Engrossments
Introduction		Posted on 02/16/2023

ARTICLE 1

FUNDING MECHANISMS

Section 1.

Minnesota Statutes 2022, section 462A.22, subdivision 1, is amended to read:

Subdivision 1.

Debt ceiling.

The aggregate principal amount of new text begin general obligation new text end bonds
and notes which are outstanding at any time, excluding the principal amount of any bonds
and notes refunded by the issuance of new bonds or notes, shall not exceed the sum of
$5,000,000,000.

Sec. 2.

Minnesota Statutes 2022, section 462A.36, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Refunding bonds. new text end

new text begin (a) The agency may issue nonprofit housing bonds in one
or more series to refund bonds authorized in subdivision 2. The amount of refunding nonprofit
housing bonds that may be issued from time to time will not be subject to the dollar limitation
contained in subdivision 2 nor will those bonds be included in computing the amount of
bonds that may be issued within that dollar limitation.
new text end

new text begin (b) In the refunding of nonprofit housing bonds, each bond must be called for redemption
prior to its maturity in accordance with its terms no later than the earliest date on which it
may be redeemed. No refunding bonds may be issued unless as of the date of the refunding
bonds the present value of the dollar amount of the debt service on the refunding bonds,
computed to their stated maturity dates, is lower than the present value of the dollar amount
of debt service on all nonprofit housing bonds refunded computed to their stated maturity
dates. For purposes of this subdivision, "present value of the dollar amount of debt service"
means the dollar amount of debt service to be paid, discounted to the nominal date of the
refunding bonds at a rate equal to the yield on the refunding bonds.
new text end

new text begin (c) If as a result of the issuance of refunding bonds the amount of debt service for an
annual period is less than the amount transferred by the commissioner of management and
budget to pay debt service for that annual period, the agency must deduct the excess amount
from the actual amount of debt service on those bonds certified for the next subsequent
annual period.
new text end

Sec. 3.

Minnesota Statutes 2022, section 462A.36, subdivision 4, is amended to read:

Subd. 4.

Appropriation; payment to agency or trustee.

(a) The agency must certify
annually to the commissioner of management and budget the actual amount of annual debt
service on each series of bonds issued under subdivision 2.

(b) Each July 15, beginning in 2009 and through 2031, if any nonprofit housing bonds
issued under subdivision 2new text begin , or nonprofit housing bonds issued to refund those bonds,new text end remain
outstanding, the commissioner of management and budget must transfer to the nonprofit
housing bond account established under section 462A.21, subdivision 32, the amount
certified under paragraph (a), not to exceed $2,400,000 annually. The amounts necessary
to make the transfers are appropriated from the general fund to the commissioner of
management and budget.

(c) The agency may pledge to the payment of the nonprofit housing bonds the payments
to be made by the state under this section.

Sec. 4.

Minnesota Statutes 2022, section 462A.37, is amended by adding a subdivision to
read:

new text begin Subd. 2i. new text end

new text begin Refunding bonds. new text end

new text begin (a) The agency may issue housing infrastructure bonds in
one or more series to refund bonds authorized in this section. The amount of refunding
housing infrastructure bonds that may be issued from time to time will not be subject to the
dollar limitation contained in any of the authorizations in this section nor will those bonds
be included in computing the amount of bonds that may be issued within those dollar
limitations.
new text end

new text begin (b) In the refunding of housing infrastructure bonds, each bond must be called for
redemption prior to its maturity in accordance with its terms no later than the earliest date
on which it may be redeemed. No refunding bonds may be issued unless as of the date of
the refunding bonds the present value of the dollar amount of the debt service on the
refunding bonds, computed to their stated maturity dates, is lower than the present value of
the dollar amount of debt service on all housing infrastructure bonds refunded computed to
their stated maturity dates. For purposes of this subdivision, "present value of the dollar
amount of debt service" means the dollar amount of debt service to be paid, discounted to
the nominal date of the refunding bonds at a rate equal to the yield on the refunding bonds.
new text end

Sec. 5.

Minnesota Statutes 2022, section 462A.37, subdivision 4, is amended to read:

Subd. 4.

Appropriation; payment to agency or trustee.

(a) The agency must certify
annually to the commissioner of management and budget the actual amount of annual debt
service on each series of bonds issued under subdivision 2.

(b) Each July 15, beginning in 2013 and through 2035, if any housing infrastructure
bonds issued under subdivision 2new text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the deleted text begin affordabledeleted text end housing new text begin infrastructure new text end bond account established under section 462A.21,
subdivision 33, the amount certified under paragraph (a), not to exceed $2,200,000 annually.
The amounts necessary to make the transfers are appropriated from the general fund to the
commissioner of management and budget.

(c) The agency may pledge to the payment of the housing infrastructure bonds the
payments to be made by the state under this section.

Sec. 6.

Minnesota Statutes 2022, section 462A.37, subdivision 5, is amended to read:

Subd. 5.

Additional appropriation.

(a) The agency must certify annually to the
commissioner of management and budget the actual amount of annual debt service on each
series of bonds issued under this section.

(b) Each July 15, beginning in 2015 and through 2037, if any housing infrastructure
bonds issued under subdivision 2anew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a), not to exceed $6,400,000 annually. The amounts
necessary to make the transfers are appropriated from the general fund to the commissioner
of management and budget.

(c) Each July 15, beginning in 2017 and through 2038, if any housing infrastructure
bonds issued under subdivision 2bnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a), not to exceed $800,000 annually. The amounts
necessary to make the transfers are appropriated from the general fund to the commissioner
of management and budget.

(d) Each July 15, beginning in 2019 and through 2040, if any housing infrastructure
bonds issued under subdivision 2cnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a), not to exceed $2,800,000 annually. The amounts
necessary to make the transfers are appropriated from the general fund to the commissioner
of management and budget.

(e) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure
bonds issued under subdivision 2dnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a). The amounts necessary to make the transfers are
appropriated from the general fund to the commissioner of management and budget.

(f) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure
bonds issued under subdivision 2enew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a). The amounts necessary to make the transfers are
appropriated from the general fund to the commissioner of management and budget.

(g) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure
bonds issued under subdivision 2fnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a). The amounts necessary to make the transfers are
appropriated from the general fund to the commissioner of management and budget.

(h) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure
bonds issued under subdivision 2gnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a). The amounts necessary to make the transfers are
appropriated from the general fund to the commissioner of management and budget.

(i) Each July 15, beginning in 2023 and through 2044, if any housing infrastructure
bonds issued under subdivision 2hnew text begin , or housing infrastructure bonds issued to refund those
bonds,new text end remain outstanding, the commissioner of management and budget must transfer to
the housing infrastructure bond account established under section 462A.21, subdivision 33,
the amount certified under paragraph (a). The amounts necessary to make the transfers are
appropriated from the general fund to the commissioner of management and budget.

(j) The agency may pledge to the payment of the housing infrastructure bonds the
payments to be made by the state under this section.

ARTICLE 2

ELIGIBILITY AND USES

Section 1.

Minnesota Statutes 2022, section 462A.05, subdivision 14, is amended to read:

Subd. 14.

Rehabilitation loans.

It may agree to purchase, make, or otherwise participate
in the making, and may enter into commitments for the purchase, making, or participation
in the making, of eligible loans for rehabilitation, with terms and conditions as the agency
deems advisable, to persons and families of low and moderate income, and to owners of
existing residential housing for occupancy by such persons and families, for the rehabilitation
of existing residential housing owned by them. new text begin Rehabilitation may include the addition or
rehabilitation of a detached accessory dwelling unit. new text end The loans may be insured or uninsured
and may be made with security, or may be unsecured, as the agency deems advisable. The
loans may be in addition to or in combination with long-term eligible mortgage loans under
subdivision 3. They may be made in amounts sufficient to refinance existing indebtedness
secured by the property, if refinancing is determined by the agency to be necessary to permit
the owner to meet the owner's housing cost without expending an unreasonable portion of
the owner's income thereon. No loan for rehabilitation shall be made unless the agency
determines that the loan will be used primarily to make the housing more desirable to live
in, to increase the market value of the housing, for compliance with state, county or municipal
building, housing maintenance, fire, health or similar codes and standards applicable to
housing, or to accomplish energy conservation related improvements. In unincorporated
areas and municipalities not having codes and standards, the agency may, solely for the
purpose of administering the provisions of this chapter, establish codes and standards. No
loan under this subdivision for the rehabilitation of owner-occupied housing shall be denied
solely because the loan will not be used for placing the owner-occupied residential housing
in full compliance with all state, county, or municipal building, housing maintenance, fire,
health, or similar codes and standards applicable to housing. Rehabilitation loans shall be
made only when the agency determines that financing is not otherwise available, in whole
or in part, from private lenders upon equivalent terms and conditions. Accessibility
rehabilitation loans authorized under this subdivision may be made to eligible persons and
families without limitations relating to the maximum incomes of the borrowers if:

(1) the borrower or a member of the borrower's family requires a level of care provided
in a hospital, skilled nursing facility, or intermediate care facility for persons with
developmental disabilities;

(2) home care is appropriate; and

(3) the improvement will enable the borrower or a member of the borrower's family to
reside in the housing.

The agency may waive any requirement that the housing units in a residential housing
development be rented to persons of low and moderate income if the development consists
of four or less dwelling units, one of which is occupied by the owner.

Sec. 2.

Minnesota Statutes 2022, section 462A.05, is amended by adding a subdivision to
read:

new text begin Subd. 42. new text end

new text begin Indian Tribes. new text end

new text begin Notwithstanding any other provision in this chapter, at its
discretion the agency may make any federally recognized Indian Tribe in Minnesota, or
their associated Tribally Designated Housing Entity (TDHE) as defined by United States
Code, title 25, section 4103(22), eligible for funding authorized under this chapter.
new text end

Sec. 3.

Minnesota Statutes 2022, section 462A.05, is amended by adding a subdivision to
read:

new text begin Subd. 43. new text end

new text begin Housing disparities. new text end

new text begin The agency must prioritize its use of appropriations for
any program under this chapter to serve households most affected by housing disparities.
new text end

Sec. 4.

Minnesota Statutes 2022, section 462A.05, is amended by adding a subdivision to
read:

new text begin Subd. 44. new text end

new text begin Special purpose credit program. new text end

new text begin The agency may establish special purpose
credit programs to assist one or more economically disadvantaged classes of persons in
order to address the effects of historic and current discrimination which resulted in limiting
access to housing credit by persons on the basis of race, color, ethnicity, or national origin.
A special purpose credit program may include a wide variety of remedies, including but
not limited to loans or other financial assistance, based on current, documented need as
determined by the agency.
new text end

Sec. 5.

Minnesota Statutes 2022, section 462A.204, subdivision 3, is amended to read:

Subd. 3.

Set aside.

At least one grant must be awarded in an area located outside of the
metropolitan area. A county, a group of contiguous counties jointly acting together, a Tribe,
a group of Tribes, or a community-based nonprofit organization deleted text begin with a sponsoring resolution
from each of the county boards of the counties located within its operating jurisdictiondeleted text end may
apply for and receive grants deleted text begin for areas located outside the metropolitan areadeleted text end .

Sec. 6.

Minnesota Statutes 2022, 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.

(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:

(1) are qualified 501(c)(3) bonds, within the meaning of section 145(a) of the Internal
Revenue Code;

(2) finance qualified residential rental projects within the meaning of section 142(d) of
the Internal Revenue Code;new text begin or
new text end

deleted text begin (3) finance the construction or rehabilitation of single-family houses that qualify for
mortgage financing within the meaning of section 143 of the Internal Revenue Code; or
deleted text end

deleted text begin (4)deleted text end new text begin (3)new text end 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.

(h) "Senior" means a person 55 years of age or older deleted text begin with an annual income not greater
than 50 percent of:deleted text end new text begin .
new text end

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

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

new text begin (i) "Senior household" means a household with one or more senior members and with
an annual combined 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

deleted text begin (i)deleted text end new text begin (j)new text end "Senior housing" means housing intended and operated for occupancy by deleted text begin at least
one senior per unitdeleted text end new text begin senior householdsnew text end with at least 80 percent of the units occupied by deleted text begin at
least one senior per unitdeleted text end new text begin senior householdsnew text end , 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.

deleted text begin (j)deleted text end new text begin (k)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. 7.

Minnesota Statutes 2022, 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 loans, or grants for the purposes of clause (4)new text begin and
clause (7)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 home buyers;

(4) to finance the acquisition, improvement, and infrastructure of manufactured home
parks under section 462A.2035, subdivision 1b;

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

(6) to finance the costs of acquisition deleted text begin anddeleted text end new text begin ,new text end rehabilitationnew text begin , and replacementnew text end 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; and

(7) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
of single-family housing.

(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.

(1) demonstrate a commitment to maintaining the housing financed as affordable to
deleted text begin seniorsdeleted text end new text begin senior householdsnew text end ;

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

(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 begin
and
new text end

deleted 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
deleted text end

deleted text begin (5)deleted text end new text begin (4)new text end include households with incomes that do not exceed 30 percent of the median
household income for the metropolitan area.

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.

Sec. 8.

Minnesota Statutes 2022, section 462A.38, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

A workforce and affordable homeownership development
program is established to award homeownership development grants to cities, new text begin counties,
new text end Tribal governments, nonprofit organizations, cooperatives created under chapter 308A or
308B, and community land trusts created for the purposes outlined in section 462A.31,
subdivision 1, for development of workforce and affordable homeownership projects. The
purpose of the program is to increase the supply of workforce and affordable, owner-occupied
multifamily or single-family housing throughout Minnesota.

Sec. 9.

Minnesota Statutes 2022, section 462A.39, subdivision 2, is amended to read:

Subd. 2.

Definitions.

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

(b) "Eligible project area" means a home rule charter or statutory city located outside
of deleted text begin thedeleted text end new text begin anew text end metropolitan deleted text begin areadeleted text end new text begin countynew text end as defined in section 473.121, subdivision deleted text begin 2deleted text end new text begin 4new text end , 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 deleted text begin thedeleted text end new text begin anew text end
metropolitan deleted text begin areadeleted text end new text begin countynew text end as defined in section 473.121, subdivision deleted text begin 2deleted text end new text begin 4new text end ; new text begin federally recognized
Tribal reservations; new text end or an area served by a joint county-city economic development authority.

(c) "Joint county-city economic development authority" means an economic development
authority formed under Laws 1988, chapter 516, section 1, as a joint partnership between
a city and county and excluding those established by the county only.

(d) "Market rate residential rental properties" means properties that are rented at market
value, including new modular homes, new manufactured homes, and new manufactured
homes on leased land or in a manufactured home park, and may include rental developments
that have a portion of income-restricted units.

(e) "Qualified expenditure" means expenditures for market rate residential rental
properties including acquisition of property; construction of improvements; and provisions
of loans or subsidies, grants, interest rate subsidies, public infrastructure, and related financing
costs.

Sec. 10.

Minnesota Statutes 2022, section 462A.39, subdivision 5, is amended to read:

Subd. 5.

Allocation.

The amount of a grant or deferred loans may not exceed 25 percent
of the rental housing development project cost. The commissioner shall not award a grant
or deferred loans to deleted text begin a citydeleted text end new text begin an eligible project areanew text end without certification by the deleted text begin citydeleted text end new text begin eligible
project areanew text end that the amount of the grant or deferred loans shall be matched by a local unit
of government, business, deleted text begin ordeleted text end nonprofit organizationnew text begin , or federally recognized Tribe,new text end with $1
for every $2 provided in grant or deferred loans funds.

Sec. 11.

Laws 2021, First Special Session chapter 8, article 1, section 3, subdivision 11,
is amended to read:

Subd. 11.

Affordable Rental Investment Fund

4,218,000

(a) This appropriation is for the affordable
rental investment fund program under
Minnesota Statutes, section 462A.21,
subdivision 8b, to finance the acquisition,
rehabilitation, new text begin replacement, new text end and debt
restructuring of federally assisted rental
property and for making equity take-out loans
under Minnesota Statutes, section 462A.05,
subdivision 39.

(b) The owner of federally assisted rental
property must agree to participate in the
applicable federally assisted housing program
and to extend any existing low-income
affordability restrictions on the housing for
the maximum term permitted.

(c) The appropriation also may be used to
finance the acquisition, rehabilitation, and debt
restructuring of existing supportive housing
properties and naturally occurring affordable
housing as determined by the commissioner.
For purposes of this paragraph, "supportive
housing" means affordable rental housing with
links to services necessary for individuals,
youth, and families with children to maintain
housing stability.

HF 1874

Bill Text Versions

Current Version - as introduced

ARTICLE 1

FUNDING MECHANISMS

Section 1.

Subdivision 1.

Debt ceiling.

Sec. 2.

new text begin Subd. 2a. new text end

new text begin Refunding bonds. new text end

Sec. 3.

Subd. 4.

Appropriation; payment to agency or trustee.

Sec. 4.

new text begin Subd. 2i. new text end

new text begin Refunding bonds. new text end

Sec. 5.

Subd. 4.

Appropriation; payment to agency or trustee.

Sec. 6.

Subd. 5.

Additional appropriation.

ARTICLE 2

ELIGIBILITY AND USES

Section 1.

Subd. 14.

Rehabilitation loans.

Sec. 2.

new text begin Subd. 42. new text end

new text begin Indian Tribes. new text end

Sec. 3.

new text begin Subd. 43. new text end

new text begin Housing disparities. new text end

Sec. 4.

new text begin Subd. 44. new text end

new text begin Special purpose credit program. new text end

Sec. 5.

Subd. 3.

Set aside.

Sec. 6.

Subdivision 1.

Definitions.

Sec. 7.

Subd. 2.

Authorization.

Sec. 8.

Subdivision 1.

Establishment.

Sec. 9.

Subd. 2.

Definitions.

Sec. 10.

Subd. 5.

Allocation.

Sec. 11.

Subd. 11.

Affordable Rental Investment Fund