Minnesota Session Laws - 1992, Regular Session

  

                         Laws of Minnesota 1992 

                        CHAPTER 376-S.F.No. 720 
           An act relating to housing and economic development; 
          modifying procedures relating to rent escrow actions; 
          modifying procedures relating to the tenant's loss of 
          essential services; modifying provisions relating to 
          tenant remedy actions, retaliatory eviction 
          proceedings, and receivership proceedings; modifying 
          provisions relating to Minnesota housing finance 
          agency low- and moderate-income housing programs; 
          modifying certain receivership, assignment of rents 
          and profits, and landlord and tenant provisions; 
          modifying provisions relating to housing and 
          redevelopment authorities; authorizing certain 
          economic development activities within the city of St. 
          Paul; providing for job training for homeless persons; 
          amending Minnesota Statutes 1990, sections 268.362; 
          268.364, subdivision 4; 268.365, subdivision 2; 
          469.002, subdivision 24; 469.011, subdivision 4; 
          469.012, subdivisions 1 and 3; 469.015, subdivisions 
          3, 4, and by adding a subdivision; 504.02; 504.18, 
          subdivision 1; 504.185, subdivision 2; 504.20, 
          subdivisions 3, 4, 5, and 7; 504.27; 559.17, 
          subdivision 2; 566.03, subdivision 1; 566.17, by 
          adding a subdivision; 566.175, subdivision 6; 566.18, 
          subdivision 9; 566.29, subdivisions 2 and 4; 566.34, 
          subdivision 2; 576.01, subdivision 2; Minnesota 
          Statutes 1991 Supplement, sections 481.02, subdivision 
          3; proposing coding for new law in Minnesota Statutes, 
          chapter 609. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1
LANDLORD AND TENANT
    Section 1.  Minnesota Statutes 1991 Supplement, section 
481.02, subdivision 3, is amended to read: 
    Subd. 3.  [PERMITTED ACTIONS.] The provisions of this 
section shall not prohibit:  
      (1) any person from drawing, without charge, any document 
to which the person, an employer of the person, a firm of which 
the person is a member, or a corporation whose officer or 
employee the person is, is a party, except another's will or 
testamentary disposition or instrument of trust serving purposes 
similar to those of a will; 
      (2) a person from drawing a will for another in an 
emergency if the imminence of death leaves insufficient time to 
have it drawn and its execution supervised by a licensed 
attorney-at-law; 
      (3) any insurance company from causing to be defended, or 
from offering to cause to be defended through lawyers of its 
selection, the insureds in policies issued or to be issued by 
it, in accordance with the terms of the policies; 
      (4) a licensed attorney-at-law from acting for several 
common-carrier corporations or any of its subsidiaries pursuant 
to arrangement between the corporations; 
      (5) any bona fide labor organization from giving legal 
advice to its members in matters arising out of their 
employment; 
      (6) any person from conferring or cooperating with a 
licensed attorney-at-law of another in preparing any legal 
document, if the attorney is not, directly or indirectly, in the 
employ of the person or of any person, firm, or corporation 
represented by the person; 
      (7) any licensed attorney-at-law of Minnesota, who is an 
officer or employee of a corporation, from drawing, for or 
without compensation, any document to which the corporation is a 
party or in which it is interested personally or in a 
representative capacity, except wills or testamentary 
dispositions or instruments of trust serving purposes similar to 
those of a will, but any charge made for the legal work 
connected with preparing and drawing the document shall not 
exceed the amount paid to and received and retained by the 
attorney, and the attorney shall not, directly or indirectly, 
rebate the fee to or divide the fee with the corporation; 
      (8) any person or corporation from drawing, for or without 
a fee, farm or house leases, notes, mortgages, chattel 
mortgages, bills of sale, deeds, assignments, satisfactions, or 
any other conveyances except testamentary dispositions and 
instruments of trust; 
      (9) a licensed attorney-at-law of Minnesota from rendering 
to a corporation legal services to itself at the expense of one 
or more of its bona fide principal stockholders by whom the 
attorney is employed and by whom no compensation is, directly or 
indirectly, received for the services; 
      (10) any person or corporation engaged in the business of 
making collections from engaging or turning over to an 
attorney-at-law for the purpose of instituting and conducting 
suit or making proof of claim of a creditor in any case in which 
the attorney-at-law receives the entire compensation for the 
work; 
     (11) any regularly established farm journal or newspaper, 
devoted to general news, from publishing a department of legal 
questions and answers to them, made by a licensed 
attorney-at-law, if no answer is accompanied or at any time 
preceded or followed by any charge for it, any disclosure of any 
name of the maker of any answer, any recommendation of or 
reference to any one to furnish legal advice or services, or by 
any legal advice or service for the periodical or any one 
connected with it or suggested by it, directly or indirectly; 
     (12) any authorized management agent of an owner of rental 
property used for residential purposes, whether the management 
agent is a natural person, corporation, partnership, limited 
partnership, or any other business entity, from commencing, 
maintaining, conducting, or defending in its own behalf any 
action in any court in this state to recover or retain 
possession of the property, except that the provision of this 
clause does not authorize a person who is not a licensed 
attorney-at-law to conduct a jury trial or to appear before a 
district court or the court of appeals or supreme court pursuant 
to an appeal; 
    (13) any person from commencing, maintaining, conducting, 
or defending on behalf of the plaintiff or defendant any action 
in any court of this state pursuant to the provisions of section 
566.175 or sections 566.18 to 566.33 566.35 or from commencing, 
maintaining, conducting, or defending on behalf of the plaintiff 
or defendant any action in any court of this state for the 
recovery of rental property used for residential purposes 
pursuant to the provisions of section 566.02 or 566.03, 
subdivision 1, except that the provision of this clause does not 
authorize a person who is not a licensed attorney-at-law to 
conduct a jury trial or to appear before a district court or the 
court of appeals or supreme court pursuant to an appeal, and 
provided that, except for a nonprofit corporation, a person who 
is not a licensed attorney-at-law shall not charge or collect a 
separate fee for services rendered pursuant to this clause; or 
    (14) the delivery of legal services by a specialized legal 
assistant in accordance with a specialty license issued by the 
supreme court before July 1, 1995. 
    Sec. 2.  Minnesota Statutes 1990, section 504.02, is 
amended to read: 
    504.02 [CANCELLATION OF LEASES IN CERTAIN CASES; 
ABANDONMENT OR SURRENDER OF POSSESSION.] 
    Subdivision 1.  [ACTION TO RECOVER.] (a) In case of a lease 
of real property, when the landlord has a subsisting right of 
reentry for the failure of the tenant to pay rent the landlord 
may bring an action to recover possession of the property and 
such action is equivalent to a demand for the rent and a reentry 
upon the property; but if, at any time before possession has 
been delivered to the plaintiff on recovery in the action, the 
lessee or a successor in interest as to the whole or any part of 
the property pays to the plaintiff or brings into court the 
amount of the rent then in arrears, with interest and costs of 
the action, and an attorney's fee not exceeding $5, and performs 
the other covenants on the part of the lessee, the lessee or 
successor may be restored to the possession and hold the 
property according to the terms of the original lease.  
    (b) If the tenant has paid to the plaintiff or brought into 
court the amount of rent in arrears but is unable to pay the 
interest, costs of the action, and attorney fees required by 
this subdivision, the court may permit the defendant to pay 
these amounts into court and be restored to possession within 
the same period of time, if any, which the court stays the 
issuance of the writ of restitution pursuant to section 566.09. 
    (c) Prior to or after commencement of an action to recover 
possession for nonpayment of rent, the parties may agree only in 
writing that partial payment of rent in arrears which is 
accepted by the landlord prior to issuance of the order granting 
restitution of the premises pursuant to section 566.09 may be 
applied to the balance due and does not waive the landlord's 
action to recover possession of the premises for nonpayment of 
rent. 
    (d) Rental payments under this subdivision must first be 
applied to rent claimed as due in the complaint from prior 
rental periods before applying any payment toward rent claimed 
in the complaint for the current rental period, unless the court 
finds that under the circumstances the claim for rent from prior 
rental periods has been waived. 
    Subd. 2.  [LEASE GREATER THAN 20 YEARS.] (a) If the lease 
under which the right of reentry is claimed is a lease for a 
term of more than 20 years, reentry cannot be made into the land 
or such action commenced by the landlord unless, after default, 
the landlord shall serve upon the tenant, also upon all 
creditors having a lien of record legal or equitable upon the 
leased premises or any part thereof, a written notice that the 
lease will be canceled and terminated unless the payment or 
payments in default shall be made and the covenants in default 
shall be performed within 30 days after the service of such 
notice, or within such greater period as the lessor shall 
specify in the notice, and if such default shall not be removed 
within the period specified within the notice, then the right of 
reentry shall be complete at the expiration of the period and 
may be exercised as provided by law. If any such lease shall 
provide that the landlord, after default, shall give more then 
30 days' notice in writing to the tenant of the landlord 
intention to terminate the tenancy by reason of default in terms 
thereof, then the length of the notice to terminate shall be the 
same as provided for and required by the lease.  
    (b) As to such leases for a term of more than 20 years, if 
at any time before the expiration of six months after possession 
obtained by the plaintiff by abandonment or surrender of 
possession by the tenant or on recovery in the action, the 
lessee or a successor in interest as to the whole or part of the 
property, or any creditor having a lien legal or equitable upon 
the leased premises or any part thereof, pays to the plaintiff, 
or brings into court, the amount of rent then in arrears, with 
interest and the costs of the action, and performs the other 
covenants on the part of the lessee, the lessee or successor may 
be restored to the possession and hold the property according to 
the terms of the original lease.  The provisions of this section 
shall not apply to any action or proceeding now pending in any 
of the courts of this state.  
    Subd. 3.  [JUDGMENT TO BE RECORDED.] Upon recovery of 
possession by the landlord in the action a certified copy of the 
judgment shall be recorded in the office of the county recorder 
of the county where the land is situated if unregistered land or 
in the office of the registrar of titles of such county if 
registered land and upon recovery of possession by the landlord 
by abandonment or surrender by the tenant an affidavit by the 
landlord or the landlord's attorney setting forth such fact 
shall be recorded in a like manner and such recorded certified 
copy of such judgment or such recorded affidavit shall be prima 
facie evidence of the facts stated therein in reference to the 
recovery of possession by such landlord. 
    Sec. 3.  Minnesota Statutes 1990, section 504.18, 
subdivision 1, is amended to read: 
    Subdivision 1.  In every lease or license of residential 
premises, whether in writing or parol, the lessor or licensor 
covenants: 
    (a) That the premises and all common areas are fit for the 
use intended by the parties.  
    (b) To keep the premises in reasonable repair during the 
term of the lease or license, except when the disrepair has been 
caused by the willful, malicious, or irresponsible conduct of 
the lessee or licensee or a person under the direction or 
control of the lessee or licensee.  
    (c) To maintain the premises in compliance with the 
applicable health and safety laws of the state, including the 
weatherstripping, caulking, storm window, and storm door energy 
efficiency standards for renter-occupied residences prescribed 
by section 216C.27, subdivisions 1 and 3, and of the local units 
of government where the premises are located during the term of 
the lease or license, except when violation of the health and 
safety laws has been caused by the willful, malicious, or 
irresponsible conduct of the lessee or licensee or a person 
under the direction or control of the lessee or licensee.  
    The parties to a lease or license of residential premises 
may not waive or modify the covenants imposed by this section. 
    Sec. 4.  Minnesota Statutes 1990, section 504.185, 
subdivision 2, is amended to read: 
    Subd. 2.  [PROCEDURE.] When a municipality, utility 
company, or other company supplying home heating oil, propane, 
natural gas, electricity, or water to a building has issued a 
final notice or has posted the building proposing to disconnect 
or discontinued the service to the building because an owner who 
has contracted for the service has failed to pay for it or 
because an owner is required by law or contract to pay for the 
service and fails to do so, a tenant or group of tenants may pay 
to have the service continued or reconnected as provided under 
this section.  Before paying for the service, the tenant or 
group of tenants shall give oral or written notice to the owner 
of the tenant's intention to pay after 48 hours, or a shorter 
period that is reasonable under the circumstances, if the owner 
has not already paid for the service.  In the case of oral 
notification, written notice shall be mailed or delivered to the 
owner within 24 hours after oral notice is given. 
    (a) In the case of natural gas, electricity, or water, if 
the owner has not yet paid the bill by the time of the tenant's 
intended payment, or if the service remains discontinued, the 
tenant or tenants may pay the outstanding bill for the most 
recent billing period, if the utility company or municipality 
will restore the service for at least one billing period. 
    (b) In the case of home heating oil or propane, if the 
owner has not yet paid the bill by the time of the tenant's 
intended payment, or if the service remains discontinued, the 
tenant or tenants may order and pay for one month's supply of 
the proper grade and quality of oil or propane. 
    After submitting receipts for the payment to the owner, a 
tenant may deduct the amount of the tenant's payment from the 
rental payment next paid to the owner.  Any amount paid to the 
municipality, utility company, or other company by a tenant 
under this subdivision is considered payment of rent to the 
owner for purposes of section 504.02. 
    Sec. 5.  Minnesota Statutes 1990, section 504.20, 
subdivision 3, is amended to read: 
    Subd. 3.  (a) Every landlord shall,: 
     (1) within three weeks after termination of the tenancy; or 
     (2) within five days of the date when the tenant leaves the 
building or dwelling due to the legal condemnation of the 
building or dwelling in which the tenant lives for reasons not 
due to willful, malicious, or irresponsible conduct of the 
tenant, 
and after receipt of the tenant's mailing address or delivery 
instructions, return the deposit to the tenant, with interest 
thereon as above provided, or furnish to the tenant a written 
statement showing the specific reason for the withholding of the 
deposit or any portion thereof. 
    (b) It shall be sufficient compliance with the time 
requirement of this subdivision if the deposit or written 
statement required by this subdivision is placed in the United 
States mail as first class mail, postage prepaid, in an envelope 
with a proper return address, correctly addressed according to 
the mailing address or delivery instructions furnished by the 
tenant, within the time required by this subdivision.  The 
landlord may withhold from the deposit only amounts reasonably 
necessary: 
    (a) (1) to remedy tenant defaults in the payment of rent or 
of other funds due to the landlord pursuant to an agreement; or 
    (b) (2) to restore the premises to their condition at the 
commencement of the tenancy, ordinary wear and tear excepted. 
    (c) In any action concerning the deposit, the burden of 
proving, by a fair preponderance of the evidence, the reason for 
withholding all or any portion of the deposit shall be on the 
landlord. 
    Sec. 6.  Minnesota Statutes 1990, section 504.20, 
subdivision 4, is amended to read: 
    Subd. 4.  Any landlord who fails to:  
    (1) provide a written statement within three weeks of 
termination of the tenancy and; 
    (2) provide a written statement within five days of the 
date when the tenant leaves the building or dwelling due to the 
legal condemnation of the building or dwelling in which the 
tenant lives for reasons not due to willful, malicious, or 
irresponsible conduct of the tenant, or 
    (3) transfer or return a deposit as required by subdivision 
5, 
after receipt of the tenant's mailing address or delivery 
instructions, as required in subdivision 3, shall be liable to 
the tenant for damages in an amount equal to the portion of the 
deposit withheld by the landlord and interest thereon as 
provided in subdivision 2, as a penalty, in addition to the 
portion of the deposit wrongfully withheld by the landlord and 
interest thereon. 
    Sec. 7.  Minnesota Statutes 1990, section 504.20, 
subdivision 5, is amended to read: 
    Subd. 5.  Upon termination of the landlord's interest in 
the premises, whether by sale, assignment, death, appointment of 
receiver or otherwise, the landlord or the landlord's agent 
shall, within a reasonable time 60 days of termination of the 
interest or when the successor in interest is required to return 
or otherwise account for the deposit to the tenant, whichever 
occurs first, do one of the following acts, either of which 
shall relieve the landlord or agent of further liability with 
respect to such deposit: 
    (a) Transfer such deposit, or any remainder after any 
lawful deductions made under subdivision 3, with interest 
thereon as provided in subdivision 2, to the landlord's 
successor in interest and thereafter notify the tenant of such 
transfer and of the transferee's name and address; or 
    (b) Return such deposit, or any remainder after any lawful 
deductions made under subdivision 3, with interest thereon as 
provided in subdivision 2, to the tenant. 
    Sec. 8.  Minnesota Statutes 1990, section 504.20, 
subdivision 7, is amended to read: 
    Subd. 7.  The bad faith retention by a landlord of the a 
deposit, the interest thereon, or any portion thereof, in 
violation of this section shall subject the landlord to punitive 
damages not to exceed $200 for each deposit in addition to the 
damages provided in subdivision 4.  If the landlord has failed 
to comply with the provisions of subdivision 3 or 5, retention 
of the a deposit shall be presumed to be in bad faith unless the 
landlord returns the deposit within two weeks after the 
commencement of any action for the recovery of the deposit. 
    Sec. 9.  Minnesota Statutes 1990, section 504.27, is 
amended to read: 
    504.27 [REMEDIES ARE ADDITIONAL.] 
    The remedies provided in sections 504.24 to 504.26 are in 
addition to and shall not limit other rights or remedies 
available to landlords and tenants.  Any provision, whether oral 
or written, of any lease or other agreement, whereby any 
provision of sections 504.24 to 504.27 is waived by a tenant is 
contrary to public policy and void.  The provisions of sections 
504.24 to 504.27 shall apply only to tenants as that term is 
defined in section 566.18, subdivision 2, and buildings as that 
term is defined in section 566.18, subdivision 7.  The 
provisions of sections 504.24, 504.25, 504.255, and 504.26 apply 
to occupants and owners of residential real property which is 
the subject of a mortgage foreclosure or contract for deed 
cancellation and as to which the period for redemption or 
reinstatement of the contract has expired. 
    Sec. 10.  Minnesota Statutes 1990, section 566.03, 
subdivision 1, is amended to read: 
    Subdivision 1.  The person entitled to the premises may 
recover possession in the manner provided in this section when: 
    (1) any person holds over lands or tenements after a sale 
thereof on an execution or judgment, or on foreclosure of a 
mortgage, and expiration of the time for redemption, or after 
termination of contract to convey the same, provided that if the 
person holding such lands or tenements after the sale, 
foreclosure, expiration of the time for redemption or 
termination is a tenant, the person has received: 
    (i) at least one month's written notice of the termination 
of tenancy as a result of to vacate no sooner than one month 
after the sale, foreclosure, expiration of the time for 
redemption or termination, provided that the tenant pays the 
rent and abides by all terms of the lease; or when 
    (ii) at least one month's written notice to vacate no later 
than the date of the expiration of the time for redemption or 
termination, which notice shall also state that the sender will 
hold the tenant harmless for breaching the lease by vacating the 
premises if the mortgage is redeemed or the contract is 
reinstated; 
    (2) any person holds over lands or tenements after 
termination of the time for which they are demised or let to 
that person or to the persons under whom that person holds 
possession, or contrary to the conditions or covenants of the 
lease or agreement under which that person holds, or after any 
rent becomes due according to the terms of such lease or 
agreement; or when 
    (3) any tenant at will holds over after the determination 
of any such the estate by notice to quit; in all such cases the 
person entitled to the premises may recover possession thereof 
in the manner hereinafter provided. 
    Sec. 11.  Minnesota Statutes 1990, section 566.17, is 
amended by adding a subdivision to read: 
    Subd. 2a.  In the second and fourth judicial districts, the 
housing calendar consolidation project shall retain jurisdiction 
in matters relating to removal of property under this section.  
If the plaintiff refuses to return the property after proper 
demand is made as provided in section 504.24, the court shall 
enter an order requiring the plaintiff to return the property to 
the defendant and awarding reasonable expenses including 
attorney fees to the defendant. 
    Sec. 12.  Minnesota Statutes 1990, section 566.175, 
subdivision 6, is amended to read: 
    Subd. 6.  The provisions of This section shall apply only 
applies to: 
     (1) tenants as that term is defined in section 566.18, 
subdivision 2, and including occupants and owners of residential 
real property which is the subject of a mortgage foreclosure or 
contract for deed cancellation and as to which the period for 
redemption or reinstatement of the contract has expired; 
     (2) buildings as that term is defined in section 566.18, 
subdivision 7; and 
     (3) landlords as the term "owner" is defined in section 
566.18, subdivision 3, but also including mortgagees and 
contract for deed vendors. 
    Sec. 13.  Minnesota Statutes 1990, section 566.18, 
subdivision 9, is amended to read: 
    Subd. 9.  [NEIGHBORHOOD ORGANIZATION.] "Neighborhood 
organization" means a nonprofit corporation incorporated under 
chapter 317A that satisfies clauses (1) and (2).  
    The corporation shall:  
    (1) designate in its articles of incorporation or bylaws a 
specific geographic community to which its activities are 
limited; and 
    (2) be formed for the purposes of promoting community 
safety, crime prevention, and housing quality in a 
nondiscriminatory manner. 
    For purposes of this chapter, an action taken by a 
neighborhood organization with the written permission of a 
tenant means, with respect to a building with multiple dwelling 
units, an action taken by the neighborhood organization with the 
written permission of the tenants of a majority of the occupied 
units. 
    Sec. 14.  Minnesota Statutes 1990, section 566.29, 
subdivision 2, is amended to read: 
    Subd. 2.  Such person or neighborhood organization shall 
post bond to the extent of the rents expected by the court to be 
necessary to be collected to correct the violation or 
violations.  Administrators appointed from the governmental 
agencies shall not be required to give bond.  
    Sec. 15.  Minnesota Statutes 1990, section 566.29, 
subdivision 4, is amended to read: 
    Subd. 4.  [POWERS.] The administrator is authorized to: 
    (a) Collect rents from tenants and commercial tenants, 
evict tenants and commercial tenants for nonpayment of rent or 
other cause, enter into leases for vacant dwelling units, rent 
vacant commercial units with the consent of the owner and 
exercise all other powers necessary and appropriate to carry out 
the purposes of Laws 1973, chapter 611; 
    (b) Contract for the reasonable cost of materials, labor 
and services necessary to remedy the violation or violations 
found by the court to exist and for the rehabilitation of the 
property in order to maintain safe and habitable conditions over 
the useful life of the property, and make disbursements for 
payment therefor from funds available for the purpose; 
    (c) Provide any services to the tenants which the owner is 
obligated to provide but refuses or fails to provide, and pay 
for them from funds available for the purpose; 
    (d) Petition the court, after notice to the parties, for an 
order allowing the administrator to encumber the premise 
premises to secure funds to the extent necessary to cover the 
cost of materials, labor, and services, including reasonable 
fees for the administrator's services, necessary to remedy the 
violation or violations found by the court to exist and for 
rehabilitation of the property in order to maintain safe and 
habitable conditions over the useful life of the property, and 
to pay for them from funds derived from the encumbrance; and 
    (e) Petition the court, after notice to the parties, for an 
order allowing the administrator to receive funds made available 
for this purpose by the federal or state governing body or the 
municipality to the extent necessary to cover the cost of 
materials, labor, and services necessary to remedy the violation 
or violations found by the court to exist and for rehabilitation 
of the property in order to maintain safe and habitable 
conditions over the useful life of the property, and pay for 
them from funds derived from the municipal sources this source.  
The municipality shall recover disbursements by special 
assessment on the real estate affected, bearing interest at the 
rate determined by the municipality, not exceeding the rate 
established for finance charges for open-end credit sales under 
section 334.16, subdivision 1, clause (b), with the assessment, 
interest and any penalties to be collected the same as special 
assessments made for other purposes under state statute or 
municipal charter. 
    Sec. 16.  [609.606] [UNLAWFUL OUSTER OR EXCLUSION.] 
    A landlord, agent of the landlord, or person acting under 
the landlord's direction or control who unlawfully and 
intentionally removes or excludes a tenant from lands or 
tenements or intentionally interrupts or causes the interruption 
of electrical, heat, gas, or water services to the tenant with 
intent to unlawfully remove or exclude the tenant from lands or 
tenements is guilty of a misdemeanor. 

                               ARTICLE 2 

                  ASSIGNMENT OF RENTS AND RECEIVERSHIP 
    Section 1.  Minnesota Statutes 1990, section 559.17, 
subdivision 2, is amended to read: 
    Subd. 2.  A mortgagor may assign, as additional security 
for the debt secured by the mortgage, the rents and profits from 
the mortgaged real property, if the mortgage: 
    (1) Was executed, modified or amended subsequent to August 
1, 1977; 
    (2) Secured an original principal amount 
of $500,000 $100,000 or more or is a lien upon residential real 
estate containing more than four dwelling units; and 
    (3) Is not a lien upon property which was entirely 
homesteaded as, residential real estate containing four or less 
dwelling units where at least one of the units is homesteaded, 
or agricultural property.  The assignment may be enforced as 
follows: 
    (a) If, by the terms of an assignment, a receiver is to be 
appointed upon the occurrence of some specified event, and a 
showing is made that the event has occurred, the court shall, 
without regard to waste, adequacy of the security, or solvency 
of the mortgagor, appoint a receiver who shall, with respect to 
the excess cash remaining after application as provided in 
section 576.01, subdivision 2, apply it as prescribed by the 
assignment.  If the assignment so provides, the receiver shall 
apply the excess cash in the manner set out herein from the date 
of appointment through the entire redemption period from any 
foreclosure sale.  Subject to the terms of the assignment, the 
receiver shall have the powers and duties as set forth in 
section 576.01, subdivision 2.; or 
    (b) If no provision is made for the appointment of a 
receiver in the assignment or if by the terms of the assignment 
a receiver may be appointed, the assignment shall be binding 
upon the assignor unless or until a receiver is appointed 
without regard to waste, adequacy of the security or solvency of 
the mortgagor, but only in the event of default in the terms and 
conditions of the mortgage, and only in the event the assignment 
requires the holder thereof to first apply the rents and profits 
received as provided in section 576.01, subdivision 2, in which 
case the same shall operate against and be binding upon the 
occupiers of the premises from the date of filing by the holder 
of the assignment in the office of the county recorder or the 
office of the registrar of titles for the county in which the 
property is located of a notice of default in the terms and 
conditions of the mortgage and service of a copy of the notice 
upon the occupiers of the premises.  The holder of the 
assignment shall apply the rents and profits received in 
accordance with the terms of the assignment, and, if the 
assignment so provides, for the entire redemption period from 
any foreclosure sale.  A holder of an assignment who enforces it 
in accordance with this clause shall not be deemed to be a 
mortgagee in possession with attendant liability. 
    Nothing contained herein shall prohibit the right to 
reinstate the mortgage debt granted pursuant to section 580.30, 
nor the right to redeem granted pursuant to sections 580.23 and 
581.10, and any excess cash, as that term is used herein, 
collected by the receiver under clause (a), or any rents and 
profits taken by the holder of the assignment under clause (b), 
shall be credited to the amount required to be paid to effect a 
reinstatement or redemption. 
    Sec. 2.  Minnesota Statutes 1990, section 576.01, 
subdivision 2, is amended to read: 
    Subd. 2.  A receiver shall be appointed in the following 
case: 
    After the first publication of notice of sale for the 
foreclosure of a mortgage pursuant to chapter 580, or with the 
commencement of an action to foreclose a mortgage pursuant to 
chapter 581, and during the period of redemption, if the 
mortgage being foreclosed secured an original principal amount 
of $500,000 $100,000 or more or is a lien upon residential real 
estate containing more than four dwelling units and was not a 
lien upon property which was entirely homesteaded, residential 
real estate containing four or less dwelling units where at 
least one unit is homesteaded, or agricultural property, the 
foreclosing mortgagee or the purchaser at foreclosure sale may 
at any time bring an action in the district court of the county 
in which the mortgaged premises or any part thereof is located 
for the appointment of a receiver; provided, however, if the 
foreclosure is by action under chapter 581, a separate action 
need not be filed. Pending trial of the action on the merits, 
the court may make a temporary appointment of a receiver 
following the procedures applicable to temporary injunctions 
under the rules of civil procedure.  If the motion for temporary 
appointment of a receiver is denied, the trial of the action on 
the merits shall be held as early as practicable, but not to 
exceed 30 days after the motion for temporary appointment of a 
receiver is heard.  The court shall appoint a receiver upon a 
showing that the mortgagor has breached a covenant contained in 
the mortgage relating to any of the following: 
    (1) Application of tenant security deposits as required by 
section 504.20; 
    (2) Payment when due of prior or current real estate taxes 
or special assessments with respect to the mortgaged premises, 
or the periodic escrow for the payment of the taxes or special 
assessments; 
    (3) Payment when due of premiums for insurance of the type 
required by the mortgage, or the periodic escrow for the payment 
of the premiums; 
    (4) Keeping of the covenants required of a lessor or 
licensor pursuant to section 504.18, subdivision 1. 
    The receiver shall be an experienced property manager.  The 
court shall determine the amount of the bond to be posted by the 
receiver. 
    The receiver shall collect the rents, profits and all other 
income of any kind, manage the mortgaged premises so to prevent 
waste, execute leases within or beyond the period of the 
receivership if approved by the court, pay the expenses listed 
in clauses (1), (2), and (3) in the priority as numbered, pay 
all expenses for normal maintenance of the mortgaged premises 
and perform the terms of any assignment of rents which complies 
with section 559.17, subdivision 2.  Reasonable fees to the 
receiver shall be paid prior thereto.  The receiver shall file 
periodic accountings as the court determines are necessary and a 
final accounting at the time of discharge. 
    The purchaser at foreclosure sale shall have the right, at 
any time and without limitation as provided in section 582.03, 
to advance money to the receiver to pay any or all of the 
expenses which the receiver should otherwise pay if cash were 
available from the mortgaged premises.  Sums so advanced, with 
interest, shall be a part of the sum required to be paid to 
redeem from the sale.  The sums shall be proved by the affidavit 
of the purchaser, an agent or attorney, stating the expenses and 
describing the mortgaged premises.  The affidavit must be filed 
for record with the county recorder or the registrar of titles, 
and a copy thereof shall be furnished to the sheriff and the 
receiver at least ten days before the expiration of the period 
of redemption. 
    Any sums collected which remain in the possession of the 
receiver at termination of the receivership shall, in the event 
the termination of the receivership is due to the reinstatement 
of the mortgage debt or redemption of the mortgaged premises by 
the mortgagor, be paid to the mortgagor; and in the event 
termination of the receivership occurs at the end of the period 
of redemption without redemption by the mortgagor or any other 
party entitled to redeem, interest accrued upon the sale price 
pursuant to section 580.23 or section 581.10 shall be paid to 
the purchaser at foreclosure sale.  Any net sum remaining shall 
be paid to the mortgagor, except if the receiver was enforcing 
an assignment of rents which complies with section 559.17, 
subdivision 2, in which case any net sum remaining shall be paid 
pursuant to the terms of the assignment. 
    This subdivision shall apply to all mortgages executed on 
or after August 1, 1977, and to amendments or modifications of 
such mortgages, and to amendments or modifications made on or 
after August 1, 1977, to mortgages executed before August 1, 
1977, if the amendment or modification is duly recorded and is 
for the principal purpose of curing a default. 

                                ARTICLE 3

                  HOUSING AND REDEVELOPMENT AUTHORITIES
    Section 1.  Minnesota Statutes 1990, section 469.002, 
subdivision 24, is amended to read: 
    Subd. 24.  [SECTION 8 PROGRAM.] "Section 8 program" means 
an existing housing assistance payments program under section 8 
of the United States Housing Act of 1937, United States Code, 
title 42, section 1437f, as amended through December 31, 1989. 
    Sec. 2.  Minnesota Statutes 1990, section 469.011, 
subdivision 4, is amended to read: 
    Subd. 4.  [EXPENSES; COMPENSATION.] Each commissioner may 
receive necessary expenses, including traveling expenses, 
incurred in the performance of duties.  Each commissioner may be 
paid $35 up to $55 for attending each regular and special 
meeting of the authority.  The aggregate of all payments to each 
commissioner for any one year shall not exceed 
$2,500.  Commissioners who are elected officials or full-time 
state employees or full-time employees of the political 
subdivisions of the state may not receive the daily payment, but 
they may suffer no loss in compensation or benefits from the 
state or a political subdivision as a result of their service on 
the board.  Commissioners who are full-time state employees or 
full-time employees of the political subdivisions of the state 
may receive the expenses provided for in this subdivision unless 
the expenses are reimbursed by another source.  
    Sec. 3.  Minnesota Statutes 1990, section 469.012, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
a public body corporate and politic and shall have all the 
powers necessary or convenient to carry out the purposes of 
sections 469.001 to 469.047, except that the power to levy and 
collect taxes or special assessments is limited to the power 
provided in sections 469.027 to 469.033.  Its powers include the 
following powers in addition to others granted in sections 
469.001 to 469.047:  
     (1) to sue and be sued; to have a seal, which shall be 
judicially noticed, and to alter it; to have perpetual 
succession; and to make, amend, and repeal rules consistent with 
sections 469.001 to 469.047; 
     (2) to employ an executive director, technical experts, and 
officers, agents, and employees, permanent and temporary, that 
it requires, and determine their qualifications, duties, and 
compensation; for legal services it requires, to call upon the 
chief law officer of the city or to employ its own counsel and 
legal staff; so far as practicable, to use the services of local 
public bodies in its area of operation, provided that those 
local public bodies, if requested, shall make the services 
available; 
        (3) to delegate to one or more of its agents or employees 
the powers or duties it deems proper; 
        (4) within its area of operation, to undertake, prepare, 
carry out, and operate projects and to provide for the 
construction, reconstruction, improvement, extension, 
alteration, or repair of any project or part thereof; 
        (5) subject to the provisions of section 469.026, to give, 
sell, transfer, convey, or otherwise dispose of real or personal 
property or any interest therein and to execute leases, deeds, 
conveyances, negotiable instruments, purchase agreements, and 
other contracts or instruments, and take action that is 
necessary or convenient to carry out the purposes of these 
sections; 
        (6) within its area of operation, to acquire real or 
personal property or any interest therein by gifts, grant, 
purchase, exchange, lease, transfer, bequest, devise, or 
otherwise, and by the exercise of the power of eminent domain, 
in the manner provided by chapter 117, to acquire real property 
which it may deem necessary for its purposes, after the adoption 
by it of a resolution declaring that the acquisition of the real 
property is necessary to eliminate one or more of the conditions 
found to exist in the resolution adopted pursuant to section 
469.003 or to provide decent, safe, and sanitary housing for 
persons of low and moderate income, or is necessary to carry out 
a redevelopment project.  Real property needed or convenient for 
a project may be acquired by the authority for the project by 
condemnation pursuant to this section.  This includes any 
property devoted to a public use, whether or not held in trust, 
notwithstanding that the property may have been previously 
acquired by condemnation or is owned by a public utility 
corporation, because the public use in conformity with the 
provisions of sections 469.001 to 469.047 shall be deemed a 
superior public use.  Property devoted to a public use may be so 
acquired only if the governing body of the municipality has 
approved its acquisition by the authority.  An award of 
compensation shall not be increased by reason of any increase in 
the value of the real property caused by the assembly, clearance 
or reconstruction, or proposed assembly, clearance or 
reconstruction for the purposes of sections 469.001 to 469.047 
of the real property in an area; 
     (7) within its area of operation, and without the adoption 
of an urban renewal plan, to acquire, by all means as set forth 
in clause (6) but without the adoption of a resolution provided 
for in clause (6), real property, and to demolish, remove, 
rehabilitate, or reconstruct the buildings and improvements or 
construct new buildings and improvements thereon, or to so 
provide through other means as set forth in Laws 1974, chapter 
228, or to grade, fill, and construct foundations or otherwise 
prepare the site for improvements.  The authority may dispose of 
the property pursuant to section 469.029, provided that the 
provisions of section 469.029 requiring conformance to an urban 
renewal plan shall not apply.  The authority may finance these 
activities by means of the redevelopment project fund or by 
means of tax increments or tax increment bonds or by the methods 
of financing provided for in section 469.033 or by means of 
contributions from the municipality provided for in section 
469.041, clause (9), or by any combination of those means.  Real 
property with buildings or improvements thereon shall only be 
acquired under this clause when the buildings or improvements 
are substandard.  The exercise of the power of eminent domain 
under this clause shall be limited to real property which 
contains, or has contained within the three years immediately 
preceding the exercise of the power of eminent domain and is 
currently vacant, buildings and improvements which are vacated 
and substandard.  For the purpose of this clause, substandard 
buildings or improvements mean hazardous buildings as defined in 
section 463.15, subdivision 3, or buildings or improvements that 
are dilapidated or obsolescent, faultily designed, lack adequate 
ventilation, light, or sanitary facilities, or any combination 
of these or other factors that are detrimental to the safety or 
health of the community; 
    (8) within its area of operation, to determine the level of 
income constituting low or moderate family income.  The 
authority may establish various income levels for various family 
sizes.  In making its determination, the authority may consider 
income levels that may be established by the Department of 
Housing and Urban Development or a similar or successor federal 
agency for the purpose of federal loan guarantees or subsidies 
for persons of low or moderate income.  The authority may use 
that determination as a basis for the maximum amount of income 
for admissions to housing development projects or housing 
projects owned or operated by it; 
     (9) to provide in federally assisted projects any 
relocation payments and assistance necessary to comply with the 
requirements of the Federal Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970, and any 
amendments or supplements thereto; 
     (10) to make an agreement with the governing body or bodies 
creating the authority which provides exemption from all real 
and personal property taxes levied or imposed by the state, 
city, county, or other political subdivisions, for which the 
authority shall make payments in lieu of taxes to the state, 
city, county, or other political subdivisions as provided in 
section 469.040.  The governing body shall agree on behalf of 
all the applicable governing bodies affected that local 
cooperation as required by the federal government shall be 
provided by the local governing body or bodies in whose 
jurisdiction the project is to be located, at no cost or at no 
greater cost than the same public services and facilities 
furnished to other residents; 
     (11) to cooperate with or act as agent for the federal 
government, the state or any state public body, or any agency or 
instrumentality of the foregoing, in carrying out any of the 
provisions of sections 469.001 to 469.047 or of any other 
related federal, state, or local legislation; and upon the 
consent of the governing body of the city to purchase, lease, 
manage, or otherwise take over any housing project already owned 
and operated by the federal government; 
     (12) to make plans for carrying out a program of voluntary 
repair and rehabilitation of buildings and improvements, and 
plans for the enforcement of laws, codes, and regulations 
relating to the use of land and the use and occupancy of 
buildings and improvements, and to the compulsory repair, 
rehabilitation, demolition, or removal of buildings and 
improvements.  The authority may develop, test, and report 
methods and techniques, and carry out demonstrations and other 
activities for the prevention and elimination of slums and 
blight; 
        (13) to borrow money or other property and accept 
contributions, grants, gifts, services, or other assistance from 
the federal government, the state government, state public 
bodies, or from any other public or private sources; 
        (14) to include in any contract for financial assistance 
with the federal government any conditions that the federal 
government may attach to its financial aid of a project, not 
inconsistent with purposes of sections 469.001 to 469.047, 
including obligating itself (which obligation shall be 
specifically enforceable and not constitute a mortgage, 
notwithstanding any other laws) to convey to the federal 
government the project to which the contract relates upon the 
occurrence of a substantial default with respect to the 
covenants or conditions to which the authority is subject; to 
provide in the contract that, in case of such conveyance, the 
federal government may complete, operate, manage, lease, convey, 
or otherwise deal with the project until the defaults are cured 
if the federal government agrees in the contract to reconvey to 
the authority the project as then constituted when the defaults 
have been cured; 
        (15) to issue bonds for any of its corporate purposes and 
to secure the bonds by mortgages upon property held or to be 
held by it or by pledge of its revenues, including grants or 
contributions; 
       (16) to invest any funds held in reserves or sinking funds, 
or any funds not required for immediate disbursement, in 
property or securities in which savings banks may legally invest 
funds subject to their control or in the manner and subject to 
the conditions provided in section 475.66 for the deposit and 
investment of debt service funds; 
        (17) within its area of operation, to determine where 
blight exists or where there is unsafe, unsanitary, or 
overcrowded housing; 
        (18) to carry out studies of the housing and redevelopment 
needs within its area of operation and of the meeting of those 
needs.  This includes study of data on population and family 
groups and their distribution according to income groups, the 
amount and quality of available housing and its distribution 
according to rentals and sales prices, employment, wages, 
desirable patterns for land use and community growth, and other 
factors affecting the local housing and redevelopment needs and 
the meeting of those needs; to make the results of those studies 
and analyses available to the public and to building, housing, 
and supply industries; 
     (19) if a local public body does not have a planning agency 
or the planning agency has not produced a comprehensive or 
general community development plan, to make or cause to be made 
a plan to be used as a guide in the more detailed planning of 
housing and redevelopment areas; 
     (20) to lease or rent any dwellings, accommodations, lands, 
buildings, structures, or facilities included in any project 
and, subject to the limitations contained in sections 469.001 to 
469.047 with respect to the rental of dwellings in housing 
projects, to establish and revise the rents or charges therefor; 
     (21) to own, hold, and improve real or personal property 
and to sell, lease, exchange, transfer, assign, pledge, or 
dispose of any real or personal property or any interest 
therein; 
     (22) to insure or provide for the insurance of any real or 
personal property or operations of the authority against any 
risks or hazards; 
     (23) to procure or agree to the procurement of government 
insurance or guarantees of the payment of any bonds or parts 
thereof issued by an authority and to pay premiums on the 
insurance; 
     (24) to make expenditures necessary to carry out the 
purposes of sections 469.001 to 469.047; 
     (25) to enter into an agreement or agreements with any 
state public body to provide informational service and 
relocation assistance to families, individuals, business 
concerns, and nonprofit organizations displaced or to be 
displaced by the activities of any state public body; 
     (26) to compile and maintain a catalog of all vacant, open 
and undeveloped land, or land which contains substandard 
buildings and improvements as that term is defined in clause 
(7), that is owned or controlled by the authority or by the 
governing body within its area of operation and to compile and 
maintain a catalog of all authority owned real property that is 
in excess of the foreseeable needs of the authority, in order to 
determine and recommend if the real property compiled in either 
catalog is appropriate for disposal pursuant to the provisions 
of section 469.029, subdivisions 9 and 10; 
     (27) to recommend to the city concerning the enforcement of 
the applicable health, housing, building, fire prevention, and 
housing maintenance code requirements as they relate to 
residential dwelling structures that are being rehabilitated by 
low- or moderate-income persons pursuant to section 469.029, 
subdivision 9, for the period of time necessary to complete the 
rehabilitation, as determined by the authority; 
    (28) to recommend to the city the initiation of municipal 
powers, against certain real properties, relating to repair, 
closing, condemnation, or demolition of unsafe, unsanitary, 
hazardous, and unfit buildings, as provided in section 469.041, 
clause (5); 
    (29) to sell, at private or public sale, at the price or 
prices determined by the authority, any note, mortgage, lease, 
sublease, lease purchase, or other instrument or obligation 
evidencing or securing a loan made for the purpose of economic 
development, job creation, redevelopment, or community 
revitalization by a public agency to a business, for-profit or 
nonprofit organization, or an individual; 
    (30) within its area of operation, to acquire and sell real 
property that is benefited by federal housing assistance 
payments, other rental subsidies, interest reduction payments, 
or interest reduction contracts for the purpose of preserving 
the affordability of low- and moderate-income multifamily 
housing; and 
    (31) to apply for, enter into contracts with the federal 
government, administer, and carry out a section 8 program.  
Authorization by the governing body creating the authority to 
administer the program at the authority's initial application is 
sufficient to authorize operation of the program in its area of 
operation for which it was created without additional local 
governing body approval.  Approval by the governing body or 
bodies creating the authority constitutes approval of a housing 
program for purposes of any special or general law requiring 
local approval of section 8 programs undertaken by city, county, 
or multicounty authorities; and 
    (32) to secure a mortgage or loan for a rental housing 
project by obtaining the appointment of receivers or assignments 
of rents and profits under sections 559.17 and 576.01, except 
that the limitation relating to the minimum amounts of the 
original principal balances of mortgages specified in sections 
559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
does not apply.  
     Sec. 4.  Minnesota Statutes 1990, section 469.012, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXERCISE OF POWERS.] An authority may exercise 
all or any part or combination of the powers granted by sections 
469.001 to 469.047 within its area of operation.  Any two or 
more authorities may join with one another in the exercise, 
either jointly or otherwise, of any or all of their powers for 
the purpose of financing, including the issuance of bonds and 
giving security therefor, planning, undertaking, owning, 
constructing, operating, or contracting with respect to a 
housing project located within the area of operation of any one 
or more of the authorities.  For that purpose an authority may 
by resolution prescribe and authorize any other housing 
authority, so joining with it, to act on its behalf with respect 
to any or all powers, as its agent or otherwise, in the name of 
the authority so joining or in its own name. 
    A city, county, or multicounty authority may by resolution 
authorize another housing authority to exercise its powers 
within the authorizing authority's area of operation at the same 
time that the authorizing authority is exercising the same 
powers. 
    A county or city may join with any authority to permit the 
authority, on behalf of the county, town within the county, or 
city, to plan, undertake, administer, and carry out a leased 
existing housing assistance payments program, pursuant to 
section 8 of the United States Housing Act of 1937 as amended, 
42 United States Code, section 1437f.  A city may so join with 
an authority unless there is an authority in the city which has 
been authorized by resolution under section 469.003 to transact 
business or exercise powers.  A county may so join with an 
authority unless (a) there is a county authority which has been 
authorized by resolution under section 469.004 to exercise 
powers, or the county is a member of a multicounty authority, 
and (b) the authority has initiated or has in progress an active 
program or has applied for federal assistance in a public 
housing, section 8, or redevelopment program within 12 months 
after its establishment. 
    Notwithstanding the other provisions of this subdivision, 
an authority administering and carrying out a leased existing 
housing assistance payments program, under section 8 of the 
United States Housing Act of 1937, United States Code, title 42, 
section 1437f, as amended, may administer the leased existing 
housing assistance payments program under the statutory and 
regulatory portability provisions of the federal section 8 
existing housing assistance payments program, United States 
Code, title 42, section 1437f(r), as amended. 
    Sec. 5.  Minnesota Statutes 1990, section 469.015, 
subdivision 3, is amended to read: 
    Subd. 3.  [PERFORMANCE BONDS.] Performance bonds shall be 
required from contractors for any works of construction as 
provided in and subject to all the provisions of sections 574.26 
to 574.31 except for contracts entered into by an authority for 
an expenditure of less than $15,000 $25,000.  
    Sec. 6.  Minnesota Statutes 1990, section 469.015, 
subdivision 4, is amended to read: 
    Subd. 4.  [EXCEPTIONS.] (a) An authority need not require 
competitive bidding in the following circumstances:  
    (1) in the case of a contract for the acquisition of a 
low-rent housing project: 
    (i) for which financial assistance is provided by the 
federal government; 
    (ii) which does not require any direct loan or grant of 
money from the municipality as a condition of the federal 
financial assistance; and 
     (iii) for which the contract provides for the construction 
of the project upon land not owned by the authority at the time 
of the contract, or owned by the authority for redevelopment 
purposes, and provides for the conveyance or lease to the 
authority of the project or improvements upon completion of 
construction; 
     (2) with respect to a structured parking facility:  
     (i) constructed in conjunction with, and directly above or 
below, a development; and 
     (ii) financed with the proceeds of tax increment or parking 
ramp revenue bonds; and 
     (3) in the case of a housing development project if: 
     (i) the project is financed with the proceeds of bonds 
issued under section 469.034; 
     (ii) the project is located on land that is not owned by 
the authority at the time the contract is entered into, or is 
owned by the authority only for development purposes, and 
provides for conveyance or lease to the authority of the project 
or improvements upon completion of construction; and 
    (iii) the authority finds and determines that elimination 
of the public bidding requirements is necessary in order for the 
housing development project to be economical and feasible. 
    (b) An authority need not require a performance bond in the 
case of for the following projects: 
    (1) a contract described in paragraph (a), clause (1); 
    (2) a construction change order for a housing project in 
which 30 percent of the construction has been completed; 
    (3) a construction contract for a single-family housing 
project in which the authority acts as the general construction 
contractor; or 
    (4) a services or materials contract for a housing project. 
     For purposes of this paragraph, "services or materials 
contract" does not include construction contracts. 
    Sec. 7.  Minnesota Statutes 1990, section 469.015, is 
amended by adding a subdivision to read: 
    Subd. 5.  [SECURITY IN LIEU OF BOND.] The authority may 
accept a certified check or cashier's check in the same amount 
as required for a bond in lieu of a performance bond for 
contracts entered into by an authority for an expenditure of 
less than $25,000.  The check must be held by the authority for 
90 days after the contract has been completed.  If no suit is 
brought within the 90 days, the authority must return the amount 
of the check to the person making it.  If a suit is brought 
within the 90-day period, the authority must disburse the amount 
of the check pursuant to the order of the court. 

                                ARTICLE 4

             LOCAL HOUSING AND ECONOMIC DEVELOPMENT PROGRAMS
    Section 1.  [ST. PAUL ECONOMIC DEVELOPMENT PROGRAM.] 
    Subdivision 1.  [AUTHORIZATION.] The city of St. Paul and 
the housing and redevelopment authority of the city of St. Paul 
may implement a citywide economic development program.  The 
program may: 
    (1) provide working capital financing, except from the 
proceeds of bonds or other obligations which may be issued only 
to provide the capital costs of a project; 
    (2) apply funds of the city or housing and redevelopment 
authority within or without the boundaries of a presently 
existing or future redevelopment project area, housing 
development project, housing project, municipal development 
district, economic development district, development district, 
mined underground space development, industrial development 
district, or tax increment district, except that tax increments 
shall only be applied in accordance with Minnesota Statutes, 
sections 469.174 to 469.179; 
    (3) exercise the powers of an economic development 
authority under Minnesota Statutes, sections 469.090 to 469.108, 
and the powers granted to a city by Minnesota Statutes, sections 
469.090 to 469.108, or Minnesota Statutes, sections 469.048 to 
469.068, or other law, provided that:  (i) only the city shall 
have the power under Minnesota Statutes, section 469.084, 
subdivision 11, to approve the issuance of revenue bonds by the 
port authority; and (ii) the housing and redevelopment authority 
shall not exercise the other powers of the city under sections 
469.090 to 469.108 or sections 469.048 to 469.068 until and 
unless the city, by resolution, delegates the exercise of all or 
some of those powers to the housing and redevelopment authority; 
and 
    (4) apply funds as permitted by clauses (1) to (3) for the 
financing of a public or private parking facility, child care 
facility, or a project as defined by Minnesota Statutes, section 
469.153, subdivision 2. 
    Subd. 2.  [SUPPLEMENTAL POWERS.] The powers authorized 
under this section are in addition and supplemental to any other 
provisions of general or special law or charter. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective on the day after compliance with 
Minnesota Statutes, section 645.021, subdivision 3, by the 
governing body of the city of St. Paul. 

                                ARTICLE 5

                              MISCELLANEOUS
    Section 1.  Minnesota Statutes 1990, section 268.362, is 
amended to read: 
    268.362 [GRANTS.] 
    Subdivision 1.  [GENERALLY.] The commissioner shall make 
grants to eligible organizations for programs to provide 
education and training services to targeted youth.  The purpose 
of these programs is to provide specialized training and work 
experience to at-risk targeted youth who have not been served 
effectively by the current educational system.  The programs are 
to include a work experience component with work projects that 
result in the rehabilitation or construction of residential 
units for the homeless.  Two or more eligible organizations may 
jointly apply for a grant.  The commissioner shall administer 
the grant program. 
    Subd. 2.  [GRANT APPLICATIONS; AWARDS.] Interested eligible 
organizations must apply to the commissioner for the grants.  
The advisory committee must review the applications and provide 
to the commissioner a list of recommended eligible organizations 
that the advisory committee determines meet the requirements for 
receiving a grant.  The total grant award for any program may 
not exceed $50,000 per year.  In awarding grants, the 
commissioner must give priority to (1) organizations that are 
operating or have operated successfully a program; and (2) to 
distributing programs throughout the state.  To receive a grant 
under this section, the eligible organization must match the 
grant money with at least an equal amount of nonstate money.  
The commissioner must verify that the eligible organization has 
matched the grant money.  
    Sec. 2.  Minnesota Statutes 1990, section 268.364, 
subdivision 4, is amended to read: 
    Subd. 4.  [JOB READINESS SKILLS COMPONENT.] A job readiness 
skills component must be included in comprise at least 20 
percent of each program.  The component must provide program 
participants with job search skills, placement assistance, and 
other job readiness skills to ensure that participants will have 
an understanding of the building trades, unions, 
self-employment, and other employment opportunities and be able 
to compete in the employment market. 
    Sec. 3.  Minnesota Statutes 1990, section 268.365, 
subdivision 2, is amended to read: 
    Subd. 2.  [PRIORITY FOR HOUSING.] Any residential units 
that become available through the program must be allocated in 
the following order: 
    (1) homeless individuals who have participated in 
constructing, rehabilitating, or improving the unit; 
    (2) homeless families with at least one dependent; 
    (2) (3) other homeless individuals; 
    (3) (4) other very low income families and individuals; and 
    (4) (5) families or individuals that receive public 
assistance and that do not qualify in any other priority group. 
    Sec. 4.  Minnesota Statutes 1990, section 566.34, 
subdivision 2, is amended to read: 
    Subd. 2.  [ESCROW OF RENT.] If a violation exists in a 
building, a tenant may deposit the amount of rent due to the 
owner with the court administrator using the following procedure:
    (a) For a violation of section 566.18, subdivision 6, 
clause (a), the tenant may deposit with the court administrator 
the rent due the owner along with a copy of the written notice 
of the code violation as provided in section 566.19, subdivision 
2.  The tenant may not deposit the rent or file the written 
notice of the code violation until the time granted to make 
repairs has expired without satisfactory repairs being made, 
unless the tenant alleges that the time granted is excessive. 
    (b) For a violation of section 566.18, subdivision 6, 
clause (b) or (c), the tenant must give written notice to the 
owner specifying the violation.  The notice must be delivered 
personally or sent to the person or place where rent is normally 
paid.  If the violation is not corrected within 14 days, the 
tenant may deposit the amount of rent due to the owner with the 
court administrator along with an affidavit specifying the 
violation.  The court must provide a simplified form affidavit 
for use under this clause. 
    (c) The tenant need not deposit rent if none is due to the 
owner at the time the tenant otherwise files the notice required 
by this subdivision.  All rent which thereafter becomes due to 
the owner prior to the hearing under this section must be 
deposited with the court administrator.  As long as proceedings 
are pending under this section, the tenant must pay rent to the 
owner or as directed by the court and may not withhold rent to 
remedy a violation. 

                                ARTICLE 6

                HOUSING AND ECONOMIC DEVELOPMENT PROGRAMS
    Section 1.  [462A.33] [TRAINING AND HOUSING PROGRAM FOR 
HOMELESS ADULTS.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in this 
subdivision apply to this section. 
    (a) "Eligible organization" means a nonprofit organization 
run by or for the homeless. 
    (b) "Homeless individual" or "homeless person" has the 
meaning given in United States Code, title 42, section 11302. 
    Subd. 2.  [PLANNING GRANT.] The commissioner of the housing 
finance agency may make a planning grant to eligible 
organizations for programs to provide homeownership 
opportunities, education and training, or services to homeless 
adults.  The program must promote individual stability and 
responsibility of homeless adults through training for jobs that 
pay a living wage, job placement, life skills development, and 
access to community support services including health services, 
counseling, and drug rehabilitation.  The program must include a 
work experience and training component, job skills component, 
and life skills component. 
    Subd. 3.  [WORK EXPERIENCE AND TRAINING COMPONENT.] The 
work experience and training component must provide vocational 
skill training in an industry where there are potential 
opportunities for jobs that pay a living wage.  A monetary 
compensation may be provided to program participants.  The 
compensation must be provided to participants who are recipients 
of public assistance in a manner or amount which will not reduce 
public assistance benefits.  The work experience component must 
be designed so that work projects result in the expansion of 
residential units for homeless persons and very low-income 
individuals and families.  The work experience component must 
include work projects that provide residential units through 
construction or rehabilitation for the homeless and families 
with income that does not exceed 50 percent of the median income 
for the metropolitan area.  The program design must include an 
examination of how program participants may achieve 
certification as a part of the work experience and training 
component by entering licensing, apprenticeship, or other 
educational programs. 
    Subd. 4.  [JOB SKILLS COMPONENT.] The job skills component 
must provide program participants with job search skills, 
placement assistance, and other job readiness skills to ensure 
that participants will be able to compete in the employment 
market. 
    Subd. 5.  [LIFE SKILLS COMPONENT.] The life skills 
component must include mentoring to develop homeownership 
skills, and offer or coordinate participation in parenting and 
citizenship classes and leadership development to encourage 
community involvement and responsibility. 
    Presented to the governor March 30, 1992 
    Signed by the governor April 1, 1992, 4:58 p.m.