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SF 3147

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/22/2022 08:42am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to housing; creating various grant programs to fund municipal housing
projects and initiatives; creating an excise tax imposed on the sale of residential
property when the buyer is a corporate entity; authorizing housing and
redevelopment authorities and economic development authorities to impose a
mortgage registry and deed taxes; authorizing housing infrastructure bonds to
finance affordable housing to low-income households; authorizing the issuance
of additional housing infrastructure bonds; adding workforce housing as an eligible
project for housing and redevelopment authorities; creating standards and
procedures for municipal relocation assistance programs; modifying regulations
on revenue derived from tax increments in tax increment financing districts;
appropriating money; authorizing the sale and issuance of bonds; amending
Minnesota Statutes 2020, sections 462A.37, subdivision 2, by adding a subdivision;
469.002, subdivision 12, by adding a subdivision; Minnesota Statutes 2021
Supplement, sections 462A.37, subdivision 5; 469.1763, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapters 116J; 426; 462A; 471;
proposing coding for new law as Minnesota Statutes, chapter 287A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116J.4315] GREATER MINNESOTA HOUSING INFRASTRUCTURE
GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Grant program established. new text end

new text begin The commissioner may make grants to
cities to provide up to 50 percent of the capital costs of public infrastructure necessary for
an eligible workforce housing development project. The commissioner may make a grant
award only after determining that nonstate resources are committed to complete the project.
The nonstate contribution may be either cash or in kind. In-kind contributions may include
the value of the site, whether the site is prepared before or after the law appropriating money
for the grant is enacted.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (b) "City" means a statutory or home rule charter city located outside the metropolitan
area, as defined in section 473.121, subdivision 2.
new text end

new text begin (c) "Housing infrastructure" means publicly owned physical infrastructure necessary to
support housing development projects, including but not limited to sewers, water supply
systems, utility extensions, streets, wastewater treatment systems, storm water management
systems, and facilities for pretreatment of wastewater to remove phosphorus.
new text end

new text begin Subd. 3. new text end

new text begin Eligible projects. new text end

new text begin Housing projects eligible for a grant under this section may
be single-family or multifamily housing developments, and either owner-occupied or a
rental.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin (a) The commissioner must develop forms and procedures for
soliciting and reviewing applications for grants under this section. At a minimum, a city
must include in its application a resolution of the city council certifying that the required
nonstate match is available. The commissioner must evaluate complete applications for
funding for eligible projects to determine that:
new text end

new text begin (1) the project is necessary to increase sites available for housing development that will
provide adequate housing stock for the current or future workforce; and
new text end

new text begin (2) the increase in workforce housing will result in substantial public and private capital
investment in the city in which the project would be located.
new text end

new text begin (b) The determination of whether to make a grant for a site is within the discretion of
the commissioner, subject to this section. The commissioner's decisions and application of
the criteria are not subject to judicial review, except for abuse of discretion.
new text end

new text begin Subd. 5. new text end

new text begin Maximum grant amount. new text end

new text begin A city may receive no more than $30,000 per lot
for single-family, duplex, triplex, or fourplex housing developed, and no more than $60,000
per lot for multifamily housing with more than four units per building. A city may receive
no more than $500,000 in two years for one or more housing developments.
new text end

new text begin Subd. 6. new text end

new text begin Cancellation of grant; return of grant money. new text end

new text begin If after five years, the
commissioner determines that a project has not proceeded in a timely manner and is unlikely
to be completed, the commissioner must cancel the grant and require the grantee to return
all grant money awarded for that project.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin Grant money returned to the commissioner is appropriated to
the commissioner to make additional grants under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [287A.03] REAL ESTATE EXCISE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Imposition. new text end

new text begin (a) A tax is imposed on the sale of real property classified
as class 1a under section 273.13, subdivision 22, when the buyer is a corporate entity. For
the purposes of this section, "corporate entity" means any partnership, corporation, or limited
liability company.
new text end

new text begin (b) Payment of the tax is due and payable immediately at the time of sale and must be
collected with the taxes imposed under chapter 287. The tax is the obligation of the buyer.
new text end

new text begin Subd. 2. new text end

new text begin Rates. new text end

new text begin The tax imposed under subdivision 1 is at the following rates:
new text end

new text begin (1) ... percent of the portion of the selling price less than or equal to $200,000;
new text end

new text begin (2) ... percent of the portion of the selling price above $200,000 and less than or equal
to $350,000;
new text end

new text begin (3) ... percent of the portion of the selling price above $350,000 and less than or equal
to $500,000;
new text end

new text begin (4) ... percent of the portion of the selling price above $500,000.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of funds. new text end

new text begin (a) All taxes paid to the county treasurer must be apportioned,
97 percent to the general fund of the state and three percent to the county revenue fund.
new text end

new text begin (b) On or before the 20th day of each month, the county treasurer shall determine and
pay to the commissioner of revenue for deposit in the state treasury and credit to the general
fund the state's portion of the receipts from this tax during the preceding month subject to
the electronic payment requirements of section 270C.42. The county treasurer shall provide
any related reports requested by the commissioner of revenue.
new text end

new text begin Subd. 4. new text end

new text begin Violations; civil penalties. new text end

new text begin (a) Any buyer liable for the tax imposed by this
section who fails to pay the full amount of tax owed, unless the failure is shown to be due
to reasonable cause, is liable for a civil penalty of $....... or 100 percent of the tax for each
such failure, whichever is less.
new text end

new text begin (b) Any person or entity who willfully attempts to evade or defeat the tax imposed under
this section or the payment thereof shall, in addition to the penalty provided in subdivision
1, be liable for a penalty of 50 percent of the total amount of the underpayment of the tax.
new text end

new text begin Subd. 5. new text end

new text begin Exemptions. new text end

new text begin The following entities are exempt from the tax imposed under
this section:
new text end

new text begin (1) a corporate entity that owns fewer than four class 1a nonhomesteaded residential
properties;
new text end

new text begin (2) a corporate entity that is a community land trust under section 462A.31; and
new text end

new text begin (3) a nonprofit corporation under chapter 317A.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 3.

new text begin [426.101] HOUSING AND REDEVELOPMENT AUTHORITY; AUTHORITY
TO IMPOSE MORTGAGE REGISTRY TAX AND DEED TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose tax. new text end

new text begin A city or county in which a housing authority
has been created under section 469.003 or 469.004 or in which an economic development
authority created under section 469.091 exercises the powers of a housing and redevelopment
authority may by ordinance impose either a mortgage registry tax, a deed tax, or both, as
specified in this section. The ordinance must establish a separate fund in the city treasury
or county treasury into which all of the tax revenues imposed under this section shall be
deposited. A tax imposed under this section is in addition to the taxes imposed under chapter
287.
new text end

new text begin Subd. 2. new text end

new text begin Mortgage registry tax. new text end

new text begin (a) A city or county described under subdivision 1 may
impose a tax on the privilege of recording a mortgage at a rate of 0.0001 percent of the debt
or the portion of a debt that is secured by a recorded mortgage of real property located within
the relevant city or county. The person liable for the tax is the mortgagor. The tax is not
imposed on the lawful interest amounts that may accrue with respect to a debt. The tax does
not apply to documents exempt under section 287.04.
new text end

new text begin (b) On or before the 20th day of each month, the county treasurer shall:
new text end

new text begin (1) in the case of a tax imposed by a city under this subdivision, determine and pay the
receipts to the city treasurer for deposit in the appropriate fund in the city treasury; or
new text end

new text begin (2) in the case of a tax imposed by a county under this subdivision, deposit the receipts
in the appropriate fund in the county treasury.
new text end

new text begin Subd. 3. new text end

new text begin Deed tax. new text end

new text begin (a) A city or county described under subdivision 1 may impose a tax
on each deed or instrument by which any real property located in the relevant city or county
is granted, assigned, transferred, or otherwise conveyed. The tax applies against the net
consideration. For the purposes of the tax, the conversion of a corporation to a limited
liability company, a limited liability company to a corporation, a partnership to a limited
partnership, a limited partnership to another limited partnership or other entity, or a similar
conversion of one entity to another does not grant, assign, transfer, or convey real property.
new text end

new text begin (b) When a deed tax of .0033 percent of the net consideration of a sale or transfer is
determined under section 287.21, subdivision 1, a deed tax of .0001 percent of the net
consideration of the sale or transfer is determined under this subdivision. The person liable
for the tax is the person liable for deed tax under section 287.24. The tax does not apply to
documents upon which a $1.65 deed tax is determined under chapter 287 or to documents
exempt under section 287.22.
new text end

new text begin (c) On or before the 20th day of each month, the county treasurer shall:
new text end

new text begin (1) in the case of a tax imposed by a city under this subdivision, determine and pay the
receipts to the city treasurer for deposit in the appropriate fund in the city treasury; or
new text end

new text begin (2) in the case of a tax imposed by a county under this subdivision, deposit the receipts
in the appropriate fund in the county treasury.
new text end

new text begin Subd. 4. new text end

new text begin Violations; civil penalties. new text end

new text begin The penalties under section 287.13 apply to a tax
imposed under this section.
new text end

Sec. 4.

Minnesota Statutes 2020, section 462A.37, subdivision 2, is amended to read:


Subd. 2.

Authorization.

(a) The agency may issue up to $30,000,000 in aggregate
principal amount of housing infrastructure bonds in one or more series to which the payment
made under this section may be pledged. The housing infrastructure bonds authorized in
this subdivision may be issued to fund loans, or grants for the purposes of clause (4), on
terms and conditions the agency deems appropriate, made for one or more of the following
purposes:

(1) to finance the costs of the construction, acquisition, and rehabilitation of supportive
housing for individuals and families who are without a permanent residence;

(2) to finance the costs of the acquisition and rehabilitation of foreclosed or abandoned
housing to be used for affordable rental housing and the costs of new construction of rental
housing on abandoned or foreclosed property where the existing structures will be demolished
or removed;

(3) to finance that portion of the costs of acquisition of property that is attributable to
the land to be leased by community land trusts to low- and moderate-income home buyers;

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

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

(6) to finance the costs of acquisition and rehabilitation of federally assisted rental
housing and for the refinancing of costs of the construction, acquisition, and rehabilitation
of federally assisted rental housing, including providing funds to refund, in whole or in part,
outstanding bonds previously issued by the agency or another government unit to finance
or refinance such costs; deleted text beginand
deleted text end

(7) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
of single-family housingdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (8) to finance the costs of construction, acquisition, and rehabilitation of permanent
housing that is affordable to households with incomes at or below 50 percent of the area
median income. "Area median income" means the area median income for the applicable
county or metropolitan area as published by the United States Department of Housing and
Urban Development, as adjusted for household size.
new text end

(b) Among comparable proposals for permanent supportive housing, preference shall
be given to permanent supportive housing for veterans and other individuals or families
who:

(1) either have been without a permanent residence for at least 12 months or at least four
times in the last three years; or

(2) are at significant risk of lacking a permanent residence for 12 months or at least four
times in the last three years.

(c) Among comparable proposals for senior housing, the agency must give priority to
requests for projects that:

(1) demonstrate a commitment to maintaining the housing financed as affordable to
seniors;

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

(3) provide access to services to residents and demonstrate the ability to increase physical
supports and support services as residents age and experience increasing levels of disability;

(4) provide a service plan containing the elements of clause (3) reviewed by the housing
authority, economic development authority, public housing authority, or community
development agency that has an area of operation for the jurisdiction in which the project
is located; and

(5) include households with incomes that do not exceed 30 percent of the median
household income for the metropolitan area.

new text begin (d) Of comparable proposals for permanent housing, the agency must give preference
to projects that will provide housing that is affordable to households at or below 30 percent
of the area median income.
new text end

new text begin (e) new text endTo the extent practicable, the agency shall balance the loans made between projects
in the metropolitan area and projects outside the metropolitan area. Of the loans made to
projects outside the metropolitan area, the agency shall, to the extent practicable, balance
the loans made between projects in counties or cities with a population of 20,000 or less,
as established by the most recent decennial census, and projects in counties or cities with
populations in excess of 20,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2020, section 462A.37, is amended by adding a subdivision to
read:


new text begin Subd. 2i. new text end

new text begin Additional authorization. new text end

new text begin In addition to the amount authorized in subdivisions
2 to 2h, the agency may issue up to $400,000,000 in housing infrastructure bonds in one or
more series to which the payments under this section may be pledged.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2021 Supplement, section 462A.37, subdivision 5, is amended
to read:


Subd. 5.

Additional appropriation.

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

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

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

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

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

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

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

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

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

new text begin (j) Each July 15, beginning in 2024 and through 2045, if any housing infrastructure
bonds issued under subdivision 2i remain outstanding, the commissioner of management
and budget must transfer to the housing infrastructure bond account established under section
462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
to make the transfers are appropriated from the general fund to the commissioner of
management and budget.
new text end

deleted text begin (j)deleted text endnew text begin (k)new text end The agency may pledge to the payment of the housing infrastructure bonds the
payments to be made by the state under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

new text begin [462A.41] HOUSING COST REDUCTION INCENTIVE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Grant program established. new text end

new text begin The agency shall establish and administer
the housing cost reduction incentive program for the purpose of reimbursing cities for fee
waivers or reductions provided to qualified multifamily housing developments and
single-family, owner-occupied housing developments through local fee waiver and
inclusionary housing programs.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (b) "Applicant" means any statutory or home rule charter city and any county.
new text end

new text begin (c) "Inclusionary housing program" means a program that requires at least ... percent of
new construction to be affordable to households with incomes at or below 80 percent of the
area median income for multifamily housing developments or 115 percent of the area median
income for single-family, owner-occupied housing developments.
new text end

new text begin (d) "Local fee waiver program" means a program established by a statutory or home
rule charter city that waives or reduces fees for developers of qualified multifamily housing
developments and single-family, owner-occupied housing developments.
new text end

new text begin (e) "Multifamily housing development" has the meaning given in section 462C.02,
subdivision 5, except that only new construction qualifies.
new text end

new text begin (f) "Program" means the housing cost reduction incentive program established in this
section.
new text end

new text begin (g) "Single-family, owner-occupied housing" has the meaning given in section 462C.02,
subdivision 4, except that only new construction qualifies.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin (a) The agency must develop forms and procedures for soliciting
and reviewing applications for grants under this section. At a minimum, a city must include
in its application information about the local fee waiver and inclusionary housing programs
under which the fee waivers or reductions were issued.
new text end

new text begin (b) The agency must evaluate complete applications for funding for reimbursement for
eligible fee waivers or reductions to determine whether the fee waiver or reduction is
necessary to increase the number of multifamily housing developments and single-family,
owner-occupied housing developments within the applicant's boundaries.
new text end

new text begin (c) The determination of whether to award a grant for reimbursement of fee waivers or
reductions is within the discretion of the agency, subject to this section. The agency's
decisions and application of the criteria are not subject to judicial review, except for abuse
of discretion.
new text end

new text begin Subd. 4. new text end

new text begin Grant amount. new text end

new text begin The commissioner may award grants to applicants in an amount
up to 50 percent of the amount of the development impact fee waived or reduced for a
qualified rental housing development. A city may receive no more than $....... per multifamily
housing development or single-family, owner-occupied housing.
new text end

Sec. 8.

Minnesota Statutes 2020, section 469.002, subdivision 12, is amended to read:


Subd. 12.

Project.

"Project" means a housing project, a housing development projectnew text begin,
a workforce housing project,
new text end or a redevelopment project, or any combination of those
projects. The term "project" also may be applied to all real and personal property, assets,
cash, or other funds, held or used in connection with the development or operation of the
project. The term "project" also includes an interest reduction program authorized by section
469.012, subdivision 7.

Sec. 9.

Minnesota Statutes 2020, section 469.002, is amended by adding a subdivision to
read:


new text begin Subd. 25. new text end

new text begin Workforce housing project. new text end

new text begin (a) "Workforce housing project" means any
work or undertaking by an authority located in an eligible project area to develop market
rate residential rental properties, as defined in section 462A.39, subdivision 2, paragraph
(d), or single-family housing as defined under section 462C.02, subdivision 4.
new text end

new text begin (b) For the purposes of this paragraph, "eligible project area" means an area that meets
the criteria under section 462A.39, subdivisions 2, paragraph (b), and 4, paragraph (a).
new text end

Sec. 10.

Minnesota Statutes 2021 Supplement, section 469.1763, subdivision 2, is amended
to read:


Subd. 2.

Expenditures outside district.

(a) For each tax increment financing district,
an amount equal to at least 75 percent of the total revenue derived from tax increments paid
by properties in the district must be expended on activities in the district or to pay bonds,
to the extent that the proceeds of the bonds were used to finance activities in the district or
to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other
than redevelopment districts for which the request for certification was made after June 30,
1995, the in-district percentage for purposes of the preceding sentence is 80 percent. Not
more than 25 percent of the total revenue derived from tax increments paid by properties
in the district may be expended, through a development fund or otherwise, on activities
outside of the district but within the defined geographic area of the project except to pay,
or secure payment of, debt service on credit enhanced bonds. For districts, other than
redevelopment districts for which the request for certification was made after June 30, 1995,
the pooling percentage for purposes of the preceding sentence is 20 percent. The revenues
derived from tax increments paid by properties in the district that are expended on costs
under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating
the percentages that must be expended within and without the district.

(b) deleted text beginIn the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11
, is an activity in the district.
deleted text endnew text begin The following are considered activities in the
district:
new text end

new text begin (1) a housing project, as defined in section 469.174, subdivision 11; and
new text end

new text begin (2) a transfer of increments to an affordable housing trust fund established pursuant to
section 462C.16 for expenditures made in conformity with the political subdivision's
ordinance and policy establishing the trust fund. Any transfers made pursuant to this clause
are not subject to the annual reporting requirements imposed by section 469.175.
new text end

(c) All administrative expenses are for activities outside of the district, except that if the
only expenses for activities outside of the district under this subdivision are for the purposes
described in paragraph (d), administrative expenses will be considered as expenditures for
activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district, to increase
by up to deleted text begintendeleted text endnew text begin 25new text end percentage points the permitted amount of expenditures for activities located
outside the geographic area of the district under paragraph (a). As permitted by section
469.176, subdivision 4k, the expenditures, including the permitted expenditures under
paragraph (a), need not be made within the geographic area of the project. Expenditures
that meet the requirements of this paragraph are legally permitted expenditures of the district,
notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. To qualify for the increase
under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code; and

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of the
Internal Revenue Code, less the amount of any credit allowed under section 42 of the Internal
Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing; or

(4) be used to develop housing:

(i) if the market value of the housing does not exceed the lesser of:

(A) 150 percent of the average market value of single-family homes in that municipality;
or

(B) $200,000 for municipalities located in the metropolitan area, as defined in section
473.121, or $125,000 for all other municipalities; and

(ii) if the expenditures are used to pay the cost of site acquisition, relocation, demolition
of existing structures, site preparation, and pollution abatement on one or more parcels, if
the parcel contains a residence containing one to four family dwelling units that has been
vacant for six or more months and is in foreclosure as defined in section 325N.10, subdivision
7
, but without regard to whether the residence is the owner's principal residence, and only
after the redemption period has expired; or

(5) to assist owner-occupied housing that meets the requirements of section 469.1761,
subdivision 2.

(e) The authority under paragraph (d), clause (4), expires on December 31, 2016.
Increments may continue to be expended under this authority after that date, if they are used
to pay bonds or binding contracts that would qualify under subdivision 3, paragraph (a), if
December 31, 2016, is considered to be the last date of the five-year period after certification
under that provision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

new text begin [471.9994] RELOCATION ASSISTANCE FOR AFFORDABLE HOUSING
UNIT TENANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Affordable housing unit" means a rental unit that rents for an amount that is
affordable to households whose income at the time of initial occupancy does not exceed 50
percent of the greater of area or state median income, adjusted for family size, as determined
by the United States Department of Housing and Urban Development.
new text end

new text begin (c) "City" means a statutory or home rule charter city.
new text end

new text begin Subd. 2. new text end

new text begin Relocation assistance. new text end

new text begin (a) A city may by ordinance require a property owner
to provide relocation assistance consistent with the provisions of Code of Federal Regulations,
title 49, sections 24.201 to 24.209, to tenants of affordable housing units upon the sale;
demolition; substantial rehabilitation, whether due to code enforcement or any other reason;
or change of use of the property in which the affordable housing units are located when the
property owner changes the units in the property from affordable housing units to market
rate units.
new text end

new text begin (b) A city that adopts an ordinance under this subdivision must adopt policies, procedures,
or regulations to implement the requirements of the ordinance. Such policies, procedures,
or regulations must include provisions for an administrative hearing process to timely resolve
disputes between tenants and property owners relating to relocation assistance or unlawful
detainer actions during relocation. A party who feels aggrieved by a decision of the
administrative hearing process may appeal within 15 days as provided for civil actions in
district court.
new text end

new text begin Subd. 3. new text end

new text begin Notice of transfer of ownership. new text end

new text begin A city may by ordinance require an owner
of property that includes an affordable housing unit to provide written notice of transfer of
ownership of the property to the tenant of each affordable housing unit.
new text end

Sec. 12. new text beginAPPROPRIATION; HOUSING COST REDUCTION INCENTIVE
PROGRAM.
new text end

new text begin $....... in fiscal year 2023 is appropriated from the general fund to the commissioner of
the Minnesota Housing Finance Agency for deposit in the housing development fund for
grants to cities and counties under Minnesota Statutes, section 462A.41, for reimbursement
of fee waivers or reductions to qualified housing developments. This is a onetime
appropriation.
new text end

Sec. 13. new text beginMINNESOTA HOUSING FINANCE AGENCY; CHALLENGE PROGRAM.
new text end

new text begin $22,425,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of the Minnesota Housing Finance Agency for deposit in the housing development fund for
the economic development and housing challenge program under Minnesota Statutes, section
462A.33.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 14. new text beginHOUSING INFRASTRUCTURE GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $2,500,000 is appropriated from the bond proceeds fund
to the commissioner of employment and economic development for grants under the greater
Minnesota housing infrastructure grant program under Minnesota Statutes, section 116J.4315.
new text end

new text begin Subd. 2. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in this section from the bond
proceeds fund, the commissioner of management and budget shall sell and issue bonds of
the state in an amount up to $2,500,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15. new text beginHOUSING FINANCE AGENCY; NOAH APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Naturally Occurring Affordable Housing; appropriation. new text end

new text begin $50,000,000
in fiscal year 2023 is appropriated from the general fund to the Minnesota Housing Finance
Agency: (1) to make loans or grants to owners of Naturally Occurring Affordable Housing
(NOAH) preservation properties that have demonstrated experience and capacity in owning
and operating quality and well-managed affordable housing, or (2) to make a grant to a
statewide intermediary to make loans or grants for the same purposes. A loan or grant must
be used to acquire and rehabilitate a NOAH property that the agency or the statewide
intermediary determines is at risk of increased rents and that is occupied by tenants at risk
of involuntary displacement. The agency shall determine how much of the appropriation
may be used for grants and how much for loans. This appropriation is available until June
30, 2025.
new text end

new text begin Subd. 2. new text end

new text begin Requirements; terms. new text end

new text begin (a) A funding applicant must demonstrate that the
applicant will have sufficient capital and capital reserves to improve and maintain the
property for the term of the loan if funding is in the form of a loan, but in all cases for at
least 15 years.
new text end

new text begin (b) A funding recipient must be contractually obligated by means of a deed restriction
to maintain for at least 15 years one of the following three levels of affordability:
new text end

new text begin (1) at least 75 percent of the units must be at rents affordable to households with incomes
at or less than 80 percent of the area median income and at least 51 percent of units must
be at rents affordable to households with incomes at or less than 60 percent of the area
median income;
new text end

new text begin (2) at least 15 percent of the units, or 15 units, whichever is fewer, must be at rents
affordable to households with incomes at or less than 30 percent of the area median income,
and at least 51 percent of the units must be at rents affordable to households with incomes
at or less than 60 percent of the area median income; or
new text end

new text begin (3) at least 75 percent of the units must be at rents affordable to households with incomes
at 50 percent or less of the area median income, and 100 percent of the units must be at
rents affordable to households with incomes at or less than 80 percent of the area median
income.
new text end

new text begin (c) A funding applicant must provide to the agency or statewide intermediary
administering the grant and loan program the details of the total financing package.
new text end

new text begin (d) Properties that receive funds must accept vouchers under section 8 of the United
States Housing Act of 1937, as amended, if the subsidy payment standard is no more than
five percent below marketplace rent levels.
new text end

new text begin (e) The agency or statewide intermediary may require other criteria and application
information that will promote NOAH preservation.
new text end

new text begin (f) A loan or grant may be for up to 40 percent of the total acquisition cost of the NOAH
property but no more than $50,000 per individual rental housing unit acquired.
new text end

new text begin (g) The agency, or the statewide intermediary making loans or grants under this section,
may give priority to applications that reserve at least 15 units to provide homes for homeless
households.
new text end

new text begin (h) A loan may have a term of up to 15 years at no- or low-interest rates at the discretion
of the agency or statewide intermediary.
new text end

new text begin Subd. 3. new text end

new text begin Report. new text end

new text begin A recipient of a grant or loan under this section must report to the
agency or statewide intermediary information required by the agency as a condition of the
loan or grant.
new text end

Sec. 16. new text beginPUBLIC HOUSING REHABILITATION.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $100,000,000 is appropriated from the bond proceeds
fund to the Minnesota Housing Finance Agency for transfer to the housing development
fund to finance the costs of rehabilitation to preserve public housing under Minnesota
Statutes, section 462A.202, subdivision 3a. For the purposes of this section, "public housing"
means housing for low-income persons and households financed by the federal government
and publicly owned. Priority may be given to proposals that maximize federal or local
resources to finance the capital costs and requests that prioritize health, safety, and energy
improvements. The priority in Minnesota Statutes, section 462A.202, subdivision 3a, for
projects to increase the supply of affordable housing and the restrictions of Minnesota
Statutes, section 462A.202, subdivision 7, do not apply to this appropriation.
new text end

new text begin Subd. 2. new text end

new text begin Bond sale. new text end

new text begin To provide the money appropriated in this section from the bond
proceeds fund, the commissioner of management and budget shall sell and issue bonds of
the state in an amount up to $100,000,000 in the manner, upon the terms, and with the effect
prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 17. new text beginLOCAL HOUSING TRUST FUND GRANTS.
new text end

new text begin (a) $10,000,000 in fiscal year 2023 is appropriated from the general fund to the
commissioner of the Minnesota Housing Finance Agency for deposit in the housing
development fund for grants to local housing trust funds established under Minnesota
Statutes, section 462C.16, to incentivize local funding. This is a onetime appropriation.
new text end

new text begin (b) A grantee is eligible to receive a grant amount equal to 100 percent of the public
revenue committed to the local housing trust fund from any source other than the state or
federal government, up to $150,000, and in addition, an amount equal to 50 percent of the
public revenue committed to the local housing trust fund from any source other than the
state or federal government that is more than $150,000 but not more than $300,000.
new text end

new text begin (c) $100,000 of this appropriation is for technical assistance grants to local and regional
housing trust funds. A housing trust fund may apply for a technical assistance grant at the
time and in the manner and form required by the agency. The agency shall make grants on
a first-come, first-served basis. A technical assistance grant must not exceed $5,000.
new text end

new text begin (d) A grantee must use grant funds within eight years of receipt for purposes (1)
authorized under Minnesota Statutes, section 462C.16, subdivision 3, and (2) benefiting
households with incomes at or below 115 percent of the state median income. A grantee
must return any grant funds not used for these purposes within eight years of receipt to the
commissioner of the Minnesota Housing Finance Agency for deposit into the housing
development fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 18. new text beginAPPROPRIATION; PILOT PROGRAM FOR HOUSING
INFRASTRUCTURE GRANTS.
new text end

new text begin $5,000,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of the Minnesota Housing Finance Agency for a pilot program to provide grants to
municipalities for up to 50 percent of the costs of infrastructure that would otherwise be
required to be paid by the developer for new housing developments. The grants shall be
limited to 16 housing units in the municipality and a maximum of $12,000 per housing unit.
This appropriation is onetime and available until June 30, 2023.
new text end