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SF 2893

2nd Engrossment - 90th Legislature (2017 - 2018) Posted on 04/23/2018 03:58pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 2nd Engrossment

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A bill for an act
relating to state government; providing for financing of agriculture, rural
development, and housing; modifying agriculture, rural development, and housing
provisions; requiring reports; appropriating money; amending Minnesota Statutes
2016, sections 17.494; 17.4982, by adding subdivisions; 18.83, subdivision 7;
18C.425, subdivision 6; 18C.80, subdivision 2; 21.89, subdivision 2; 41A.16,
subdivisions 1, 2; 41A.17, subdivisions 1, 2; 103H.275, subdivision 1; 327.31, by
adding a subdivision; 327C.095, subdivisions 4, 6, 12, 13, by adding a subdivision;
462A.33, subdivisions 1, 2; 462A.37, subdivisions 1, 2; 474A.02, by adding
subdivisions; 474A.03, subdivision 1; 474A.04, subdivision 1a; 474A.047,
subdivision 2; 474A.061, subdivisions 1, 2a, 2b, 2c, 4, by adding subdivisions;
474A.062; 474A.091, subdivisions 1, 2, 3, 5, 6, by adding a subdivision; 474A.131,
subdivisions 1, 1b, 2; 474A.14; Minnesota Statutes 2017 Supplement, sections
18C.70, subdivision 5; 18C.71, subdivision 4; 462A.2035, subdivisions 1, 1b;
Laws 2017, chapter 88, article 1, section 2, subdivision 2; proposing coding for
new law in Minnesota Statutes, chapters 17; 327.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

AGRICULTURE AND RURAL DEVELOPMENT APPROPRIATIONS

Section 1. new text beginAPPROPRIATIONS.
new text end

new text begin The sums shown in the columns marked "Appropriations" are added to the appropriations
in Laws 2017, chapter 88, or appropriated to the agencies and for the purposes specified in
this article. The appropriations are from the general fund, or another named fund, and are
available for the fiscal year indicated for each purpose. The figures "2018" and "2019" used
in this article mean that the addition to the appropriations listed under them are available
for the fiscal year ending June 30, 2018, or June 30, 2019, respectively. "The first year" is
fiscal year 2018. "The second year" is fiscal year 2019. Appropriations for fiscal year 2018
are effective the day following final enactment.
new text end

new text begin APPROPRIATIONS
new text end
new text begin Available for the Year
new text end
new text begin Ending June 30
new text end
new text begin 2018
new text end
new text begin 2019
new text end

Sec. 2. new text beginDEPARTMENT OF AGRICULTURE.
new text end

new text begin $
new text end
new text begin .......
new text end
new text begin $
new text end
new text begin .......
new text end

new text begin (a) $200,000 the second year is for additional
statewide mental health counseling support to
farm families and business operators. This
amount is added to the appropriation in Laws
2017, chapter 88, article 1, section 2,
subdivision 5, paragraph (h), and to the
department's base budget.
new text end

new text begin (b) $200,000 the second year is a reduction to
the administration and financial assistance
division.
new text end

Sec. 3.

Laws 2017, chapter 88, article 1, section 2, subdivision 2, is amended to read:


Subd. 2.

Protection Services

17,821,000
17,825,000
Appropriations by Fund
2018
2019
General
17,428,000
17,428,000
Remediation
393,000
397,000

(a) $25,000 the first year and $25,000 the
second year are to develop and maintain
cottage food license exemption outreach and
training materials.

(b) $75,000 the first year and $75,000 the
second year are to coordinate the correctional
facility vocational training program and to
assist entities that have explored the feasibility
of establishing a USDA-certified or state
"equal to" food processing facility within 30
miles of the Northeast Regional Corrections
Center.

(c) $125,000 the first year and $125,000 the
second year are for additional funding for the
noxious weed and invasive plant program.
These are onetime appropriations.

(d) $250,000 the first year and $250,000 the
second year are for transfer to the pollinator
habitat and research account in the agricultural
fund. These are onetime transfers.

(e) $393,000 the first year and $397,000 the
second year are from the remediation fund for
administrative funding for the voluntary
cleanup program.

(f) $200,000 the first year and $200,000 the
second year are for the industrial hemp pilot
program under Minnesota Statutes, section
18K.09. These are onetime appropriations.

(g) $175,000 the first year and $175,000 the
second year are for compensation for
destroyed or crippled livestock under
Minnesota Statutes, section 3.737. This
appropriation may be spent to compensate for
livestock that were destroyed or crippled
during fiscal year 2017. If the amount in the
first year is insufficient, the amount in the
second year is available in the first year.new text begin The
commissioner may use up to $5,000 of this
appropriation the second year to reimburse
expenses incurred by university extension
agents to provide fair market values of
destroyed or crippled livestock.
new text end

(h) $155,000 the first year and $155,000 the
second year are for compensation for crop
damage under Minnesota Statutes, section
3.7371. If the amount in the first year is
insufficient, the amount in the second year is
available in the first year. The commissioner
may use up to $30,000 of the appropriation
each year to reimburse expenses incurred by
the commissioner or the commissioner's
approved agent to investigate and resolve
claims.

If the commissioner determines that claims
made under Minnesota Statutes, section 3.737
or 3.7371, are unusually high, amounts
appropriated for either program may be
transferred to the appropriation for the other
program.

(i) $250,000 the first year and $250,000 the
second year are to expand current capabilities
for rapid detection, identification, containment,
control, and management of high priority plant
pests and pathogens. These are onetime
appropriations.

(j) $300,000 the first year and $300,000 the
second year are for transfer to the noxious
weed and invasive plant species assistance
account in the agricultural fund to award
grants to local units of government under
Minnesota Statutes, section 18.90, with
preference given to local units of government
responding to Palmer amaranth or other weeds
on the eradicate list. These are onetime
transfers.

(k) $120,000 the first year and $120,000 the
second year are for wolf-livestock conflict
prevention grants under article 2, section 89.
The commissioner must submit a report to the
chairs and ranking minority members of the
legislative committees with jurisdiction over
agriculture policy and finance by January 15,
2020, on the outcomes of the wolf-livestock
conflict prevention grants and whether
livestock compensation claims were reduced
in the areas that grants were awarded. These
are onetime appropriations.

ARTICLE 2

AGRICULTURE STATUTORY CHANGES

Section 1.

Minnesota Statutes 2016, section 17.494, is amended to read:


17.494 AQUACULTURE PERMITS; RULES.

new text begin (a) new text endThe commissioner shall act as permit or license coordinator for aquatic farmers and
shall assist aquatic farmers to obtain licenses or permits.

deleted text begin By July 1, 1992,deleted text end new text begin(b) new text endA state agency issuing multiple permits or licenses for aquaculture
shall consolidate the permits or licenses required for every aquatic farm location. The
Department of Natural Resources transportation permits are exempt from this requirement.
State agencies shall adopt rules or issue commissioner's orders that establish permit and
license requirements, approval timelines, and compliance standards.new text begin Saltwater aquatic farms,
as defined in section 17.4982, and processing facilities for saltwater aquatic life, as defined
in section 17.4982, must be classified as agricultural operations for purposes of any
construction, discharge, or other permit issued by the Pollution Control Agency.
new text end

Nothing in this section modifies any state agency's regulatory authority over aquaculture
production.

Sec. 2.

Minnesota Statutes 2016, section 17.4982, is amended by adding a subdivision to
read:


new text begin Subd. 20a. new text end

new text begin Saltwater aquaculture. new text end

new text begin "Saltwater aquaculture" means the commercial
propagation and rearing of saltwater aquatic life including, but not limited to, crustaceans,
primarily for consumption as human food.
new text end

Sec. 3.

Minnesota Statutes 2016, section 17.4982, is amended by adding a subdivision to
read:


new text begin Subd. 20b. new text end

new text begin Saltwater aquatic farm. new text end

new text begin "Saltwater aquatic farm" means a facility used for
saltwater aquaculture including but not limited to artificial ponds, vats, tanks, raceways,
and other facilities that an aquatic farmer owns or has exclusive control of for the sole
purpose of producing saltwater aquatic life.
new text end

Sec. 4.

Minnesota Statutes 2016, section 17.4982, is amended by adding a subdivision to
read:


new text begin Subd. 20c. new text end

new text begin Saltwater aquatic life. new text end

new text begin "Saltwater aquatic life" means aquatic species that
are saltwater obligates or perform optimally when raised in salinities closer to that of natural
seawater and need saltwater to survive.
new text end

Sec. 5.

new text begin [17.499] TRANSPORTATION OR IMPORTATION OF SALTWATER
AQUATIC LIFE; QUARANTINE REQUIREMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The legislature finds that it is in the public interest to increase
private saltwater aquaculture production and processing in this state under the coordination
of the commissioner of agriculture. Additional private production will reduce dependence
on foreign suppliers and benefit the rural economy by creating new jobs and economic
activity.
new text end

new text begin Subd. 2. new text end

new text begin Transportation permit. new text end

new text begin (a) Notwithstanding the requirements in section
17.4985, saltwater aquatic life transportation and importation requirements are governed
by this section. A transportation permit is required prior to any importation or intrastate
transportation of saltwater aquatic life not exempted under subdivision 3. A transportation
permit may be used for multiple shipments within the 30-day term of the permit if the source
and the destination remain the same. Transportation permits must be obtained from the
commissioner prior to shipment of saltwater aquatic life.
new text end

new text begin (b) An application for a transportation permit must be made in the form required by the
commissioner. The commissioner may reject an incomplete application.
new text end

new text begin (c) An application for a transportation permit must be accompanied by satisfactory
evidence, as determined by the commissioner, that the shipment is free of any nonindigenous
species of animal other than the saltwater aquatic species and either:
new text end

new text begin (1) the facility from which the saltwater aquatic life originated has provided
documentation of 36 or more consecutive months of negative testing by an approved
laboratory as free of any disease listed by OIE - the World Organisation for Animal Health
for that species following the testing guidelines outlined in the OIE Aquatic Animal Health
Code for crustaceans or the AFS Fish Health Blue Book for other species, as appropriate;
or
new text end

new text begin (2) the saltwater aquatic life to be imported or transported includes documentation of
negative testing for that specific lot by an approved laboratory as free of any disease listed
by OIE - the World Organisation for Animal Health for crustaceans or in the AFS Fish
Health Blue Book for other species, as appropriate.
new text end

new text begin If a shipment authorized by the commissioner under clause (1) includes saltwater aquatic
life that originated in a foreign country, the shipment must be quarantined at the receiving
facility according to a quarantine plan approved by the commissioner. A shipment authorized
by the commissioner under clause (2) must be quarantined at the receiving facility according
to a quarantine plan approved by the commissioner.
new text end

new text begin (d) For purposes of this subdivision, "approved laboratory" means a laboratory approved
by the commissioner or the United States Department of Agriculture, Animal and Plant
Health Inspection Services.
new text end

new text begin (e) No later than 14 calendar days after a completed transportation permit application
is received, the commissioner must approve or deny the transportation permit application.
new text end

new text begin (f) A copy of the transportation permit must accompany a shipment of saltwater aquatic
life while in transit and must be available for inspection by the commissioner.
new text end

new text begin (g) A vehicle used by a licensee for transporting aquatic life must be identified with the
license number and the licensee's name and town of residence as it appears on the license.
A vehicle used by a licensee must have identification displayed so that it is readily visible
from either side of the vehicle in letters and numbers not less than 2-1/2 inches high and
three-eighths inch wide. Identification may be permanently affixed to vehicles or displayed
on removable plates or placards placed on opposite doors of the vehicle or on the tanks
carried on the vehicle.
new text end

new text begin (h) An application to license a vehicle for brood stock or larvae transport or for use as
a saltwater aquatic life vendor that is received by the commissioner is a temporary license
until approved or denied by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Exemptions. new text end

new text begin (a) A transportation permit is not required to transport or import
saltwater aquatic life:
new text end

new text begin (1) previously processed for use as food or other purposes unrelated to propagation;
new text end

new text begin (2) transported directly to an outlet for processing as food or for other food purposes if
accompanied by shipping documents;
new text end

new text begin (3) that is being exported if accompanied by shipping documents;
new text end

new text begin (4) that is being transported through the state if accompanied by shipping documents;
or
new text end

new text begin (5) transported intrastate within or between facilities licensed for saltwater aquaculture
by the commissioner if accompanied by shipping documents.
new text end

new text begin (b) Shipping documents required under paragraph (a) must include the place of origin,
owner or consignee, destination, number, species, and satisfactory evidence, as determined
by the commissioner, of the disease-free certification required under subdivision 2, paragraph
(c), clauses (1) and (2).
new text end

Sec. 6.

Minnesota Statutes 2016, section 18.83, subdivision 7, is amended to read:


Subd. 7.

Expenses; reimbursements.

A claim for the expense of controlling or
eradicating noxious weeds, which may include the costs of serving notices, is a legal charge
against the county in which the land is located. The officers having the work done must file
with the county auditor a verified and itemized statement of cost for all services rendered
on each separate tract or lot of land. The county auditor shall immediately issue proper
warrants to the persons named on the statement as having rendered services. To reimburse
the county for its expenditure in this regard, the county auditor shall certify the total amount
due and, unless an appeal is made in accordance with section 18.84, enter it on the tax roll
as a tax upon the land and it must be collected as other real estate taxes are collected.

If deleted text beginpublicdeleted text endnew text begin publicly owned or managednew text end land is involved, the amount due must be paid
from deleted text beginfunds provideddeleted text endnew text begin money appropriatednew text end for maintenance of the land or from the general
revenue or operating fund of the agency responsible for the land. deleted text beginEach claim for control or
eradication of noxious weeds on public lands must first be approved by the commissioner
of agriculture.
deleted text end

Sec. 7.

Minnesota Statutes 2016, section 18C.425, subdivision 6, is amended to read:


Subd. 6.

Payment of inspection fee.

(a) The person who registers and distributes in the
state a specialty fertilizer, soil amendment, or plant amendment under section 18C.411 shall
pay the inspection fee to the commissioner.

(b) The person licensed under section 18C.415 who distributes a fertilizer to a person
not required to be so licensed shall pay the inspection fee to the commissioner, except as
exempted under section 18C.421, subdivision 1, paragraph (b).

(c) The person responsible for payment of the inspection fees for fertilizers, soil
amendments, or plant amendments sold and used in this state must pay an inspection fee of
39 cents per ton, and until June 30, deleted text begin2019deleted text endnew text begin 2029new text end, an additional 40 cents per ton, of fertilizer,
soil amendment, and plant amendment sold or distributed in this state, with a minimum of
$10 on all tonnage reports. Notwithstanding section 18C.131, the commissioner must deposit
all revenue from the additional 40 cents per ton fee in the agricultural fertilizer research and
education account in section 18C.80. Products sold or distributed to manufacturers or
exchanged between them are exempt from the inspection fee imposed by this subdivision
if the products are used exclusively for manufacturing purposes.

(d) A registrant or licensee must retain invoices showing proof of fertilizer, plant
amendment, or soil amendment distribution amounts and inspection fees paid for a period
of three years.

Sec. 8.

Minnesota Statutes 2017 Supplement, section 18C.70, subdivision 5, is amended
to read:


Subd. 5.

Expiration.

This section expires June 30, deleted text begin2020deleted text endnew text begin 2030new text end.

Sec. 9.

Minnesota Statutes 2017 Supplement, section 18C.71, subdivision 4, is amended
to read:


Subd. 4.

Expiration.

This section expires June 30, deleted text begin2020deleted text endnew text begin 2030new text end.

Sec. 10.

Minnesota Statutes 2016, section 18C.80, subdivision 2, is amended to read:


Subd. 2.

Expiration.

This section expires June 30, deleted text begin2020deleted text endnew text begin 2030new text end.

Sec. 11.

Minnesota Statutes 2016, section 21.89, subdivision 2, is amended to read:


Subd. 2.

Permits; issuance and revocation.

The commissioner shall issue a permit to
the initial labeler of agricultural, vegetable, flower, and wildflower seeds which are sold
for use in Minnesota and which conform to and are labeled under sections 21.80 to 21.92.
The categories of permits are as follows:

(1) for initial labelers who sell 50,000 pounds or less of agricultural seed each calendar
year, an annual permit issued for a fee established in section 21.891, subdivision 2, paragraph
(b);

(2) for initial labelers who sell vegetable, flower, and wildflower seed packed for use
in home gardens or household plantings, deleted text beginand initial labelers who sell native grasses and
wildflower seed in commercial or agricultural quantities,
deleted text end an annual permit issued for a fee
established in section 21.891, subdivision 2, paragraph (c), based upon the gross sales from
the previous year; and

(3) for initial labelers who sell more than 50,000 pounds of agricultural seed each calendar
year, a permanent permit issued for a fee established in section 21.891, subdivision 2,
paragraph (d).

In addition, the person shall furnish to the commissioner an itemized statement of all
seeds sold in Minnesota for the periods established by the commissioner. This statement
shall be delivered, along with the payment of the fee, based upon the amount and type of
seed sold, to the commissioner no later than 30 days after the end of each reporting period.
Any person holding a permit shall show as part of the analysis labels or invoices on all
agricultural, vegetable, flower, wildflower, tree, or shrub seeds all information the
commissioner requires. The commissioner may revoke any permit in the event of failure to
comply with applicable laws and rules.

Sec. 12.

Minnesota Statutes 2016, section 41A.16, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

(a) A facility eligible for payment under this section must
source at least 80 percent raw materials from Minnesota. If a facility is sited 50 miles or
less from the state border, raw materials may be sourced from within a 100-mile radius.
Raw materials must be from agricultural or forestry sources or from solid waste. The facility
must be located in Minnesota, must begin production at a specific location by June 30, 2025,
and must not begin operating above deleted text begin23,750deleted text endnew text begin 1,500new text end MMbtu of quarterly new text beginadvanced new text endbiofuel
production before July 1, 2015. Eligible facilities include existing companies and facilities
that are adding advanced biofuel production capacity, or retrofitting existing capacity, as
well as new companies and facilities. Production of conventional corn ethanol and
conventional biodiesel is not eligible. Eligible advanced biofuel facilities must produce at
least deleted text begin23,750deleted text endnew text begin 1,500new text end MMbtu of new text beginadvanced new text endbiofuel quarterly.

(b) No payments shall be made for advanced biofuel production that occurs after June
30, 2035, for those eligible biofuel producers under paragraph (a).

(c) An eligible producer of advanced biofuel shall not transfer the producer's eligibility
for payments under this section to an advanced biofuel facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

(e) Renewable chemical production for which payment has been received under section
41A.17, and biomass thermal production for which payment has been received under section
41A.18, are not eligible for payment under this section.

(f) Biobutanol is eligible under this section.

Sec. 13.

Minnesota Statutes 2016, section 41A.16, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; limits.

(a) The commissioner shall make payments to
eligible producers of advanced biofuel. The amount of the payment for each eligible
producer's annual production is $2.1053 per MMbtu for advanced biofuel production from
cellulosic biomass, and $1.053 per MMbtu for advanced biofuel production from sugar deleted text beginordeleted text endnew text begin,new text end
starchnew text begin, oil, or animal fatnew text end at a specific location for ten years after the start of production.

(b) Total payments under this section to an eligible biofuel producer in a fiscal year may
not exceed the amount necessary for 2,850,000 MMbtu of biofuel production. Total payments
under this section to all eligible biofuel producers in a fiscal year may not exceed the amount
necessary for 17,100,000 MMbtu of biofuel production. The commissioner shall award
payments on a first-come, first-served basis within the limits of available funding.

(c) For purposes of this section, an entity that holds a controlling interest in more than
one advanced biofuel facility is considered a single eligible producer.

Sec. 14.

Minnesota Statutes 2016, section 41A.17, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

(a) A facility eligible for payment under this program must
source at least 80 percent new text beginof the new text endbiobased content new text beginused to produce a renewable chemical
new text end from new text beginthe state of new text endMinnesota. If a facility is sited 50 miles or less from the state border, new text beginthe
facility must source at least 80 percent of the
new text endbiobased content deleted text beginmust be sourceddeleted text end new text beginused to
produce a renewable chemical
new text endfrom within a 100-mile radiusnew text begin of the facilitynew text end. Biobased content
must be from agricultural or forestry sources or from solid waste. The facility must be
located in Minnesota, must begin production at a specific location by June 30, 2025, and
must not begin production of deleted text begin750,000deleted text endnew text begin 250,000new text end pounds of chemicals quarterly before January
1, deleted text begin2015deleted text endnew text begin 2013new text end. Eligible facilities include existing companies and facilities that are adding
production capacity, or retrofitting existing capacity, as well as new companies and facilities.
Eligible renewable chemical facilities must produce at least deleted text begin750,000deleted text endnew text begin 250,000new text end pounds of
renewable chemicals quarterly. Renewable chemicals produced through processes that are
fully commercial before January 1, 2000, are not eligible.

(b) No payments shall be made for renewable chemical production that occurs after June
30, 2035, for those eligible renewable chemical producers under paragraph (a).

(c) An eligible producer of renewable chemicals shall not transfer the producer's eligibility
for payments under this section to a renewable chemical facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

(e) Advanced biofuel production for which payment has been received under section
41A.16, and biomass thermal production for which payment has been received under section
41A.18, are not eligible for payment under this section.

Sec. 15.

Minnesota Statutes 2016, section 41A.17, subdivision 2, is amended to read:


Subd. 2.

Payment amounts; bonus; limits.

(a) The commissioner shall make payments
to eligible producers of renewable chemicals located in the state. The amount of the payment
for each producer's annual production is $0.03 per pound of sugar-derived renewable
chemical, $0.03 per pound of cellulosic sugar, and $0.06 per pound of cellulosic-derived
renewable chemical produced at a specific location for ten years after the start of production.

(b) An eligible facility producing renewable chemicals using agricultural cellulosic
biomass is eligible for a 20 percent bonus payment for each pound produced from agricultural
biomass that is derived from perennial crop or cover crop biomass.

(c) Total payments under this section to an eligible renewable chemical producer in a
fiscal year may not exceed the amount necessary for 99,999,999 pounds of renewable
chemical production. Total payments under this section to all eligible renewable chemical
producers in a fiscal year may not exceed the amount necessary for 599,999,999 pounds of
renewable chemical production. The commissioner shall award payments on a first-come,
first-served basis within the limits of available fundingnew text begin:
new text end

new text begin (1) first for production that begins on or after January 1, 2015; and
new text end

new text begin (2) after awarding payments for all eligible capacity under clause (1), for production
that began on or after January 1, 2013, and before January 1, 2015
new text end.

(d) For purposes of this section, an entity that holds a controlling interest in more than
one renewable chemical production facility is considered a single eligible producer.

Sec. 16.

Minnesota Statutes 2016, section 103H.275, subdivision 1, is amended to read:


Subdivision 1.

Areas where groundwater pollution is detected.

(a) If groundwater
pollution is detected, a state agency or political subdivision that regulates an activity causing
or potentially causing a contribution to the pollution identified shall promote implementation
of best management practices to prevent or minimize the source of pollution to the extent
practicable.

(b) The Pollution Control Agency, or for agricultural chemicals and practices, the
commissioner of agriculture may adopt water source protection requirements under
subdivision 2 that are consistent with the goal of section 103H.001 and are commensurate
with the groundwater pollution if the implementation of best management practices has
proven to be ineffective.

(c) The water resources protection requirements must be:

(1) designed to prevent and minimize the pollution to the extent practicable;

(2) designed to prevent the pollution from exceeding the health risk limits; and

(3) submitted to the house of representatives and senate committees with jurisdiction
over the environment, natural resources, and agriculture.

new text begin (d) The commissioner of agriculture shall not adopt water resource protection
requirements under subdivision 2 for nitrogen fertilizer unless the water resource protection
requirements are specifically approved by law.
new text end

ARTICLE 3

HOUSING STATUTORY CHANGES

Section 1.

Minnesota Statutes 2016, section 327.31, is amended by adding a subdivision
to read:


new text begin Subd. 23. new text end

new text begin Modular home. new text end

new text begin "Modular home" means a building or structural unit of closed
construction that has been substantially manufactured or constructed, in whole or in part,
at an off-site location, with the final assembly occurring on site alone or with other units
and attached to a foundation designed to the State Building Code and occupied as a
single-family dwelling. Modular home construction must comply with applicable standards
adopted in Minnesota Rules, chapter 1360 or 1361.
new text end

Sec. 2.

new text begin [327.335] PLACEMENT OF MODULAR HOMES.
new text end

new text begin A modular home may be placed in a manufactured home park as defined in section
327.14, subdivision 3. A modular home placed in a manufactured home park is a
manufactured home for purposes of chapters 327C and 504B and all rights, obligations, and
duties, under those chapters apply. A modular home may not be placed in a manufactured
home park without prior written approval of the park owner. Nothing in this section shall
be construed to inhibit the application of zoning, subdivision, architectural, or esthetic
requirements pursuant to chapters 394 and 462 that otherwise apply to manufactured homes
and manufactured home parks. A modular home placed in a manufactured home park under
this section shall be assessed and taxed as a manufactured home.
new text end

Sec. 3.

Minnesota Statutes 2016, section 327C.095, subdivision 4, is amended to read:


Subd. 4.

Public hearing; relocation compensation; neutral third party.

new text beginWithin 60
days after receiving notice of a closure statement,
new text end the governing body of the affected
municipality shall hold a public hearing to review the closure statement and any impact that
the park closing may have on the displaced residents and the park owner. At the time of,
and in the notice for, the public hearing, displaced residents must be informed that they may
be eligible for payments from the Minnesota manufactured home relocation trust fund under
section 462A.35 as compensation for reasonable relocation costs under subdivision 13,
paragraphs (a) and (e).

The governing body of the municipality may also require that other parties, including
the municipality, but excluding the park owner or its purchaser, involved in the park closing
provide additional compensation to residents to mitigate the adverse financial impact of the
park closing upon the residents.

At the public hearing, the municipality shall appoint anew text begin qualifiednew text end neutral third party, to
be agreed upon by both the manufactured home park owner and manufactured home owners,
whose hourly cost must be reasonable and paid from the Minnesota manufactured home
relocation trust fund. The neutral third party shall act as a paymaster and arbitrator, with
decision-making authority to resolve any questions or disputes regarding any contributions
or disbursements to and from the Minnesota manufactured home relocation trust fund by
either the manufactured home park owner or the manufactured home owners. If the parties
cannot agree on a neutral third party, the municipality will deleted text beginmake a determinationdeleted text endnew text begin determine
who shall act as the neutral third party
new text end.

new text begin The qualified neutral third party shall be familiar with manufactured housing and the
requirements of this section. The neutral third party shall keep an overall receipts and cost
summary together with a detailed accounting, for each manufactured lot, of the payments
received by the manufactured home park owner, and expenses approved and payments
disbursed to the manufactured home owners, pursuant to subdivisions 12 and 13, as well
as a record of all services and hours it provided and at what hourly rate it charged to the
Minnesota manufactured home trust fund. This detailed accounting shall be provided to the
manufactured home park owner, the municipality, and the Minnesota Housing Finance
Agency to be included in its yearly October 15 report as required in subdivision 13, paragraph
(h), not later than 30 days after the expiration of the nine-month notice provided in the
closure statement.
new text end

Sec. 4.

Minnesota Statutes 2016, section 327C.095, subdivision 6, is amended to read:


Subd. 6.

Intent to convert use of park at time of purchase.

Before the execution of
an agreement to purchase a manufactured home park, the purchaser must notify the park
owner, in writing, if the purchaser intends to close the manufactured home park or convert
it to another use within one year of the execution of the agreement. The park owner shall
provide a resident of each manufactured home with a 45-day written notice of the purchaser's
intent to close the park or convert it to another use. The notice must state that the park owner
will provide information on the cash price and the terms and conditions of the purchaser's
offer to residents requesting the information. The notice must be sent by first class mail to
a resident of each manufactured home in the park. The notice period begins on the postmark
date affixed to the notice and ends 45 days after it begins. During the notice period required
in this subdivision, the owners of at least 51 percent of the manufactured homes in the park
or a nonprofit organization which has the written permission of the owners of at least 51
percent of the manufactured homes in the park to represent them in the acquisition of the
park shall have the right to meet the cash price and execute an agreement to purchase the
park for the purposes of keeping the park as a manufactured housing communitynew text begin, provided
that the owners or nonprofit organization will covenant and warrant to the park owner in
the agreement that they will continue to operate the park for not less than six years from
the date of closing
new text end. The park owner must accept the offer if it meets the cash price and the
same terms and conditions set forth in the purchaser's offer except that the seller is not
obligated to provide owner financing. For purposes of this section, cash price means the
cash price offer or equivalent cash offer as defined in section 500.245, subdivision 1,
paragraph (d).

Sec. 5.

Minnesota Statutes 2016, section 327C.095, subdivision 12, is amended to read:


Subd. 12.

Payment to the Minnesota manufactured home relocation trust fund.

(a)
If a manufactured home owner is required to move due to the conversion of all or a portion
of a manufactured home park to another use, the closure of a park, or cessation of use of
the land as a manufactured home park, the manufactured park owner shall, upon the change
in use, pay to the commissioner of management and budget for deposit in the Minnesota
manufactured home relocation trust fund under section 462A.35, the lesser amount of the
actual costs of moving or purchasing the manufactured home approved by the neutral third
party and paid by the Minnesota Housing Finance Agency under subdivision 13, paragraph
(a) or (e), or $3,250 for each single section manufactured home, and $6,000 for each
multisection manufactured home, for which a manufactured home owner has made
application for payment of relocation costs under subdivision 13, paragraph (c). The
manufactured home park owner shall make payments required under this section to the
Minnesota manufactured home relocation trust fund within 60 days of receipt of invoice
from the neutral third party.

(b) A manufactured home park owner is not required to make the payment prescribed
under paragraph (a), nor is a manufactured home owner entitled to compensation under
subdivision 13, paragraph (a) or (e), if:

(1) the manufactured home park owner relocates the manufactured home owner to
another space in the manufactured home park or to another manufactured home park at the
park owner's expense;

(2) the manufactured home owner is vacating the premises and has informed the
manufactured home park owner or manager of this prior to the mailing date of the closure
statement under subdivision 1;

(3) a manufactured home owner has abandoned the manufactured home, or the
manufactured home owner is not current on the monthly lot rental, personal property taxes;

(4) the manufactured home owner has a pending eviction action for nonpayment of lot
rental amount under section 327C.09, which was filed against the manufactured home owner
prior to the mailing date of the closure statement under subdivision 1, and the writ of recovery
has been ordered by the district court;

(5) the conversion of all or a portion of a manufactured home park to another use, the
closure of a park, or cessation of use of the land as a manufactured home park is the result
of a taking or exercise of the power of eminent domain by a governmental entity or public
utility; or

(6) the owner of the manufactured home is not a resident of the manufactured home
park, as defined in section 327C.01, subdivision 9, or the owner of the manufactured home
is a resident, but came to reside in the manufactured home park after the mailing date of
the closure statement under subdivision 1.

(c) If the unencumbered fund balance in the manufactured home relocation trust fund
is less than deleted text begin$1,000,000deleted text endnew text begin $3,000,000new text end as of June 30 of each year, the commissioner of
management and budget shall assess each manufactured home park owner by mail the total
amount of $15 for each licensed lot in their park, payable on or before deleted text beginSeptemberdeleted text endnew text begin Novembernew text end
15 of that year. deleted text beginThe commissioner of managementdeleted text endnew text begin Failure to notifynew text end and deleted text beginbudget shall deposit
any payments in the Minnesota
deleted text endnew text begin timely assess thenew text end manufactured home deleted text beginrelocation trust fund.
On or before July 15 of
deleted text endnew text begin park owner by August 30 of any year shall waive the assessment
and payment obligations of the manufactured home park owner for that year. Together with
said assessment notice,
new text end each yeardeleted text begin,deleted text end the commissioner of management and budget shall prepare
and distribute to park owners a letter explaining whether funds are being collected for that
year, information about the collection, an invoice for all licensed lots, and a sample form
for the park owners to collect information on which park residents have been accounted
for. If assessed under this paragraph, the park owner may recoup the cost of the $15
assessment as a lump sum or as a monthly fee of no more than $1.25 collected from park
residents together with monthly lot rent as provided in section 327C.03, subdivision 6. Park
owners may adjust payment for lots in their park that are vacant or otherwise not eligible
for contribution to the trust fund under section 327C.095, subdivision 12, paragraph (b),
new text begin and for park residents who have not paid the $15 assessment to the park owner by October
15,
new text endand deduct from the assessment accordingly.new text begin The commissioner of management and
budget shall deposit any payments in the Minnesota manufactured home relocation trust
fund.
new text end

(d) This subdivision and subdivision 13, paragraph (c), clause (5), are enforceable by
the neutral third party, on behalf of the Minnesota Housing Finance Agency, or by action
in a court of appropriate jurisdiction. The court may award a prevailing party reasonable
attorney fees, court costs, and disbursements.

Sec. 6.

Minnesota Statutes 2016, section 327C.095, subdivision 13, is amended to read:


Subd. 13.

Change in use, relocation expenses; payments by park owner.

(a) If a
manufactured home owner is required to relocate due to the conversion of all or a portion
of a manufactured home park to another use, the closure of a manufactured home park, or
cessation of use of the land as a manufactured home park under subdivision 1, and the
manufactured home owner complies with the requirements of this section, the manufactured
home owner is entitled to payment from the Minnesota manufactured home relocation trust
fund equal to the manufactured home owner's actual relocation costs for relocating the
manufactured home to a new location within a deleted text begin25deleted text end new text begin50new text end-mile radius of the park that is being
closed, up to a maximum of $7,000 for a single-section and $12,500 for a multisection
manufactured home. The actual relocation costs must include the reasonable cost of taking
down, moving, and setting up the manufactured home, including equipment rental, utility
connection and disconnection charges, minor repairs, modifications necessary for
transportation of the home, necessary moving permits and insurance, moving costs for any
appurtenances, which meet applicable local, state, and federal building and construction
codes.

(b) A manufactured home owner is not entitled to compensation under paragraph (a) if
the manufactured home park owner is not required to make a payment to the Minnesota
manufactured home relocation trust fund under subdivision 12, paragraph (b).

(c) Except as provided in paragraph (e), in order to obtain payment from the Minnesota
manufactured home relocation trust fund, the manufactured home owner shall submit to the
neutral third party and the Minnesota Housing Finance Agency, with a copy to the park
owner, an application for payment, which includes:

(1) a copy of the closure statement under subdivision 1;

(2) a copy of the contract with a moving or towing contractor, which includes the
relocation costs for relocating the manufactured home;

(3) a statement with supporting materials of any additional relocation costs as outlined
in subdivision 1;

(4) a statement certifying that none of the exceptions to receipt of compensation under
subdivision 12, paragraph (b), apply to the manufactured home owner;

(5) a statement from the manufactured park owner that the lot rental is current and that
the annual $15 deleted text beginpaymentsdeleted text endnew text begin paymentnew text end to the Minnesota manufactured home relocation trust
fund deleted text beginhavedeleted text endnew text begin hasnew text end been paid when due; and

(6) a statement from the county where the manufactured home is located certifying that
personal property taxes for the manufactured home are paid through the end of that year.

(d)new text begin The neutral third party shall promptly process all payments for completed applications
within 14 days.
new text end If the neutral third party has acted reasonably and does not approve or deny
payment within 45 days after receipt of the information set forth in paragraph (c), the
payment is deemed approved. Upon approval and request by the neutral third party, the
Minnesota Housing Finance Agency shall issue two checks in equal amount for 50 percent
of the contract price payable to the mover and towing contractor for relocating the
manufactured home in the amount of the actual relocation cost, plus a check to the home
owner for additional certified costs associated with third-party vendors, that were necessary
in relocating the manufactured home. The moving or towing contractor shall receive 50
percent upon execution of the contract and 50 percent upon completion of the relocation
and approval by the manufactured home owner. The moving or towing contractor may not
apply the funds to any other purpose other than relocation of the manufactured home as
provided in the contract. A copy of the approval must be forwarded by the neutral third
party to the park owner with an invoice for payment of the amount specified in subdivision
12, paragraph (a).

(e) In lieu of collecting a relocation payment from the Minnesota manufactured home
relocation trust fund under paragraph (a), the manufactured home owner may collect an
amount from the fund after reasonable efforts to relocate the manufactured home have failed
due to the age or condition of the manufactured home, or because there are no manufactured
home parks willing or able to accept the manufactured home within a 25-mile radius. A
manufactured home owner may tender title of the manufactured home in the manufactured
home park to the manufactured home park owner, and collect an amount to be determined
by an independent appraisal. The appraiser must be agreed to by both the manufactured
home park owner and the manufactured home owner. If the appraised market value cannot
be determined, the tax market value, averaged over a period of five years, can be used as a
substitute. The maximum amount that may be reimbursed under the fund is $8,000 for a
single-section and $14,500 for a multisection manufactured home. The minimum amount
that may be reimbursed under the fund is $2,000 for a single section and $4,000 for a
multisection manufactured home. The manufactured home owner shall deliver to the
manufactured home park owner the current certificate of title to the manufactured home
duly endorsed by the owner of record, and valid releases of all liens shown on the certificate
of title, and a statement from the county where the manufactured home is located evidencing
that the personal property taxes have been paid. The manufactured home owner's application
for funds under this paragraph must include a document certifying that the manufactured
home cannot be relocated, that the lot rental is current, that the annual $15 payments to the
Minnesota manufactured home relocation trust fund have been paid when due, that the
manufactured home owner has chosen to tender title under this section, and that the park
owner agrees to make a payment to the commissioner of management and budget in the
amount established in subdivision 12, paragraph (a), less any documented costs submitted
to the neutral third party, required for demolition and removal of the home, and any debris
or refuse left on the lot, not to exceed deleted text begin$1,000deleted text endnew text begin $3,000new text end. The manufactured home owner must
also provide a copy of the certificate of title endorsed by the owner of record, and certify
to the neutral third party, with a copy to the park owner, that none of the exceptions to
receipt of compensation under subdivision 12, paragraph (b), clauses (1) to (6), apply to the
manufactured home owner, and that the home owner will vacate the home within 60 days
after receipt of payment or the date of park closure, whichever is earlier, provided that the
monthly lot rent is kept current.

(f) The Minnesota Housing Finance Agency must make a determination of the amount
of payment a manufactured home owner would have been entitled to under a local ordinance
in effect on May 26, 2007. Notwithstanding paragraph (a), the manufactured home owner's
compensation for relocation costs from the fund under section 462A.35, is the greater of
the amount provided under this subdivision, or the amount under the local ordinance in
effect on May 26, 2007, that is applicable to the manufactured home owner. Nothing in this
paragraph is intended to increase the liability of the park owner.

(g) Neither the neutral third party nor the Minnesota Housing Finance Agency shall be
liable to any person for recovery if the funds in the Minnesota manufactured home relocation
trust fund are insufficient to pay the amounts claimed. The Minnesota Housing Finance
Agency shall keep a record of the time and date of its approval of payment to a claimant.

(h) Thenew text begin Minnesota Housing Financenew text end Agency shallnew text begin post on its Web site andnew text end report to the
chairs of the senate Finance Committee and house of representatives Ways and Means
Committee by deleted text beginJanuarydeleted text endnew text begin Octobernew text end 15 of each year on the Minnesota manufactured home
relocation trust fund, including thenew text begin aggregatenew text end account balance,new text begin the aggregate assessment
payments received, summary information regarding each closed park including the total
new text end
payments to claimantsnew text begin and payments received from each closed parknew text end, the amount of any
advances to the fund, the amount of any insufficiencies encountered during the previous
deleted text begin calendardeleted text endnew text begin fiscalnew text end year,new text begin reports of neutral third parties provided pursuant to subdivision 4,new text end and
anynew text begin itemizednew text end administrative charges or expenses deducted from the trust fund balancenew text begin, all
of which should be reconciled to the previous year's trust fund balance
new text end. If sufficient funds
become available, the Minnesota Housing Finance Agency shall pay the manufactured home
owner whose unpaid claim is the earliest by time and date of approval.

Sec. 7.

Minnesota Statutes 2016, section 327C.095, is amended by adding a subdivision
to read:


new text begin Subd. 16. new text end

new text begin Reporting of licensed manufactured home parks. new text end

new text begin The Department of Health
or, if applicable, local units of government that have entered into a delegation of authority
agreement with the Department of Health as provided in section 145A.07 shall provide, by
March 31 of each year, a list of names and addresses of the manufactured home parks
licensed in the previous year, and for each manufactured home park, the current licensed
owner, the owner's address, the number of licensed manufactured home lots, and other data
as they may request for the Department of Management and Budget to invoice each licensed
manufactured home park in the state of Minnesota.
new text end

Sec. 8.

Minnesota Statutes 2017 Supplement, section 462A.2035, subdivision 1, is amended
to read:


Subdivision 1.

Establishment.

The agency shall establish a manufactured home park
redevelopment program for the purpose of making manufactured home park redevelopment
grants or loans deleted text beginto cities, counties, community action programs, nonprofit organizations, and
cooperatives created under chapter 308A or 308B
deleted text endnew text begin for the purposes specified in this sectionnew text end.

Sec. 9.

Minnesota Statutes 2017 Supplement, section 462A.2035, subdivision 1b, is
amended to read:


Subd. 1b.

new text beginManufactured home new text endpark infrastructure grants.

Eligible recipients may
use new text beginmanufactured home new text endpark infrastructure grants under this program for:

(1) new text beginacquisition of and new text endimprovements in manufactured home parks; and

(2) infrastructure, including storm shelters and community facilities.

Sec. 10.

Minnesota Statutes 2016, section 462A.33, subdivision 1, is amended to read:


Subdivision 1.

Created.

The economic development and housing challenge program is
created to be administered by the agency.

(a) The program shall provide grants or loans for the purpose of construction, acquisition,
rehabilitation, demolition or removal of existing structures, construction financing, permanent
financing, interest rate reduction, refinancing, and gap financing of housing new text beginor manufactured
home parks, as defined in section 327C.01,
new text endto support economic development and
redevelopment activities or job creation or job preservation within a community or region
by meeting locally identified housing needs.

Gap financing is either:

(1) the difference between the costs of the property, including acquisition, demolition,
rehabilitation, and construction, and the market value of the property upon sale; or

(2) the difference between the cost of the property and the amount the targeted household
can afford for housing, based on industry standards and practices.

(b) Preference for grants and loans shall be given to comparable proposals that include
regulatory changes or waivers that result in identifiable cost avoidance or cost reductions,
such as increased density, flexibility in site development standards, or zoning code
requirements. Preference must also be given among comparable proposals to proposals for
projects that are accessible to transportation systems, jobs, schools, and other services.

(c) If a grant or loan is used for demolition or removal of existing structures, the cleared
land must be used for the construction of housing to be owned or rented by persons who
meet the income limits of this section or for other housing-related purposes that primarily
benefit the persons residing in the adjacent housing. In making selections for grants or loans
for projects that demolish affordable housing units, the agency must review the potential
displacement of residents and consider the extent to which displacement of residents is
minimized.

Sec. 11.

Minnesota Statutes 2016, section 462A.33, subdivision 2, is amended to read:


Subd. 2.

Eligible recipients.

Challenge grants or loans may be made to a city, a federally
recognized American Indian tribe or subdivision located in Minnesota, a tribal housing
corporation, a private developer, a nonprofit organization, or the owner of the housingnew text begin or
the manufactured home park
new text end, including individuals. For the purpose of this section, "city"
has the meaning given it in section 462A.03, subdivision 21. To the extent practicable,
grants and loans shall be made so that an approximately equal number of housing units are
financed in the metropolitan area and in the nonmetropolitan area.

Sec. 12.

Minnesota Statutes 2016, section 462A.37, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Abandoned property" has the meaning given in section 117.025, subdivision 5.

(c) "Community land trust" means an entity that meets the requirements of section
462A.31, subdivisions 1 and 2.

(d) "Debt service" means the amount payable in any fiscal year of principal, premium,
if any, and interest on housing infrastructure bonds and the fees, charges, and expenses
related to the bonds.

(e) "Foreclosed property" means residential property where foreclosure proceedings
have been initiated or have been completed and title transferred or where title is transferred
in lieu of foreclosure.

(f) "Housing infrastructure bonds" means bonds issued by the agency under this chapter
that are qualified 501(c)(3) bonds, within the meaning of Section 145(a) of the Internal
Revenue Code, finance qualified residential rental projects within the meaning of Section
142(d) of the Internal Revenue Code, or are tax-exempt bonds that are not private activity
bonds, within the meaning of Section 141(a) of the Internal Revenue Code, for the purpose
of financing or refinancing affordable housing authorized under this chapter.

(g) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.

new text begin (h) "Senior" means a person 62 years of age or older with an annual income not greater
than 50 percent of:
new text end

new text begin (1) the metropolitan area median income for persons in the metropolitan area; or
new text end

new text begin (2) the statewide median income for persons outside the metropolitan area.
new text end

new text begin (i) "Senior housing" means housing intended and operated for occupancy by at least one
senior per unit with at least 80 percent of the units occupied by at least one senior per unit,
and for which there is publication of, and adherence to, policies and procedures that
demonstrate an intent by the owner or manager to provide housing for seniors. Senior
housing may be developed in conjunction with and as a distinct portion of mixed-income
senior housing developments that use a variety of public or private financing sources.
new text end

deleted text begin (h)deleted text endnew text begin (j)new text end "Supportive housing" means housing that is not time-limited and provides or
coordinates with linkages to services necessary for residents to maintain housing stability
and maximize opportunities for education and employment.

Sec. 13.

Minnesota Statutes 2016, section 462A.37, subdivision 2, is amended to read:


Subd. 2.

Authorization.

(a) The agency may issue up to $30,000,000 in aggregate
principal amount of housing infrastructure bonds in one or more series to which the payment
made under this section may be pledged. The housing infrastructure bonds authorized in
this subdivision may be issued to fund loansnew text begin or grants for the purposes of clause (4)new text end, on
terms and conditions the agency deems appropriate, made for one or more of the following
purposes:

(1) to finance the costs of the construction, acquisition, and rehabilitation of supportive
housing for individuals and families who are without a permanent residence;

(2) to finance the costs of the acquisition and rehabilitation of foreclosed or abandoned
housing to be used for affordable rental housing and the costs of new construction of rental
housing on abandoned or foreclosed property where the existing structures will be demolished
or removed;

(3) to finance that portion of the costs of acquisition of property that is attributable to
the land to be leased by community land trusts to low- and moderate-income homebuyers;
deleted text begin and
deleted text end

(4) new text beginto finance that portion of the acquisition, improvement, and infrastructure of
manufactured home parks under section 462A.2035, subdivision 1b, that is attributable to
land to be leased to low- and moderate-income manufactured home owners;
new text end

new text begin (5) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
of senior housing; and
new text end

new text begin (6) new text endto finance the costs of acquisition and rehabilitation of federally assisted rental
housing and for the refinancing of costs of the construction, acquisition, and rehabilitation
of federally assisted rental housing, including providing funds to refund, in whole or in part,
outstanding bonds previously issued by the agency or another government unit to finance
or refinance such costs.

(b) Among comparable proposals for permanent supportive housing, preference shall
be given to permanent supportive housing for veterans and other individuals or families
who:

(1) either have been without a permanent residence for at least 12 months or at least four
times in the last three years; or

(2) are at significant risk of lacking a permanent residence for 12 months or at least four
times in the last three years.

new text begin (c) Among comparable proposals for senior housing, the agency must give priority to
requests for projects that:
new text end

new text begin (1) demonstrate a commitment to maintaining the housing financed as affordable to
seniors;
new text end

new text begin (2) leverage other sources of funding to finance the project, including the use of
low-income housing tax credits;
new text end

new text begin (3) provide access to services to residents and demonstrate the ability to increase physical
supports and support services as residents age and experience increasing levels of disability;
new text end

new text begin (4) provide a service plan containing the elements of clause (3) reviewed by the housing
authority, economic development authority, public housing authority, or community
development agency that has an area of operation for the jurisdiction in which the project
is located; and
new text end

new text begin (5) include households with incomes that do not exceed 30 percent of the median
household income for the metropolitan area.
new text end

new text begin To the extent practicable, the agency shall balance the loans made between projects in the
metropolitan area and projects outside the metropolitan area. Of the loans made to projects
outside the metropolitan area, the agency shall, to the extent practicable, balance the loans
made between projects in counties or cities with a population of 20,000 or less, as established
by the most recent decennial census, and projects in counties or cities with populations in
excess of 20,000.
new text end

Sec. 14.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 30. new text end

new text begin Preservation project. new text end

new text begin "Preservation project" means any residential rental
project, regardless of whether or not the project is restricted to persons of a certain age or
older that receive federal project-based rental subsidies. In addition, to qualify as a
preservation project, the amount of bonds requested in the application must not exceed the
aggregate bond limitation.
new text end

Sec. 15.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 31. new text end

new text begin 30 percent AMI residential rental project. new text end

new text begin "30 percent AMI residential
rental project" means a residential rental project that does not otherwise qualify as a
preservation project, is expected to generate low-income housing tax credits under section
42 of the Internal Revenue Code from 100 percent of its residential units, and: (1) in which
all the residential units of the project: (i) are reserved for tenants whose income, on average
is 30 percent of AMI or less; (ii) are rent restricted in accordance with section 42(g)(2) of
the Internal Revenue Code; and (iii) are subject to the rent and income restrictions for a
period of not less than 30 years; or (2)(i) is located within a home rule charter or statutory
city located outside of the metropolitan area as defined in section 473.121, subdivision 2,
with a population exceeding 500; a community that has a combined population of 1,500
residents located within 15 miles of a home rule charter or statutory city located outside the
metropolitan area as defined in section 473.121, subdivision 2, and that has a current area
median gross income that is less than the statewide area median income for the state of
Minnesota; (ii) all of the units of the project are rent restricted in accordance with section
42(g)(2) of the Internal Revenue Code; and (iii) all of the units of the project are subject to
the applicable rent and income restrictions for a period of not less than 30 years. In addition,
to qualify as a 30 percent AMI residential rental project, the amount of bonds requested in
the application must not exceed the aggregate bond limitation. For purposes of this
subdivision, "on average" means the average of the applicable income limitation level for
a project determined on a unit-by-unit basis e.g., a project with one-half of its units subject
to income limitations of not greater than 20 percent AMI and one-half subject to income
limitations of not greater than 40 percent AMI would be subject to an income limitation on
average of not greater than 30 percent AMI.
new text end

Sec. 16.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 32. new text end

new text begin 50 percent AMI residential rental project. new text end

new text begin "50 percent AMI residential
rental project" means a residential rental project that does not qualify as a preservation
project or a 30 percent AMI residential rental project, is expected to generate low-income
housing tax credits under section 42 of the Internal Revenue Code from 100 percent of its
residential units, and in which all the residential units of the project: (1) are reserved for
tenants whose income on average is 50 percent of AMI or less; (2) are rent restricted in
accordance with section 42(g)(2) of the Internal Revenue Code; and (3) are subject to the
rent and income restrictions for a period of not less than 30 years. In addition, to qualify as
a 50 percent AMI residential rental project, the amount of bonds requested in the application
must not exceed the aggregate bond limitation. For purposes of this subdivision, "on average"
means the average of the applicable income limitation level for a project determined on a
unit-by-unit basis e.g., a project with one-half of its units subject to income limitations of
not greater than 40 percent AMI and one-half subject to income limitations of not greater
than 60 percent AMI would be subject to an income limitation on average of not greater
than 50 percent AMI.
new text end

Sec. 17.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 33. new text end

new text begin 100 percent LIHTC project. new text end

new text begin "100 percent LIHTC project" means a residential
rental project that is expected to generate low-income housing tax credits under section 42
of the Internal Revenue Code from 100 percent of its residential units and does not otherwise
qualify as a preservation project, a 30 percent AMI residential rental project, or a 50 percent
AMI residential rental project. In addition, to qualify as a 100 percent LIHTC project, the
amount of bonds requested in the application must not exceed the aggregate bond limitation.
new text end

Sec. 18.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 34. new text end

new text begin 20 percent LIHTC project. new text end

new text begin "20 percent LIHTC project" means a residential
rental project that is expected to generate low-income housing tax credits under section 42
of the Internal Revenue Code from at least 20 percent of its residential units and does not
otherwise qualify as a preservation project, a 30 percent AMI residential rental project, a
50 percent AMI residential rental project, or a 100 percent LIHTC project. In addition, to
qualify as a 20 percent LIHTC project, the amount of bonds requested in the application
must not exceed the aggregate bond limitation.
new text end

Sec. 19.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 35. new text end

new text begin AMI. new text end

new text begin "AMI" means the area median income for the applicable county or
metropolitan area as published by the Department of Housing and Urban Development, as
adjusted for household size.
new text end

Sec. 20.

Minnesota Statutes 2016, section 474A.02, is amended by adding a subdivision
to read:


new text begin Subd. 36. new text end

new text begin Aggregate bond limitation. new text end

new text begin "Aggregate bond limitation" means up to 55
percent of the reasonably expected aggregate basis of a residential rental project and the
land on which the project is or will be located.
new text end

Sec. 21.

Minnesota Statutes 2016, section 474A.03, subdivision 1, is amended to read:


Subdivision 1.

Under federal tax law; allocations.

At the beginning of each calendar
year deleted text beginafter December 31, 2001deleted text end, the commissioner shall determine the aggregate dollar amount
of the annual volume cap under federal tax law for the calendar year, and of this amount
the commissioner shall make the following allocation:

(1) $74,530,000 to the small issue pool;

(2) $122,060,000 to the housing pool, of which 31 percent of the adjusted allocation is
reserved until the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end for single-family housing programs;

(3) $12,750,000 to the public facilities pool; and

(4) amounts to be allocated as provided in subdivision 2a.

If the annual volume cap is greater or less than the amount of bonding authority allocated
under clauses (1) to (4) and subdivision 2a, paragraph (a), clauses (1) to (4), the allocation
must be adjusted so that each adjusted allocation is the same percentage of the annual volume
cap as each original allocation is of the total bonding authority originally allocated.

Sec. 22.

Minnesota Statutes 2016, section 474A.04, subdivision 1a, is amended to read:


Subd. 1a.

Entitlement reservations.

Any amount returned by an entitlement issuer
before deleted text beginJulydeleted text endnew text begin Junenew text end 15 shall be reallocated through the housing pool. Any amount returned on
or after deleted text beginJulydeleted text endnew text begin Junenew text end 15 shall be reallocated through the unified pool. An amount returned after
the last Monday in November shall be reallocated to the Minnesota Housing Finance Agency.

Sec. 23.

Minnesota Statutes 2016, section 474A.047, subdivision 2, is amended to read:


Subd. 2.

15-year agreement.

Prior to the issuance of residential rental bonds, the
developer of the project for which the bond proceeds will be used must enter into a 15-year
agreement with the issuer that specifies the maximum rental rates of the rent-restricted units
in the project and the income levels of the residents of the project occupying income-restricted
unitsnew text begin and in which the developer will agree to maintain the project as a preservation project,
a 30 percent AMI residential rental project, a 50 percent AMI residential rental project, a
100 percent LIHTC project, or a 20 percent LIHTC project, as applicable and as described
in its application
new text end. deleted text beginSuchdeleted text endnew text begin Thenew text end rental rates and income levels must be within the limitations
established under subdivision 1. The developer must annually certify to the issuer over the
term of the agreement that the rental rates for the rent-restricted units are within the
limitations under subdivision 1. The issuer may request individual certification of the income
of residents of the income-restricted units. The commissioner may request from the issuer
a copy of the annual certification prepared by the developer. The commissioner may require
the issuer to request individual certification of all residents of the income-restricted units.

Sec. 24.

Minnesota Statutes 2016, section 474A.061, subdivision 1, is amended to read:


Subdivision 1.

Allocation applicationnew text begin; small issue pool and public facilities poolnew text end.

(a)
new text begin For any requested allocations from the small issue pool or the public facilities pool, new text endan issuer
may apply for an allocation under this section by submitting to the department an application
on forms provided by the department, accompanied by (1) a preliminary resolution, (2) a
statement of bond counsel that the proposed issue of obligations requires an allocation under
this chapter and the Internal Revenue Code, (3) the type of qualified bonds to be issued, (4)
an application deposit in the amount of one percent of the requested allocation before the
last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, or in the amount of two percent of the requested allocation on or
after the last Monday in deleted text beginJuly,deleted text endnew text begin June; andnew text end (5) a public purpose scoring worksheet for
manufacturing project and enterprise zone facility project applicationsdeleted text begin, and (6) for residential
rental projects, a statement from the applicant or bond counsel as to whether the project
preserves existing federally subsidized housing for residential rental project applications
and whether the project is restricted to persons who are 55 years of age or older
deleted text end. The issuer
must pay the application deposit by a check made payable to the Department of Management
and Budget. The Minnesota Housing Finance Agency, the Minnesota Rural Finance
Authority, and the Minnesota Office of Higher Education may apply for and receive an
allocation under this section without submitting an application deposit.

(b) An entitlement issuer may not apply for an allocation deleted text beginfrom the public facilities pooldeleted text endnew text begin
under this subdivision
new text end unless it has either permanently issued bonds equal to the amount of
its entitlement allocation for the current year plus any amount of bonding authority carried
forward from previous years or returned for reallocation all of its unused entitlement
allocation. new text beginFor purposes of this subdivision, an entitlement allocation includes an amount
obtained under section 474A.04, subdivision 6.
new text end

deleted text begin An entitlement issuer may not apply for an allocation from the housing pool unless it
either has permanently issued bonds equal to any amount of bonding authority carried
forward from a previous year or has returned for reallocation any unused bonding authority
carried forward from a previous year. For purposes of this subdivision, its entitlement
allocation includes an amount obtained under section 474A.04, subdivision 6. This paragraph
does not apply to an application from the Minnesota Housing Finance Agency for an
allocation under subdivision 2a for cities who choose to have the agency issue bonds on
their behalf.
deleted text end

(c) If an application is rejected under this section, the commissioner must notify the
applicant and return the application deposit to the applicant within 30 days unless the
applicant requests in writing that the application be resubmitted. The granting of an allocation
of bonding authority under this section must be evidenced by a certificate of allocation.

Sec. 25.

Minnesota Statutes 2016, section 474A.061, is amended by adding a subdivision
to read:


new text begin Subd. 1a. new text end

new text begin Allocation application; housing pool. new text end

new text begin (a) For any requested allocations from
the housing pool, an issuer may apply for an allocation under this section by submitting to
the department an application on forms provided by the department, accompanied by: (1)
a preliminary resolution; (2) a statement of bond counsel that the proposed issue of
obligations requires an allocation under this chapter and the Internal Revenue Code; (3) an
application deposit in the amount of two percent of the requested allocation; (4) a sworn
statement from the applicant identifying the project as either a preservation project, a 30
percent AMI residential rental project, a 50 percent AMI residential rental project, a 100
percent LIHTC project, a 20 percent LIHTC project, or any other residential rental project;
and (5) a certification from the applicant or the applicant's accountant stating whether the
requested allocation exceeds the aggregate bond limitation. The issuer must pay the
application deposit by a check made payable to the Department of Management and Budget.
The Minnesota Housing Finance Agency may apply for and receive an allocation under this
section without submitting an application deposit.
new text end

new text begin (b) An entitlement issuer may not apply for an allocation from the housing pool unless
it has either permanently issued bonds equal to any amount of bonding authority carried
forward from a previous year or returned for reallocation any unused bonding authority
carried forward from a previous year. For purposes of this subdivision, an entitlement
allocation includes an amount obtained under section 474A.04, subdivision 6. This paragraph
does not apply to an application from the Minnesota Housing Finance Agency for an
allocation under subdivision 2a for cities that choose to have the agency issue bonds on
their behalf.
new text end

new text begin (c) If an application is rejected under this section, the commissioner must notify the
applicant and return the application deposit to the applicant within 30 days unless the
applicant requests in writing that the application be resubmitted. The granting of an allocation
of bonding authority under this section must be evidenced by a certificate of allocation.
new text end

Sec. 26.

Minnesota Statutes 2016, section 474A.061, subdivision 2a, is amended to read:


Subd. 2a.

Housing pool allocation.

(a) Commencing on the second Tuesday in January
and continuing on each Monday through deleted text beginJuly 15deleted text endnew text begin June 15new text end, the commissioner shall allocate
available bonding authority from the housing pool to applications received on or before the
Monday of the preceding week for residential rental projects that meet the eligibility criteria
under section 474A.047. Allocations of available bonding authority from the housing pool
for eligible residential rental projects shall be awarded in the following order of priority:
(1) deleted text beginprojects that preserve existing federally subsidized housing; (2) projects that are not
restricted to persons who are 55 years of age or older; and
deleted text endnew text begin preservation projects; (2) 30
percent AMI residential rental projects;
new text end (3) new text begin50 percent AMI residential rental projects; (4)
100 percent LIHTC projects; (5) 20 percent LIHTC projects; and (6)
new text endother residential rental
projectsdeleted text begin. Prior to May 15, no allocation shall be made to a project restricted to persons who
are 55 years of age or older. If an
deleted text endnew text begin for which the amount of bonds requested in their respective
applications do not exceed the aggregate bond limitation.
new text endnew text begin If there are two or more applications
for residential rental projects at the same priority level and there is insufficient bonding
authority to provide allocations for all the projects in any one allocation period, available
bonding authority shall be randomly awarded by lot but only for projects that can receive
the full amount of their respective requested allocations. If a residential rental project does
not receive any of its requested allocation pursuant to this paragraph, the remaining bonding
authority not allocated to the project shall be reserved by the commissioner, or by the
Minnesota Housing Financing Agency if the authority is carried forward pursuant to section
474A.131, for the project for up to 24 months thereafter, and if the project applies in the
future to the housing pool or unified pool for additional allocation of bonds, the project
shall be fully funded up to the remaining amount of its original application request for
bonding authority before any new project, applying in the same allocation period, that has
an equal priority shall receive bonding authority. An
new text end issuer that receives an allocation under
this paragraph deleted text begindoes not issue obligations equal to all or a portion of the allocation received
within 120 days of the allocation
deleted text endnew text begin must issue obligations equal to all or a portion of the
allocation received on or before the later of 180 days of the allocation or within 18 months
after the allocation date if the applicant submits an additional application deposit equal to
one percent of the allocation amount on or prior to 180 days after the allocation date. If an
issuer that receives an allocation under this paragraph does not issue obligations equal to
all or a portion of the allocation received within the time period provided in this paragraph
new text end
or returns the allocation to the commissioner, the amount of the allocation is canceled and
returned for reallocation through the housing pool or to the unified pool after July deleted text begin15.deleted text endnew text begin 1. If
an issuer that receives an allocation under this paragraph issues obligations within the time
period provided in this paragraph, the commissioner shall refund 50 percent of any application
deposit previously paid within 30 days of the issuance of the obligations and the remaining
50 percent of the application deposit: (i) within 30 days after the date on which IRS Form
8609(s) are issued with respect to projects generating low-income housing tax credits; or
(ii) within 90 days after the issuer provides a certification and any other reasonable
documentation requested by the commissioner evidencing that construction of the project
has been completed.
new text end

(b) After January 1, and through January 15, the Minnesota Housing Finance Agency
may accept applications from cities for single-family housing programs which meet program
requirements as follows:

(1) the housing program must meet a locally identified housing need and be economically
viable;

(2) the adjusted income of home buyers may not exceed 80 percent deleted text beginof the greater of
statewide or area median income as published by the Department of Housing and Urban
Development, adjusted for household size
deleted text endnew text begin AMInew text end;

(3) house price limits may not exceed the federal price limits established for mortgage
revenue bond programs. Data on the home purchase price amount, mortgage amount, income,
household size, and race of the households served in the previous year's single-family
housing program, if any, must be included in each application; and

(4) for applicants who choose to have the agency issue bonds on their behalf, an
application fee pursuant to section 474A.03, subdivision 4, and an application deposit equal
to one percent of the requested allocation must be submitted to the Minnesota Housing
Finance Agency before the agency forwards the list specifying the amounts allocated to the
commissioner under paragraph (d). The agency shall submit the city's application fee and
application deposit to the commissioner when requesting an allocation from the housing
pool.

Applications by a consortium shall include the name of each member of the consortium
and the amount of allocation requested by each member.

(c) Any amounts remaining in the housing pool after deleted text beginJulydeleted text endnew text begin Junenew text end 15 are available for
single-family housing programs for cities that applied in January and received an allocation
under this section in the same calendar year. For a city that chooses to issue bonds on its
own behalf or pursuant to a joint powers agreement, the agency must allot available bonding
authority based on the formula in paragraphs (d) and (f). Allocations will be made loan by
loan, on a first-come, first-served basis among cities on whose behalf the Minnesota Housing
Finance Agency issues bonds.

Any city that received an allocation pursuant to paragraph (f) in the same calendar year
that wishes to issue bonds on its own behalf or pursuant to a joint powers agreement for an
amount becoming available for single-family housing programs after deleted text beginJulydeleted text endnew text begin Junenew text end 15 shall
notify the Minnesota Housing Finance Agency by deleted text beginJulydeleted text endnew text begin Junenew text end 15. The Minnesota Housing
Finance Agency shall notify each city making a request of the amount of its allocation within
three business days after deleted text beginJulydeleted text endnew text begin Junenew text end 15. The city must comply with paragraph (f).

For purposes of paragraphs (a) to (h), "city" means a county or a consortium of local
government units that agree through a joint powers agreement to apply together for
single-family housing programs, and has the meaning given it in section 462C.02, subdivision
6
. "Agency" means the Minnesota Housing Finance Agency.

(d) The total amount of allocation for mortgage bonds for one city is limited to the lesser
of: (i) the amount requested, or (ii) the product of the total amount available for mortgage
bonds from the housing pool, multiplied by the ratio of each applicant's population as
determined by the most recent estimate of the city's population released by the state
demographer's office to the total of all the applicants' population, except that each applicant
shall be allocated a minimum of $100,000 regardless of the amount requested or the amount
determined under the formula in clause (ii). If a city applying for an allocation is located
within a county that has also applied for an allocation, the city's population will be deducted
from the county's population in calculating the amount of allocations under this paragraph.

Upon determining the amount of each applicant's allocation, the agency shall forward
to the commissioner a list specifying the amounts allotted to each application with all
application fees and deposits from applicants who choose to have the agency issue bonds
on their behalf.

Total allocations from the housing pool for single-family housing programs may not
exceed 31 percent of the adjusted allocation to the housing pool until after deleted text beginJulydeleted text endnew text begin Junenew text end 15.

(e) The agency may issue bonds on behalf of participating cities. The agency shall request
an allocation from the commissioner for all applicants who choose to have the agency issue
bonds on their behalf and the commissioner shall allocate the requested amount to the
agency. The agency may request an allocation at any time after the second Tuesday in
January and through the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end. After awarding an allocation and receiving
a notice of issuance for the mortgage bonds issued on behalf of the participating cities, the
commissioner shall transfer the application deposits to the Minnesota Housing Finance
Agency to be returned to the participating cities. The Minnesota Housing Finance Agency
shall return any application deposit to a city that paid an application deposit under paragraph
(b), clause (4), but was not part of the list forwarded to the commissioner under paragraph
(d).

(f) A city may choose to issue bonds on its own behalf or through a joint powers
agreement and may request an allocation from the commissioner by forwarding an application
with an application fee pursuant to section 474A.03, subdivision 4, and a one percent
application deposit to the commissioner no later than the Monday of the week preceding
an allocation. If the total amount requested by all applicants exceeds the amount available
in the pool, the city may not receive a greater allocation than the amount it would have
received under the list forwarded by the Minnesota Housing Finance Agency to the
commissioner. No city may request or receive an allocation from the commissioner until
the list under paragraph (d) has been forwarded to the commissioner. A city must request
an allocation from the commissioner no later than the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end. No city
may receive an allocation from the housing pool for mortgage bonds which has not first
applied to the Minnesota Housing Finance Agency. The commissioner shall allocate the
requested amount to the city or cities subject to the limitations under this paragraph.

If a city issues mortgage bonds from an allocation received under this paragraph, the
issuer must provide for the recycling of funds into new loans. If the issuer is not able to
provide for recycling, the issuer must notify the commissioner in writing of the reason that
recycling was not possible and the reason the issuer elected not to have the Minnesota
Housing Finance Agency issue the bonds. "Recycling" means the use of money generated
from the repayment and prepayment of loans for further eligible loans or for the redemption
of bonds and the issuance of current refunding bonds.

(g) No entitlement city or county or city in an entitlement county may apply for or be
allocated authority to issue mortgage bonds or use mortgage credit certificates from the
housing pool. No city in an entitlement county may apply for or be allocated authority to
issue residential rental bonds from the housing pool or the unified pool.

(h) A city that does not use at least 50 percent of its allotment by the date applications
are due for the first allocation that is made from the housing pool for single-family housing
programs in the immediately succeeding calendar year may not apply to the housing pool
for a single-family mortgage bond or mortgage credit certificate program allocation that
exceeds the amount of its allotment for the preceding year that was used by the city in the
immediately preceding year or receive an allotment from the housing pool in the succeeding
calendar year that exceeds the amount of its allotment for the preceding year that was used
in the preceding year. The minimum allotment is $100,000 for an allocation made prior to
deleted text begin Julydeleted text endnew text begin Junenew text end 15, regardless of the amount used in the preceding calendar year, except that a
city whose allocation in the preceding year was the minimum amount of $100,000 and who
did not use at least 50 percent of its allocation from the preceding year is ineligible for an
allocation in the immediate succeeding calendar year. Each local government unit in a
consortium must meet the requirements of this paragraph.

Sec. 27.

Minnesota Statutes 2016, section 474A.061, subdivision 2b, is amended to read:


Subd. 2b.

Small issue pool allocation.

Commencing on the second Tuesday in January
and continuing on each Monday through the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner
shall allocate available bonding authority from the small issue pool to applications received
on or before the Monday of the preceding week for manufacturing projects and enterprise
zone facility projects. From the second Tuesday in January through the last Monday in deleted text beginJulydeleted text endnew text begin
June
new text end, the commissioner shall reserve $5,000,000 of the available bonding authority from
the small issue pool for applications for agricultural development bond loan projects of the
Minnesota Rural Finance Authority.

deleted text begin Beginning in calendar year 2002,deleted text end On the second Tuesday in January through the last
Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner shall reserve $10,000,000 of available bonding
authority in the small issue pool for applications for student loan bonds of or on behalf of
the Minnesota Office of Higher Education. The total amount of allocations for student loan
bonds from the small issue pool may not exceed $10,000,000 per year.

The commissioner shall reserve $10,000,000 until the day after the last Monday in
February, $10,000,000 until the day after the last Monday in April, and $10,000,000 until
the day after the last Monday in June in the small issue pool for enterprise zone facility
projects and manufacturing projects. The amount of allocation provided to an issuer for a
specific enterprise zone facility project or manufacturing project will be based on the number
of points received for the proposed project under the scoring system under section 474A.045.

If there are two or more applications for manufacturing and enterprise zone facility
projects from the small issue pool and there is insufficient bonding authority to provide
allocations for all projects in any one week, the available bonding authority shall be awarded
based on the number of points awarded a project under section 474A.045, with those projects
receiving the greatest number of points receiving allocation first. If two or more applications
receive an equal number of points, available bonding authority shall be awarded by lot
unless otherwise agreed to by the respective issuers.

Sec. 28.

Minnesota Statutes 2016, section 474A.061, subdivision 2c, is amended to read:


Subd. 2c.

Public facilities pool allocation.

From the beginning of the calendar year and
continuing for a period of 120 days, the commissioner shall reserve $5,000,000 of the
available bonding authority from the public facilities pool for applications for public facilities
projects to be financed by the Western Lake Superior Sanitary District. Commencing on
the second Tuesday in January and continuing on each Monday through the last Monday
in deleted text beginJulydeleted text endnew text begin Junenew text end, the commissioner shall allocate available bonding authority from the public
facilities pool to applications for eligible public facilities projects received on or before the
Monday of the preceding week. If there are two or more applications for public facilities
projects from the pool and there is insufficient available bonding authority to provide
allocations for all projects in any one week, the available bonding authority shall be awarded
by lot unless otherwise agreed to by the respective issuers.

Sec. 29.

Minnesota Statutes 2016, section 474A.061, subdivision 4, is amended to read:


Subd. 4.

Return of allocation; deposit refundnew text begin for small issue pool or public facilities
pool
new text end.

(a)new text begin For any requested allocations from the small issue pool or the public facilities
pool,
new text end if an issuer that receives an allocation under this section determines that it will not
issue obligations equal to all or a portion of the allocation received under this section within
120 days of allocation or within the time period permitted by federal tax law, whichever is
less, the issuer must notify the department. If the issuer notifies the department or the 120-day
period since allocation has expired prior to the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the amount of
allocation is canceled and returned for reallocation through the pool from which it was
originally allocated. If the issuer notifies the department or the 120-day period since allocation
has expired on or after the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end, the amount of allocation is canceled
and returned for reallocation through the unified pool. If the issuer notifies the department
after the last Monday in November, the amount of allocation is canceled and returned for
reallocation to the Minnesota Housing Finance Agency. To encourage a competitive
application process, the commissioner shall reserve, for new applications, the amount of
allocation that is canceled and returned for reallocation under this section for a minimum
of seven calendar days.

(b) An issuer that returns for reallocation all or a portion of an allocation received under
this deleted text beginsectiondeleted text endnew text begin subdivisionnew text end within 120 days of allocation shall receive within 30 days a refund
equal to:

(1) one-half of the application deposit for the amount of bonding authority returned
within 30 days of receiving allocation;

(2) one-fourth of the application deposit for the amount of bonding authority returned
between 31 and 60 days of receiving allocation; and

(3) one-eighth of the application deposit for the amount of bonding authority returned
between 61 and 120 days of receiving allocation.

(c) No refund shall be available for allocations returned 120 or more days after receiving
the allocation or beyond the last Monday in November.

Sec. 30.

Minnesota Statutes 2016, section 474A.061, is amended by adding a subdivision
to read:


new text begin Subd. 7. new text end

new text begin Return of allocation; deposit refund for housing pool. new text end

new text begin (a) For any requested
allocations from the housing pool, if an issuer that receives an allocation under this section
determines that it will not issue obligations equal to all or a portion of the allocation received
under this section within the time period provided under section 474A.061, subdivision 2a,
paragraph (a), or within the time period permitted by federal tax law, whichever is less, the
issuer must notify the department. If the issuer notifies the department or the time period
provided under section 474A.061, subdivision 2a, paragraph (a), has expired prior to the
last Monday in June, the amount of allocation is canceled and returned for reallocation
through the pool from which it was originally allocated. If the issuer notifies the department
or the time period provided under section 474A.061, subdivision 2a, paragraph (a), has
expired on or after the last Monday in June, the amount of allocation is canceled and returned
for reallocation through the unified pool. If the issuer notifies the department after the last
Monday in November, the amount of allocation is canceled and returned for reallocation
to the Minnesota Housing Finance Agency. To encourage a competitive application process,
the commissioner shall reserve, for new applications, the amount of allocation that is canceled
and returned for reallocation under this section for a minimum of seven calendar days.
new text end

new text begin (b) An issuer that returns for reallocation all or a portion of an allocation received under
this subdivision within 180 days of allocation shall receive within 30 days a refund equal
to:
new text end

new text begin (1) one-half of the application deposit for the amount of bonding authority returned
within 45 days of receiving allocation;
new text end

new text begin (2) one-fourth of the application deposit for the amount of bonding authority returned
between 46 and 90 days of receiving allocation; and
new text end

new text begin (3) one-eighth of the application deposit for the amount of bonding authority returned
between 91 and 180 days of receiving allocation.
new text end

new text begin (c) No refund shall be available for allocations returned 180 or more days after receiving
the allocation or beyond the last Monday in November.
new text end

Sec. 31.

Minnesota Statutes 2016, section 474A.062, is amended to read:


474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION deleted text begin120-DAYdeleted text end ISSUANCE
EXEMPTION.

The Minnesota Office of Higher Education is exempt from deleted text beginthe 120-daydeleted text endnew text begin any time
limitation on
new text end issuance deleted text beginrequirementsdeleted text endnew text begin of bonds set forthnew text end in this chapter and may carry forward
allocations for student loan bonds, subject to carryforward notice requirements of section
474A.131, subdivision 2.

Sec. 32.

Minnesota Statutes 2016, section 474A.091, subdivision 1, is amended to read:


Subdivision 1.

Unified pool amount.

On the day after the last Monday in deleted text beginJulydeleted text endnew text begin Junenew text end any
bonding authority remaining unallocated from the small issue pool, the housing pool, and
the public facilities pool is transferred to the unified pool and must be reallocated as provided
in this section.

Sec. 33.

Minnesota Statutes 2016, section 474A.091, subdivision 2, is amended to read:


Subd. 2.

Applicationnew text begin for residential rental projectsnew text end.

new text begin(a) new text endIssuers may apply for an
allocation deleted text beginunder this section by submitting to the department an application on forms provided
by the department accompanied by (1) a preliminary resolution, (2) a statement of bond
counsel that the proposed issue of obligations requires an allocation under this chapter and
the Internal Revenue Code, (3) the type of qualified bonds to be issued, (4) an application
deposit in the amount of two percent of the requested allocation, (5) a public purpose scoring
worksheet for manufacturing and enterprise zone applications, and (6) for residential rental
projects, a statement from the applicant or bond counsel as to whether the project preserves
existing federally subsidized housing and whether the project is restricted to persons who
are 55 years of age or older. The issuer must pay the application deposit by check. An
entitlement issuer may not apply for an allocation for public facility bonds, residential rental
project bonds, or mortgage bonds under this section unless it has either permanently issued
bonds equal to the amount of its entitlement allocation for the current year plus any amount
carried forward from previous years or returned for reallocation all of its unused entitlement
allocation. For purposes of this subdivision, its entitlement allocation includes an amount
obtained under section 474A.04, subdivision 6.
deleted text end

deleted text begin Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
Rural Finance Authority may apply for and receive an allocation under this section without
submitting an application deposit.
deleted text end new text begin for residential rental bonds under this section by submitting
to the department an application on forms provided by the department accompanied by: (1)
a preliminary resolution; (2) a statement of bond counsel that the proposed issue of
obligations requires an allocation under this chapter and the Internal Revenue Code; (3) an
application deposit in the amount of two percent of the requested allocation; (4) a sworn
statement from the applicant identifying the project as a preservation project, a 30 percent
AMI residential rental project, a 50 percent AMI residential rental project, a 100 percent
LIHTC project, a 20 percent LIHTC project, or any other residential rental project; and (5)
a certification from the applicant or its accountant stating whether the requested allocation
exceeds the aggregate bond limitation. Applications for projects requesting bonds in excess
of the aggregate bond limitation may not apply or be allocated bonding authority until after
September 1 each year. The issuer must pay the application deposit by check. An entitlement
issuer may not apply for an allocation for residential rental bonds under this section unless
it has either permanently issued bonds equal to the amount of its entitlement allocation for
the current year plus any amount carried forward from previous years or returned for
reallocation all of its unused entitlement allocation. For purposes of this subdivision, an
entitlement allocation includes an amount obtained under section 474A.04, subdivision 6.
new text end

new text begin (b) An issuer that receives an allocation under this subdivision must issue obligations
equal to all or a portion of the allocation received on or before the later of 180 days of the
allocation or within 18 months after the allocation date if the applicant submits an additional
application deposit equal to one percent of the allocation amount on or prior to 180 days
after the allocation date. If an issuer that receives an allocation under this subdivision does
not issue obligations equal to all or a portion of the allocation received within the time
period provided in this paragraph or returns the allocation to the commissioner, the amount
of the allocation is canceled and returned for reallocation through the unified pool. If an
issuer that receives an allocation under this subdivision issues obligations within the time
period provided in this paragraph, the commissioner shall refund 50 percent of any application
deposit previously paid: (i) within 30 days after the date on which IRS Form 8609(s) are
issued with respect to projects generating low-income housing tax credits; or (ii) within 90
days after the issuer provides a certification and any other reasonable documentation
requested by the commissioner evidencing that construction of the project has been
completed. The obligations and the remaining 50 percent of the application deposit within
30 days after completion of construction of the project.
new text end

new text begin (c) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency may apply for and receive an allocation under this section without
submitting an application deposit.
new text end

Sec. 34.

Minnesota Statutes 2016, section 474A.091, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Application for all other types of qualified bonds. new text end

new text begin (a) Issuers may apply
for an allocation for all types of qualified bonds other than residential rental bonds under
this section by submitting to the department an application on forms provided by the
department accompanied by: (1) a preliminary resolution; (2) a statement of bond counsel
that the proposed issue of obligations requires an allocation under this chapter and the
Internal Revenue Code; (3) the type of qualified bonds to be issued; (4) an application
deposit in the amount of two percent of the requested allocation; and (5) a public purpose
scoring worksheet for manufacturing and enterprise zone applications. The issuer must pay
the application deposit by check. An entitlement issuer may not apply for an allocation for
public facility bonds or mortgage bonds under this section unless it has either permanently
issued bonds equal to the amount of its entitlement allocation for the current year plus any
amount carried forward from previous years or returned for reallocation all of its unused
entitlement allocation. For purposes of this subdivision, an entitlement allocation includes
an amount obtained under section 474A.04, subdivision 6.
new text end

new text begin (b) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
under this section prior to the first Monday in October, but may be awarded allocations for
mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
Rural Finance Authority may apply for and receive an allocation under this section without
submitting an application deposit.
new text end

Sec. 35.

Minnesota Statutes 2016, section 474A.091, subdivision 3, is amended to read:


Subd. 3.

Allocation procedure.

(a) The commissioner shall allocate available bonding
authority under this section on the Monday of every other week beginning with the first
Monday in deleted text beginAugustdeleted text endnew text begin Julynew text end through and on the last Monday in November. Applications for
allocations must be received by the department by 4:30 p.m. on the Monday preceding the
Monday on which allocations are to be made. If a Monday falls on a holiday, the allocation
will be made or the applications must be received by the next business day after the holiday.

(b) Prior to October 1, only the following applications shall be awarded allocations from
the unified pool. Allocations shall be awarded in the following order of priority:

(1) applications for residential rental project bonds;

(2) applications for small issue bonds for manufacturing projects; and

(3) applications for small issue bonds for agricultural development bond loan projects.

(c) On the first Monday in October through the last Monday in November, allocations
shall be awarded from the unified pool in the following order of priority:

(1) applications for student loan bonds issued by or on behalf of the Minnesota Office
of Higher Education;

(2) applications for mortgage bonds;

(3) applications for public facility projects funded by public facility bonds;

(4) applications for small issue bonds for manufacturing projects;

(5) applications for small issue bonds for agricultural development bond loan projects;

(6) applications for residential rental project bonds;

(7) applications for enterprise zone facility bonds;

(8) applications for governmental bonds; and

(9) applications for redevelopment bonds.

(d) If there are two or more applications for manufacturing projects from the unified
pool and there is insufficient bonding authority to provide allocations for all manufacturing
projects in any one allocation period, the available bonding authority shall be awarded based
on the number of points awarded a project under section 474A.045 with those projects
receiving the greatest number of points receiving allocation first. If two or more applications
for manufacturing projects receive an equal amount of points, available bonding authority
shall be awarded by lot unless otherwise agreed to by the respective issuers.

(e) If there are two or more applications for enterprise zone facility projects from the
unified pool and there is insufficient bonding authority to provide allocations for all enterprise
zone facility projects in any one allocation period, the available bonding authority shall be
awarded based on the number of points awarded a project under section 474A.045 with
those projects receiving the greatest number of points receiving allocation first. If two or
more applications for enterprise zone facility projects receive an equal amount of points,
available bonding authority shall be awarded by lot unless otherwise agreed to by the
respective issuers.

(f) If there are two or more applications for residential rental projects from the unified
pool and there is insufficient bonding authority to provide allocations for all residential
rental projects in any one allocation period, the available bonding authority shall be awarded
in the following order of priority: (1) deleted text beginprojects that preserve existing federally subsidized
housing; (2) projects that are not restricted to persons who are 55 years of age or older; and
(3)
deleted text endnew text begin preservation projects; (2) 30 percent AMI residential rental projects; (3) 50 percent AMI
residential rental projects; (4) 100 percent LIHTC projects; (5) 20 percent LIHTC projects;
(6)
new text end other residential rental projectsnew text begin for which the amount of bonds requested in their
respective applications do not exceed the aggregate bond limitation; and (7) other residential
rental projects for which the amount of bonds requested in their respective applications
exceed the aggregate bond limitation and that apply on or after September 1 of a calendar
year.
new text endnew text begin If there are two or more applications for residential rental projects at the same priority
level and there is insufficient bonding authority to provide allocations for all the projects
in any one allocation period, available bonding authority shall be randomly awarded by lot
but only for projects that received the full amount of their respective requested allocations.
If a residential rental project does not receive any of its requested allocation pursuant to this
paragraph, the remaining bonding authority not allocated to the project shall be reserved
by the commissioner, or by the Minnesota Housing Finance Agency if the authority is carried
forward pursuant to section 474A.131, for the project for up to 24 months thereafter, and
if the project applies in the future to the housing pool or unified pool for additional allocation
of bonds, the project shall be fully funded up to the remaining amount of its original
application request for bonding authority before any new project, applying in the same
allocation period, that has an equal priority shall receive bonding authority
new text end.

(g) From the first Monday in deleted text beginAugustdeleted text endnew text begin Julynew text end through the last Monday in November,
$20,000,000 of bonding authority or an amount equal to the total annual amount of bonding
authority allocated to the small issue pool under section 474A.03, subdivision 1, less the
amount allocated to issuers from the small issue pool for that year, whichever is less, is
reserved within the unified pool for small issue bonds to the extent deleted text beginsuchdeleted text endnew text begin thenew text end amounts are
available within the unified pool.

(h) The total amount of allocations for mortgage bonds from the housing pool and the
unified pool may not exceed:

(1) $10,000,000 for any one city; or

(2) $20,000,000 for any number of cities in any one county.

(i) The total amount of allocations for student loan bonds from the unified pool may not
exceed $25,000,000 per year.

(j) If there is insufficient bonding authority to fund all projects within any qualified bond
category other than enterprise zone facility projects, manufacturing projects, and residential
rental projects, allocations shall be awarded by lot unless otherwise agreed to by the
respective issuers.

(k) If an application is rejected, the commissioner must notify the applicant and return
the application deposit to the applicant within 30 days unless the applicant requests in writing
that the application be resubmitted.

(l) The granting of an allocation of bonding authority under this section must be evidenced
by issuance of a certificate of allocation.

Sec. 36.

Minnesota Statutes 2016, section 474A.091, subdivision 5, is amended to read:


Subd. 5.

Return of allocation; deposit refund.

(a) If an issuer that receives an allocation
under this section determines that it will not issue obligations equal to all or a portion of
the allocation received under this section within deleted text begin120deleted text endnew text begin the applicable number ofnew text end days deleted text beginofdeleted text endnew text begin afternew text end
the allocation new text beginrequired in this chapter new text endor within the time period permitted by federal tax law,
whichever is less, the issuer must notify the department. If the issuer notifies the department
or the deleted text begin120-daydeleted text end period since allocation has expired prior to the last Monday in November,
the amount of allocation is canceled and returned for reallocation through the unified pool.
If the issuer notifies the department on or after the last Monday in November, the amount
of allocation is canceled and returned for reallocation to the Minnesota Housing Finance
Agency. To encourage a competitive application process, the commissioner shall reserve,
for new applications, the amount of allocation that is canceled and returned for reallocation
under this section for a minimum of seven calendar days.

(b) An issuer that returns for reallocation all or a portion of an allocation new text beginfor all types
of bonds other than residential rental project bonds
new text endreceived under this section within 120
days of the allocation shall receive within 30 days a refund equal to:

(1) one-half of the application deposit for the amount of bonding authority returned
within 30 days of receiving the allocation;

(2) one-fourth of the application deposit for the amount of bonding authority returned
between 31 and 60 days of receiving the allocation; and

(3) one-eighth of the application deposit for the amount of bonding authority returned
between 61 and 120 days of receiving the allocation.

(c) No refund of the application deposit shall be available for allocations returned on or
after the last Monday in November.

new text begin (d) An issuer that returns for reallocation all or a portion of an allocation for residential
rental project bonds received under this section within 180 days of the allocation shall
receive within 30 days a refund equal to:
new text end

new text begin (1) one-half of the application deposit for the amount of bonding authority returned
within 45 days of receiving the allocation;
new text end

new text begin (2) one-fourth of the application deposit for the amount of bonding authority returned
between 46 and 90 days of receiving the allocation; and
new text end

new text begin (3) one-eighth of the application deposit for the amount of bonding authority returned
between 91 and 180 days of receiving the allocation.
new text end

Sec. 37.

Minnesota Statutes 2016, section 474A.091, subdivision 6, is amended to read:


Subd. 6.

Final allocation; carryforward.

Notwithstanding the notice requirements of
section 474A.131, subdivision 2, any bonding authority remaining unissued by the Minnesota
Housing Finance Agency on the last business day in December shall be carried forward
into the next calendar year by the commissioner for the Minnesota Housing Finance Agency.new text begin
Any authority carried forward shall be allocated to utilize the authority that is closest to
expiring first, and in all events, the Minnesota Housing Finance Agency shall allocate its
bonding authority to utilize the authority carried forward prior to any current year's allocation.
new text end

Sec. 38.

Minnesota Statutes 2016, section 474A.131, subdivision 1, is amended to read:


Subdivision 1.

Notice of issue.

Each issuer deleted text beginthat issues bondsdeleted text end with an allocation received
under this chapter shall provide a notice of issue to the department on forms provided by
the department stating:

(1) the date of issuance of the bonds;

(2) the title of the issue;

(3) the principal amount of the bonds;

(4) the type of qualified bonds under federal tax law;

(5) the dollar amount of the bonds issued that were subject to the annual volume cap;
and

(6) for entitlement issuers, whether the allocation is from current year entitlement
authority or is from carryforward authority.

For obligations that are issued as a part of a series of obligations, a notice must be
provided for each series. A penalty of one-half of the amount of the application deposit not
to exceed $5,000 shall apply to any issue of obligations for which a notice of issue is not
provided to the department within five business days after issuance or before 4:30 p.m. on
the last business day in December, whichever occurs first. Within 30 days after receipt of
a notice of issue the department shall refund a portion of the application deposit equal to
one percent of the amount of the bonding authority actually issued if a one percent application
deposit was made, or equal to two percent of the amount of the bonding authority actually
issued if deleted text begina two percentdeleted text endnew text begin the applicablenew text end application deposit was made, less any penalty amount.

Sec. 39.

Minnesota Statutes 2016, section 474A.131, subdivision 1b, is amended to read:


Subd. 1b.

Deadline for issuance of qualified bonds.

new text begin(a) new text endIf an issuer fails to notify the
department before 4:30 p.m. on the last business day in December of issuance of obligations
pursuant to an allocation received for any qualified bond project or issuance of an entitlement
allocationnew text begin other than those involving residential rental bondsnew text end, the allocation is canceled and
the bonding authority is allocated to the Minnesota Housing Finance Agency for carryforward
by the commissioner under section 474A.091, subdivision 6.

new text begin (b) With respect to: (1) an allocation received for a residential rental project for which
the obligations have not been issued before 4:30 p.m. on the last business day in December
and the time period for issuance of the obligations provided under section 474A.061,
subdivision 2a, or 474A.091, subdivision 2a, as applicable, has not expired; and (2) bonding
authority reserved for a project for up to 24 months under section 474A.061, subdivision
2a, or section 471A.091, subdivision 3, paragraph (f), as of 4:30 p.m. on the last business
day of December, the bonding authority shall be allocated to the Minnesota Housing Finance
Agency for carryforward by the commissioner under section 474A.091, subdivision 6;
provided, however, that the allocation shall remain reserved by the Minnesota Housing
Finance Agency for the residential rental project described in the original application and
the Minnesota Housing Finance Agency will have the fiduciary duty to issue the bonds as
intended by the originally intended issuer. In addition, any obligations issued by the
Minnesota Housing Finance Agency for a residential rental project that is subject to this
paragraph shall not be subject to the debt management policies of the Minnesota Housing
Finance Agency, as adopted and amended from time to time.
new text end

Sec. 40.

Minnesota Statutes 2016, section 474A.131, subdivision 2, is amended to read:


Subd. 2.

Carryforward notice.

If an issuer intends to carry forward an allocation received
under this chapter, it must notify the department in writing before 4:30 p.m. on the last
business day in December. This notice requirement does not apply to the Minnesota Housing
Finance Agency for the carryforward of unallocated unified pool balancesnew text begin or for the
carryforward of allocations of residential rental project bonds pursuant to section 474A.131,
subdivision 1b
new text end.

Sec. 41.

Minnesota Statutes 2016, section 474A.14, is amended to read:


474A.14 NOTICE OF AVAILABLE AUTHORITY.

The department shall provide at its official Web site a written notice of the amount of
bonding authority in the housing, small issue, and public facilities pools as soon after January
1 as possible. The department shall provide at its official Web site a written notice of the
amount of bonding authority available for allocation in the unified pool as soon after deleted text beginAugustdeleted text endnew text begin
July
new text end 1 as possible.

Sec. 42. new text beginADVANCES TO THE MINNESOTA MANUFACTURED HOME
RELOCATION TRUST FUND.
new text end

new text begin (a) Until June 30, 2020, the Minnesota Housing Finance Agency or Department of
Management and Budget as determined by the commissioner of management and budget,
is authorized to advance up to $400,000 from state appropriations or other resources to the
Minnesota manufactured home relocation trust fund established under Minnesota Statutes,
section 462A.35, if the account balance in the Minnesota manufactured home relocation
trust fund is insufficient to pay the amounts claimed under Minnesota Statutes, section
327C.095, subdivision 13.
new text end

new text begin (b) The Minnesota Housing Finance Agency or Department of Management and Budget
shall be reimbursed from the Minnesota manufactured home relocation trust fund for any
money advanced by the agency under paragraph (a) to the fund. Approved claims for payment
to manufactured home owners shall be paid prior to the money being advanced by the agency
or the department to the fund.
new text end

Sec. 43. new text beginHOUSING AFFORDABILITY FUND; 2019 ALLOCATIONS.
new text end

new text begin Allocations from the Housing Finance Agency's housing affordability fund, pool 3, in
2019, shall include a set-aside of ten percent for single-family home ownership development
in municipalities with a population under 10,000 or for manufactured housing projects. The
set-aside shall remain until June 1, 2019, after which any money remaining in the set-aside
shall be available to all eligible projects.
new text end

Sec. 44. new text beginREPORT; COSTS OF LOCAL ZONING ON AFFORDABLE HOUSING.
new text end

new text begin By January 15, 2019, the commissioner of the Housing Finance Agency shall report to
the members of the legislative policy and finance committees with jurisdiction over housing
on the effects of local regulatory, fee, and zoning decisions that raise the cost of development
of affordable housing.
new text end