1.1                          A bill for an act
  1.2             relating to housing; creating and changing programs 
  1.3             and projects; imposing terms and conditions; 
  1.4             appropriating money; amending Minnesota Statutes 1996, 
  1.5             sections 462A.05, subdivision 14; 462A.21, by adding 
  1.6             subdivisions; 462A.222, subdivision 3; and 474A.061, 
  1.7             subdivision 2a; Minnesota Statutes 1997 Supplement, 
  1.8             sections 462A.05, subdivision 39; and 462A.205, 
  1.9             subdivisions 1, 2, 5, 6, and 9; Laws 1997, chapter 
  1.10            200, article 1, section 6; proposing coding for new 
  1.11            law in Minnesota Statutes, chapters 462A; and 471. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13  Section 1.  [APPROPRIATIONS.] 
  1.14     The sums in the columns marked "APPROPRIATIONS" are 
  1.15  appropriated from the general fund, or another named fund, to 
  1.16  the agencies and for the purposes specified in this act, to be 
  1.17  available for the fiscal years indicated for each purpose.  The 
  1.18  figures "1998" and "1999," where used in this act, mean that the 
  1.19  appropriation or appropriations listed under them are available 
  1.20  for the year ending June 30, 1998, or June 30, 1999, 
  1.21  respectively.  The term "first year" means the fiscal year 
  1.22  ending June 30, 1998, and "second year" means the fiscal year 
  1.23  ending June 30, 1999. 
  1.24                          SUMMARY BY FUND 
  1.25                                           1998           1999 
  1.26  General                              $    -0-       $15,100,000 
  1.27  TOTAL                                $    -0-       $15,100,000 
  1.28                                             APPROPRIATIONS 
  1.29                                         Available for the Year 
  2.1                                              Ending June 30 
  2.2                                             1998         1999 
  2.3   Sec. 2.  [MINNESOTA HOUSING 
  2.4   FINANCE AGENCY.]                           -0-       14,975,000
  2.5   The amounts that may be spent from this 
  2.6   appropriation for certain programs are 
  2.7   specified below. 
  2.8   This appropriation is for transfer to 
  2.9   the housing development fund for the 
  2.10  programs specified.  Except as 
  2.11  otherwise indicated, this transfer is 
  2.12  part of the agency's permanent budget 
  2.13  base. 
  2.14  $365,000 in 1999 is for a rental 
  2.15  housing assistance program for persons 
  2.16  with a mental illness or families with 
  2.17  an adult member with a mental illness 
  2.18  under Minnesota Statutes, section 
  2.19  462A.2097, and is added to the 
  2.20  appropriation for this program in Laws 
  2.21  1997, chapter 200, article 1, section 6.
  2.22  $700,000 in 1999 is for the family 
  2.23  homeless prevention and assistance 
  2.24  program under Minnesota Statutes, 
  2.25  section 462A.204 and is added to the 
  2.26  appropriation for this program in Laws 
  2.27  1997, chapter 200, article 1, section 6.
  2.28  $11,600,000 in 1999 is for the 
  2.29  affordable rental investment fund 
  2.30  program under Minnesota Statutes, 
  2.31  section 462A.21, subdivision 8b, and 
  2.32  added to the appropriation for this 
  2.33  program in Laws 1997, chapter 200, 
  2.34  article 1, section 6.  The agency must 
  2.35  seek a commitment from nonstate 
  2.36  resources to be used in coordination 
  2.37  with the affordable rental investment 
  2.38  fund program to secure affordable 
  2.39  housing for workers.  The annual base 
  2.40  appropriation for the affordable rental 
  2.41  investment fund program in the 
  2.42  2000-2001 biennium is equal to the 
  2.43  fiscal year 1999 appropriation plus 
  2.44  $2,085,000. 
  2.45  Of the amount appropriated to the 
  2.46  affordable rental investment fund 
  2.47  program, $10,000,000 is to finance the 
  2.48  acquisition, rehabilitation, and debt 
  2.49  restructuring of federally assisted 
  2.50  rental property and for making equity 
  2.51  take-out loans under Minnesota 
  2.52  Statutes, section 462A.05, subdivision 
  2.53  39.  The owner of the rental property 
  2.54  must agree to participate in the 
  2.55  applicable federally assisted housing 
  2.56  program and to extend any existing 
  2.57  low-income affordability restrictions 
  2.58  on the housing for the maximum term 
  2.59  permitted.  The owner must also agree 
  2.60  to give local units of government, 
  2.61  housing and redevelopment authorities, 
  2.62  and nonprofit housing organizations the 
  2.63  right of first refusal if the rental 
  2.64  property is offered for sale.  Priority 
  3.1   must be given to properties with the 
  3.2   longest remaining term under an 
  3.3   agreement for federal rental 
  3.4   assistance.  Priority must also be 
  3.5   given among comparable rental housing 
  3.6   developments to developments that are 
  3.7   or will be owned by a local government 
  3.8   unit, a housing and redevelopment 
  3.9   authority, or a nonprofit housing 
  3.10  organization. 
  3.11  $65,000 in 1999 is for nonprofit 
  3.12  capacity building grants under 
  3.13  Minnesota Statutes, section 462A.21, 
  3.14  subdivision 3b, and is added to the 
  3.15  appropriation for this program in Laws 
  3.16  1997, chapter 200, article 1, section 
  3.17  6.  This appropriation is for grants to 
  3.18  supplement resources from the 
  3.19  corporation for national service in 
  3.20  support of placement of VISTA 
  3.21  volunteers with nonprofit housing 
  3.22  agencies. 
  3.23  $1,600,000 in 1999 is for the community 
  3.24  rehabilitation program under Minnesota 
  3.25  Statutes, section 462A.206, and is 
  3.26  added to the appropriation for this 
  3.27  program in Laws 1997, chapter 200, 
  3.28  article 1, section 6.  The agency must 
  3.29  seek a commitment from nonstate 
  3.30  resources to be used in coordination 
  3.31  with the community rehabilitation 
  3.32  program to secure affordable housing 
  3.33  for workers.  The annual base 
  3.34  appropriation for the community 
  3.35  rehabilitation program in the 2000-2001 
  3.36  biennium is equal to the fiscal year 
  3.37  1999 appropriation plus $2,085,000. 
  3.38  $70,000 in 1999 is for full-cycle home 
  3.39  ownership and purchase-rehabilitation 
  3.40  lending initiatives under Minnesota 
  3.41  Statutes, section 462A.209.  This is a 
  3.42  one-time appropriation and is not added 
  3.43  to the agency's permanent budget base.  
  3.44  This appropriation must be used to make 
  3.45  a grant to a statewide organization 
  3.46  that advocates on behalf of persons 
  3.47  with mental retardation or related 
  3.48  conditions.  The grant must be used to 
  3.49  provide prepurchase and postpurchase 
  3.50  counseling to persons with disabilities 
  3.51  who are participating in the Fannie Mae 
  3.52  Homechoice demonstration project and 
  3.53  other projects designed to encourage 
  3.54  home ownership among persons with 
  3.55  disabilities. 
  3.56  $500,000 in 1999 is for the 
  3.57  homeownership zones program, under 
  3.58  Minnesota Statutes, section 462A.2066. 
  3.59  If the agency does not receive fundable 
  3.60  applications for this program by June 
  3.61  30, 1999, that will use the entire 
  3.62  appropriation, the remaining amount is 
  3.63  transferred to the community 
  3.64  rehabilitation program. 
  3.65  $75,000 in 1999 is appropriated for the 
  3.66  housing rehabilitation loan program 
  4.1   under Minnesota Statutes, section 
  4.2   462A.05, subdivision 14a, for loans to 
  4.3   households which include a member 
  4.4   diagnosed with chemical sensitivity.  
  4.5   Notwithstanding section 462A.05, 
  4.6   subdivision 14a, loans may be made to 
  4.7   households which include a member 
  4.8   diagnosed with chemical sensitivity for 
  4.9   the lesser of the actual cost of 
  4.10  improvements or $25,000.  This is a 
  4.11  one-time appropriation and is not added 
  4.12  to the agency's permanent budget base. 
  4.13  Sec. 3.  [ADMINISTRATION.]               -0-            125,000
  4.14  To the commissioner of administration 
  4.15  for the Healthy Homes Pilot Project 
  4.16  established in section 5.  This is a 
  4.17  one-time appropriation and is not added 
  4.18  to the department's permanent budget 
  4.19  base. 
  4.20     Sec. 4.  Laws 1997, chapter 200, article 1, section 6, is 
  4.21  amended to read: 
  4.22  Sec. 6.  HOUSING FINANCE AGENCY       33,380,000     24,976,000
  4.23  The amounts that may be spent from this 
  4.24  appropriation for certain programs are 
  4.25  specified below. 
  4.26  This appropriation is for transfer to 
  4.27  the housing development fund for the 
  4.28  programs specified.  Except as 
  4.29  otherwise indicated, this transfer is 
  4.30  part of the agency's permanent budget 
  4.31  base. 
  4.32  Spending limit on cost of general 
  4.33  administration of agency programs:  
  4.34        1998                     1999
  4.35      11,017,000 11,684,000    11,678,000 13,278,000
  4.36  $1,550,000 the first year and 
  4.37  $1,550,000 the second year is for a 
  4.38  rental housing assistance program for 
  4.39  persons with a mental illness or 
  4.40  families with an adult member with a 
  4.41  mental illness under Minnesota 
  4.42  Statutes, section 462A.2097. 
  4.43  A biennial appropriation of $5,750,000 
  4.44  is made in the first year and is for 
  4.45  the family homeless prevention and 
  4.46  assistance program under Minnesota 
  4.47  Statutes, section 462A.204, and is 
  4.48  available until June 30, 1999. 
  4.49  Grants to organizations made under the 
  4.50  family homeless prevention and 
  4.51  assistance program may include grants 
  4.52  (1) to organizations providing case 
  4.53  management for persons that need 
  4.54  assistance to rehabilitate their rent 
  4.55  history and find rental housing, and 
  4.56  (2) to organizations that will provide, 
  4.57  and report on the success or failure 
  4.58  of, innovative approaches to housing 
  5.1   persons with poor rental histories, 
  5.2   including, but not limited to, 
  5.3   assisting tenants in correcting tenant 
  5.4   screening reports, developing a single 
  5.5   application fee and process acceptable 
  5.6   to participating landlords, developing 
  5.7   a certification of tenants program 
  5.8   acceptable to participating landlords, 
  5.9   expungement of unlawful detainer 
  5.10  records, and creating a bonding program 
  5.11  to encourage landlords to accept 
  5.12  high-risk tenants with poor rent 
  5.13  histories. 
  5.14  $583,000 the first year and $583,000 
  5.15  the second year is for the foreclosure 
  5.16  prevention and assistance program under 
  5.17  Minnesota Statutes, section 462A.207. 
  5.18  $2,750,000 the first year and 
  5.19  $2,750,000 the second year is for the 
  5.20  rent assistance for family 
  5.21  stabilization program under Minnesota 
  5.22  Statutes, section 462A.205.  Of this 
  5.23  amount, $750,000 each year is a 
  5.24  one-time appropriation and is not added 
  5.25  to the agency's permanent base. 
  5.26  $2,348,000 the first year and 
  5.27  $2,348,000 the second year is for the 
  5.28  housing trust fund to be deposited in 
  5.29  the housing trust fund account created 
  5.30  under Minnesota Statutes, section 
  5.31  462A.201, and used for the purposes 
  5.32  provided in that section.  Of this 
  5.33  amount, $550,000 each year must be used 
  5.34  for transitional housing. 
  5.35  $8,118,000 the first year and 
  5.36  $6,493,000 the second year is for the 
  5.37  affordable rental investment fund 
  5.38  program under Minnesota Statutes, 
  5.39  section 462A.21, subdivision 8b.  Of 
  5.40  this amount, $1,625,000 the first year 
  5.41  is a one-time appropriation and is not 
  5.42  added to the agency's permanent base.  
  5.43  Of the one-time appropriation, $125,000 
  5.44  the first year is for housing for 
  5.45  people with HIV or AIDS outside of the 
  5.46  Minneapolis-St. Paul metropolitan 
  5.47  statistical area.  
  5.48  To the extent practicable, this 
  5.49  appropriation shall be used so that an 
  5.50  approximately equal number of housing 
  5.51  units are financed in the metropolitan 
  5.52  area, as defined in Minnesota Statutes, 
  5.53  section 473.121, subdivision 2, and in 
  5.54  the nonmetropolitan area. 
  5.55  (a) In the area of the state outside 
  5.56  the metropolitan area, the agency must 
  5.57  work with groups in the funding regions 
  5.58  created under Minnesota Statutes, 
  5.59  section 116J.415, to assist the agency 
  5.60  in identifying the affordable housing 
  5.61  needed in each region in connection 
  5.62  with economic development and 
  5.63  redevelopment efforts and in 
  5.64  establishing priorities for uses of the 
  5.65  affordable rental investment fund.  The 
  6.1   groups must include the regional 
  6.2   development commissioners, the regional 
  6.3   organization selected under Minnesota 
  6.4   Statutes, section 116J.415, the private 
  6.5   industry councils, units of local 
  6.6   government, community action agencies, 
  6.7   the Minnesota housing partnership 
  6.8   network groups, local lenders, 
  6.9   for-profit and nonprofit developers, 
  6.10  and realtors.  In addition to 
  6.11  priorities developed by the group, the 
  6.12  agency must give a preference to 
  6.13  economically viable projects in which 
  6.14  units of local government, area 
  6.15  employers, and the private sector 
  6.16  contribute financial assistance.  
  6.17  (b) In the metropolitan area, the 
  6.18  commissioner shall collaborate with the 
  6.19  metropolitan council to identify the 
  6.20  priorities for use of the affordable 
  6.21  rental investment fund.  Funds 
  6.22  distributed in the metropolitan area 
  6.23  must be used consistent with the 
  6.24  objectives of the metropolitan 
  6.25  development guide, adopted under 
  6.26  Minnesota Statutes, section 473.145.  
  6.27  In addition to the priorities 
  6.28  identified in conjunction with the 
  6.29  metropolitan council, the agency shall 
  6.30  give preference to economically viable 
  6.31  projects that: 
  6.32  (1) include a contribution of financial 
  6.33  resources from units of local 
  6.34  government and area employers; 
  6.35  (2) take into account the availability 
  6.36  of transportation in the community; and 
  6.37  (3) take into account the job training 
  6.38  efforts in the community. 
  6.39  $187,000 the first year and $187,000 
  6.40  the second year is for the urban Indian 
  6.41  housing program under Minnesota 
  6.42  Statutes, section 462A.07, subdivision 
  6.43  15.  
  6.44  $1,683,000 the first year and 
  6.45  $1,683,000 the second year is for the 
  6.46  tribal Indian housing program under 
  6.47  Minnesota Statutes, section 462A.07, 
  6.48  subdivision 14.  
  6.49  $186,000 the first year and $186,000 
  6.50  the second year is for the Minnesota 
  6.51  rural and urban homesteading program 
  6.52  under Minnesota Statutes, section 
  6.53  462A.057.  
  6.54  $340,000 the first year and $240,000 
  6.55  the second year is for nonprofit 
  6.56  capacity building grants under 
  6.57  Minnesota Statutes, section 462A.21, 
  6.58  subdivision 3b.  Of this amount, 
  6.59  $80,000 is for a grant to the Minnesota 
  6.60  housing partnership.  Of this amount, 
  6.61  $150,000 is for equal grants to an 
  6.62  organization in each of the six regions 
  6.63  established under Minnesota Statutes, 
  7.1   section 116J.415, for capacity building 
  7.2   grants.  Of this amount, $50,000 is for 
  7.3   a grant in the metropolitan area, as 
  7.4   defined in Minnesota Statutes, section 
  7.5   473.121, subdivision 2.  Of this 
  7.6   amount, $100,000 the first year is to 
  7.7   develop projects under the neighborhood 
  7.8   land trust program under Minnesota 
  7.9   Statutes, sections 462A.30 and 462A.31, 
  7.10  and is available until June 30, 1999.  
  7.11  The appropriation in the first year for 
  7.12  the neighborhood land trust program is 
  7.13  a one-time appropriation and is not 
  7.14  added to the agency's permanent base.  
  7.15  $4,368,000 the first year and 
  7.16  $3,569,000 the second year is for the 
  7.17  community rehabilitation program under 
  7.18  Minnesota Statutes, section 462A.206.  
  7.19  Of this amount, $250,000 the first year 
  7.20  and $250,000 the second year is for 
  7.21  full-cycle home ownership and 
  7.22  purchase-rehabilitation lending 
  7.23  initiatives.  Of this amount, 
  7.24  $1,218,000 the first year and $419,000 
  7.25  the second year are one-time 
  7.26  appropriations and are not added to the 
  7.27  agency's permanent base. 
  7.28  Of the one-time appropriation for the 
  7.29  community rehabilitation program, 
  7.30  $375,000 the first year and $375,000 
  7.31  the second year is for grants to 
  7.32  acquire, demolish, and remove 
  7.33  substandard multiple-unit residential 
  7.34  rental property or acquire, 
  7.35  rehabilitate, and reconfigure 
  7.36  multiple-unit residential rental 
  7.37  property.  No more than one-half of 
  7.38  money available in a year shall be 
  7.39  given to a single project.  Priority 
  7.40  must be given to projects that result 
  7.41  in the creation of housing 
  7.42  opportunities that will diversify the 
  7.43  housing stock and promote the creation 
  7.44  of life-cycle housing opportunities 
  7.45  within the community.  For the purposes 
  7.46  of this paragraph, "substandard 
  7.47  multiple-unit residential rental 
  7.48  property" is property that meets the 
  7.49  definition of Minnesota Statutes 1996, 
  7.50  section 273.1316, subdivision 2.  
  7.51  Displaced residents must be provided 
  7.52  relocation assistance, as provided in 
  7.53  Minnesota Statutes, sections 117.50 to 
  7.54  117.56.  To the extent allowed by 
  7.55  federal law, a public agency 
  7.56  administering a federal rent subsidy 
  7.57  program shall give priority to persons 
  7.58  displaced by grants under this section. 
  7.59  Of the one-time appropriation for the 
  7.60  community rehabilitation program, 
  7.61  $250,000 the first year is for a grant 
  7.62  to provide funds to an organization or 
  7.63  consortium of organizations 
  7.64  participating in a project that is 
  7.65  awarded a grant from the metropolitan 
  7.66  livable communities demonstration 
  7.67  program to develop affordable and 
  7.68  life-cycle housing in St. Paul or 
  8.1   Minneapolis.  The project must be based 
  8.2   upon a comprehensive community planning 
  8.3   process that creates a long-term plan 
  8.4   to revitalize a neighborhood and must 
  8.5   include compact development with 
  8.6   linkages to employment, transit, and 
  8.7   affordable life-cycle housing. 
  8.8   Of the one-time appropriation for the 
  8.9   community rehabilitation program, up to 
  8.10  $550,000 the first year is for a grant 
  8.11  to the city of Landfall to purchase a 
  8.12  portion of real property in the city 
  8.13  owned by the Washington county housing 
  8.14  and redevelopment authority.  The 
  8.15  agency shall not make the grant until 
  8.16  the city of Landfall has secured the 
  8.17  balance of the funds necessary to 
  8.18  purchase the real property from the 
  8.19  Washington county housing and 
  8.20  redevelopment authority.  The agency 
  8.21  shall require that the land purchased 
  8.22  be restricted to use by current 
  8.23  residents or for affordable housing for 
  8.24  the term of the bonds issued by the 
  8.25  city to purchase the land.  "Affordable"
  8.26  is as defined by the metropolitan 
  8.27  council for the purposes of the 
  8.28  metropolitan livable communities 
  8.29  program.  
  8.30  A recipient of funds from the community 
  8.31  rehabilitation program for a project in 
  8.32  a historic preservation district in St. 
  8.33  Paul, must provide assurances to the 
  8.34  agency that the project will conform to 
  8.35  the written historic preservation 
  8.36  guidelines for the district and that 
  8.37  the funding recipient will not seek any 
  8.38  variance to the guidelines.  
  8.39  $4,287,000 the first year and 
  8.40  $4,287,000 the second year is for the 
  8.41  housing rehabilitation and 
  8.42  accessibility program under Minnesota 
  8.43  Statutes, section 462A.05, subdivisions 
  8.44  14a and 15a.  
  8.45  $1,075,000 the first year and 
  8.46  $1,075,000 the second year is for the 
  8.47  home ownership assistance fund under 
  8.48  Minnesota Statutes, section 462A.21, 
  8.49  subdivision 8.  Of this amount, 
  8.50  $175,000 each year is a one-time 
  8.51  appropriation and is not added to the 
  8.52  agency's permanent base. 
  8.53  $25,000 the first year and $25,000 the 
  8.54  second year is for home equity 
  8.55  conversion counseling grants under 
  8.56  Minnesota Statutes, section 462A.28.  
  8.57  The money must be used for a counseling 
  8.58  service which only counsels for home 
  8.59  equity conversions. 
  8.60  $50,000 is for the costs of the 
  8.61  advisory task force on lead hazard 
  8.62  reduction, established in article 4, 
  8.63  section 1.  This is a one-time 
  8.64  appropriation and is not added to the 
  8.65  agency's permanent base. 
  9.1   $80,000 is for the affordable 
  9.2   neighborhood design and development 
  9.3   initiative, in Laws 1995, chapter 224, 
  9.4   section 122.  This is a one-time 
  9.5   appropriation and is not added to the 
  9.6   agency's permanent base. 
  9.7      Sec. 5.  [HEALTHY HOMES PILOT PROJECT.] 
  9.8      (a) The commissioner of administration shall establish a 
  9.9   Minnesota healthy homes pilot project to provide training and 
  9.10  technical assistance to selected building code officials, and 
  9.11  low-income housing developers and their contractors in the pilot 
  9.12  communities to address the problem of defective homes and to 
  9.13  develop a model program for education, training, and technical 
  9.14  assistance to be replicated statewide.  The project must be 
  9.15  implemented in up to four demonstration sites (two urban, one 
  9.16  suburban, and one in greater Minnesota) and work with building 
  9.17  code officials from the selected municipalities, and selected 
  9.18  low-income housing developers and their building contractors.  
  9.19  The project must: 
  9.20     (1) provide up to four low-income housing developers with 
  9.21  education and implementation guidelines to produce healthy 
  9.22  homes, including on-site training during the actual construction 
  9.23  phase; 
  9.24     (2) demonstrate the use of mechanical ventilation systems 
  9.25  as a strategy for healthy indoor air while allowing for a 
  9.26  tightly constructed building, including design, installation, 
  9.27  and testing of this approach; 
  9.28     (3) conduct classroom and on-site training at designated 
  9.29  building sites to provide inspectors and builders with practical 
  9.30  training and experience from the ground up; 
  9.31     (4) conduct integrated performance testing of homes 
  9.32  throughout the construction process; 
  9.33     (5) establish a protocol utilizing the results of the pilot 
  9.34  project, which can be used statewide as a guideline for healthy 
  9.35  home construction; 
  9.36     (6) develop an educational program for homeowners in the 
  9.37  pilot communities on how to operate and maintain their homes in 
  9.38  order to prevent contributing to indoor air quality problems 
 10.1   that lead to unhealthy houses; and 
 10.2      (7) report to the house and senate finance and policy 
 10.3   committees with jurisdiction over housing on the progress and 
 10.4   results of the pilot project by March 15, 1999. 
 10.5      (b) The commissioner of administration shall make a grant 
 10.6   to Sustainable Resources Center, a nonprofit organization with 
 10.7   expertise and certification in indoor air quality diagnostics 
 10.8   and remediating sick homes, to design, implement, and manage the 
 10.9   pilot project. 
 10.10     (c) This section is effective the day following final 
 10.11  enactment. 
 10.12     Sec. 6.  [METRO STATE UNIVERSITY HOUSING PROJECT.] 
 10.13     The housing finance agency shall consult with the Minnesota 
 10.14  state colleges and universities system, the city of St. Paul, 
 10.15  the Dayton's Bluff neighborhood housing service, the district 4 
 10.16  council, the east side neighborhood development corporation, the 
 10.17  swede hollow land trust organization, east metro women's 
 10.18  resource center, and other interested parties concerning the 
 10.19  feasibility of a project to acquire and/or rehabilitate existing 
 10.20  housing structures for use as rental housing for low-income 
 10.21  students at Metro State University.  The housing finance agency 
 10.22  shall report to the legislature during the 1999 legislative 
 10.23  session on the feasibility of the project, and identify the 
 10.24  barriers to the project and the potential sources of funding. 
 10.25     Sec. 7.  Minnesota Statutes 1996, section 462A.05, 
 10.26  subdivision 14, is amended to read: 
 10.27     Subd. 14.  [REHABILITATION LOANS.] It may agree to 
 10.28  purchase, make, or otherwise participate in the making, and may 
 10.29  enter into commitments for the purchase, making, or 
 10.30  participation in the making, of eligible loans for 
 10.31  rehabilitation to persons and families of low and moderate 
 10.32  income, and to owners of existing residential housing for 
 10.33  occupancy by such persons and families, for the rehabilitation 
 10.34  of existing residential housing owned by them.  The loans may be 
 10.35  insured or uninsured and may be made with security, or may be 
 10.36  unsecured, as the agency deems advisable.  The loans may be in 
 11.1   addition to or in combination with long-term eligible mortgage 
 11.2   loans under subdivision 3.  They may be made in amounts 
 11.3   sufficient to refinance existing indebtedness secured by the 
 11.4   property, if refinancing is determined by the agency to be 
 11.5   necessary to permit the owner to meet the owner's housing cost 
 11.6   without expending an unreasonable portion of the owner's income 
 11.7   thereon.  No loan for rehabilitation shall be made unless the 
 11.8   agency determines that the loan will be used primarily to make 
 11.9   the housing more desirable to live in, to increase the market 
 11.10  value of the housing, for compliance with state, county or 
 11.11  municipal building, housing maintenance, fire, health or similar 
 11.12  codes and standards applicable to housing, or to accomplish 
 11.13  energy conservation related improvements.  In unincorporated 
 11.14  areas and municipalities not having codes and standards, the 
 11.15  agency may, solely for the purpose of administering the 
 11.16  provisions of this chapter, establish codes and standards.  
 11.17  Except for accessibility improvements under this subdivision and 
 11.18  subdivisions 14a and 24, clause (1), no secured loan for 
 11.19  rehabilitation of any property shall be made in an amount which, 
 11.20  with all other existing indebtedness secured by the property, 
 11.21  would exceed 110 percent of its market value, as determined by 
 11.22  the agency.  No loan under this subdivision shall be denied 
 11.23  solely because the loan will not be used for placing the 
 11.24  residential housing in full compliance with all state, county, 
 11.25  or municipal building, housing maintenance, fire, health, or 
 11.26  similar codes and standards applicable to housing.  
 11.27  Rehabilitation loans shall be made only when the agency 
 11.28  determines that financing is not otherwise available, in whole 
 11.29  or in part, from private lenders upon equivalent terms and 
 11.30  conditions.  Accessibility rehabilitation loans authorized under 
 11.31  this subdivision may be made to eligible persons and families 
 11.32  without limitations relating to the maximum incomes of the 
 11.33  borrowers if: 
 11.34     (1) the borrower or a member of the borrower's family 
 11.35  requires a level of care provided in a hospital, skilled nursing 
 11.36  facility, or intermediate care facility for persons with mental 
 12.1   retardation or related conditions; 
 12.2      (2) home care is appropriate; and 
 12.3      (3) the improvement will enable the borrower or a member of 
 12.4   the borrower's family to reside in the housing. 
 12.5      Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 12.6   462A.05, subdivision 39, is amended to read: 
 12.7      Subd. 39.  [EQUITY TAKE-OUT LOANS.] The agency may make 
 12.8   equity take-out loans to owners of section 8 project-based and 
 12.9   section 236 federally assisted rental property upon which the 
 12.10  agency holds a first mortgage.  The owner of a section 8 
 12.11  project-based federally assisted rental property must agree to 
 12.12  participate in the section 8 federal assistance program and 
 12.13  extend the low-income affordability restrictions on the housing 
 12.14  for the maximum term of the section 8 federal assistance 
 12.15  contract.  The owner of section 236 rental property must agree 
 12.16  to participate in the section 236 interest reduction payments 
 12.17  program, to extend any existing low-income affordability 
 12.18  restrictions on the housing, and to extend any rental assistance 
 12.19  payments for the maximum term permitted under the agreement for 
 12.20  rental assistance payments.  The equity take-out loan must be 
 12.21  secured by a subordinate loan on the property and may include 
 12.22  additional appropriate security determined necessary by the 
 12.23  agency. 
 12.24     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 12.25  462A.205, subdivision 1, is amended to read: 
 12.26     Subdivision 1.  [FAMILY STABILIZATION DEMONSTRATION 
 12.27  PROJECT.] The agency, in consultation with the department of 
 12.28  human services, may establish a rent assistance for family 
 12.29  stabilization demonstration project.  The purpose of the project 
 12.30  is to provide rental assistance to families who, at the time of 
 12.31  initial eligibility for rental assistance under this section, 
 12.32  were receiving public assistance, and had a caretaker parent 
 12.33  participating in a self-sufficiency program who was complying 
 12.34  with the parent's job search support plan or employment plan and 
 12.35  at least one minor child and to provide rental assistance to 
 12.36  families who, at the time of initial eligibility for rental 
 13.1   assistance under this section, were receiving public assistance, 
 13.2   and had a caretaker parent who had earned income and with at 
 13.3   least one minor child.  The demonstration project is limited to 
 13.4   counties with high average housing costs.  The program must 
 13.5   offer two options:  a voucher option and a project-based voucher 
 13.6   option.  The funds may be distributed on a request for proposal 
 13.7   basis.  
 13.8      Sec. 10.  Minnesota Statutes 1997 Supplement, section 
 13.9   462A.205, subdivision 2, is amended to read: 
 13.10     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
 13.11  the following terms have the meanings given them. 
 13.12     (a) "Caretaker parent" means a parent, relative caretaker, 
 13.13  or minor caretaker as defined by the aid to families with 
 13.14  dependent children program, sections 256.72 to 256.87, or its 
 13.15  successor program. 
 13.16     (b) "County agency" means the agency designated by the 
 13.17  county board to implement financial assistance for current 
 13.18  public assistance programs and for the Minnesota family 
 13.19  investment program statewide. 
 13.20     (c) "Counties with high average housing costs" means 
 13.21  counties whose average federal section 8 fair market rents as 
 13.22  determined by the Department of Housing and Urban Development 
 13.23  are in the highest one-third of average rents in the state. 
 13.24     (d) "Designated rental property" is rental property (1) 
 13.25  that is made available by a self-sufficiency program for use by 
 13.26  participating families and meets federal section 8 existing 
 13.27  quality standards, or (2) that has received federal, state, or 
 13.28  local rental rehabilitation assistance since January 1, 1987, 
 13.29  and meets federal section 8 existing housing quality standards. 
 13.30     (e) "Earned income" for a family receiving rental 
 13.31  assistance under this section means cash or in-kind income 
 13.32  earned through the receipt of wages, salary, commissions, profit 
 13.33  from employment activities, net profit from self-employment 
 13.34  activities, payments made by an employer for regularly accrued 
 13.35  vacation or sick leave, and any other profit from activity 
 13.36  earned through effort or labor. 
 14.1      (f) "Employment and training service provider" means a 
 14.2   provider as defined in chapter 256J.  
 14.3      (g) "Employment plan" means a plan as defined in chapter 
 14.4   256J.  
 14.5      (h) "Family or participating family" means: 
 14.6      (1) a family with a caretaker parent who is participating 
 14.7   in a self-sufficiency program complying with the parent's job 
 14.8   search support plan or employment plan and with at least one 
 14.9   minor child; 
 14.10     (2) a family that, at the time it began receiving rent 
 14.11  assistance under this section, had a caretaker parent 
 14.12  participating in a self-sufficiency program complying with the 
 14.13  parent's job search support plan or employment plan and had at 
 14.14  least one minor child; 
 14.15     (3) a family with a caretaker parent who is receiving 
 14.16  public assistance and has earned income and with at least one 
 14.17  minor child; or 
 14.18     (4) a family that, at the time it began receiving rent 
 14.19  assistance under this section, had a caretaker parent who had 
 14.20  earned income and at least one minor child; and 
 14.21     (5) a family that has at least one member who is a 
 14.22  recipient of public assistance. 
 14.23     (g) (i) "Gross family income" for a family receiving rental 
 14.24  assistance under this section means the gross amount of the 
 14.25  wages, salaries, social security payments, pensions, workers' 
 14.26  compensation, reemployment insurance, the cash assistance 
 14.27  portion of public assistance payments, alimony, and child 
 14.28  support, and income from assets received by the family. 
 14.29     (h) (j) "Local housing organization" means the agency of 
 14.30  local government responsible for administering the Department of 
 14.31  Housing and Urban Development's section 8 existing voucher and 
 14.32  certificate program or a nonprofit or for-profit organization 
 14.33  experienced in housing management. 
 14.34     (i) (k) "Public assistance" means aid to families with 
 14.35  dependent children, or its successor program, family general 
 14.36  assistance, or its successor program, or family work readiness, 
 15.1   or its successor program. 
 15.2      (j) "Self-sufficiency program" means a program operated by 
 15.3   an employment and training service provider as defined in 
 15.4   chapter 256J, an employability program administered by a 
 15.5   community action agency, or courses of study at an accredited 
 15.6   institution of higher education pursued with at least half-time 
 15.7   student status. 
 15.8      Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 15.9   462A.205, subdivision 5, is amended to read: 
 15.10     Subd. 5.  [VOUCHER OPTION.] At least one-half of the 
 15.11  appropriated funds must be made available for a voucher option.  
 15.12  Under the voucher option, the Minnesota housing finance agency, 
 15.13  in consultation with the department of human services, will 
 15.14  award a number of vouchers to self-sufficiency program 
 15.15  administrators employment and training service providers for 
 15.16  participating families and to county agencies for participating 
 15.17  families with earned income.  Families may use the voucher for 
 15.18  any rental housing that is certified by the local housing 
 15.19  organization as meeting section 8 existing housing quality 
 15.20  standards. 
 15.21     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 15.22  462A.205, subdivision 6, is amended to read: 
 15.23     Subd. 6.  [PROJECT-BASED VOUCHER OPTION.] A portion of the 
 15.24  appropriated funds must be made available for a project-based 
 15.25  voucher option.  Under the project-based voucher option, the 
 15.26  Minnesota housing finance agency, in consultation with the 
 15.27  department of human services, will award a number of vouchers to 
 15.28  self-sufficiency program administrators and to county 
 15.29  agencies employment and training service providers for 
 15.30  participating families who live in designated rental property 
 15.31  that is certified by a local housing organization as meeting 
 15.32  section 8 existing housing quality standards.  
 15.33     Sec. 13.  Minnesota Statutes 1997 Supplement, section 
 15.34  462A.205, subdivision 9, is amended to read: 
 15.35     Subd. 9.  [VOUCHERS FOR FAMILIES WITH A CARETAKER PARENT 
 15.36  WITH EARNED INCOME.] (a) Applications to provide the rental 
 16.1   assistance for families with a caretaker parent with earned 
 16.2   income under either the voucher or project-based option must be 
 16.3   submitted jointly by a local housing organization and a county 
 16.4   agency an employment and training service provider.  The 
 16.5   application must include a description of how the caretaker 
 16.6   parent participants will be selected. 
 16.7      (b) County agencies Employment and training service 
 16.8   providers awarded vouchers must select the caretaker parents 
 16.9   with earned income whose families will receive the rental 
 16.10  assistance.  The county agency employment and training service 
 16.11  provider must notify the local housing organization and the 
 16.12  agency if: 
 16.13     (1) at the time of annual recertification, the caretaker 
 16.14  parent no longer has earned income and is not in compliance with 
 16.15  the caretaker parent's employment plan or job search plan; and 
 16.16     (2) for a period of six months after the annual 
 16.17  recertification, the caretaker parent has no earned income and 
 16.18  has failed to comply with the job search support plan or 
 16.19  employment plan. 
 16.20     (c) The county agency employment and training service 
 16.21  provider must provide the caretaker parent who, at the time of 
 16.22  annual recertification, has no earned income and is not in 
 16.23  compliance with the job search support plan or employment plan 
 16.24  with the notice specified in Minnesota Rules, part 4900.3379.  
 16.25  The county agency employment and training service provider must 
 16.26  send a subsequent notice to the caretaker parent, the local 
 16.27  housing organization, and the Minnesota housing finance agency 
 16.28  60 days before the termination of rental assistance. 
 16.29     (d) If the local housing organization receives notice from 
 16.30  a county agency an employment and training service provider that 
 16.31  a caretaker parent whose initial eligibility for rental 
 16.32  assistance was based on the receipt of earned income no longer 
 16.33  has earned income and for a period of six months after the 
 16.34  termination of earned income the annual recertification has 
 16.35  failed to comply with the caretaker parent's job search plan or 
 16.36  employment plan, the local housing organization must notify the 
 17.1   property owner that rental assistance may terminate and notify 
 17.2   the caretaker parent of the termination of rental assistance 
 17.3   under Minnesota Rules, part 4900.3380. 
 17.4      (e) The county agency employment and training service 
 17.5   provider awarded vouchers for families with a caretaker parent 
 17.6   with earned income must comply with the provisions of Minnesota 
 17.7   Rules, part 4900.3377. 
 17.8      (f) For families whose initial eligibility for rental 
 17.9   assistance was based on the receipt of earned income, rental 
 17.10  assistance must be terminated under any of the following 
 17.11  conditions: 
 17.12     (1) the family is evicted from the property for cause; 
 17.13     (2) the caretaker parent no longer has earned income and, 
 17.14  after six months after an annual recertification, is not in 
 17.15  compliance with the parent's job search or employment plan; 
 17.16     (3) 30 percent of the family's gross income equals or 
 17.17  exceeds the amount of the housing costs for two or more 
 17.18  consecutive months; 
 17.19     (4) the family has received rental assistance under this 
 17.20  section for a 36-month 60-month period; or 
 17.21     (5) the rental unit no longer meets federal section 8 
 17.22  existing housing quality standards, the owner refused to make 
 17.23  necessary repairs or alterations to bring the rental unit into 
 17.24  compliance within a reasonable time, and the caretaker parent 
 17.25  refused to relocate to a qualifying unit. 
 17.26     (g) If a county agency an employment and training service 
 17.27  provider determines that a caretaker parent no longer has earned 
 17.28  income and is not in compliance with the parent's job search or 
 17.29  employment plan, the county agency employment and training 
 17.30  service provider must notify the caretaker parent of that 
 17.31  determination.  The notice must be in writing and must explain 
 17.32  the effect of not having earned income or failing to be in 
 17.33  compliance with the job search or employment plan will have on 
 17.34  the rental assistance.  The notice must: 
 17.35     (1) state that rental assistance will end six months after 
 17.36  earned income has ended an annual recertification; 
 18.1      (2) specify the date the rental assistance will end; 
 18.2      (3) explain that after the date specified, the caretaker 
 18.3   parent will be responsible for the total housing costs; 
 18.4      (4) describe the actions the caretaker parent may take to 
 18.5   avoid termination of rental assistance; and 
 18.6      (5) inform the caretaker parent of the caretaker parent's 
 18.7   responsibility to notify the county agency employment and 
 18.8   training service provider if the caretaker parent has earned 
 18.9   income. 
 18.10     Sec. 14.  [462A.2066] [HOMEOWNERSHIP ZONES PROGRAM.] 
 18.11     Subdivision 1.  [ACCOUNT.] The homeownership zones fund 
 18.12  account is established as a separate account in the housing 
 18.13  development fund.  Money in the account is appropriated to the 
 18.14  agency for the purposes specified in this section. 
 18.15     Subd. 2.  [COMPLEMENTARY TO FEDERAL PROGRAM.] In 
 18.16  implementing the state homeownership zones program, the agency 
 18.17  shall follow, to the extent practicable and not inconsistent 
 18.18  with provisions in this section, the federal program guidelines 
 18.19  for homeownership zones, established in the Federal Register, 
 18.20  volume 62, number 129, July 7, 1997. 
 18.21     Subd. 3.  [ELIGIBILITY; GRANTS AND LOANS.] The agency may 
 18.22  make grants or loans to cities, counties, or nonprofit 
 18.23  organizations for the purposes of this section.  In awarding 
 18.24  grants and loans, the agency shall take into account the amount 
 18.25  of money that the applicant leverages from other sources, 
 18.26  including the federal homeownership zones program.  The 
 18.27  applicant must indicate in its application how the proposed 
 18.28  project is consistent with the consolidated housing plan.  Not 
 18.29  less than ten days before submitting its application to the 
 18.30  agency, a county or nonprofit organization must notify the city 
 18.31  in which the project will be located of its intent to apply for 
 18.32  funds.  The city may submit to the agency its written comments 
 18.33  on the county's or nonprofit organization's application and the 
 18.34  agency shall consider the city's comments in reviewing the 
 18.35  application. 
 18.36     Subd. 4.  [SPECIAL PROJECT CHARACTERISTICS.] A 
 19.1   homeownership zone project may include scattered sites of less 
 19.2   than 300 units in an identified zone as well as a single 
 19.3   contiguous tract.  A homeownership zone project must incorporate 
 19.4   energy conservation design and measures into the project. 
 19.5      Sec. 15.  Minnesota Statutes 1996, section 462A.21, is 
 19.6   amended by adding a subdivision to read: 
 19.7      Subd. 24.  [HOMEOWNERSHIP ZONES.] The agency may spend 
 19.8   money for the purposes of the homeownership zones program under 
 19.9   section 462A.2066, and may pay the costs and expenses necessary 
 19.10  and incidental to the development and operation of the program.  
 19.11  It may approve allocations of more than $300,000 to individual 
 19.12  projects. 
 19.13     Sec. 16.  Minnesota Statutes 1996, section 462A.21, is 
 19.14  amended by adding a subdivision to read: 
 19.15     Subd. 25.  [FULL CYCLE HOMEOWNERSHIP.] It may spend money 
 19.16  for the purposes of the full cycle homeownership services 
 19.17  program under section 462A.209, and may pay the costs and 
 19.18  expenses necessary and incidental to the development and 
 19.19  operation of the program. 
 19.20     Sec. 17.  Minnesota Statutes 1996, section 462A.222, 
 19.21  subdivision 3, is amended to read: 
 19.22     Subd. 3.  [ALLOCATION PROCEDURE.] (a) Projects will be 
 19.23  awarded tax credits in three competitive rounds on an annual 
 19.24  basis.  The date for applications for each round must be 
 19.25  determined by the agency.  No allocating agency may award tax 
 19.26  credits prior to the application dates established by the agency.
 19.27     (b) Each allocating agency must meet the requirements of 
 19.28  section 42(m) of the Internal Revenue Code of 1986, as amended 
 19.29  through December 31, 1989, for the allocation of tax credits and 
 19.30  the selection of projects. 
 19.31     (c) For projects that are eligible for an allocation of 
 19.32  credits pursuant to section 42(h)(4) of the Internal Revenue 
 19.33  Code of 1986, as amended, tax credits may only be allocated if 
 19.34  the project satisfies the requirements of the allocating 
 19.35  agency's qualified allocation plan.  For projects that are 
 19.36  eligible for an allocation of credits pursuant to section 
 20.1   42(h)(4) of the Internal Revenue Code of 1986, as amended, for 
 20.2   which the agency is the issuer of the bonds for the project, or 
 20.3   the issuer of the bonds for the project is located outside the 
 20.4   jurisdiction of a city or county that has received reserved tax 
 20.5   credits, the applicable allocation plan is the agency's 
 20.6   qualified allocation plan. 
 20.7      (d) For applications submitted for the first round, an 
 20.8   allocating agency may allocate tax credits only to the following 
 20.9   types of projects: 
 20.10     (1) in the metropolitan area: 
 20.11     (i) new construction or substantial rehabilitation of 
 20.12  projects in which, for the term of the extended use period, at 
 20.13  least 75 percent of the total tax credit units are single-room 
 20.14  occupancy, efficiency, or one bedroom units and which are 
 20.15  affordable by households whose income does not exceed 30 percent 
 20.16  of the median income; 
 20.17     (ii) new construction or substantial rehabilitation family 
 20.18  housing projects that are not restricted to persons who are 55 
 20.19  years of age or older and in which, for the term of the extended 
 20.20  use period, at least 75 percent of the tax credit units contain 
 20.21  two or more bedrooms and at least one-third of the 75 percent 
 20.22  contain three or more bedrooms; or 
 20.23     (iii) substantial rehabilitation projects in neighborhoods 
 20.24  targeted by the city for revitalization; 
 20.25     (2) outside the metropolitan area, projects which meet a 
 20.26  locally identified housing need and which are in short supply in 
 20.27  the local housing market as evidenced by credible data submitted 
 20.28  with the application; 
 20.29     (3) projects that are not restricted to persons of a 
 20.30  particular age group and in which, for the term of the extended 
 20.31  use period, a percentage of the units are set aside and rented 
 20.32  to persons: 
 20.33     (i) with a serious and persistent mental illness as defined 
 20.34  in section 245.462, subdivision 20, paragraph (c); 
 20.35     (ii) with a developmental disability as defined in United 
 20.36  States Code, title 42, section 6001, paragraph (5), as amended 
 21.1   through December 31, 1990; 
 21.2      (iii) who have been assessed as drug dependent persons as 
 21.3   defined in section 254A.02, subdivision 5, and are receiving or 
 21.4   will receive care and treatment services provided by an approved 
 21.5   treatment program as defined in section 254A.02, subdivision 2; 
 21.6      (iv) with a brain injury as defined in section 256B.093, 
 21.7   subdivision 4, paragraph (a); or 
 21.8      (v) with permanent physical disabilities that substantially 
 21.9   limit one or more major life activities, if at least 50 percent 
 21.10  of the units in the project are accessible as provided under 
 21.11  Minnesota Rules, chapter 1340; 
 21.12     (4) projects, whether or not restricted to persons of a 
 21.13  particular age group, which preserve existing subsidized housing 
 21.14  which is subject to prepayment if the use of tax credits is 
 21.15  necessary to prevent conversion to market rate use; or 
 21.16     (5) projects financed by the Farmers Home Administration, 
 21.17  or its successor agency, which meet statewide distribution goals.
 21.18     (e) Before the date for applications for the second round, 
 21.19  the allocating agencies other than the agency shall return all 
 21.20  uncommitted and unallocated tax credits to the pool from which 
 21.21  they were allocated, along with copies of any allocation or 
 21.22  commitment.  In the second round, the agency shall allocate the 
 21.23  remaining credits from the regional pools to projects from the 
 21.24  respective regions.  
 21.25     (f) In the third round, all unallocated tax credits must be 
 21.26  transferred to a unified pool for allocation by the agency on a 
 21.27  statewide basis. 
 21.28     (g) Unused portions of the state ceiling for low-income 
 21.29  housing tax credits reserved to cities and counties for 
 21.30  allocation may be returned at any time to the agency for 
 21.31  allocation. 
 21.32     (h) If an allocating agency determines, at any time after 
 21.33  the initial commitment or allocation for a specific project, 
 21.34  that a project is no longer eligible for all or a portion of the 
 21.35  low-income housing tax credits committed or allocated to the 
 21.36  project, the credits must be transferred to the agency to be 
 22.1   reallocated pursuant to the procedures established in paragraphs 
 22.2   (e) to (g); provided that if the tax credits for which the 
 22.3   project is no longer eligible are from the current year's annual 
 22.4   ceiling and the allocating agency maintains a waiting list, the 
 22.5   allocating agency may continue to commit or allocate the credits 
 22.6   until not later than October 1, at which time any uncommitted 
 22.7   credits must be transferred to the agency. 
 22.8      Sec. 18.  [471.9997] [FEDERALLY ASSISTED RENTAL HOUSING; 
 22.9   IMPACT STATEMENT.] 
 22.10     At least 12 months before termination of participation in a 
 22.11  federally assisted rental housing program, including 
 22.12  project-based section 8 and section 236 rental housing, the 
 22.13  owner of the federally assisted rental housing must submit a 
 22.14  statement regarding the impact of termination on the residents 
 22.15  of the rental housing to the governing body of the local 
 22.16  government unit in which the housing is located.  The impact 
 22.17  statement must identify the number of units that will no longer 
 22.18  be subject to rent restrictions imposed by the federal program, 
 22.19  the estimated rents that will be charged as compared to rents 
 22.20  charged under the federal program, and actions the owner will 
 22.21  take to assist displaced tenants in obtaining other housing.  A 
 22.22  copy of the impact statement must be provided to each resident 
 22.23  of the affected building, the Minnesota housing finance agency, 
 22.24  and, if the property is located in the metropolitan area as 
 22.25  defined in section 473.121, subdivision 2, the metropolitan 
 22.26  council. 
 22.27     Sec. 19.  Minnesota Statutes 1996, section 474A.061, 
 22.28  subdivision 2a, is amended to read: 
 22.29     Subd. 2a.  [HOUSING POOL ALLOCATION.] (a) On the first 
 22.30  business day that falls on a Monday of the calendar year and the 
 22.31  first Monday in February, the commissioner shall allocate 
 22.32  available bonding authority in the housing pool to applications 
 22.33  received by the Monday of the previous week for residential 
 22.34  rental projects that are not restricted to persons who are 55 
 22.35  years of age or older and that meet the eligibility criteria 
 22.36  under section 474A.047, except that allocations may be made to 
 23.1   projects that are restricted to persons who are 55 years of age 
 23.2   or older if the project preserves existing federally assisted 
 23.3   rental housing.  Projects that preserve existing federally 
 23.4   assisted rental housing shall be allocated available bonding 
 23.5   authority in the housing pool prior to the allocation of 
 23.6   available bonding authority to other eligible residential rental 
 23.7   projects.  If an issuer that receives an allocation under this 
 23.8   paragraph does not issue obligations equal to all or a portion 
 23.9   of the allocation received within 120 days of the allocation or 
 23.10  returns the allocation to the commissioner, the amount of the 
 23.11  allocation is canceled and returned for reallocation through the 
 23.12  housing pool. 
 23.13     (b) After February 1, and through February 15, the 
 23.14  Minnesota housing finance agency may accept applications from 
 23.15  cities for single-family housing programs which meet program 
 23.16  requirements as follows:  
 23.17     (1) the housing program must meet a locally identified 
 23.18  housing need and be economically viable; 
 23.19     (2) the adjusted income of home buyers may not exceed the 
 23.20  greater of the agency's income limits or 80 percent of the area 
 23.21  median income as published by the Department of Housing and 
 23.22  Urban Development; 
 23.23     (3) house price limits may not exceed: 
 23.24     (i) the greater of agency house price limits or the federal 
 23.25  price limits for housing up to a maximum of $95,000; or 
 23.26     (ii) for a new construction affordability initiative, the 
 23.27  greater of 115 percent of agency house price limits or 90 
 23.28  percent of the median purchase price in the city for which the 
 23.29  bonds are to be sold up to a maximum of $95,000. 
 23.30     Data establishing the median purchase price in the city 
 23.31  must be included in the application by a city requesting house 
 23.32  price limits higher than the housing finance agency's house 
 23.33  price limits; and 
 23.34     (4) an application deposit equal to one percent of the 
 23.35  requested allocation must be submitted before the agency 
 23.36  forwards the list specifying the amounts allocated to the 
 24.1   commissioner under paragraph (c).  The agency shall submit the 
 24.2   city's application and application deposit to the commissioner 
 24.3   when requesting an allocation from the housing pool. 
 24.4      Applications by a consortium shall include the name of each 
 24.5   member of the consortium and the amount of allocation requested 
 24.6   by each member. 
 24.7      The Minnesota housing finance agency may accept 
 24.8   applications from June 15 through June 30 from cities for 
 24.9   single-family housing programs which meet program requirements 
 24.10  specified under clauses (1) to (4) if bonding authority is 
 24.11  available in the housing pool.  The agency must allot available 
 24.12  bonding authority.  For purposes of paragraphs (a) to (g), 
 24.13  "city" means a county or a consortium of local government units 
 24.14  that agree through a joint powers agreement to apply together 
 24.15  for single-family housing programs, and has the meaning given it 
 24.16  in section 462C.02, subdivision 6.  "Agency" means the Minnesota 
 24.17  housing finance agency.  
 24.18     (c) The total amount of allocation for mortgage bonds for 
 24.19  one city is limited to the lesser of:  (i) the amount requested, 
 24.20  or (ii) the product of the total amount available for mortgage 
 24.21  bonds from the housing pool, multiplied by the ratio of each 
 24.22  applicant's population as determined by the most recent estimate 
 24.23  of the city's population released by the state demographer's 
 24.24  office to the total of all the applicants' population, except 
 24.25  that each applicant shall be allocated a minimum of $100,000 
 24.26  regardless of the amount requested or the amount determined 
 24.27  under the formula in clause (ii).  If a city applying for an 
 24.28  allocation is located within a county that has also applied for 
 24.29  an allocation, the city's population will be deducted from the 
 24.30  county's population in calculating the amount of allocations 
 24.31  under this paragraph. 
 24.32     Upon determining the amount of each applicant's allocation, 
 24.33  the agency shall forward a list specifying the amounts allotted 
 24.34  to each application and application deposit checks to the 
 24.35  commissioner. 
 24.36     (d) The agency may issue bonds on behalf of participating 
 25.1   cities.  The agency shall request an allocation from the 
 25.2   commissioner for all applicants who choose to have the agency 
 25.3   issue bonds on their behalf and the commissioner shall allocate 
 25.4   the requested amount to the agency.  The agency may request an 
 25.5   allocation at any time after the first Monday in February and 
 25.6   through the last Monday in July, but may request an allocation 
 25.7   no later than the last Monday in July.  The commissioner shall 
 25.8   return any application deposit to a city that paid an 
 25.9   application deposit under paragraph (b), clause (4), but was not 
 25.10  part of the list forwarded to the commissioner under paragraph 
 25.11  (c). 
 25.12     (e) A city may choose to issue bonds on its own behalf or 
 25.13  through a joint powers agreement or may use bonding authority 
 25.14  for mortgage credit certificates and may request an allocation 
 25.15  from the commissioner.  If the total amount requested by all 
 25.16  applicants exceeds the amount available in the pool, the city 
 25.17  may not receive a greater allocation than the amount it would 
 25.18  have received under the list forwarded by the Minnesota housing 
 25.19  finance agency to the commissioner.  No city may request or 
 25.20  receive an allocation from the commissioner until the list under 
 25.21  paragraph (c) has been forwarded to the commissioner.  A city 
 25.22  must request an allocation from the commissioner no later than 
 25.23  14 days before the unified pool is created pursuant to section 
 25.24  474A.091, subdivision 1.  On and after the first Monday in 
 25.25  February and through the last Monday in July, no city may 
 25.26  receive an allocation from the housing pool which has not first 
 25.27  applied to the Minnesota housing finance agency.  The 
 25.28  commissioner shall allocate the requested amount to the city or 
 25.29  cities subject to the limitations under this paragraph.  
 25.30     If a city issues mortgage bonds from an allocation received 
 25.31  under this paragraph, the issuer must provide for the recycling 
 25.32  of funds into new loans.  If the issuer is not able to provide 
 25.33  for recycling, the issuer must notify the commissioner in 
 25.34  writing of the reason that recycling was not possible and the 
 25.35  reason the issuer elected not to have the Minnesota housing 
 25.36  finance agency issue the bonds.  "Recycling" means the use of 
 26.1   money generated from the repayment and prepayment of loans for 
 26.2   further eligible loans or for the redemption of bonds and the 
 26.3   issuance of current refunding bonds. 
 26.4      (f) No entitlement city or county or city in an entitlement 
 26.5   county may apply for or be allocated authority to issue bonds or 
 26.6   use mortgage credit certificates from the housing pool. 
 26.7      (g) A city that does not use at least 50 percent of their 
 26.8   allotment by the date applications are due for the first 
 26.9   allocation that is made from the housing pool for single-family 
 26.10  housing programs in the immediately succeeding calendar year may 
 26.11  not apply to the housing pool for a single-family mortgage bond 
 26.12  or mortgage credit certificate program allocation or receive an 
 26.13  allotment from the housing pool in the succeeding two calendar 
 26.14  years.  Each local government unit in a consortium must meet the 
 26.15  requirements of this paragraph.