully 22.36 in the normal housing market and to pay the amounts at which 23.1 private enterprise is providing sanitary, decent and safe 23.2 housing. In the case of federally subsidized mortgages with 23.3 respect to which income limits have been established by any 23.4 agency of the federal government having jurisdiction thereover 23.5 for the purpose of defining eligibility of low and moderate 23.6 income families, the limits so established shall govern under 23.7 theprovisionprovisions ofsections 462A.01 to 462A.24this 23.8 chapter. In all other cases income limits for the purpose of 23.9 defining low or moderate income persons shall be established by 23.10 the agency by rules. 23.11 Sec. 5. Minnesota Statutes 2000, section 462A.03, is 23.12 amended by adding a subdivision to read: 23.13 Subd. 23. [METROPOLITAN AREA.] "Metropolitan area" has the 23.14 meaning given in section 473.121, subdivision 2. 23.15 Sec. 6. Minnesota Statutes 2000, section 462A.04, 23.16 subdivision 6, is amended to read: 23.17 Subd. 6. [MANAGEMENT, CONTROL.] The management and control 23.18 of the agency shall be vested solely in the members in 23.19 accordance with the provisions ofsections 462A.01 to 462A.2423.20 this chapter. 23.21 Sec. 7. Minnesota Statutes 2000, section 462A.05, 23.22 subdivision 16, is amended to read: 23.23 Subd. 16. [PAYMENTS FOR STRUCTURAL DEFECTS.] (a) It may 23.24 make payments or expenditures from the housing development fund 23.25 to persons of low or moderate income, who are recipients of an 23.26 eligible loan as defined in section 462A.03, subdivision 11, or 23.27 who have purchased residential housing from a recipient of such 23.28 eligible loan, and who are owners and occupants of residential 23.29 housing constructed or rehabilitated undersections 462A.01 to23.30462A.24this chapter, when, in the agency's determination, such 23.31 residential housing contains defects or omissions which affect 23.32 the structural soundness, or the use and the livability of such 23.33 housing, including but not limited to defects or omissions in 23.34 materials, hardware, fixtures, design, workmanship and 23.35 landscaping of whatever kind and nature incorporated in said 23.36 housing and which are covered by an agency approved warranty, 24.1 for the purposes of (i) correcting such defects, or (ii) paying 24.2 the claims of the owner arising from such defects, provided, 24.3 that this authority shall exist only if the owner has requested 24.4 assistance from the agency not later than four years after the 24.5 issuance of the eligible loan, or where such residential housing 24.6 was rehabilitated undersections 462A.01 to 462A.24this chapter 24.7 only if the owner has requested assistance from the agency not 24.8 later than two years after the issuance of the eligible loan. 24.9 (b) If such owner elects to receive payments or 24.10 expenditures pursuant to this section, the agency is subrogated 24.11 to the right of such owner to recover damages against any party 24.12 or persons reasonably calculated to be responsible for such 24.13 damages. 24.14 (c) The agency may require from the seller of such 24.15 residential housing, or the contractor responsible for the 24.16 construction or rehabilitation of such housing, an agreement to 24.17 reimburse the agency for any payments and expenditures made 24.18 pursuant to this subdivision with respect to such residential 24.19 housing. 24.20 Sec. 8. Minnesota Statutes 2000, section 462A.05, 24.21 subdivision 22, is amended to read: 24.22 Subd. 22. [LOANS TO FINANCIAL INSTITUTIONS.] It may make 24.23 or participate in the making and enter into commitments for the 24.24 making of loans to any banking institution, savings association, 24.25 or other lender approved by the members, organized under the 24.26 laws of this or any other state or of the United States having 24.27 an office in this state, notwithstanding the provisions of 24.28 section 462A.03, subdivision 13, if it first determines that the 24.29 proceeds of such loans will be utilized for the purpose of 24.30 making loans to or for the benefit of eligible persons and 24.31 families as provided and in accordance withsections 462A.01 to24.32462A.24this chapter. Loans pursuant to this subdivision shall 24.33 be secured, repaid and bear interest at the rate as determined 24.34 by the members. 24.35 Sec. 9. Minnesota Statutes 2000, section 462A.05, 24.36 subdivision 26, is amended to read: 25.1 Subd. 26. [FORMATION OF NONPROFIT CORPORATIONS.] It may, 25.2 when the agency determines it is necessary or desirable to carry 25.3 out its purposes and to exercise any or all of the powers 25.4 conferred upon itunder sections 462A.01 to 462A.24by this 25.5 chapter, and subject to the provisions of subdivision 27, form 25.6 or consent to the formation of one or more corporations under 25.7 the Minnesota Nonprofit Corporation Act, as amended, or under 25.8 other laws of this state. The agency may be a member of the 25.9 corporations, and the members and employees of the agency from 25.10 time to time may be members of the board of directors or 25.11 officers of the corporations. The agency may enter into 25.12 agreements with them providing for the agency to approve various 25.13 aspects of their operations. The agency may capitalize the 25.14 corporations and may acquire all or a part of the corporations' 25.15 share or member certificates. The agency may require that it 25.16 approve aspects of the operation of the corporations including 25.17 the corporations' articles of incorporation or bylaws, 25.18 directors, projects and expenditures, and the sale or conveyance 25.19 of projects, and the issuance of obligations. The agency may 25.20 agree to and may take title to property of the corporations upon 25.21 their dissolution. 25.22 Sec. 10. Minnesota Statutes 2000, section 462A.06, 25.23 subdivision 1, is amended to read: 25.24 Subdivision 1. [LISTED HERE.] For the purpose of 25.25 exercising the specific powers granted in section 462A.05 and 25.26 effectuating the other purposes ofsections 462A.01 to 462A.2425.27 this chapter, the agency shall have the general powers granted 25.28 in this section. 25.29 Sec. 11. Minnesota Statutes 2000, section 462A.06, 25.30 subdivision 4, is amended to read: 25.31 Subd. 4. [RULES.] It may make, and from time to time, 25.32 amend and repeal rules not inconsistent with the provisions of 25.33sections 462A.01 to 462A.24this chapter. 25.34 Sec. 12. Minnesota Statutes 2000, section 462A.07, 25.35 subdivision 10, is amended to read: 25.36 Subd. 10. [HUMAN RIGHTS.] It may establish and enforce 26.1 such rules as may be necessary to insure compliance with chapter 26.2 363, and to insure that occupancy of housing assisted under 26.3sections 462A.01 to 462A.24this chapter shall be open to all 26.4 persons, and that contractors and subcontractors engaged in the 26.5 construction of such housing shall provide an equal opportunity 26.6 for employment to all persons, without discrimination as to 26.7 race, color, creed, religion, national origin, sex, marital 26.8 status, age, and status with regard to public assistance or 26.9 disability. 26.10 Sec. 13. Minnesota Statutes 2000, section 462A.07, 26.11 subdivision 12, is amended to read: 26.12 Subd. 12. [USE OF OTHER AGENCIES.] It may delegate, use or 26.13 employ any federal, state, regional or local public or private 26.14 agency or organization, including organizations of physically 26.15 handicapped persons, upon terms it deems necessary or desirable, 26.16 to assist in the exercise of any of the powers grantedin26.17sections 462A.01 to 462A.24by this chapter and to carry out the 26.18 objectives ofsections 462A.01 to 462A.24this chapter and may 26.19 pay for the services from the housing development fund. 26.20 Sec. 14. Minnesota Statutes 2000, section 462A.073, 26.21 subdivision 1, is amended to read: 26.22 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 26.23 section, the following terms have the meanings given them. 26.24 (b) "Existing housing" means single-family housing that (i) 26.25 has been previously occupied prior to the first day of the 26.26 origination period; or (ii) has been available for occupancy for 26.27 at least 12 months but has not been previously occupied. 26.28 (c)"Metropolitan area" means the metropolitan area as26.29defined in section 473.121, subdivision 2.26.30(d)"New housing" means single-family housing that has not 26.31 been previously occupied. 26.32(e)(d) "Origination period" means the period that loans 26.33 financed with the proceeds of qualified mortgage revenue bonds 26.34 are available for the purchase of single-family housing. The 26.35 origination period begins when financing actually becomes 26.36 available to the borrowers for loans. 27.1(f)(e) "Redevelopment area" means a compact and contiguous 27.2 area within which the city finds by resolution that 70 percent 27.3 of the parcels are occupied by buildings, streets, utilities, or 27.4 other improvements and more than 25 percent of the buildings, 27.5 not including outbuildings, are structurally substandard to a 27.6 degree requiring substantial renovation or clearance. 27.7(g)(f) "Single-family housing" means dwelling units 27.8 eligible to be financed from the proceeds of qualified mortgage 27.9 revenue bonds under federal law. 27.10(h)(g) "Structurally substandard" means containing defects 27.11 in structural elements or a combination of deficiencies in 27.12 essential utilities and facilities, light, ventilation, fire 27.13 protection including adequate egress, layout and condition of 27.14 interior partitions, or similar factors, which defects or 27.15 deficiencies are of sufficient total significance to justify 27.16 substantial renovation or clearance. 27.17 Sec. 15. Minnesota Statutes 2000, section 462A.15, is 27.18 amended to read: 27.19 462A.15 [STATE PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.] 27.20 The state pledges and agrees with the holders of any notes 27.21 or bonds issued undersections 462A.01 to 462A.24this chapter, 27.22 that the state will not limit or alter the rights vested in the 27.23 agency to fulfill the terms of any agreements made with the 27.24 holders thereof, or in any way impair the rights and remedies of 27.25 the holders until the notes or bonds, together with the interest 27.26 thereon, with interest on any unpaid installments of interest, 27.27 and all costs and expenses in connection with any action or 27.28 proceeding by or on behalf of such holders, are fully met and 27.29 discharged. The agency is authorized to include this pledge and 27.30 agreement of the state in any agreement with the holders of such 27.31 notes or bonds. 27.32 Sec. 16. Minnesota Statutes 2000, section 462A.17, 27.33 subdivision 3, is amended to read: 27.34 Subd. 3. [RAMSEY COUNTY VENUE; NOTICE OF PRINCIPAL DUE.] 27.35 The venue of any action or proceedings brought by the trustees 27.36 undersections 462A.01 to 462A.24this chapter, shall be in 28.1 Ramsey county. Before declaring the principal of notes or bonds 28.2 due and payable, the trustee shall first give 30 days' notice in 28.3 writing to the governor, to the agency and to the state 28.4 treasurer. 28.5 Sec. 17. Minnesota Statutes 2000, section 462A.204, 28.6 subdivision 3, is amended to read: 28.7 Subd. 3. [SET ASIDE.] At least one grant must be awarded 28.8 in an area located outside of the metropolitan areaas defined28.9in section 473.121, subdivision 2. A county, a group of 28.10 contiguous counties jointly acting together, or a 28.11 community-based nonprofit organization with a sponsoring 28.12 resolution from each of the county boards of the counties 28.13 located within its operating jurisdiction may apply for and 28.14 receive grants for areas located outside the metropolitan area. 28.15 Sec. 18. Minnesota Statutes 2000, section 462A.205, 28.16 subdivision 4, is amended to read: 28.17 Subd. 4. [AMOUNT AND PAYMENT OF RENT ASSISTANCE.] (a) This 28.18 subdivision applies to both the voucher option and the 28.19 project-based voucher option. 28.20 (b) Within the limits of available appropriations, eligible 28.21 families may receive monthly rent assistance for a 60-month 28.22 period starting with the month the family first receives rent 28.23 assistance under this section. The amount of the family's 28.24 portion of the rental payment is equal to at least 30 percent of 28.25 gross income. 28.26 (c) The rent assistance must be paid by the local housing 28.27 organization to the property owner. 28.28 (d) Subject to the limitations in paragraph (e), the amount 28.29 of rent assistance is the difference between the rent and the 28.30 family's portion of the rental payment. 28.31 (e) In no case: 28.32 (1) may the amount of monthly rent assistance be more than 28.33 $250 for housing located within the metropolitan area,as28.34defined in section 473.121, subdivision 2,or more than $200 for 28.35 housing located outside of the metropolitan area; 28.36 (2) may the owner receive more rent for assisted units than 29.1 for comparable unassisted units; nor 29.2 (3) may the amount of monthly rent assistance be more than 29.3 the difference between the family's portion of the rental 29.4 payment and the fair market rent for the unit as determined by 29.5 the Department of Housing and Urban Development. 29.6 Sec. 19. Minnesota Statutes 2000, section 462A.205, 29.7 subdivision 4a, is amended to read: 29.8 Subd. 4a. [ADDITIONAL AUTHORIZED EXPENSES.] In addition to 29.9 the monthly rent assistance authorized under subdivision 4, rent 29.10 assistance may include up to $200 for a security deposit for 29.11 housing located outside the metropolitan area,as defined in29.12section 473.121, subdivision 2,and up to $250 for a security 29.13 deposit for housing located within the metropolitan area. 29.14 Sec. 20. Minnesota Statutes 2000, section 462A.2091, 29.15 subdivision 3, is amended to read: 29.16 Subd. 3. [ELIGIBLE PROPERTY.] Contracts for deed eligible 29.17 for refinancing with guarantee fund assistance must be for the 29.18 purchase of an owner-occupied single-family or duplex 29.19 structure. In a city of the first class in the metropolitan 29.20 area,as defined in section 473.121, subdivision 2,eligible 29.21 properties must be located in an area in which at least one 29.22 census tract meets at least three of the following four criteria: 29.23 (1) at least 70 percent of the housing structures were 29.24 built before 1960; 29.25 (2) at least 60 percent of the single-family housing is 29.26 owner-occupied; 29.27 (3) the median market value of the area's owner-occupied 29.28 housing, as recorded in the most recent federal decennial 29.29 census, is not more than 100 percent of the purchase price limit 29.30 for existing homes eligible for purchase in the area under the 29.31 agency's home mortgage loan program; and 29.32 (4) between 1980 and 1990, the rate of owner occupancy of 29.33 residential properties in the area declined by at least five 29.34 percent, or at least 80 percent of the residential properties in 29.35 the area are rental properties. 29.36 The area must include eight blocks in any direction from 30.1 the census tract. Priority must be given for property located 30.2 in an area that meets all four criteria. 30.3 Sec. 21. Minnesota Statutes 2000, section 462A.2093, 30.4 subdivision 1, is amended to read: 30.5 Subdivision 1. [DEFINITIONS.] For purposes of this 30.6 section, the following terms have the meanings given them in 30.7 this subdivision. 30.8 (a) "Municipality" means a town or a statutory or home rule 30.9 city. 30.10 (b) "Nonmetropolitan" means the area of the state outside 30.11 of the metropolitan areadefined in section 473.121, subdivision30.122. 30.13 (c) "Inclusionary housing development" means a new 30.14 construction development including owner-occupied or rental 30.15 housing, or a combination of both, with a variety of prices and 30.16 designs which serve families with a range of incomes and housing 30.17 needs. 30.18 Sec. 22. Minnesota Statutes 2000, section 462A.21, 30.19 subdivision 5, is amended to read: 30.20 Subd. 5. [OTHER AGENCY PURPOSES.] It may expend moneys in 30.21 the fund, not otherwise appropriated, for such other agency 30.22 purposes as previously enumerated insections 462A.01 to 462A.2430.23 this chapter as the agency in its discretion shall determine and 30.24 provide. 30.25 Sec. 23. Minnesota Statutes 2000, section 462A.222, 30.26 subdivision 1a, is amended to read: 30.27 Subd. 1a. [DETERMINATION OF REGIONAL CREDIT POOLS.] The 30.28 agency shall divide the annual per capita amount used in 30.29 determining the state ceiling for low-income housing tax credits 30.30 provided under section 42 of the Internal Revenue Code of 1986, 30.31 as amended, into a metropolitan pool and a greater Minnesota 30.32 pool. The metropolitan pool shall serve the metropolitan area 30.33as defined in section 473.121, subdivision 2. The greater 30.34 Minnesota pool shall serve the remaining counties of the state. 30.35 The percentage of the annual per capita amount allotted to each 30.36 pool must be determined as follows: 31.1 (a) The percentage set-aside for projects involving a 31.2 qualified nonprofit organization as provided in section 42 of 31.3 the Internal Revenue Code of 1986, as amended, must be deducted 31.4 from the annual per capita amount used in determining the state 31.5 ceiling. 31.6 (b) Of the remaining amount, the metropolitan pool must be 31.7 allotted a percentage equal to the metropolitan counties' 31.8 percentage of the total number of state recipients of the 31.9 Minnesota family investment program, general assistance, 31.10 Minnesota supplemental aid, and supplemental security income in 31.11 the state, as reported annually by the department of human 31.12 services. The greater Minnesota pool must be allotted the 31.13 amount remaining after the metropolitan pool's percentage has 31.14 been allotted. 31.15 The set-aside for qualified nonprofit organizations must be 31.16 divided between the two regional pools in the same percentage as 31.17 determined for the credit amounts above. 31.18 Sec. 24. Minnesota Statutes 2000, section 462A.24, is 31.19 amended to read: 31.20 462A.24 [CONSTRUCTION.] 31.21Sections 462A.01 to 462A.24 areThis chapter is necessary 31.22 for the welfare of the state of Minnesota and its inhabitants; 31.23 therefore, it shall be liberally construed to effect its purpose. 31.24 Sec. 25. Minnesota Statutes 2000, section 462A.33, 31.25 subdivision 2, is amended to read: 31.26 Subd. 2. [ELIGIBLE RECIPIENTS.] Challenge grants or loans 31.27 may be made to a city, a private developer, a nonprofit 31.28 organization, or the owner of the housing, including 31.29 individuals. For the purpose of this section, "city" has the 31.30 meaning given it in section 462A.03, subdivision 21. Preference 31.31 shall be given to challenge grants or loans for home ownership. 31.32 To the extent practicable, grants and loans shall be made so 31.33 that an approximately equal number of housing units are financed 31.34 in the metropolitan area, as defined in section 473.121,31.35subdivision 2,and in the nonmetropolitan area. 31.36 Sec. 26. [REPEALER.] 32.1 Minnesota Statutes 2000, sections 462A.221, subdivision 4; 32.2 and 462A.30, subdivision 2, are repealed.