1.1                          A bill for an act 
  1.2             relating to housing; providing funding for existing 
  1.3             and new housing programs; creating housing programs; 
  1.4             appropriating money; amending Minnesota Statutes 2000, 
  1.5             section 462A.201, subdivision 2; proposing coding for 
  1.6             new law in Minnesota Statutes, chapter 462A. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 462A.201, 
  1.9   subdivision 2, is amended to read: 
  1.10     Subd. 2.  [LOW-INCOME HOUSING.] (a) The agency may, in 
  1.11  consultation with the advisory committee, use money from the 
  1.12  housing trust fund account for operational costs for providing 
  1.13  permanent housing and to provide loans or grants for projects 
  1.14  for the development, construction, acquisition, preservation, 
  1.15  and rehabilitation of low-income rental and limited equity 
  1.16  cooperative housing units, including temporary and transitional 
  1.17  housing, and homes for ownership.  For purposes of this section, 
  1.18  "transitional housing" means housing that is provided for a 
  1.19  limited duration not exceeding 24 months, except that up to 
  1.20  one-third of the residents may live in the housing for up to 36 
  1.21  months.  Loans or grants for residential housing for migrant 
  1.22  farmworkers may be made under this section.  No more than 20 
  1.23  percent of available funds may be used for home ownership 
  1.24  projects.  
  1.25     (b) A rental or limited equity cooperative permanent 
  1.26  housing project must meet one of the following income tests: 
  2.1      (1) at least 75 percent of the rental and cooperative units 
  2.2   must be rented to or cooperatively owned by persons and families 
  2.3   whose income does not exceed 30 percent of the median family 
  2.4   income for the metropolitan area as defined in section 473.121, 
  2.5   subdivision 2; or 
  2.6      (2) all of the units funded by the housing trust fund 
  2.7   account must be used for the benefit of persons and families 
  2.8   whose income does not exceed 30 percent of the median family 
  2.9   income for the metropolitan area as defined in section 473.121, 
  2.10  subdivision 2. 
  2.11     The median family income may be adjusted for families of 
  2.12  five or more. 
  2.13     (c) Homes for ownership must be owned or purchased by 
  2.14  persons and families whose income does not exceed 50 percent of 
  2.15  the metropolitan area median income, adjusted for family size. 
  2.16     (d) In making the grants, the agency shall determine the 
  2.17  terms and conditions of repayment and the appropriate security, 
  2.18  if any, should repayment be required.  To promote the geographic 
  2.19  distribution of grants and loans, the agency may designate a 
  2.20  portion of the grant or loan awards to be set aside for projects 
  2.21  located in specified congressional districts or other 
  2.22  geographical regions specified by the agency.  The agency may 
  2.23  adopt rules for awarding grants and loans under this subdivision.
  2.24     Sec. 2.  [462A.34] [LOCAL INITIATIVE BLOCK GRANT PROGRAM.] 
  2.25     The commissioner may make block grants to local governments 
  2.26  or nonprofit organizations in partnership with local governments 
  2.27  for housing production and preservation programs for persons 
  2.28  with incomes at or below 80 percent of statewide median income.  
  2.29  The commissioner may use existing processes for making grants or 
  2.30  may establish a request for proposal process specifically for 
  2.31  this block grant program.  Grants shall be made to satisfy 
  2.32  specific housing needs, however, grants do not need to be tied 
  2.33  to any particular project, but rather, should be available to 
  2.34  flexibly meet the identified need.  
  2.35     Sec. 3.  [HOUSING FINANCE AGENCY; APPROPRIATION.] 
  2.36     Subdivision 1.  [TOTAL APPROPRIATION.] $294,018,000 is 
  3.1   appropriated from the general fund for the fiscal biennium 
  3.2   ending June 30, 2003, for transfer to the housing development 
  3.3   fund for the programs specified.  Except as otherwise indicated, 
  3.4   this transfer is part of the agency's permanent budget base.  
  3.5   The amounts that may be spent from this appropriation for 
  3.6   certain programs are specified in the following subdivisions. 
  3.7      Subd. 2.  [CHALLENGE PROGRAM.] $40,000,000 is appropriated 
  3.8   for transfer to the housing development fund for the economic 
  3.9   development and housing challenge program created by Minnesota 
  3.10  Statutes, section 462A.33.  
  3.11     Subd. 3.  [RENTAL ASSISTANCE FOR MENTALLY ILL.] $1,700,000 
  3.12  the first year and $1,700,000 the second year are for a rental 
  3.13  housing assistance program for persons with a mental illness or 
  3.14  families with an adult member with a mental illness under 
  3.15  Minnesota Statutes, section 462A.2097. 
  3.16     Subd. 4.  [FAMILY HOMELESS PREVENTION.] $5,550,000 the 
  3.17  first year and $5,550,000 the second year is for the family 
  3.18  homeless prevention and assistance program under Minnesota 
  3.19  Statutes, section 462A.204, and is available until June 30, 2003.
  3.20     Subd. 5.  [MORTGAGE FORECLOSURE PREVENTION.] $583,000 the 
  3.21  first year and $583,000 the second year are for the mortgage 
  3.22  foreclosure prevention and assistance program under Minnesota 
  3.23  Statutes, section 462A.207. 
  3.24     Subd. 6.  [RENTAL ASSISTANCE FOR FAMILY 
  3.25  STABILIZATION.] $2,000,000 the first year and $2,000,000 the 
  3.26  second year are for rent subsidies provided to families 
  3.27  receiving TANF assistance from the MFIP program under the rent 
  3.28  assistance for family stabilization program under Minnesota 
  3.29  Statutes, section 462A.205.  If the appropriation in either year 
  3.30  is insufficient, the appropriation for the other year is 
  3.31  available.  
  3.32     Subd. 7.  [HOUSING TRUST FUND.] $37,500,000 the first year 
  3.33  and $37,500,000 the second year are for the housing trust fund 
  3.34  to be deposited in the housing trust fund account created under 
  3.35  Minnesota Statutes, section 462A.201, and used for the purposes 
  3.36  provided in that section.  Of this amount, $550,000 each year 
  4.1   must be used for transitional housing. 
  4.2      Subd. 8.  [AFFORDABLE RENTAL INVESTMENT FUND.] $32,993,000 
  4.3   the first year and $32,993,000 the second year are for the 
  4.4   affordable rental investment fund program under Minnesota 
  4.5   Statutes, section 462A.21, subdivision 8b.  Of this amount, 
  4.6   $22,500,000 the first year and $22,500,000 the second year are 
  4.7   to finance the acquisition, rehabilitation, and debt 
  4.8   restructuring of federally assisted rental property and for 
  4.9   making equity take-out loans under Minnesota Statutes, section 
  4.10  462A.05, subdivision 39.  The owner of the federally assisted 
  4.11  rental property must agree to participate in the applicable 
  4.12  federally assisted housing program and to extend any existing 
  4.13  low-income affordability restrictions on the housing for the 
  4.14  maximum term permitted.  The owner must also enter into an 
  4.15  agreement that gives local units of government, housing and 
  4.16  redevelopment authorities, and nonprofit housing organizations 
  4.17  the right of first refusal if the rental property is offered for 
  4.18  sale.  Priority must be given among comparable properties to 
  4.19  properties with the longest remaining term under an agreement 
  4.20  for federal rental assistance.  Priority must also be given 
  4.21  among comparable rental housing developments to developments 
  4.22  that are or will be owned by local government units, a housing 
  4.23  and redevelopment authority, or a nonprofit housing organization.
  4.24     To the extent practicable, this appropriation shall be used 
  4.25  so that an approximately equal number of housing units are 
  4.26  financed in the metropolitan area, as defined in Minnesota 
  4.27  Statutes, section 473.121, subdivision 2, and in the 
  4.28  nonmetropolitan area. 
  4.29     Subd. 9.  [URBAN INDIAN HOUSING PROGRAM.] $237,000 the 
  4.30  first year and $237,000 the second year are for the urban Indian 
  4.31  housing program under Minnesota Statutes, section 462A.07.  
  4.32     Subd. 10.  [TRIBAL INDIAN HOUSING PROGRAM.] $1,683,000 the 
  4.33  first year and $1,683,000 the second year are for the tribal 
  4.34  Indian housing program under Minnesota Statutes, section 
  4.35  462A.07, subdivision 14.  
  4.36     Subd. 11.  [RURAL AND URBAN HOMESTEADING.] $186,000 the 
  5.1   first year and $186,000 the second year are for the Minnesota 
  5.2   rural and urban homesteading program under Minnesota Statutes, 
  5.3   section 462A.057.  
  5.4      Subd. 12.  [CAPACITY BUILDING GRANTS.] $240,000 the first 
  5.5   year and $240,000 the second year are for nonprofit capacity 
  5.6   building grants under Minnesota Statutes, section 462A.21, 
  5.7   subdivision 3b.  
  5.8      Subd. 13.  [COMMUNITY REHABILITATION PROGRAM.] $12,350,000 
  5.9   the first year and $12,350,000 the second year are for the 
  5.10  community rehabilitation program under Minnesota Statutes, 
  5.11  section 462A.206.  
  5.12     Of this appropriation, $550,000 the first year and $550,000 
  5.13  the second year are for full-cycle home ownership and 
  5.14  purchase-rehabilitation lending initiatives under Minnesota 
  5.15  Statutes, section 462A.21, subdivision 26. 
  5.16     Subd. 14.  [HOUSING REHABILITATION AND 
  5.17  ACCESSIBILITY.] $4,287,000 the first year and $4,287,000 the 
  5.18  second year are for the housing rehabilitation and accessibility 
  5.19  program under Minnesota Statutes, section 462A.05, subdivisions 
  5.20  14a and 15a. 
  5.21     Subd. 15.  [HOME OWNERSHIP ASSISTANCE FUND.] $900,000 the 
  5.22  first year and $900,000 the second year are for the home 
  5.23  ownership assistance fund under Minnesota Statutes, section 
  5.24  462A.21, subdivision 8.  
  5.25     Subd. 16.  [EMPLOYER MATCHING GRANTS.] $800,000 in the 
  5.26  first year and $800,000 in the second year are for the employer 
  5.27  matching grant program under Minnesota Statutes, section 
  5.28  462A.2092.  
  5.29     Subd. 17.  [INNOVATIVE AND INCLUSIONARY HOUSING 
  5.30  PROGRAM.] $19,000,000 is for innovative and inclusionary housing 
  5.31  programs.  $4,000,000 of this appropriation is for the 
  5.32  nonmetropolitan innovative and inclusionary housing program 
  5.33  under Minnesota Statutes, section 462A.2093.  $15,000,000 of 
  5.34  this appropriation is for transfer to the metropolitan council 
  5.35  for deposit in the inclusionary housing account created in 
  5.36  Minnesota Statutes, section 473.251.  The metropolitan council 
  6.1   may use this transfer only for projects that are consistent with 
  6.2   Minnesota Statutes, section 473.255.  
  6.3      Subd. 18.  [RENTER ASSISTANCE.] $2,000,000 is for grants to 
  6.4   organizations providing case management for persons that need 
  6.5   assistance to rehabilitate their rental history and find rental 
  6.6   housing.  Case management services include, but are not limited 
  6.7   to, assisting tenants in correcting tenant screening reports, 
  6.8   providing intensive training and certification for tenants, 
  6.9   creating a bonding program to encourage landlords to accept 
  6.10  high-risk tenants with poor rent histories, paying security 
  6.11  deposits for high-risk tenants, and agreeing to pay landlord 
  6.12  expenses for filing unlawful detainer actions.  
  6.13     Subd. 19.  [LOCAL INITIATIVE BLOCK GRANTS.] $20,000,000 is 
  6.14  for the local initiative block grant program in Minnesota 
  6.15  Statutes, section 462A.34. 
  6.16     Subd. 20.  [LEAD HAZARD REDUCTION.] $10,000,000 is for lead 
  6.17  hazard reduction activities under Minnesota Statutes, section 
  6.18  462A.05, subdivision 15c. 
  6.19     Forty percent of the amount must be used for grants to 
  6.20  eligible organizations, as defined in Minnesota Statutes, 
  6.21  section 119A.46, subdivision 1, and to nonprofit organizations 
  6.22  experienced in lead hazard reduction, for the purposes of 
  6.23  Minnesota Statutes, section 119A.46. 
  6.24     Subd. 21.  [SECTION 8 HOME OWNERSHIP.] $1,000,000 is for 
  6.25  grants to agencies administering the federal Section 8 housing 
  6.26  program for administrative costs associated with the 
  6.27  establishment and operation of Section 8 home ownership programs 
  6.28  as provided by Code of Federal Regulations, title 24, parts 5, 
  6.29  903, and 982, and for the acquisition and rehabilitation of 
  6.30  homes for resale to Section 8 eligible households using Section 
  6.31  8 certificates and vouchers to finance the home purchases.  The 
  6.32  housing finance agency, in conjunction with local Section 8 
  6.33  administering agencies, shall set guidelines for the sale of 
  6.34  homes under this subdivision to ensure that a home buyer who 
  6.35  later loses eligibility for Section 8 assistance will continue 
  6.36  to have an opportunity to purchase the home and to retain any 
  7.1   equity built up in the home.