1.1A bill for an act1.2relating to capital investment; appropriating money for public housing; 1.3establishing nonprofit housing bonds; authorizing sale and issuance of state 1.4bonds; requiring a report;amending Minnesota Statutes 2006, section 462A.21, 1.5by adding a subdivision; proposing coding for new law in Minnesota Statutes, 1.6chapter 462A.1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.8    Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.1.9The sums shown in the column under "Appropriations" are appropriated from the 1.10bond proceeds fund, or another named fund, to the state agencies or officials indicated, 1.11to be spent for public purposes. Appropriations of bond proceeds must be spent as 1.12authorized by the Minnesota Constitution, article XI, section 5, paragraph (a), to acquire 1.13and better public land and buildings and other public improvements of a capital nature, or 1.14as authorized by the Minnesota Constitution, article XI, section 5, paragraphs (b) to (j), or 1.15article XIV. Unless otherwise specified, the appropriations in this act are available until 1.16the project is completed or abandoned subject to Minnesota Statutes, section 16A.642.1.17    Sec. 2. PRIORITIES.1.18    Subdivision 1.General.The Housing Policy and Finance and Public Health 1.19Finance Division of the House Finance Committee prioritizes the appropriations in this act 1.20as provided in this section.1.21    Subd. 2.High priorities.(1) For the housing development fund under section 3, 1.22subdivision 1;1.23    (2) for public housing rehabilitation under section 3, subdivision 2;1.24    (3) for the Hennepin County Opportunity Center under section 3, subdivision 3; and2.1    (4) for debt service appropriations under section 5.2.2    Subd. 3.Medium.2.3    Subd. 4.Low.2.4    Subd. 5.Do not fund.

2.5Sec. 3. APPROPRIATION.

2.6Subdivision 1.Housing Development Fund$10,000,000

2.7To the commissioner of the Housing 2.8Finance Agency for transfer to the housing 2.9development fund for the purposes specified 2.10in this subdivision. This appropriation is 2.11for loans or grants: (1) for publicly owned 2.12emergency shelter; (2) for publicly owned 2.13temporary or transitional housing under 2.14Minnesota Statutes, section 462A.201, 2.15subdivision 2; and (3) for publicly owned 2.16permanent rental housing under Minnesota 2.17Statutes, section 462A.202, subdivision 2.183a, for persons who have been without a 2.19permanent residence either for at least 12 2.20months or on at least four occasions in the 2.21last three years, or who were at significant 2.22risk of lacking a permanent residence for at 2.23least 12 months or on at least four occasions 2.24in the last three years. Loans or grants 2.25under Minnesota Statutes, section 462A.202, 2.26subdivision 3a, must be for housing that 2.27provides or coordinates with linkages to 2.28services necessary for residents to maintain 2.29housing stability and maximize opportunities 2.30for education and employment.

2.31Subd. 2.Public Housing Rehabilitation$20,000,000

2.32To the Housing Finance Agency for the 2.33purposes of financing the rehabilitation costs 2.34to preserve public housing. For purposes of 3.1this subdivision, "public housing" is housing 3.2for low-income persons and households 3.3financed by the federal government and 3.4owned and operated by public housing 3.5authorities and agencies. Eligible public 3.6housing authorities must have a public 3.7housing assessment system rating of standard 3.8or above. Priority must be given to proposals 3.9that maximize federal or local resources to 3.10finance the capital costs.

3.11Subd. 3.Hennepin County Opportunity Center$2,500,000

3.12To the commissioner of human services 3.13for a grant to Hennepin County for site 3.14acquisition, design, and development of the 3.15Opportunity Center. The Opportunity Center 3.16will provide a one-stop site connecting 3.17people experiencing homelessness or at risk 3.18of becoming homeless to the continuum of 3.19services needed to secure and maintain safe 3.20and permanent housing. Heading Home 3.21Hennepin, the Minneapolis/Hennepin County 3.22ten-year plan to end homelessness, calls for 3.23opening the Opportunity Center in 2009.3.24    Sec. 4. Minnesota Statutes 2006, section 462A.21, is amended by adding a subdivision 3.25to read:3.26    Subd. 32.Nonprofit housing bonds account.The agency may establish a nonprofit 3.27housing bond account as a separate account within the housing development fund. 3.28Proceeds of nonprofit housing bonds and payments made by the state pursuant to section 3.29462A.36 may be deposited in the account. The agency may transfer the proceeds of 3.30nonprofit housing bonds to another account within the housing development fund that it 3.31determines appropriate to accomplish the purposes for which the bonds are authorized 3.32under section 462A.36.3.33    Sec. 5. [462A.36] NONPROFIT HOUSING BONDS; AUTHORIZATION; 3.34STANDING APPROPRIATION.4.1    Subdivision 1.Definitions.(a) For purposes of this section, the following terms 4.2have the meanings given them.4.3    (b) "Debt service" means the amount payable in any fiscal year of principal of, 4.4premium, if any, and interest on nonprofit housing bonds and the fees, charges, and 4.5expenses related to the bonds.4.6    (c) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.4.7    (d) "Nonprofit housing bonds" means bonds issued by the agency under this chapter 4.8that are "qualified 501(c)(3) bonds" (within the meaning of Section 145(a) of the Internal 4.9Revenue Code) or are not "private activity bonds" (within the meaning of Section 141(a) 4.10of the Internal Revenue Code) for the purpose of financing or refinancing affordable 4.11housing authorized under this chapter.4.12    Subd. 2.Appropriation of debt service; payment to agency or trustee.(a) Up to 4.13$2,400,000 annually is appropriated from the general fund for deposit in the nonprofit 4.14housing bond account established in section 462A.21, subdivision 32, to pay the debt 4.15service on nonprofit housing bonds. The appropriation may be made for no more than 20 4.16years, commencing with the fiscal year beginning July 1, 2009.4.17    (b) On July 1 of each year, but no earlier than July 1, 2009, and for so long as any 4.18nonprofit housing bonds are outstanding, the state must transfer from the general fund 4.19to the nonprofit housing bond account established under section 462A.21, subdivision 4.2032, the amount of debt service payable in the fiscal year certified by the agency to the 4.21commissioner of finance, not  to exceed $2,400,000 annually.4.22    (c) The agency may pledge to the payment of the nonprofit housing bonds the 4.23payments to be made by the state pursuant to this section.4.24    Subd. 3.No full faith and credit.The nonprofit housing bonds are not public debt 4.25of the state, and the full faith and credit and taxing powers of the state are not pledged 4.26to the payment of the nonprofit housing bonds or to any payment that the state agrees to 4.27make under this section. The bonds must contain a conspicuous statement to such effect.4.28    Subd. 4.Authorization.The agency may issue up to $30 million of nonprofit 4.29housing bonds in one or more series to which the payments made pursuant to this section 4.30may be pledged. The nonprofit housing bonds authorized in this subdivision may be issued 4.31for the purpose of making loans, on terms and conditions the agency deems appropriate, 4.32to finance the costs of the construction, acquisition, preservation, and rehabilitation of 4.33permanent supportive housing for individuals and families who: (1) either have been 4.34without a permanent residence for at least 12 months or at least four times in the last three 4.35years; or (2) are at significant risk of lacking a permanent residence for 12 months or at 4.36least four times in the last three years. An insubstantial portion of the bond proceeds 5.1may be used for permanent supportive housing for individuals and families experiencing 5.2homelessness who do not meet the criteria of the previous sentence. For purposes of this 5.3subdivision, "permanent supportive housing" means housing that is not time-limited and 5.4provides or coordinates with linkages to services necessary for residents to maintain 5.5housing stability and maximize opportunities for education and employment.5.6    Sec. 6. BOND SALE AUTHORIZATION.5.7    To provide the money appropriated in this act from the bond proceeds fund, the 5.8commissioner of finance shall sell and issue bonds of the state in an amount up to 5.9$32,500,000 in the manner, upon the terms, and with the effect prescribed by Minnesota 5.10Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI, 5.11sections 4 to 7.5.12    Sec. 7. STAKEHOLDER CONSULTATION.5.13    The Minnesota Housing Finance Agency shall meet with the stakeholders described 5.14in section 8 for the following purposes: 5.15    (1) to consider the use of 501(c)(3) bonds as a means to prevent residential mortgage 5.16foreclosures and to address the effects of widespread residential mortgage foreclosures; 5.17    (2) to consider means to make community activity set aside (CASA) mortgages 5.18more accessible to neighborhood land trusts; and 5.19    (3) to consider alternative tax classifications for neighborhood land trust properties 5.20to make taxation of such properties more equitable and to provide an incentive for greater 5.21utilization of neighborhood land trusts.5.22    Sec. 8. STAKEHOLDERS.5.23    The stakeholders referenced in section 7 must include individuals with experience in 5.24community land trusts, providers of mortgage foreclosure prevention services, bankers, 5.25individuals who have experienced mortgage foreclosure, legal aid attorneys, and a 5.26representative of the property tax division of the Department of Revenue.5.27    Sec. 9. REPORT TO LEGISLATURE.5.28    The Minnesota Housing Finance Agency shall report the results and 5.29recommendations of the meetings under section 7 to the legislature by January 1, 2009.5.30    Sec. 10. EFFECTIVE DATE.5.31    Except as otherwise provided, this act is effective the day following final enactment.