1.1                          A bill for an act 
  1.2             relating to housing; housing finance agency; 
  1.3             consolidating supportive housing related programs into 
  1.4             the housing trust fund program; consolidating 
  1.5             development and redevelopment programs into the 
  1.6             economic development and challenge fund program; 
  1.7             consolidating the full cycle homeownership services 
  1.8             program and the foreclosure prevention and assistance 
  1.9             programs; lengthening the time after which a loan 
  1.10            under the rehabilitation loan program may be forgiven; 
  1.11            eliminating tenant income limits under the home 
  1.12            improvement loan program for the owner-occupied rental 
  1.13            buildings; authorizing project-based rental assistance 
  1.14            in the bridges program; authorizing the aggregation of 
  1.15            earnings from investments of moneys appropriated to 
  1.16            the agency; making technical and conforming changes; 
  1.17            amending Minnesota Statutes 2000, sections 462A.01; 
  1.18            462A.03, subdivisions 1, 6, 10, and by adding a 
  1.19            subdivision; 462A.04, subdivision 6; 462A.05, 
  1.20            subdivisions 14, 14a, 16, 22, and 26; 462A.06, 
  1.21            subdivisions 1 and 4; 462A.07, subdivisions 10 and 12; 
  1.22            462A.073, subdivision 1; 462A.15; 462A.17, subdivision 
  1.23            3; 462A.20, subdivision 3; 462A.201, subdivisions 2 
  1.24            and 6; 462A.204, subdivision 3; 462A.205, subdivisions 
  1.25            4 and 4a; 462A.209; 462A.2091, subdivision 3; 
  1.26            462A.2093, subdivision 1; 462A.2097; 462A.21, 
  1.27            subdivisions 5, 10, and by adding subdivisions; 
  1.28            462A.222, subdivision 1a; 462A.24; and 462A.33, 
  1.29            subdivisions 1, 2, 3, 5, and by adding a subdivision; 
  1.30            Laws 2000, chapter 488, article 8, section 2, 
  1.31            subdivision 6; repealing Minnesota Statutes 2000, 
  1.32            sections 462A.201, subdivision 4; 462A.207; 462A.209, 
  1.33            subdivision 4; 462A.21, subdivision 17; 462A.221, 
  1.34            subdivision 4; 462A.30, subdivision 2; and 462A.33, 
  1.35            subdivisions 4, 6, and 7. 
  1.36  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.37                             ARTICLE 1
  1.38                       PROGRAM CONSOLIDATION
  1.39     Section 1.  Minnesota Statutes 2000, section 462A.201, 
  1.40  subdivision 2, is amended to read: 
  2.1      Subd. 2.  [LOW-INCOME HOUSING.] (a) The agency may, in 
  2.2   consultation with the advisory committee, use money from the 
  2.3   housing trust fund account to provide loans or grants for: 
  2.4      (1) projects for the development, construction, 
  2.5   acquisition, preservation, and rehabilitation of low-income 
  2.6   rental and limited equity cooperative housing units, including 
  2.7   temporary and transitional housing, and homes for ownership; 
  2.8      (2) the costs of operating rental housing, as determined by 
  2.9   the agency, that are unique to the operation of low-income 
  2.10  rental housing or supportive housing; and 
  2.11     (3) rental assistance, either project-based or tenant-based.
  2.12  For purposes of this section, "transitional housing" means 
  2.13  housing that is provided for a limited duration not exceeding 24 
  2.14  months, except that up to one-third of the residents may live in 
  2.15  the housing for up to 36 months has the meaning given by the 
  2.16  United States Department of Housing and Urban Development.  
  2.17  Loans or grants for residential housing for migrant farmworkers 
  2.18  may be made under this section.  No more than 20 percent of 
  2.19  available funds may be used for home ownership projects.  
  2.20     (b) A rental or limited equity cooperative permanent 
  2.21  housing project must meet one of the following income tests: 
  2.22     (1) at least 75 percent of the rental and cooperative units 
  2.23  must be rented to or cooperatively owned by persons and families 
  2.24  whose income does not exceed 30 percent of the median family 
  2.25  income for the metropolitan area as defined in section 473.121, 
  2.26  subdivision 2; or 
  2.27     (2) all The housing trust fund account must be used for the 
  2.28  benefit of persons and families whose income, at the time of 
  2.29  initial occupancy, does not exceed 60 percent of median income 
  2.30  as determined by the United States Department of Housing and 
  2.31  Urban Development for the metropolitan area.  At least 50 
  2.32  percent of the units funded by funds in the housing trust fund 
  2.33  account must be used for the benefit of persons and families 
  2.34  whose income, at the time of initial occupancy, does not exceed 
  2.35  30 percent of the median family income for the metropolitan area 
  2.36  as defined in section 473.121, subdivision 2. For purposes of 
  3.1   this section, a household with a housing assistance voucher 
  3.2   under section 8 of the United States Housing Act of 1937, as 
  3.3   amended, is deemed to meet the income requirements of this 
  3.4   section. 
  3.5      The median family income may be adjusted for families of 
  3.6   five or more. 
  3.7      (c) Homes for ownership must be owned or purchased by 
  3.8   persons and families whose income does not exceed 50 percent of 
  3.9   the metropolitan area median income, adjusted for family size. 
  3.10     (d) Rental assistance under this section must be provided 
  3.11  by governmental units which administer housing assistance 
  3.12  supplements or for-profit or by nonprofit organizations 
  3.13  experienced in housing management.  Rental assistance shall be 
  3.14  limited to households whose income at the time of initial 
  3.15  receipt of rental assistance does not exceed 60 percent of 
  3.16  median income, as determined by the United States Department of 
  3.17  Housing and Urban Development for the metropolitan area.  
  3.18  Priority among comparable applications for tenant-based rental 
  3.19  assistance will be given to proposals that will serve households 
  3.20  whose income at the time of initial application for rental 
  3.21  assistance does not exceed 30 percent of median income, as 
  3.22  determined by the United States Department of Housing and Urban 
  3.23  Development for the metropolitan area.  Rental assistance must 
  3.24  be terminated when it is determined that 30 percent of a 
  3.25  household's monthly income for two consecutive months equals or 
  3.26  exceeds the market rent for the unit in which the household 
  3.27  resides plus utilities for which the tenant is responsible.  
  3.28  Rental assistance may only be used for rental housing units that 
  3.29  meet the housing maintenance code of the local unit of 
  3.30  government in which the unit is located, if such a code has been 
  3.31  adopted, or the housing quality standards adopted by the United 
  3.32  States Department of Housing and Urban Development, if no local 
  3.33  housing maintenance code has been adopted.  
  3.34     (d) In making the loans or grants, the agency shall 
  3.35  determine the terms and conditions of repayment and the 
  3.36  appropriate security, if any, should repayment be required.  To 
  4.1   promote the geographic distribution of grants and loans, the 
  4.2   agency may designate a portion of the grant or loan awards to be 
  4.3   set aside for projects located in specified congressional 
  4.4   districts or other geographical regions specified by the 
  4.5   agency.  The agency may adopt rules for awarding grants and 
  4.6   loans under this subdivision. 
  4.7      Sec. 2.  Minnesota Statutes 2000, section 462A.201, 
  4.8   subdivision 6, is amended to read: 
  4.9      Subd. 6.  [REPORT.] The agency shall submit a biennial 
  4.10  report to the legislature and the governor annually on the use 
  4.11  of the housing trust fund account including the number of loans 
  4.12  and grants made, the number and types of residential units 
  4.13  assisted through the account, the number of households for whom 
  4.14  rental assistance payments were provided, and the number of 
  4.15  residential units assisted through the account that were rented 
  4.16  to or cooperatively owned by persons or families at or below 30 
  4.17  percent of the median family income of the metropolitan area at 
  4.18  the time of initial occupancy.  
  4.19     Sec. 3.  Minnesota Statutes 2000, section 462A.209, is 
  4.20  amended to read: 
  4.21     462A.209 [HOME OWNERSHIP ASSISTANCE EDUCATION, COUNSELING, 
  4.22  AND TRAINING PROGRAM.] 
  4.23     Subdivision 1.  [FULL CYCLE HOME OWNERSHIP SERVICES.] 
  4.24  The full cycle home ownership services homeownership education, 
  4.25  counseling, and training program shall be used to fund provide 
  4.26  funding to community-based nonprofit organizations and political 
  4.27  subdivisions providing, building capacity to provide, or 
  4.28  supporting full cycle lending for to assist them in building the 
  4.29  capacity to provide and providing full cycle home ownership 
  4.30  services to low and moderate income home buyers and homeowners, 
  4.31  including seniors.  The purpose of the program is to encourage 
  4.32  private investment in affordable housing and collaboration of 
  4.33  nonprofit organizations and political subdivisions with each 
  4.34  other and private lenders in providing full cycle lending 
  4.35  homeownership services. 
  4.36     Subd. 2.  [DEFINITION.] "Full cycle home ownership 
  5.1   services" means supporting eligible home buyers and owners 
  5.2   homeowners through all phases of purchasing and keeping a home, 
  5.3   by providing prepurchase home buyer education,; prepurchase 
  5.4   counseling and credit repair,; prepurchase and postpurchase 
  5.5   property inspection and technical and financial assistance to 
  5.6   buyers in rehabilitating the home,; postpurchase counseling, 
  5.7   including home equity conversion loan counseling, mortgage 
  5.8   default counseling, postpurchase assistance with home 
  5.9   maintenance, entry cost assistance,; foreclosure prevention and 
  5.10  assistance; and access to flexible loan products. 
  5.11     Subd. 3.  [ELIGIBILITY.] The agency shall establish 
  5.12  eligibility criteria for nonprofit organizations and political 
  5.13  subdivisions to receive funding under this section.  The 
  5.14  eligibility criteria must require the nonprofit organization or 
  5.15  political subdivision to provide, to build capacity to provide, 
  5.16  or support full cycle home ownership services for eligible home 
  5.17  buyers.  The agency may fund a nonprofit organization or 
  5.18  political subdivision that will provide full cycle home 
  5.19  ownership services by coordinating with one or more other 
  5.20  organizations that will provide specific components of full 
  5.21  cycle home ownership services.  The agency may make exceptions 
  5.22  to providing all components of full cycle lending if justified 
  5.23  by the application.  If there are more applicants requesting 
  5.24  funding than there are funds available, the agency shall award 
  5.25  the funds on a competitive basis and also assure an equitable 
  5.26  geographic distribution of the available funds.  The eligibility 
  5.27  criteria must require the nonprofit organization or political 
  5.28  subdivision to have a demonstrated involvement in the local 
  5.29  community and to target the housing affordability needs of the 
  5.30  local community or to have demonstrated experience with 
  5.31  counseling older persons on housing, or both.  The eligibility 
  5.32  criteria may include a requirement for specific training 
  5.33  provided by designated state or national entities.  The agency 
  5.34  may also include an eligibility criteria that requires counselor 
  5.35  certification or organizational accreditation by specified 
  5.36  organizations which provide certification or accreditation 
  6.1   services.  Partnerships and collaboration with innovative, grass 
  6.2   roots, or community-based initiatives shall be encouraged.  The 
  6.3   agency shall give priority to nonprofit organizations and 
  6.4   political subdivisions that provide matching funds have funding 
  6.5   from other sources for full cycle home ownership services.  
  6.6   Applicants for funds under section 462A.057 may also apply funds 
  6.7   under this program. 
  6.8      Subd. 4.  [ENTRY COST HOME OWNERSHIP OPPORTUNITY PROGRAM.] 
  6.9   The agency may establish an entry cost home ownership 
  6.10  opportunity program, on terms and conditions it deems advisable, 
  6.11  to assist individuals with downpayment and closing costs to 
  6.12  finance the purchase of a home. 
  6.13     Subd. 5.  [SELECTION CRITERIA.] The agency shall take the 
  6.14  following criteria into consideration when determining whether 
  6.15  to award funds to an eligible organization: 
  6.16     (1) to the extent to which there is an equitable geographic 
  6.17  distribution of funds among program applicants; 
  6.18     (2) the prior experience and documented familiarity of the 
  6.19  organization, as may be applicable, in establishing, 
  6.20  administering, and maintaining some or all of the components of 
  6.21  full cycle homeownership services; 
  6.22     (3) the reasonableness of the proposed budget in meeting 
  6.23  the program objectives, a demonstrated ability to leverage 
  6.24  program money with other sources of funding, and the extent of 
  6.25  the leveraging of other sources of funding; 
  6.26     (4) the extent to which efforts are targeted towards 
  6.27  households with incomes that do not exceed 80 percent of the 
  6.28  state or area median income or underserved segments of the local 
  6.29  population; and 
  6.30     (5) the extent to which program funding does not duplicate 
  6.31  other efforts currently available in the local area and will 
  6.32  enable, expand, or enhance existing activities. 
  6.33     Subd. 6.  [DESIGNATED AREAS.] A program administrator must 
  6.34  designate specific areas, communities, or neighborhoods within 
  6.35  which the program is proposed to be operated for the purpose of 
  6.36  focusing resources. 
  7.1      Subd. 7.  [ASSISTANCE TO PREVENT MORTGAGE FORECLOSURES.] (a)
  7.2   Program assistance and counseling to prevent mortgage 
  7.3   foreclosures or cancellations of contract for deeds includes 
  7.4   general information, screening, assessment, referral services, 
  7.5   case management, advocacy, and financial assistance to borrowers 
  7.6   who are delinquent on mortgage or contract for deed payments. 
  7.7      (b) Not more than one-half of funds awarded for foreclosure 
  7.8   prevention and assistance activities may be used for mortgage or 
  7.9   financial counseling services. 
  7.10     (c) Financial assistance consists of payments for 
  7.11  delinquent mortgage or contract for deed payments, future 
  7.12  mortgage or contract for deed payments for a period of up to six 
  7.13  months, property taxes, assessments, utilities, insurance, home 
  7.14  improvement repairs, future rent payments for a period of up to 
  7.15  six months, and relocation costs if necessary, or other costs 
  7.16  necessary to prevent foreclosure. 
  7.17     (d) An individual or family may receive a maximum of $5,500 
  7.18  of financial assistance to prevent a mortgage foreclosure or the 
  7.19  cancellation of a contract for deed. 
  7.20     (e) The agency may require the recipient of financial 
  7.21  assistance to enter into an agreement with the agency for 
  7.22  repayment.  The repayment agreement for mortgages or contract 
  7.23  for deed buyers must provide that in the event the property is 
  7.24  sold, transferred, or otherwise conveyed, or ceases to be the 
  7.25  recipient's principal place of residence, the recipient shall 
  7.26  repay all or a portion of the financial assistance.  The agency 
  7.27  may take into consideration financial hardship in determining 
  7.28  repayment requirements.  The repayment agreement may be secured 
  7.29  by a lien on the property for the benefit of the agency. 
  7.30     Subd. 8.  [REPORT.] By January 10 of every year, each 
  7.31  nonprofit organization that delivers services under this section 
  7.32  must submit a report to the agency that summarizes the number of 
  7.33  people served and the sources and amounts of nonstate money used 
  7.34  to fund the services.  The agency shall annually submit a report 
  7.35  to the legislature by February 15. 
  7.36     Sec. 4.  Minnesota Statutes 2000, section 462A.21, is 
  8.1   amended by adding a subdivision to read: 
  8.2      Subd. 27.  [ECONOMIC DEVELOPMENT AND HOUSING CHALLENGE 
  8.3   PROGRAM.] The agency may spend money for the purposes of section 
  8.4   462A.33 and may pay the costs and expenses necessary and 
  8.5   incidental to the development and operation of the program. 
  8.6      Sec. 5.  Minnesota Statutes 2000, section 462A.33, 
  8.7   subdivision 1, is amended to read: 
  8.8      Subdivision 1.  [CREATED.] The economic development and 
  8.9   housing challenge program is created to be administered by the 
  8.10  agency. 
  8.11     (a) The program shall provide grants or loans for the 
  8.12  purpose of construction, acquisition, rehabilitation, demolition 
  8.13  or removal of existing structures, construction financing, 
  8.14  permanent financing, interest rate reduction, refinancing, and 
  8.15  gap financing of housing to support economic development and 
  8.16  redevelopment activities or job creation or job preservation 
  8.17  within a community or region by meeting locally identified 
  8.18  housing needs. 
  8.19     Gap financing is either: 
  8.20     (i) the difference between the costs of the property, 
  8.21  including acquisition, demolition, rehabilitation, and 
  8.22  construction, and the market value of the property upon sale; or 
  8.23     (ii) the difference between the cost of the property and 
  8.24  the amount the targeted household can afford for housing, based 
  8.25  on industry standards and practices. 
  8.26     (b) Preference for grants and loans shall be given to 
  8.27  comparable proposals that include regulatory changes or waivers 
  8.28  that result in identifiable cost avoidance or cost reductions, 
  8.29  such as increased density, flexibility in site development 
  8.30  standards, or zoning code requirements.  Preference must also be 
  8.31  given among comparable proposals to proposals for projects that 
  8.32  are accessible to transportation systems, jobs, schools, and 
  8.33  other services. 
  8.34     (c) If a grant or loan is used for demolition or removal of 
  8.35  existing structures, the cleared land must be used for the 
  8.36  construction of housing to be owned or rented by persons who 
  9.1   meet the income limits of this section or for other 
  9.2   housing-related purposes that primarily benefit the persons 
  9.3   residing in the adjacent housing. 
  9.4      Sec. 6.  Minnesota Statutes 2000, section 462A.33, 
  9.5   subdivision 2, is amended to read: 
  9.6      Subd. 2.  [ELIGIBLE RECIPIENTS.] Challenge grants or loans 
  9.7   may be made to a city, a private developer, a nonprofit 
  9.8   organization, or the owner of the housing, including 
  9.9   individuals.  For the purpose of this section, "city" has the 
  9.10  meaning given it in section 462A.03, subdivision 21.  Preference 
  9.11  shall be given to challenge grants or loans for home ownership.  
  9.12  To the extent practicable, grants and loans shall be made so 
  9.13  that an approximately equal number of housing units are financed 
  9.14  in the metropolitan area, as defined in section 473.121, 
  9.15  subdivision 2, and in the nonmetropolitan area. 
  9.16     Sec. 7.  Minnesota Statutes 2000, section 462A.33, 
  9.17  subdivision 3, is amended to read: 
  9.18     Subd. 3.  [CONTRIBUTION REQUIREMENT; REGULATORY 
  9.19  FLEXIBILITY.] Fifty percent of the funds appropriated for this 
  9.20  section must be used for challenge grants or loans which meet 
  9.21  the requirements of this subdivision.  These challenge grants or 
  9.22  loans must be used for economically viable homeownership or 
  9.23  rental housing proposals that:  
  9.24     (1) include a financial or in-kind contribution from an 
  9.25  area employer and either a unit of local government or a private 
  9.26  philanthropic, religious, or charitable organization; and 
  9.27     (2) address the housing needs of the local work force.  
  9.28     For the purpose of this subdivision, an employer 
  9.29  contribution may consist partially or wholly of the premium paid 
  9.30  for federal housing tax credits.  Preference for grants and 
  9.31  loans shall be given to comparable proposals that include 
  9.32  regulatory changes that result in identifiable cost avoidance or 
  9.33  cost reductions, such as increased density, flexibility in site 
  9.34  development standards, or zoning code requirements.  
  9.35     Preference for grants and loans shall also be given to 
  9.36  comparable proposals that include a financial or in-kind 
 10.1   contribution from a unit of local government, an area employer, 
 10.2   and a private philanthropic, religious, or charitable 
 10.3   organization. 
 10.4      Sec. 8.  Minnesota Statutes 2000, section 462A.33, 
 10.5   subdivision 5, is amended to read: 
 10.6      Subd. 5.  [INCOME LIMITS.] Households served through 
 10.7   challenge grants or loans must not have incomes at the time of 
 10.8   initial occupancy that exceed, for homeownership projects, 115 
 10.9   percent of the greater of state or area median income as 
 10.10  determined by the United States Department of Housing and Urban 
 10.11  Development, and for rental housing projects, 115 percent of the 
 10.12  greater of state or area median income as determined by the 
 10.13  United States Department of Housing and Urban Development except 
 10.14  that the housing developed or rehabilitated with challenge fund 
 10.15  grants or loans must be affordable to the local work force. 
 10.16     Preference among comparable proposals shall be given those 
 10.17  that provide housing opportunities for an expanded range of 
 10.18  household incomes within a community or that provide housing 
 10.19  opportunities for a wide range of incomes within the development.
 10.20     Sec. 9.  Minnesota Statutes 2000, section 462A.33, is 
 10.21  amended by adding a subdivision to read: 
 10.22     Subd. 8.  [LIMITATION ON RETURN.] The limitations on return 
 10.23  of eligible mortgagors contained in section 462A.03, subdivision 
 10.24  13, do not apply to loans or grants for rental housing if the 
 10.25  loans or grants made by the agency, from all sources, are less 
 10.26  than 50 percent of the total costs, as determined by the agency. 
 10.27     Sec. 10.  [REPEALER.] 
 10.28     Minnesota Statutes 2000, sections 462A.201, subdivision 4; 
 10.29  462A.207; 462A.209, subdivision 4; 462A.21, subdivision 17; and 
 10.30  462A.33, subdivisions 4, 6, and 7, are repealed. 
 10.31                             ARTICLE 2
 10.32                      MISCELLANEOUS PROVISIONS
 10.33     Section 1.  Minnesota Statutes 2000, section 462A.05, 
 10.34  subdivision 14, is amended to read: 
 10.35     Subd. 14.  [REHABILITATION LOANS.] It may agree to 
 10.36  purchase, make, or otherwise participate in the making, and may 
 11.1   enter into commitments for the purchase, making, or 
 11.2   participation in the making, of eligible loans for 
 11.3   rehabilitation to persons and families of low and moderate 
 11.4   income, and to owners of existing residential housing for 
 11.5   occupancy by such persons and families, for the rehabilitation 
 11.6   of existing residential housing owned by them.  The loans may be 
 11.7   insured or uninsured and may be made with security, or may be 
 11.8   unsecured, as the agency deems advisable.  The loans may be in 
 11.9   addition to or in combination with long-term eligible mortgage 
 11.10  loans under subdivision 3.  They may be made in amounts 
 11.11  sufficient to refinance existing indebtedness secured by the 
 11.12  property, if refinancing is determined by the agency to be 
 11.13  necessary to permit the owner to meet the owner's housing cost 
 11.14  without expending an unreasonable portion of the owner's income 
 11.15  thereon.  No loan for rehabilitation shall be made unless the 
 11.16  agency determines that the loan will be used primarily to make 
 11.17  the housing more desirable to live in, to increase the market 
 11.18  value of the housing, for compliance with state, county or 
 11.19  municipal building, housing maintenance, fire, health or similar 
 11.20  codes and standards applicable to housing, or to accomplish 
 11.21  energy conservation related improvements.  In unincorporated 
 11.22  areas and municipalities not having codes and standards, the 
 11.23  agency may, solely for the purpose of administering the 
 11.24  provisions of this chapter, establish codes and standards.  
 11.25  Except for accessibility improvements under this subdivision and 
 11.26  subdivisions 14a and 24, clause (1), no secured loan for 
 11.27  rehabilitation of any property shall be made in an amount which, 
 11.28  with all other existing indebtedness secured by the property, 
 11.29  would exceed 110 percent of its market value, as determined by 
 11.30  the agency.  No loan under this subdivision shall be denied 
 11.31  solely because the loan will not be used for placing the 
 11.32  residential housing in full compliance with all state, county, 
 11.33  or municipal building, housing maintenance, fire, health, or 
 11.34  similar codes and standards applicable to housing.  
 11.35  Rehabilitation loans shall be made only when the agency 
 11.36  determines that financing is not otherwise available, in whole 
 12.1   or in part, from private lenders upon equivalent terms and 
 12.2   conditions.  Accessibility rehabilitation loans authorized under 
 12.3   this subdivision may be made to eligible persons and families 
 12.4   without limitations relating to the maximum incomes of the 
 12.5   borrowers if: 
 12.6      (1) the borrower or a member of the borrower's family 
 12.7   requires a level of care provided in a hospital, skilled nursing 
 12.8   facility, or intermediate care facility for persons with mental 
 12.9   retardation or related conditions; 
 12.10     (2) home care is appropriate; and 
 12.11     (3) the improvement will enable the borrower or a member of 
 12.12  the borrower's family to reside in the housing. 
 12.13  The agency may waive any requirement that the housing units in a 
 12.14  residential housing development be rented to persons of low and 
 12.15  moderate income if the development consists of four or less 
 12.16  dwelling units, one of which is occupied by the owner. 
 12.17     Sec. 2.  Minnesota Statutes 2000, section 462A.05, 
 12.18  subdivision 14a, is amended to read: 
 12.19     Subd. 14a.  [REHABILITATION LOANS; EXISTING OWNER OCCUPIED 
 12.20  RESIDENTIAL HOUSING.] It may make loans to persons and families 
 12.21  of low and moderate income to rehabilitate or to assist in 
 12.22  rehabilitating existing residential housing owned and occupied 
 12.23  by those persons or families.  No loan shall be made unless the 
 12.24  agency determines that the loan will be used primarily for 
 12.25  rehabilitation work necessary for health or safety, essential 
 12.26  accessibility improvements, or to improve the energy efficiency 
 12.27  of the dwelling.  No loan for rehabilitation of owner occupied 
 12.28  residential housing shall be denied solely because the loan will 
 12.29  not be used for placing the residential housing in full 
 12.30  compliance with all state, county or municipal building, housing 
 12.31  maintenance, fire, health or similar codes and standards 
 12.32  applicable to housing.  The amount of any loan shall not exceed 
 12.33  the lesser of (a) a maximum loan amount determined under rules 
 12.34  adopted by the agency not to exceed $20,000, or (b) the actual 
 12.35  cost of the work performed, or (c) that portion of the cost of 
 12.36  rehabilitation which the agency determines cannot otherwise be 
 13.1   paid by the person or family without the expenditure of an 
 13.2   unreasonable portion of the income of the person or family.  
 13.3   Loans made in whole or in part with federal funds may exceed the 
 13.4   maximum loan amount to the extent necessary to comply with 
 13.5   federal lead abatement requirements prescribed by the funding 
 13.6   source.  In making loans, the agency shall determine the 
 13.7   circumstances under which and the terms and conditions under 
 13.8   which all or any portion of the loan will be repaid and shall 
 13.9   determine the appropriate security for the repayment of the 
 13.10  loan.  Loans pursuant to this subdivision may be made with or 
 13.11  without interest or periodic payments.  Loans made without 
 13.12  interest or periodic payments need not be repaid by the borrower 
 13.13  if the property for which the loan is made has not been sold, 
 13.14  transferred, or otherwise conveyed nor has it ceased to be the 
 13.15  principal place of residence of the borrower, within ten years 
 13.16  after the date of the loan.  
 13.17     Sec. 3.  Minnesota Statutes 2000, section 462A.20, 
 13.18  subdivision 3, is amended to read: 
 13.19     Subd. 3.  [SEPARATE ACCOUNTS; TRANSFERS; LIMITS.] Whenever 
 13.20  any money is appropriated by the state to the agency solely for 
 13.21  a specified purpose or purposes, the agency shall establish a 
 13.22  separate bookkeeping account or accounts in the housing 
 13.23  development fund to record the receipt and disbursement of such 
 13.24  money and of the income, gain, and loss from the investment and 
 13.25  reinvestment thereof.  Earnings from investment of any amounts 
 13.26  appropriated by the state to the agency for a specified purpose 
 13.27  or purposes may be aggregated.  The costs and expenses necessary 
 13.28  and incidental to the development and operation of all programs 
 13.29  funded by state appropriations may be paid from the aggregated 
 13.30  earnings from investments prior to periodic distributions of 
 13.31  earnings to separate accounts to be used for the same purpose as 
 13.32  the respective original appropriation.  The agency may transfer 
 13.33  unencumbered balances from one appropriated account to another, 
 13.34  provided that no money appropriated for the purpose of agency 
 13.35  loan programs may be transferred to an account to be used for 
 13.36  making grants, except that money appropriated for the purpose of 
 14.1   section 462A.05, subdivision 14a, may be transferred for the 
 14.2   purpose of section 462A.05, subdivision 15a.  
 14.3      Sec. 4.  Minnesota Statutes 2000, section 462A.2097, is 
 14.4   amended to read: 
 14.5      462A.2097 [RENTAL HOUSING.] 
 14.6      The agency may establish a tenant-based or project-based 
 14.7   rental housing assistance program for persons of low income or 
 14.8   for persons with a mental illness or families that include an 
 14.9   adult family member with a mental illness.  Rental assistance 
 14.10  may be in the form of direct rental subsidies for housing for 
 14.11  persons or families with incomes, at the time of initial 
 14.12  occupancy, of up to 50 percent of the area median income as 
 14.13  determined by the United States Department of Housing and Urban 
 14.14  Development, adjusted for families of five or more.  Housing for 
 14.15  the mentally ill must be operated in coordination with social 
 14.16  service providers who provide services requested by tenants.  
 14.17  Direct rental subsidies must be administered by the agency for 
 14.18  the benefit of eligible tenants.  Financial assistance provided 
 14.19  under this section must be in the form of vendor payments 
 14.20  whenever possible. 
 14.21     Sec. 5.  Minnesota Statutes 2000, section 462A.21, 
 14.22  subdivision 10, is amended to read: 
 14.23     Subd. 10.  [CERTAIN APPROPRIATIONS AVAILABLE UNTIL 
 14.24  EXPENDED.] Notwithstanding the repeal of section 462A.26 and the 
 14.25  provisions of section 16A.28 or any other law relating to lapse 
 14.26  of an appropriation, the appropriations made to the agency by 
 14.27  the legislature in 1976 and subsequent years are available until 
 14.28  fully expended, and the allocations provided in the 
 14.29  appropriations remain in effect.  Earnings from investments of 
 14.30  any of the amounts appropriated to the agency are appropriated 
 14.31  to the agency to be used for the same purposes as the respective 
 14.32  original appropriations, after payment of the costs and expenses 
 14.33  necessary and incidental to the development and operation of the 
 14.34  programs authorized under this chapter. 
 14.35     Sec. 6.  Minnesota Statutes 2000, section 462A.21, is 
 14.36  amended by adding a subdivision to read: 
 15.1      Subd. 28.  [FAMILY STABILIZATION DEMONSTRATION 
 15.2   PROJECT.] The agency may spend money for the purposes of section 
 15.3   462A.205 and may pay costs and expenses necessary and incidental 
 15.4   to the development and operation of the project. 
 15.5      Sec. 7.  Laws 2000, chapter 488, article 8, section 2, 
 15.6   subdivision 6, is amended to read: 
 15.7   Subd. 6.  Economic Support Grants
 15.8       30,509,000     25,368,000                 
 15.9   The amounts that may be spent from this 
 15.10  appropriation for each purpose are as 
 15.11  follows: 
 15.12  [ASSISTANCE TO FAMILIES GRANTS TANF 
 15.13  FORECAST ADJUSTMENT.] The federal 
 15.14  Temporary Assistance to Needy Families 
 15.15  (TANF) block grant fund appropriated to 
 15.16  the commissioner of human services in 
 15.17  Laws 1999, chapter 245, article 1, 
 15.18  section 2, subdivision 10, for MFIP 
 15.19  cash grants are reduced by $37,513,000 
 15.20  in fiscal year 2000 and $30,217,000 in 
 15.21  fiscal year 2001. 
 15.22  [FEDERAL TANF FUNDS.] (1) In addition 
 15.23  to the Federal Temporary Assistance for 
 15.24  Needy Families (TANF) block grant funds 
 15.25  appropriated to the commissioner of 
 15.26  human services in Laws 1999, chapter 
 15.27  245, article 1, section 2, subdivision 
 15.28  10, federal TANF funds are appropriated 
 15.29  to the commissioner in amounts up to 
 15.30  $20,000,000 in fiscal year 2000 and 
 15.31  $80,440,000 in fiscal year 2001.  In 
 15.32  addition to these funds, the 
 15.33  commissioner may draw or transfer any 
 15.34  other appropriations of federal TANF 
 15.35  funds or transfers of federal TANF 
 15.36  funds that are enacted into state law. 
 15.37  (2) Of the amounts in clause (1), 
 15.38  $19,680,000 in fiscal year 2001 is for 
 15.39  the local intervention grants program 
 15.40  under Minnesota Statutes, section 
 15.41  256J.625 and related grant programs and 
 15.42  shall be expended as follows: 
 15.43  (a) $500,000 in fiscal year 2001 is for 
 15.44  a grant to the Southeast Asian MFIP 
 15.45  services collaborative to replicate in 
 15.46  a second location an existing model of 
 15.47  an intensive intervention transitional 
 15.48  employment training project which 
 15.49  serves TANF-eligible recipients and 
 15.50  which moves refugee and immigrant 
 15.51  welfare recipients unto unsubsidized 
 15.52  employment and leads to economic 
 15.53  self-sufficiency.  This is a one-time 
 15.54  appropriation. 
 15.55  (b) $500,000 in fiscal year 2001 is for 
 15.56  nontraditional career assistance and 
 15.57  training programs under Minnesota 
 15.58  Statutes, section 256K.30, subdivision 
 16.1   4.  This is a one-time appropriation. 
 16.2   (c) $18,680,000 is for local 
 16.3   intervention grants for 
 16.4   self-sufficiency program under 
 16.5   Minnesota Statutes, section 256J.625.  
 16.6   For fiscal years 2002 and 2003 the 
 16.7   commissioner of finance shall ensure 
 16.8   that the base level funding for the 
 16.9   local intervention grants program is 
 16.10  $27,180,000 each year. 
 16.11  (3) Of the amounts in clause (2), 
 16.12  paragraph (c) for local intervention 
 16.13  grants, $7,000,000 in fiscal year 2001 
 16.14  shall be transferred to the 
 16.15  commissioner of health for distribution 
 16.16  to county boards according to the 
 16.17  formula in Minnesota Statutes, section 
 16.18  256J.625, subdivision 3, to be used by 
 16.19  county public health boards to serve 
 16.20  families with incomes at or below 200 
 16.21  percent of the federal poverty 
 16.22  guidelines, in the manner specified by 
 16.23  Minnesota Statutes, section 145A.16, 
 16.24  subdivision 3, clauses (2) through 
 16.25  (6).  Training, evaluation and 
 16.26  technical assistance shall be provided 
 16.27  in accordance with Minnesota Statutes, 
 16.28  section 145A.16, subdivisions 5 to 7.  
 16.29  For fiscal years 2002 and 2003 the 
 16.30  commissioner of finance shall ensure 
 16.31  that the base level funding for this 
 16.32  activity is $7,000,000 each year. 
 16.33  (4) Of the amounts in clause (1), 
 16.34  $250,000 in fiscal year 2001 is 
 16.35  appropriated to the commissioner to 
 16.36  contract with the board of trustees of 
 16.37  the Minnesota state colleges and 
 16.38  universities to provide tuition waivers 
 16.39  to employees of health care and human 
 16.40  services providers located in the state 
 16.41  that are members of qualifying 
 16.42  consortia operating under Minnesota 
 16.43  Statutes, sections 116L.10 to 116L.15. 
 16.44  (5) Of the amounts in clause (1), 
 16.45  $320,000 in fiscal year 2001 is for 
 16.46  training job counselors about the MFIP 
 16.47  program.  For fiscal years 2002 and 
 16.48  2003 the commissioner of finance shall 
 16.49  ensure that the base level funding for 
 16.50  employment services includes $320,000 
 16.51  each year for this activity.  The 
 16.52  appropriations in this clause shall not 
 16.53  become part of the base for the 
 16.54  2004-2005 biennium. 
 16.55  (6) Of the amounts in clause (1), 
 16.56  $1,000,000 in fiscal year 2001 is for 
 16.57  out-of-wedlock pregnancy prevention 
 16.58  funds to serve children in 
 16.59  TANF-eligible families under Minnesota 
 16.60  Statutes, section 256K.35. For fiscal 
 16.61  years 2002 and 2003 the commissioner of 
 16.62  finance shall ensure that the base 
 16.63  level funding for this program is 
 16.64  $1,000,000 each year.  The 
 16.65  appropriations in this clause shall not 
 16.66  become part of the base for the 
 17.1   2004-2005 biennium. 
 17.2   (7) Of the amounts in clause (1), 
 17.3   $1,000,000 in fiscal year 2001 is to 
 17.4   provide services to TANF-eligible 
 17.5   families who are participating in the 
 17.6   supportive housing and managed care 
 17.7   pilot project under Minnesota Statutes, 
 17.8   section 256K.25.  For fiscal years 2002 
 17.9   and 2003 the commissioner of finance 
 17.10  shall ensure that the base level 
 17.11  funding for this project is $1,000,000 
 17.12  each year.  The appropriations in this 
 17.13  clause shall not become part of the 
 17.14  base for this project for the 2004-2005 
 17.15  biennium. 
 17.16  [TANF TRANSFER TO SOCIAL SERVICES.] 
 17.17  $7,500,000 is transferred from the 
 17.18  state's federal TANF block grant to the 
 17.19  state's federal Title XX block grant in 
 17.20  fiscal year 2001 and in fiscal year 
 17.21  2002, for purposes of increasing 
 17.22  services for families with children 
 17.23  whose incomes are at or below 200 
 17.24  percent of the federal poverty 
 17.25  guidelines.  Notwithstanding section 6, 
 17.26  this paragraph expires June 30, 2002. 
 17.27  [TANF MOE.] (a) In order to meet the 
 17.28  basic maintenance of effort (MOE) 
 17.29  requirements of the TANF block grant 
 17.30  specified under United States Code, 
 17.31  title 42, section 609(a)(7), the 
 17.32  commissioner may only report nonfederal 
 17.33  money expended for allowable activities 
 17.34  listed in the following clauses as TANF 
 17.35  MOE expenditures: 
 17.36  (1) MFIP cash and food assistance 
 17.37  benefits under Minnesota Statutes, 
 17.38  chapter 256J; 
 17.39  (2) the child care assistance programs 
 17.40  under Minnesota Statutes, sections 
 17.41  119B.03 and 119B.05, and county child 
 17.42  care administrative costs under 
 17.43  Minnesota Statutes, section 119B.15; 
 17.44  (3) state and county MFIP 
 17.45  administrative costs under Minnesota 
 17.46  Statutes, chapters 256J and 256K; 
 17.47  (4) state, county, and tribal MFIP 
 17.48  employment services under Minnesota 
 17.49  Statutes, chapters 256J and 256K; and 
 17.50  (5) expenditures made on behalf of 
 17.51  noncitizen MFIP recipients who qualify 
 17.52  for the medical assistance without 
 17.53  federal financial participation program 
 17.54  under Minnesota Statutes, section 
 17.55  256B.06, subdivision 4, paragraphs (d), 
 17.56  (e), and (j). 
 17.57  (b) The commissioner shall ensure that 
 17.58  sufficient qualified nonfederal 
 17.59  expenditures are made each year to meet 
 17.60  the state's TANF MOE requirements.  For 
 17.61  the activities listed in paragraph (a), 
 17.62  clauses (2) to (6), the commissioner 
 18.1   may only report expenditures that are 
 18.2   excluded from the definition of 
 18.3   assistance under Code of Federal 
 18.4   Regulations, title 45, section 260.31.  
 18.5   If nonfederal expenditures for the 
 18.6   programs and purposes listed in 
 18.7   paragraph (a) are insufficient to meet 
 18.8   the state's TANF MOE requirements, the 
 18.9   commissioner shall recommend additional 
 18.10  allowable sources of nonfederal 
 18.11  expenditures to the legislature, if the 
 18.12  legislature is or will be in session to 
 18.13  take action to specify additional 
 18.14  sources of nonfederal expenditures for 
 18.15  TANF MOE before a federal penalty is 
 18.16  imposed.  The commissioner shall 
 18.17  otherwise provide notice to the 
 18.18  legislative commission on planning and 
 18.19  fiscal policy under paragraph (d). 
 18.20  (c) If the commissioner uses authority 
 18.21  granted under Laws 1999, chapter 245, 
 18.22  article 1, section 10, or similar 
 18.23  authority granted by a subsequent 
 18.24  legislature, to meet the state's TANF 
 18.25  MOE requirements in a reporting period, 
 18.26  the commissioner shall inform the 
 18.27  chairs of the appropriate legislative 
 18.28  committees about all transfers made 
 18.29  under that authority for this purpose. 
 18.30  (d) If the commissioner determines that 
 18.31  nonfederal expenditures for the 
 18.32  programs under Minnesota Statutes, 
 18.33  section 256J.025, are insufficient to 
 18.34  meet TANF MOE expenditure requirements, 
 18.35  and if the legislature is not or will 
 18.36  not be in session to take timely action 
 18.37  to avoid a federal penalty, the 
 18.38  commissioner may report nonfederal 
 18.39  expenditures from other allowable 
 18.40  sources as TANF MOE expenditures after 
 18.41  the requirements of this paragraph are 
 18.42  met. 
 18.43  The commissioner may report nonfederal 
 18.44  expenditures in addition to those 
 18.45  specified under paragraph (a) as 
 18.46  nonfederal TANF MOE expenditures, but 
 18.47  only ten days after the commissioner of 
 18.48  finance has first submitted the 
 18.49  commissioner's recommendations for 
 18.50  additional allowable sources of 
 18.51  nonfederal TANF MOE expenditures to the 
 18.52  members of the legislative commission 
 18.53  on planning and fiscal policy for their 
 18.54  review. 
 18.55  (e) The commissioner of finance shall 
 18.56  not incorporate any changes in federal 
 18.57  TANF expenditures or nonfederal 
 18.58  expenditures for TANF MOE that may 
 18.59  result from reporting additional 
 18.60  allowable sources of nonfederal TANF 
 18.61  MOE expenditures under the interim 
 18.62  procedures in paragraph (d) into the 
 18.63  February or November forecasts required 
 18.64  under Minnesota Statutes, section 
 18.65  16A.103, unless the commissioner of 
 18.66  finance has approved the additional 
 18.67  sources of expenditures under paragraph 
 19.1   (d). 
 19.2   (f) The provisions of paragraphs (a) to 
 19.3   (e) supersede any contrary provisions 
 19.4   in Laws 1999, chapter 245, article 1, 
 19.5   section 2, subdivision 10. 
 19.6   (g) The provisions of Minnesota 
 19.7   Statutes, section 256.011, subdivision 
 19.8   3, which require that federal grants or 
 19.9   aids secured or obtained under that 
 19.10  subdivision be used to reduce any 
 19.11  direct appropriations provided by law 
 19.12  do not apply if the grants or aids are 
 19.13  federal TANF funds. 
 19.14  (h) Notwithstanding section 6 of this 
 19.15  article, paragraphs (a) to (g) expire 
 19.16  June 30, 2003. 
 19.17  (i) Paragraphs (a) to (h) are effective 
 19.18  the day following final enactment. 
 19.19  (a) Assistance to Families Grants
 19.20       9,628,000     (2,305,000)                
 19.21  (b) Work Grants
 19.22          -0-          (250,000)
 19.23  (c) AFDC and Other Assistance
 19.24      20,000,000     30,734,000 
 19.25  [TRANSFERS TO MINNESOTA HOUSING FINANCE 
 19.26  AGENCY.] (a) By June 30, 2001, the 
 19.27  commissioner shall transfer $50,000,000 
 19.28  of the general funds appropriated under 
 19.29  this paragraph to the Minnesota housing 
 19.30  finance agency for transfer to the 
 19.31  housing development fund.  The program 
 19.32  funded by this transfer shall be known 
 19.33  as the "Bruce F. Vento Year 2000 
 19.34  Affordable Housing Program." Up to 
 19.35  $15,000,000 may be transferred in 
 19.36  fiscal year 2000. 
 19.37  (b) Of the funds transferred in 
 19.38  paragraph (a), $5,000,000 in fiscal 
 19.39  year 2001 and $15,000,000 in fiscal 
 19.40  year 2002 is for a loan to Habitat for 
 19.41  Humanity of Minnesota, Inc.  The loan 
 19.42  shall be an interest-free deferred 
 19.43  loan.  The loan shall become due and 
 19.44  payable in the event and to the extent 
 19.45  that Habitat for Humanity of Minnesota, 
 19.46  Inc. does not invest repayments and 
 19.47  prepayment of mortgage loans financed 
 19.48  with this appropriation in new 
 19.49  mortgages for additional homebuyers 
 19.50  through Habitat for Humanity of 
 19.51  Minnesota, Inc.  To the extent 
 19.52  practicable, funding must be allocated 
 19.53  to Habitat for Humanity chapters on the 
 19.54  basis of the number of MFIP households 
 19.55  residing within a chapter's service 
 19.56  area compared to the statewide total of 
 19.57  MFIP households and on the basis of a 
 19.58  chapter's capacity. 
 20.1   (c) Of the funds transferred in 
 20.2   paragraph (a), $15,000,000 in fiscal 
 20.3   year 2001 and $15,000,000 in fiscal 
 20.4   year 2002 is for the affordable rental 
 20.5   investment fund program under Minnesota 
 20.6   Statutes, section 462A.21, subdivision 
 20.7   8b.  To the extent practicable, the 
 20.8   number of units financed with the 
 20.9   appropriation under this paragraph 
 20.10  within a city, county, or region shall 
 20.11  reflect the number of MFIP households 
 20.12  residing within the city, county, or 
 20.13  region compared to the statewide total 
 20.14  of MFIP households.  This appropriation 
 20.15  must be used to finance rental housing 
 20.16  units that serve families: 
 20.17  (1) receiving MFIP benefits under 
 20.18  Minnesota Statutes, section 256J.01, or 
 20.19  its successor program; and 
 20.20  (2) who have lost eligibility for MFIP 
 20.21  due to increased income from employment 
 20.22  or due to the collection of child or 
 20.23  spousal support under part D of title 
 20.24  IV of the Social Security Act for 
 20.25  reasons other than disqualification 
 20.26  from MFIP due to fraud. 
 20.27  Units produced with this appropriation 
 20.28  must remain affordable for a 30-year 
 20.29  period. 
 20.30  In order to coordinate the availability 
 20.31  of housing developed with the 
 20.32  appropriation under this paragraph with 
 20.33  MFIP families in need of affordable 
 20.34  housing, the commissioner of the 
 20.35  Minnesota housing finance agency, with 
 20.36  the assistance of the commissioner of 
 20.37  human services, shall establish 
 20.38  cooperative relationships with county 
 20.39  agencies as defined in Minnesota 
 20.40  Statutes, section 256J.08, local 
 20.41  employment and training service 
 20.42  providers as defined in Minnesota 
 20.43  Statutes, section 256J.49, local social 
 20.44  service agencies, or other 
 20.45  organizations that provide assistance 
 20.46  to MFIP households.  
 20.47  The commissioner of the Minnesota 
 20.48  housing finance agency shall develop 
 20.49  strategies to promote occupancy of the 
 20.50  units financed by the appropriation 
 20.51  under this paragraph by households most 
 20.52  in need of subsidized housing.  The 
 20.53  strategies shall include provisions 
 20.54  that encourage households to move into 
 20.55  homeownership or unsubsidized housing 
 20.56  as the household secures stable 
 20.57  employment and achieves 
 20.58  self-sufficiency.  The commissioner of 
 20.59  the Minnesota housing finance agency 
 20.60  shall consult with interested parties 
 20.61  in developing these strategies.  
 20.62  (d) The commissioner of the Minnesota 
 20.63  housing finance agency and the 
 20.64  commissioner of human services shall 
 20.65  jointly prepare and submit a report to 
 21.1   the governor and the legislature on the 
 21.2   results of the funding provided under 
 21.3   this section.  The report shall include:
 21.4   (1) information on the number of units 
 21.5   produced; 
 21.6   (2) the household size and income of 
 21.7   the occupants of the units at initial 
 21.8   occupancy; and 
 21.9   (3) to the extent the information is 
 21.10  available, measures related to the 
 21.11  occupants' attachment to the workforce 
 21.12  and public assistance usage, and number 
 21.13  of occupant moves. 
 21.14  The report must be submitted annually 
 21.15  beginning January 15, 2003. 
 21.16  (e) Section 6, sunset of uncodified 
 21.17  language, does not apply to paragraphs 
 21.18  (a) to (d).  Paragraphs (a) to (d) are 
 21.19  effective the day following final 
 21.20  enactment. 
 21.21  [WORKING FAMILY CREDIT.] (a) On a 
 21.22  regular basis, the commissioner of 
 21.23  revenue, with the assistance of the 
 21.24  commissioner of human services, shall 
 21.25  calculate the value of the refundable 
 21.26  portion of the Minnesota working family 
 21.27  credits provided under Minnesota 
 21.28  Statutes, section 290.0671, that 
 21.29  qualifies for federal reimbursement 
 21.30  from the temporary assistance to needy 
 21.31  families block grant.  The commissioner 
 21.32  of revenue shall provide the 
 21.33  commissioner of human services with 
 21.34  such expenditure records and 
 21.35  information as are necessary to support 
 21.36  draws of federal funds.  The 
 21.37  commissioner of human services shall 
 21.38  reimburse the commissioner of revenue 
 21.39  for the costs of providing the 
 21.40  information required by this paragraph. 
 21.41  (b) Federal TANF funds, as specified in 
 21.42  this paragraph, are appropriated to the 
 21.43  commissioner of human services based on 
 21.44  calculations under paragraph (a) of 
 21.45  working family tax credit expenditures 
 21.46  that qualify for reimbursement from the 
 21.47  TANF block grant for income tax refunds 
 21.48  payable in federal fiscal years 
 21.49  beginning October 1, 1999.  The draws 
 21.50  of federal TANF funds shall be made on 
 21.51  a regular basis based on calculations 
 21.52  of credit expenditures by the 
 21.53  commissioner of revenue.  Up to the 
 21.54  following amounts of federal TANF draws 
 21.55  are appropriated to the commissioner of 
 21.56  human services to deposit into the 
 21.57  general fund:  in fiscal year 2000, 
 21.58  $30,957,000; and in fiscal year 2001, 
 21.59  $33,895,000. 
 21.60  (d) General Assistance
 21.61          557,000    (3,134,000)
 22.1   (e) Minnesota Supplemental Aid
 22.2           324,000       323,000 
 22.3                              ARTICLE 3 
 22.4                   TECHNICAL AND CONFORMING CHANGES 
 22.5      Section 1.  Minnesota Statutes 2000, section 462A.01, is 
 22.6   amended to read: 
 22.7      462A.01 [CITATION.] 
 22.8      Sections 462A.01 to 462A.24 462A.33 shall be known as and 
 22.9   may be cited as the "Minnesota Housing Finance Agency Law of 
 22.10  1971."  
 22.11     Sec. 2.  Minnesota Statutes 2000, section 462A.03, 
 22.12  subdivision 1, is amended to read: 
 22.13     Subdivision 1.  [APPLICATION.] For the purpose of sections 
 22.14  462A.01 to 462A.24 this chapter, the terms defined in this 
 22.15  section have the meanings ascribed to them. 
 22.16     Sec. 3.  Minnesota Statutes 2000, section 462A.03, 
 22.17  subdivision 6, is amended to read: 
 22.18     Subd. 6.  [AGENCY.] "Agency" means the Minnesota housing 
 22.19  finance agency created by sections 462A.01 to 462A.24 this 
 22.20  chapter. 
 22.21     Sec. 4.  Minnesota Statutes 2000, section 462A.03, 
 22.22  subdivision 10, is amended to read: 
 22.23     Subd. 10.  [PERSONS AND FAMILIES OF LOW AND MODERATE 
 22.24  INCOME.] "Persons and families of low and moderate income" means 
 22.25  persons and families, irrespective of race, creed, national 
 22.26  origin, sex, or status with respect to guardianship or 
 22.27  conservatorship, determined by the agency to require such 
 22.28  assistance as is made available by sections 462A.01 to 462A.24 
 22.29  this chapter on account of personal or family income not 
 22.30  sufficient to afford adequate housing.  In making such 
 22.31  determination the agency shall take into account the following:  
 22.32  (a) The amount of the total income of such persons and families 
 22.33  available for housing needs, (b) the size of the family, (c) the 
 22.34  cost and condition of housing facilities available, (d) the 
 22.35  eligibility of such persons and families to compete successfully 
 22.36  in the normal housing market and to pay the amounts at which 
 23.1   private enterprise is providing sanitary, decent and safe 
 23.2   housing.  In the case of federally subsidized mortgages with 
 23.3   respect to which income limits have been established by any 
 23.4   agency of the federal government having jurisdiction thereover 
 23.5   for the purpose of defining eligibility of low and moderate 
 23.6   income families, the limits so established shall govern under 
 23.7   the provision provisions of sections 462A.01 to 462A.24 this 
 23.8   chapter.  In all other cases income limits for the purpose of 
 23.9   defining low or moderate income persons shall be established by 
 23.10  the agency by rules. 
 23.11     Sec. 5.  Minnesota Statutes 2000, section 462A.03, is 
 23.12  amended by adding a subdivision to read: 
 23.13     Subd. 23.  [METROPOLITAN AREA.] "Metropolitan area" has the 
 23.14  meaning given in section 473.121, subdivision 2. 
 23.15     Sec. 6.  Minnesota Statutes 2000, section 462A.04, 
 23.16  subdivision 6, is amended to read: 
 23.17     Subd. 6.  [MANAGEMENT, CONTROL.] The management and control 
 23.18  of the agency shall be vested solely in the members in 
 23.19  accordance with the provisions of sections 462A.01 to 462A.24 
 23.20  this chapter. 
 23.21     Sec. 7.  Minnesota Statutes 2000, section 462A.05, 
 23.22  subdivision 16, is amended to read: 
 23.23     Subd. 16.  [PAYMENTS FOR STRUCTURAL DEFECTS.] (a) It may 
 23.24  make payments or expenditures from the housing development fund 
 23.25  to persons of low or moderate income, who are recipients of an 
 23.26  eligible loan as defined in section 462A.03, subdivision 11, or 
 23.27  who have purchased residential housing from a recipient of such 
 23.28  eligible loan, and who are owners and occupants of residential 
 23.29  housing constructed or rehabilitated under sections 462A.01 to 
 23.30  462A.24 this chapter, when, in the agency's determination, such 
 23.31  residential housing contains defects or omissions which affect 
 23.32  the structural soundness, or the use and the livability of such 
 23.33  housing, including but not limited to defects or omissions in 
 23.34  materials, hardware, fixtures, design, workmanship and 
 23.35  landscaping of whatever kind and nature incorporated in said 
 23.36  housing and which are covered by an agency approved warranty, 
 24.1   for the purposes of (i) correcting such defects, or (ii) paying 
 24.2   the claims of the owner arising from such defects, provided, 
 24.3   that this authority shall exist only if the owner has requested 
 24.4   assistance from the agency not later than four years after the 
 24.5   issuance of the eligible loan, or where such residential housing 
 24.6   was rehabilitated under sections 462A.01 to 462A.24 this chapter 
 24.7   only if the owner has requested assistance from the agency not 
 24.8   later than two years after the issuance of the eligible loan. 
 24.9      (b) If such owner elects to receive payments or 
 24.10  expenditures pursuant to this section, the agency is subrogated 
 24.11  to the right of such owner to recover damages against any party 
 24.12  or persons reasonably calculated to be responsible for such 
 24.13  damages. 
 24.14     (c) The agency may require from the seller of such 
 24.15  residential housing, or the contractor responsible for the 
 24.16  construction or rehabilitation of such housing, an agreement to 
 24.17  reimburse the agency for any payments and expenditures made 
 24.18  pursuant to this subdivision with respect to such residential 
 24.19  housing. 
 24.20     Sec. 8.  Minnesota Statutes 2000, section 462A.05, 
 24.21  subdivision 22, is amended to read: 
 24.22     Subd. 22.  [LOANS TO FINANCIAL INSTITUTIONS.] It may make 
 24.23  or participate in the making and enter into commitments for the 
 24.24  making of loans to any banking institution, savings association, 
 24.25  or other lender approved by the members, organized under the 
 24.26  laws of this or any other state or of the United States having 
 24.27  an office in this state, notwithstanding the provisions of 
 24.28  section 462A.03, subdivision 13, if it first determines that the 
 24.29  proceeds of such loans will be utilized for the purpose of 
 24.30  making loans to or for the benefit of eligible persons and 
 24.31  families as provided and in accordance with sections 462A.01 to 
 24.32  462A.24 this chapter.  Loans pursuant to this subdivision shall 
 24.33  be secured, repaid and bear interest at the rate as determined 
 24.34  by the members.  
 24.35     Sec. 9.  Minnesota Statutes 2000, section 462A.05, 
 24.36  subdivision 26, is amended to read: 
 25.1      Subd. 26.  [FORMATION OF NONPROFIT CORPORATIONS.] It may, 
 25.2   when the agency determines it is necessary or desirable to carry 
 25.3   out its purposes and to exercise any or all of the powers 
 25.4   conferred upon it under sections 462A.01 to 462A.24 by this 
 25.5   chapter, and subject to the provisions of subdivision 27, form 
 25.6   or consent to the formation of one or more corporations under 
 25.7   the Minnesota Nonprofit Corporation Act, as amended, or under 
 25.8   other laws of this state.  The agency may be a member of the 
 25.9   corporations, and the members and employees of the agency from 
 25.10  time to time may be members of the board of directors or 
 25.11  officers of the corporations.  The agency may enter into 
 25.12  agreements with them providing for the agency to approve various 
 25.13  aspects of their operations.  The agency may capitalize the 
 25.14  corporations and may acquire all or a part of the corporations' 
 25.15  share or member certificates.  The agency may require that it 
 25.16  approve aspects of the operation of the corporations including 
 25.17  the corporations' articles of incorporation or bylaws, 
 25.18  directors, projects and expenditures, and the sale or conveyance 
 25.19  of projects, and the issuance of obligations.  The agency may 
 25.20  agree to and may take title to property of the corporations upon 
 25.21  their dissolution. 
 25.22     Sec. 10.  Minnesota Statutes 2000, section 462A.06, 
 25.23  subdivision 1, is amended to read: 
 25.24     Subdivision 1.  [LISTED HERE.] For the purpose of 
 25.25  exercising the specific powers granted in section 462A.05 and 
 25.26  effectuating the other purposes of sections 462A.01 to 462A.24 
 25.27  this chapter, the agency shall have the general powers granted 
 25.28  in this section. 
 25.29     Sec. 11.  Minnesota Statutes 2000, section 462A.06, 
 25.30  subdivision 4, is amended to read: 
 25.31     Subd. 4.  [RULES.] It may make, and from time to time, 
 25.32  amend and repeal rules not inconsistent with the provisions of 
 25.33  sections 462A.01 to 462A.24 this chapter.  
 25.34     Sec. 12.  Minnesota Statutes 2000, section 462A.07, 
 25.35  subdivision 10, is amended to read: 
 25.36     Subd. 10.  [HUMAN RIGHTS.] It may establish and enforce 
 26.1   such rules as may be necessary to insure compliance with chapter 
 26.2   363, and to insure that occupancy of housing assisted under 
 26.3   sections 462A.01 to 462A.24 this chapter shall be open to all 
 26.4   persons, and that contractors and subcontractors engaged in the 
 26.5   construction of such housing shall provide an equal opportunity 
 26.6   for employment to all persons, without discrimination as to 
 26.7   race, color, creed, religion, national origin, sex, marital 
 26.8   status, age, and status with regard to public assistance or 
 26.9   disability. 
 26.10     Sec. 13.  Minnesota Statutes 2000, section 462A.07, 
 26.11  subdivision 12, is amended to read: 
 26.12     Subd. 12.  [USE OF OTHER AGENCIES.] It may delegate, use or 
 26.13  employ any federal, state, regional or local public or private 
 26.14  agency or organization, including organizations of physically 
 26.15  handicapped persons, upon terms it deems necessary or desirable, 
 26.16  to assist in the exercise of any of the powers granted in 
 26.17  sections 462A.01 to 462A.24 by this chapter and to carry out the 
 26.18  objectives of sections 462A.01 to 462A.24 this chapter and may 
 26.19  pay for the services from the housing development fund. 
 26.20     Sec. 14.  Minnesota Statutes 2000, section 462A.073, 
 26.21  subdivision 1, is amended to read: 
 26.22     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 26.23  section, the following terms have the meanings given them. 
 26.24     (b) "Existing housing" means single-family housing that (i) 
 26.25  has been previously occupied prior to the first day of the 
 26.26  origination period; or (ii) has been available for occupancy for 
 26.27  at least 12 months but has not been previously occupied.  
 26.28     (c) "Metropolitan area" means the metropolitan area as 
 26.29  defined in section 473.121, subdivision 2. 
 26.30     (d) "New housing" means single-family housing that has not 
 26.31  been previously occupied.  
 26.32     (e) (d) "Origination period" means the period that loans 
 26.33  financed with the proceeds of qualified mortgage revenue bonds 
 26.34  are available for the purchase of single-family housing.  The 
 26.35  origination period begins when financing actually becomes 
 26.36  available to the borrowers for loans.  
 27.1      (f) (e) "Redevelopment area" means a compact and contiguous 
 27.2   area within which the city finds by resolution that 70 percent 
 27.3   of the parcels are occupied by buildings, streets, utilities, or 
 27.4   other improvements and more than 25 percent of the buildings, 
 27.5   not including outbuildings, are structurally substandard to a 
 27.6   degree requiring substantial renovation or clearance. 
 27.7      (g) (f) "Single-family housing" means dwelling units 
 27.8   eligible to be financed from the proceeds of qualified mortgage 
 27.9   revenue bonds under federal law. 
 27.10     (h) (g) "Structurally substandard" means containing defects 
 27.11  in structural elements or a combination of deficiencies in 
 27.12  essential utilities and facilities, light, ventilation, fire 
 27.13  protection including adequate egress, layout and condition of 
 27.14  interior partitions, or similar factors, which defects or 
 27.15  deficiencies are of sufficient total significance to justify 
 27.16  substantial renovation or clearance. 
 27.17     Sec. 15.  Minnesota Statutes 2000, section 462A.15, is 
 27.18  amended to read: 
 27.19     462A.15 [STATE PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.] 
 27.20     The state pledges and agrees with the holders of any notes 
 27.21  or bonds issued under sections 462A.01 to 462A.24 this chapter, 
 27.22  that the state will not limit or alter the rights vested in the 
 27.23  agency to fulfill the terms of any agreements made with the 
 27.24  holders thereof, or in any way impair the rights and remedies of 
 27.25  the holders until the notes or bonds, together with the interest 
 27.26  thereon, with interest on any unpaid installments of interest, 
 27.27  and all costs and expenses in connection with any action or 
 27.28  proceeding by or on behalf of such holders, are fully met and 
 27.29  discharged.  The agency is authorized to include this pledge and 
 27.30  agreement of the state in any agreement with the holders of such 
 27.31  notes or bonds.  
 27.32     Sec. 16.  Minnesota Statutes 2000, section 462A.17, 
 27.33  subdivision 3, is amended to read: 
 27.34     Subd. 3.  [RAMSEY COUNTY VENUE; NOTICE OF PRINCIPAL DUE.] 
 27.35  The venue of any action or proceedings brought by the trustees 
 27.36  under sections 462A.01 to 462A.24 this chapter, shall be in 
 28.1   Ramsey county.  Before declaring the principal of notes or bonds 
 28.2   due and payable, the trustee shall first give 30 days' notice in 
 28.3   writing to the governor, to the agency and to the state 
 28.4   treasurer.  
 28.5      Sec. 17.  Minnesota Statutes 2000, section 462A.204, 
 28.6   subdivision 3, is amended to read: 
 28.7      Subd. 3.  [SET ASIDE.] At least one grant must be awarded 
 28.8   in an area located outside of the metropolitan area as defined 
 28.9   in section 473.121, subdivision 2.  A county, a group of 
 28.10  contiguous counties jointly acting together, or a 
 28.11  community-based nonprofit organization with a sponsoring 
 28.12  resolution from each of the county boards of the counties 
 28.13  located within its operating jurisdiction may apply for and 
 28.14  receive grants for areas located outside the metropolitan area.  
 28.15     Sec. 18.  Minnesota Statutes 2000, section 462A.205, 
 28.16  subdivision 4, is amended to read: 
 28.17     Subd. 4.  [AMOUNT AND PAYMENT OF RENT ASSISTANCE.] (a) This 
 28.18  subdivision applies to both the voucher option and the 
 28.19  project-based voucher option.  
 28.20     (b) Within the limits of available appropriations, eligible 
 28.21  families may receive monthly rent assistance for a 60-month 
 28.22  period starting with the month the family first receives rent 
 28.23  assistance under this section.  The amount of the family's 
 28.24  portion of the rental payment is equal to at least 30 percent of 
 28.25  gross income. 
 28.26     (c) The rent assistance must be paid by the local housing 
 28.27  organization to the property owner. 
 28.28     (d) Subject to the limitations in paragraph (e), the amount 
 28.29  of rent assistance is the difference between the rent and the 
 28.30  family's portion of the rental payment. 
 28.31     (e) In no case: 
 28.32     (1) may the amount of monthly rent assistance be more than 
 28.33  $250 for housing located within the metropolitan area, as 
 28.34  defined in section 473.121, subdivision 2, or more than $200 for 
 28.35  housing located outside of the metropolitan area; 
 28.36     (2) may the owner receive more rent for assisted units than 
 29.1   for comparable unassisted units; nor 
 29.2      (3) may the amount of monthly rent assistance be more than 
 29.3   the difference between the family's portion of the rental 
 29.4   payment and the fair market rent for the unit as determined by 
 29.5   the Department of Housing and Urban Development. 
 29.6      Sec. 19.  Minnesota Statutes 2000, section 462A.205, 
 29.7   subdivision 4a, is amended to read: 
 29.8      Subd. 4a.  [ADDITIONAL AUTHORIZED EXPENSES.] In addition to 
 29.9   the monthly rent assistance authorized under subdivision 4, rent 
 29.10  assistance may include up to $200 for a security deposit for 
 29.11  housing located outside the metropolitan area, as defined in 
 29.12  section 473.121, subdivision 2, and up to $250 for a security 
 29.13  deposit for housing located within the metropolitan area. 
 29.14     Sec. 20.  Minnesota Statutes 2000, section 462A.2091, 
 29.15  subdivision 3, is amended to read: 
 29.16     Subd. 3.  [ELIGIBLE PROPERTY.] Contracts for deed eligible 
 29.17  for refinancing with guarantee fund assistance must be for the 
 29.18  purchase of an owner-occupied single-family or duplex 
 29.19  structure.  In a city of the first class in the metropolitan 
 29.20  area, as defined in section 473.121, subdivision 2, eligible 
 29.21  properties must be located in an area in which at least one 
 29.22  census tract meets at least three of the following four criteria:
 29.23     (1) at least 70 percent of the housing structures were 
 29.24  built before 1960; 
 29.25     (2) at least 60 percent of the single-family housing is 
 29.26  owner-occupied; 
 29.27     (3) the median market value of the area's owner-occupied 
 29.28  housing, as recorded in the most recent federal decennial 
 29.29  census, is not more than 100 percent of the purchase price limit 
 29.30  for existing homes eligible for purchase in the area under the 
 29.31  agency's home mortgage loan program; and 
 29.32     (4) between 1980 and 1990, the rate of owner occupancy of 
 29.33  residential properties in the area declined by at least five 
 29.34  percent, or at least 80 percent of the residential properties in 
 29.35  the area are rental properties.  
 29.36     The area must include eight blocks in any direction from 
 30.1   the census tract.  Priority must be given for property located 
 30.2   in an area that meets all four criteria.  
 30.3      Sec. 21.  Minnesota Statutes 2000, section 462A.2093, 
 30.4   subdivision 1, is amended to read: 
 30.5      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 30.6   section, the following terms have the meanings given them in 
 30.7   this subdivision. 
 30.8      (a) "Municipality" means a town or a statutory or home rule 
 30.9   city. 
 30.10     (b) "Nonmetropolitan" means the area of the state outside 
 30.11  of the metropolitan area defined in section 473.121, subdivision 
 30.12  2. 
 30.13     (c) "Inclusionary housing development" means a new 
 30.14  construction development including owner-occupied or rental 
 30.15  housing, or a combination of both, with a variety of prices and 
 30.16  designs which serve families with a range of incomes and housing 
 30.17  needs. 
 30.18     Sec. 22.  Minnesota Statutes 2000, section 462A.21, 
 30.19  subdivision 5, is amended to read: 
 30.20     Subd. 5.  [OTHER AGENCY PURPOSES.] It may expend moneys in 
 30.21  the fund, not otherwise appropriated, for such other agency 
 30.22  purposes as previously enumerated in sections 462A.01 to 462A.24 
 30.23  this chapter as the agency in its discretion shall determine and 
 30.24  provide. 
 30.25     Sec. 23.  Minnesota Statutes 2000, section 462A.222, 
 30.26  subdivision 1a, is amended to read: 
 30.27     Subd. 1a.  [DETERMINATION OF REGIONAL CREDIT POOLS.] The 
 30.28  agency shall divide the annual per capita amount used in 
 30.29  determining the state ceiling for low-income housing tax credits 
 30.30  provided under section 42 of the Internal Revenue Code of 1986, 
 30.31  as amended, into a metropolitan pool and a greater Minnesota 
 30.32  pool.  The metropolitan pool shall serve the metropolitan area 
 30.33  as defined in section 473.121, subdivision 2.  The greater 
 30.34  Minnesota pool shall serve the remaining counties of the state.  
 30.35  The percentage of the annual per capita amount allotted to each 
 30.36  pool must be determined as follows: 
 31.1      (a) The percentage set-aside for projects involving a 
 31.2   qualified nonprofit organization as provided in section 42 of 
 31.3   the Internal Revenue Code of 1986, as amended, must be deducted 
 31.4   from the annual per capita amount used in determining the state 
 31.5   ceiling. 
 31.6      (b) Of the remaining amount, the metropolitan pool must be 
 31.7   allotted a percentage equal to the metropolitan counties' 
 31.8   percentage of the total number of state recipients of the 
 31.9   Minnesota family investment program, general assistance, 
 31.10  Minnesota supplemental aid, and supplemental security income in 
 31.11  the state, as reported annually by the department of human 
 31.12  services.  The greater Minnesota pool must be allotted the 
 31.13  amount remaining after the metropolitan pool's percentage has 
 31.14  been allotted. 
 31.15     The set-aside for qualified nonprofit organizations must be 
 31.16  divided between the two regional pools in the same percentage as 
 31.17  determined for the credit amounts above. 
 31.18     Sec. 24.  Minnesota Statutes 2000, section 462A.24, is 
 31.19  amended to read: 
 31.20     462A.24 [CONSTRUCTION.] 
 31.21     Sections 462A.01 to 462A.24 are This chapter is necessary 
 31.22  for the welfare of the state of Minnesota and its inhabitants; 
 31.23  therefore, it shall be liberally construed to effect its purpose.
 31.24     Sec. 25.  Minnesota Statutes 2000, section 462A.33, 
 31.25  subdivision 2, is amended to read: 
 31.26     Subd. 2.  [ELIGIBLE RECIPIENTS.] Challenge grants or loans 
 31.27  may be made to a city, a private developer, a nonprofit 
 31.28  organization, or the owner of the housing, including 
 31.29  individuals.  For the purpose of this section, "city" has the 
 31.30  meaning given it in section 462A.03, subdivision 21.  Preference 
 31.31  shall be given to challenge grants or loans for home ownership.  
 31.32  To the extent practicable, grants and loans shall be made so 
 31.33  that an approximately equal number of housing units are financed 
 31.34  in the metropolitan area, as defined in section 473.121, 
 31.35  subdivision 2, and in the nonmetropolitan area. 
 31.36     Sec. 26.  [REPEALER.] 
 32.1      Minnesota Statutes 2000, sections 462A.221, subdivision 4; 
 32.2   and 462A.30, subdivision 2, are repealed.