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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 350-H.F.No. 508 
           An act relating to housing; providing for 
          administration of the state's low-income housing 
          credit; authorizing the Minnesota housing finance 
          agency to participate in certain housing construction 
          projects and in certain nonprofit corporations; 
          authorizing the sale or rental of certain housing 
          property; providing definitions; providing for the 
          issuance of certain bonds and notes; amending 
          Minnesota Statutes 1986, sections 462A.03, subdivision 
          14; 462A.05, subdivisions 14, 21, and by adding 
          subdivisions; 462A.06, subdivisions 7 and 12; 462A.08, 
          subdivisions 1 and 3; and 462A.18, subdivision 2; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 462A.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 462A.03, 
subdivision 14, is amended to read:  
    Subd. 14.  "Federal housing assistance supplements" means 
all funds or certificates of tax credit or exemption, including 
mortgage credit certificates, or low-income housing credits, 
made available to the state of Minnesota by the federal 
government or any agency or instrumentality thereof for the 
purpose of assisting in providing adequate and economic housing 
in the state of Minnesota. 
    Sec. 2.  Minnesota Statutes 1986, section 462A.05, 
subdivision 14, is amended to read: 
    Subd. 14.  It may agree to purchase, make, or otherwise 
participate in the making, and may enter into commitments for 
the purchase, making, or participation in the making, of 
eligible loans for rehabilitation to persons and families of low 
and moderate income, and to owners of existing residential 
housing for occupancy by such persons and families, for the 
rehabilitation of existing residential housing owned by them.  
The loans may be insured or uninsured and may be made with 
security, or may be unsecured, as the agency deems advisable.  
The loans may be in addition to or in combination with long term 
eligible mortgage loans under subdivision 3.  They may be made 
in amounts sufficient to refinance existing indebtedness secured 
by the property, if refinancing is determined by the agency to 
be necessary to permit the owner to meet the owner's housing 
cost without expending an unreasonable portion of the owner's 
income thereon.  No loan for rehabilitation shall be made unless 
the agency determines that the loan will be used primarily to 
make the housing more desirable to live in, to increase the 
market value of the housing, for compliance with state, county 
or municipal building, housing maintenance, fire, health or 
similar codes and standards applicable to housing, or to 
accomplish energy conservation related improvements.  In 
unincorporated areas and municipalities not having codes and 
standards, the agency may, solely for the purpose of 
administering the provisions of this chapter, establish codes 
and standards.  No loan for rehabilitation of any property shall 
be made in an amount which, with all other existing indebtedness 
secured by the property, would exceed its market value, as 
determined by the agency.  No loan for rehabilitation of owner 
occupied residential housing under this subdivision shall be 
denied solely because the loan will not be used for placing the 
residential housing in full compliance with all state, county or 
municipal building, housing maintenance, fire, health or similar 
codes and standards applicable to housing.  Rehabilitation loans 
shall be made only when the agency determines that financing is 
not otherwise available, in whole or in part, from private 
lenders upon equivalent terms and conditions. 
    Sec. 3.  Minnesota Statutes 1986, section 462A.05, 
subdivision 21, is amended to read: 
    Subd. 21.  The agency may make or purchase loans to owners 
of rental property that is occupied or intended for occupancy 
primarily by low and moderate income tenants and which does not 
comply with the standards established in section 116J.27, 
subdivision 3, for the purpose of energy improvements necessary 
to bring the property into full or partial compliance with these 
standards.  For property which meets the other requirements of 
this subdivision and, in addition, is at least 15 years old, a 
loan may also be used for moderate rehabilitation of the 
property.  The authority granted in this subdivision is in 
addition to and not in limitation of any other authority granted 
to the agency in this chapter.  The limitations on eligible 
mortgagors contained in section 462A.03, subdivision 13, do not 
apply to loans under this subdivision.  
    Sec. 4.  Minnesota Statutes 1986, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 25.  The agency, in its own name or in conjunction 
with other housing sponsors as a joint venturer, partner, 
shareholder, or member, may, subject to the provisions of 
section 6, (1) acquire, rehabilitate, or lease from private or 
public parties, housing designed and planned to be sold or 
rented at prices that low- and moderate-income persons and 
families can afford, and (2) rent or otherwise dispose of that 
housing to persons and families of low and moderate income or to 
housing sponsors to rent or sell the property to those persons 
and families.  The agency may charge rents for the use of the 
residential housing facilities acquired, rehabilitated, or 
leased under this subdivision in amounts sufficient to comply 
with any agreements of the agency, whether in connection with 
the issuance of bonds or otherwise, including rent in amounts 
sufficient for reimbursement of all costs of financing by the 
agency and the payment of those service charges and insurance 
premiums that the agency determines to be reasonable. 
    Sec. 5.  Minnesota Statutes 1986, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 26.  It may, when the agency determines it is 
necessary or desirable to carry out its purposes and to exercise 
any or all of the powers conferred upon it under sections 
462A.01 to 462A.24, and subject to the provisions of section 6, 
form or consent to the formation of one or more corporations 
under the Minnesota nonprofit corporation act, as amended, or 
under other laws of this state.  The agency may be a member of 
the corporations, and the members and employees of the agency 
from time to time may be members of the board of directors or 
officers of the corporations.  The agency may enter into 
agreements with them providing for the agency to approve various 
aspects of their operations.  The agency may capitalize the 
corporations and may acquire all or a part of the corporations' 
share or member certificates.  The agency may require that it 
approve aspects of the operation of the corporations including 
the corporations' articles of incorporation or bylaws, 
directors, projects and expenditures, and the sale or conveyance 
of projects, and the issuance of obligations.  The agency may 
agree to and may take title to property of the corporations upon 
their dissolution. 
    Sec. 6.  Minnesota Statutes 1986, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 27.  The agency, or the corporations referred to in 
subdivision 26, may acquire property or property interests under 
subdivisions 25 and 26 and section 462A.06, subdivision 7, for 
the following purposes:  (1) to protect a loan or grant in which 
the agency or corporation has an interest; or (2) to preserve 
for the use of low- and moderate-income persons or families 
multifamily housing, previously financed by the agency, which is 
benefited by federal housing assistance payments or other rental 
subsidy or interest reduction contracts.  Property or property 
interests acquired for the purpose specified in clause (1) may 
be acquired by foreclosure, deed in lieu of foreclosure, or 
otherwise. 
    Multifamily property acquired as provided in clause (2) 
must be managed on a fee basis by an entity other than the 
agency or corporation.  The agency or corporation may manage the 
property on a temporary basis until an agreement is entered into 
with another entity to manage the property.  The agency or 
corporation shall make the property available for sale at a 
purchase price and on terms that are mutually agreeable to the 
parties. 
    Sec. 7.  Minnesota Statutes 1986, section 462A.06, 
subdivision 7, is amended to read: 
    Subd. 7.  It may, subject to the provisions of section 6, 
(1) acquire real or personal property, or an interest 
therein, including partnership shares in housing-related 
partnerships, on either a temporary or long-term basis in its 
own name, by purchase or foreclosure, where such acquisition is 
necessary or appropriate to protect any loan in which the agency 
has an interest and may sell, transfer and convey any such 
property to a buyer and, in the event such sale, transfer or 
conveyance cannot be effected with reasonable promptness or at a 
reasonable price, may lease such property to a tenant, exchange, 
gift, assignment, transfer, foreclosure, deed in lieu of 
foreclosure, lease, assignment of lease or otherwise, including 
rights or easements in real property; (2) own, hold, manage, 
operate, clear, improve, and rehabilitate real or personal 
property; and (3) sell, assign, lease, encumber, mortgage, or 
otherwise dispose of any real or personal property, or any 
interest in that property, or mortgage lien or security interest 
owned by it or under its control, custody, or in its possession 
and release or relinquish any right, title, claim, lien, 
interest, easement, or demand however acquired, including any 
equity or right of redemption in property foreclosed by it, and 
do any of the foregoing by public or private sale, with or 
without public bidding, notwithstanding the provisions of any 
other law.  
    Sec. 8.  Minnesota Statutes 1986, section 462A.06, 
subdivision 12, is amended to read:  
    Subd. 12.  It may borrow money to carry out and effectuate 
its corporate purpose and may issue its negotiable bonds or 
notes as evidence of any such borrowing in accordance with 
sections 462A.08 to 462A.17.  
    Sec. 9.  Minnesota Statutes 1986, section 462A.08, 
subdivision 1, is amended to read:  
    Subdivision 1.  The agency from time to time may issue its 
negotiable bonds and notes in such principal amount as, in the 
opinion of the agency, shall be necessary to provide sufficient 
funds for achieving its purposes, including the making of 
eligible loans and the purchase of eligible securities, the 
payment of interest on bonds and notes of the agency, the 
establishment of reserves to secure such bonds and notes, and 
the payment of all other expenditures of the agency incident to 
and necessary or convenient to carry out its corporate purposes 
and powers.  
    Sec. 10.  Minnesota Statutes 1986, section 462A.08, 
subdivision 3, is amended to read: 
    Subd. 3.  All notes or bonds issued hereunder shall be 
negotiable investment securities within the meaning and for all 
purposes of the uniform commercial code, subject only to any 
provisions of the bonds and notes for registration.  All notes 
or bonds issued under this section are securities as defined in 
section 336.8-102 and may be issued as certificated securities 
or as uncertificated securities.  Certificated securities may be 
issued in bearer or registered form.  The agency may perform all 
actions that are permitted or required of issuers of securities 
under sections 336.8-101 to 336.8-408.  If notes or bonds are 
issued as uncertificated securities, and this chapter or other 
law requires or permits the notes or bonds to contain a 
statement or recital, whether on their face or otherwise, it is 
sufficient compliance with the law that the statement or recital 
is contained in the transaction statement or in a resolution or 
other instrument that is made a part of the note or bond by 
reference in the transaction statement as provided in section 
336.8-202.  All notes and bonds so issued may be either general 
obligations of the agency, secured by its full faith and credit, 
and payable out of any money, assets, or revenues of the agency, 
subject to the provisions of resolutions or indentures pledging 
and appropriating particular money, assets, or revenues to 
particular notes or bonds, or limited obligations of the agency 
not secured by its full faith and credit, and payable solely 
from those money, assets, or revenues of the agency as may be 
authorized by resolution or indenture.  
    Sec. 11.  Minnesota Statutes 1986, section 462A.18, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTRACTS AND SECURITY.] Notwithstanding the 
provisions of this section, the agency shall have power, subject 
to the approval of the state treasurer, to contract with the 
holders of any of its notes or bonds, as to the custody, 
collection, securing, investment, and payment of any moneys of 
the agency, or any moneys held in trust or otherwise for the 
payment of notes or bonds, and to carry out such contract.  
Moneys held in trust or otherwise for the payment of notes or 
bonds or in any way to secure notes or bonds and deposits of 
such moneys may be secured in the same manner as moneys of the 
agency, and all banks and trust companies are authorized to give 
such security for such deposits.  All moneys so paid to the 
state treasurer as agent of the agency, from whatever source, 
are appropriated to the agency.  The agency's notes and bonds 
are not subject to section 16B.06.  
    Sec. 12.  [462A.221] [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] For purposes of sections 12 to 15, 
the following terms have the meaning given them.  
    Subd. 2.  [CITY.] "City" means a statutory or home rule 
charter city. 
    Subd. 3.  [HOUSING AND REDEVELOPMENT AUTHORITY.] "Housing 
and redevelopment authority" means a housing and redevelopment 
authority established pursuant to section 462.425, or other law, 
or any other municipal department, agency, or authority which 
exercises the powers of a housing and redevelopment authority 
pursuant to section 462.425 or other law. 
    Sec. 13.  [462A.222] [LOW-INCOME HOUSING CREDITS.] 
    Subdivision 1.  [CREDIT RESERVATIONS.] The agency shall 
reserve a portion of the annual state ceiling for low-income 
housing credits provided under section 42 of the Internal 
Revenue Code of 1986 to (1) cities with a population of at least 
50,000 that have a housing and redevelopment authority; (2) 
cities located in three or more counties that have a housing and 
redevelopment authority; and (3) counties with a population of 
100,000 or more that have a housing and redevelopment 
authority.  A city or county is eligible to receive a reserved 
portion of the state ceiling under this subdivision if it 
submits a written request to the agency within 45 days after the 
effective date of sections 12 to 15 to act as a designated 
housing credit agency as provided in section 42 of the Internal 
Revenue Code of 1986.  A city or county may designate its 
housing and redevelopment authority as the agency to receive 
reserved low-income housing credits on behalf of the city or 
county.  The city of Minneapolis or the city of Saint Paul may 
designate the Minneapolis/Saint Paul housing finance board to 
receive reserved low-income housing credits on behalf of each 
city. 
    Subd. 2.  [CREDIT FORMULA.] The agency shall reserve to 
each eligible city and county an amount equal to the greater of 
(1) the product obtained by multiplying $1.6875 by the 
population of the city or county, or (2) 90 percent of the total 
state ceiling for low-income housing credits, multiplied by a 
fraction that has as its numerator the number of rental units 
located within the city or county and that has as its 
denominator the total number of rental units located within the 
state.  For purposes of this subdivision, the state demographer 
shall provide population and rental unit estimates to the agency.
    Subd. 3.  [RETURN OF RESERVED CREDITS.] Unused portions of 
the state ceiling for low-income housing credits reserved to 
cities and counties for allocation may be returned at any time 
to the agency for allocation.  On or before October 1 of each 
calendar year, each city and county acting as a housing credit 
agency, or the Minneapolis/Saint Paul housing finance board, 
must submit a written notice to the agency of the portion of the 
low-income housing credit ceiling reserved to it which has not 
been allocated.  The unallocated credit must then be allocated 
by the agency as provided in section 14. 
    Sec. 14.  [462A.223] [MINNESOTA HOUSING FINANCE AGENCY; 
DESIGNATED AGENCY.] 
    Subdivision 1.  [CREDITS TO QUALIFIED NONPROFIT 
ORGANIZATIONS.] The agency is designated as a housing credit 
agency with authority to provide low-income housing credits for 
projects involving qualified nonprofit organizations under 
sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code of 
1986.  The agency shall provide the ten percent minimum amount 
of the state ceiling required by section 42 of the Internal 
Revenue Code of 1986 for application to such projects. 
    Subd. 2.  [DESIGNATED AGENCY.] The agency is designated as 
a housing credit agency to allocate the portion of the state 
ceiling for low-income housing credits (1) not reserved to 
cities and counties under section 13; (2) not accepted for 
allocation by eligible cities and counties; (3) returned to the 
agency for allocation; and (4) not otherwise reserved to the 
agency for allocation under subdivision 1.  Low-income housing 
credits shall be allocated by the agency on a statewide basis.  
The agency shall make no allocation for projects located within 
the jurisdiction of the cities or counties that have received 
credits under section 13, subdivision 1, until the amounts 
reserved to the cities and counties for allocation have been 
allocated or returned to the agency for allocation. 
    Sec. 15.  [462A.225] [STATE REGISTER NOTICE.] 
    The agency shall publish in the State Register all data 
relating to the state ceiling, state demographer population and 
rental unit estimates, and other information or procedures 
specified in section 42 of the Internal Revenue Code of 1986, 
applicable United States Treasury Department regulations, and 
this subdivision, that the agency considers pertinent to the 
distribution of low-income housing credits.  Publications under 
this section are not subject to chapter 14.  
    Sec. 16.  [EFFECTIVE DATE.] 
    Sections 1 to 15 are effective the day following final 
enactment. 
    Approved June 1, 1987