language to be deleted (2) new language
Laws of Minnesota 1993 CHAPTER 236-S.F.No. 264 An act relating to housing; changing program review requirements; increasing deferred loan limits; expanding the types of eligible users of the homesharing program; expanding the project eligibility of the housing trust fund; authorizing cities to sell single-family residential housing under the neighborhood land trust program; expanding the types of eligible service providers and changing the authorized payment structure of the rental assistance for family stabilization program; increasing the income limits for rental housing assistance; establishing the community rehabilitation fund account; consolidating the blighted residential property and capital reserve programs; authorizing tribal Indian housing demonstration projects; appropriating money; amending Minnesota Statutes 1992, sections 462A.05, subdivisions 14a and 24; 462A.07, subdivisions 14 and 15; 462A.201, subdivision 2; 462A.202, subdivision 7; 462A.205, subdivisions 2, 3, 4, 5, 6, 7, and by adding subdivisions; 462A.21, subdivision 8c and by adding a subdivision; and 462C.04, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 462A; repealing Minnesota Statutes 1992, sections 462A.05, subdivision 37; and 462A.32. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1992, section 462A.05, subdivision 14a, is amended to read: Subd. 14a. [REHABILITATION LOANS; EXISTING OWNER OCCUPIED RESIDENTIAL HOUSING.] It may make loans to persons and families of low and moderate income to rehabilitate or to assist in rehabilitating existing residential housing owned and occupied by those persons or families. No loan shall be made unless the agency determines that the loan will be used primarily for rehabilitation work necessary for health or safety, essential accessibility improvements, or to improve the energy efficiency of the dwelling. No loan for rehabilitation of owner occupied residential housing 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. The amount of any loan shall not exceed the lesser of (a)
$9,000$10,000, or (b) the actual cost of the work performed, or (c) that portion of the cost of rehabilitation which the agency determines cannot otherwise be paid by the person or family without the expenditure of an unreasonable portion of the income of the person or family. Loans made in whole or in part with federal funds may exceed the maximum loan amount to the extent necessary to comply with federal lead abatement requirements prescribed by the funding source. In making loans, the agency shall determine the circumstances under which and the terms and conditions under which all or any portion of the loan will be repaid and shall determine the appropriate security for the repayment of the loan. Loans pursuant to this subdivision may be made with or without interest or periodic payments. No loan under this subdivision shall be denied solely on the basis of the inability of the applicant to make periodic loan payments.Loans made without interest or periodic payments need not be repaid by the borrower if the property for which the loan is made has not been sold, transferred, or otherwise conveyed nor has it ceased to be the principal place of residence of the borrower, within ten years after the date of the loan. Sec. 2. Minnesota Statutes 1992, section 462A.05, subdivision 24, is amended to read: Subd. 24. [ ACCESSIBILITY PROGRAMSHOUSING FOR ELDERLY, PERSONS WITH PHYSICAL OR DEVELOPMENTAL DISABILITIES, AND SINGLE PARENT FAMILIES.] It may engage in housing programs for low- and moderate-income elderly, handicapped, or developmentally disabledpersons with physical or developmental disabilities, or single parent families in the case of home sharing programs, as defined by the agency, to provide grants or loans, with or without interest, for (1) accessibility improvements to residences occupied by elderly persons; (2) housing sponsors, as defined by the agency, of home sharing programs to match existing homeowners with prospective tenants who will contribute either rent or services to the homeowner, where either the homeowner or the prospective tenant is elderly, handicapped, or developmentally disableda person with physical or developmental disabilities, or the head of a single parent family; (3) the construction of or conversion of existing buildings into structures for occupancy by the elderly that contain from three to 12 private sleeping rooms with shared cooking facilities and common space; and (4) housing sponsors, as defined by the agency, to demonstrate the potential for home equity conversion in Minnesota for the elderly, in both rural and urban areas, and to determine the need in those equity conversions for consumer safeguards. In making the grants or loans, the agency shall determine the terms and conditions of repayment and the appropriate security, if any, should repayment be required. The agency may provide technical assistance to sponsors of home sharing programs or may contract or delegate the provision of the technical assistance in accordance with section 462A.07, subdivision 12. Housing sponsors who receive funding through these programs shall provide homeowners and tenants participating in a home sharing program with information regarding their rights and obligations as they relate to federal and state tax law including, but not limited to, taxable rental income, homestead credit under chapter 273, and the property tax refund act under chapter 290A. Sec. 3. Minnesota Statutes 1992, section 462A.07, subdivision 14, is amended to read: Subd. 14. [AMERICAN INDIANS.] (a) It may engage in housing programs for low- and moderate-income American Indians developed and administered separately or in combination by the Minnesota Chippewa tribe, the Red Lake band of Chippewa Indians, and the Sioux communities as determined by such tribe, band, or communities. In furtherance of the policy of economic integration stated in section 462A.02, subdivision 6, it may engage in housing programs for American Indians who intend to reside on reservations and who are not persons of low and moderate income, provided that the aggregate dollar amount of the loans for each lender's fiscal year shall not exceed an amount equal to 25 percent of the total dollar amount of all loans made by that lender during the lender's fiscal year at the time of loan application. In developing such housing programs, the tribe, band, or communities shall take into account the housing needs of all American Indians residing both on and off reservations within the state. A plan for each such program, which specifically describes the program (a)content, (b)utilization of funds, (c)administration, (d)operation, (e)implementation and other matter, as determined by the agency, must be submitted to the agency for its review and approval prior to the making of eligible loans pursuant to section 462A.21. All such programs must conform to rules promulgated by the agency concerning program administration, including but not limited to rules concerning costs of administration; the quality of housing; interest rates, fees, and charges in connection with making eligible loans; and other matters determined by the agency to be necessary in order to effectuate the purposes of this subdivision and section 462A.21, subdivisions 4b and 4c. All such programs must provide for a reasonable balance in the distribution of funds appropriated for the purpose of this section between American Indians residing on and off reservations within the state. Nothing in this section shall preclude such tribe, band, or communities from requesting and receiving cooperation, advice, and assistance from the agency as regards program development, operation, delivery, financing, or administration. As a condition to the making of such eligible loans, the Minnesota Chippewa tribe, the Red Lake band of Chippewa Indians, and the Sioux communities shall: (a)(1) enter into a loan agreement and other contractual arrangements with the agency for the purpose of transferring the allocated portion of loan funds as set forth in section 462A.26 and to insure compliance with the provisions of this section and this chapter, and (b)(2) shall agree that all of their official books and records related to such housing programs shall be subjected to audit by the legislative auditor in the manner prescribed for agencies of state government. The agency shall submit a biennial report concerning the various housing programs for American Indians, and related receipts and expenditures as provided in section 462A.22, subdivision 9, and such tribe, band, or communities to the extent that they administer such programs, shall be responsible for any costs and expenses related to such administration provided, however, they shall be eligible for payment for costs, expenses, and services pursuant to subdivision 12 and section 462A.21. The agency may provide or cause to be provided essential general technical services as set forth in subdivision 2, and general consultative project assistance services, including, but not limited to, management training, and home ownership counseling as set forth in subdivision 3. Members of boards, committees, or other governing bodies of the tribe, band, and communities administering the programs authorized by this subdivision must be compensated for those services as provided in section 15.0575. Rules promulgated under this subdivision may be promulgated as emergency rules under chapter 14. (b) The agency may engage in demonstration projects to encourage the participation of financial institutions or other leveraging sources in providing housing opportunities for American Indians. The agency shall consult with the Minnesota Chippewa tribe, the Red Lake band of Chippewa Indians, and the Sioux communities in developing the demonstration projects. The income limits specified in paragraph (a) do not apply to the demonstration projects. Sec. 4. Minnesota Statutes 1992, section 462A.07, subdivision 15, is amended to read: Subd. 15. [ AMERICAN INDIANS IN METROPOLITAN AREAURBAN INDIAN HOUSING PROGRAM.] It may engage in housing programs for low and moderate income American Indians residing in the metropolitan area defined in section 473.121, subdivision 2, andcities with a population greater than 50,000 persons, and cities with an American Indian population greater than 1,000 persons. The programs shall demonstrate innovative methods of providing housing for urban Indians, may involve the construction, purchase, and rehabilitation of residential housing, and may be administered through any other provision of this chapter. To the extent possible, the programs shall combine appropriated money with other money from both public and private sources, except that interest earned on the portion of an appropriation to be expended for Indian housing programs in the city of Duluth does not have to be combined with money from other sources. Effective June 30, 1985, all money allocated by the agency under this subdivision to programs for urban Indian housing that are not subject to active contracts shall be reallocated by the agency to programs to fulfill the purposes of this subdivision. Members of boards, committees, or other governing bodies of organizations administering the urban Indian programs authorized by this subdivision must be compensated for those services as provided in section 15.0575. The agency shall consult with the advisory council on urban Indians created pursuant to section 3.922, subdivision 8, in the development of programs pursuant to this subdivision. Sec. 5. Minnesota Statutes 1992, section 462A.201, subdivision 2, is amended to read: Subd. 2. [LOW-INCOME HOUSING.] (a) The agency may, in consultation with the advisory committee, use money from the housing trust fund account to provide loans or grants for projects for the development, construction, acquisition, preservation, and rehabilitation of low-income rental and limited equity cooperative housing units and homes for ownership. No more than 20 percent of available funds may be used for home ownership projects. (b) The project must meet one of the following income tests; (1) at least 75 percent of the rental and cooperative units, and 100 percent of the homes for ownership, must be rented to or cooperatively owned, or owned by persons and families whose income does not exceed 30 percent of the median family income for the metropolitan area as defined in section 473.121, subdivision 2; or (2) all of the units funded by the housing trust fund account must be used for the benefit of persons and families whose income does not exceed 30 percent of the median family income for the metropolitan area as defined in section 473.121, subdivision 2. The median family income may be adjusted for families of five or more. (c) In making the grants, the agency shall determine the terms and conditions of repayment and the appropriate security, if any, should repayment be required. To promote the geographic distribution of grants and loans, the agency may designate a portion of the grant or loan awards to be set aside for projects located in specified congressional districts or other geographical regions specified by the agency. The agency may adopt emergency and permanent rules for awarding grants and loans under this subdivision. The emergency rules are effective for 180 days or until the permanent rules are adopted, whichever occurs first. Sec. 6. Minnesota Statutes 1992, section 462A.202, subdivision 7, is amended to read: Subd. 7. [RESTRICTIONS.] (a) Except as provided in paragraphs (b), (c), and(d), and (e), the city must own the property financed with a loan under this section and use the property for the purposes specified in this section: (1) the city may sell the property at its fair market value provided it repays the lesser of the net proceeds of the sale or the amount of the loan balance to the agency for deposit in the local government unit housing account; or (2) the city may use the property for a different purpose provided that the city repays the amount of the original loan. If the city owns and uses the property for the purposes specified in this section for a 20-year period, the agency shall forgive the loan. (b) In cases where the property consists of land only, including land on which buildings acquired with a loan under this section are demolished by the city, the city may lease the property for a term not to exceed 99 years to a nonprofit corporation to use for the purposes specified in this section. (c) In cases where the property consists of land and buildings, the city may do the following: (1) demolish the buildings in whole or in part and use or lease the property under paragraph (b); (2) sell the buildings to a nonprofit corporation to use for the purposes specified in this section. If sold, the city must sell the buildings for fair market value and repay the proceeds of the sale to the agency for deposit in the local government unit housing account; (3) lease the buildings to a nonprofit corporation to use for the purposes specified in this section. If leased, except as provided in paragraph (d), the annual rental must equal the amount of the loan attributable to the cost of the buildings, divided by the number of years of useful life of the buildings as determined in accordance with generally accepted accounting principles. For purposes of determining the required rental, the purchase price of land and buildings must be allocated between them based on standard valuation procedures; or (4) contract with a nonprofit organization to manage the property. (d) A city may lease a building to a nonprofit organization for a nominal amount under the following conditions: (1) the lease does not exceed ten years; (2) the city must have the option to cancel the lease with or without cause at the end of any three-year period; and (3) the city must determine annually that the property is being used for the purposes specified in this section and that the terms of the lease, including any income limits for residents, are being met. (e) A city may sell single-family residential housing directly to persons and families of low and moderate income. Sec. 7. Minnesota Statutes 1992, section 462A.205, subdivision 2, is amended to read: Subd. 2. [DEFINITIONS.] For the purposes of this section, the following terms have the meaning given them. (a) "Caretaker parent" means a parent, relative caretaker, or minor caretaker as defined by the aid to families with dependent children program, sections 256.72 to 256.87. (b) "Counties with high average housing costs" means counties whose average federal section 8 fair market rents as determined by the Department of Housing and Urban Development are in the highest one-third of average rents in the state. (c) "Designated rental property" is rental property (1) that is made available by a self-sufficiency program for use by participating families and meets federal section 8 existing quality standards, or (2) that has received federal, state, or local rental rehabilitation assistance since January 1, 1987, and meets federal section 8 existing housing quality standards. (d) "Gross family income" for a family receiving rental assistance under this section means the gross amount of the wages, salaries, social security payments, pensions, workers' compensation, unemployment compensation, public assistance payments, alimony, child support, and income from assets received by the family. (e) "Local housing agencyorganization" means the agency of local government responsible for administering the Department of Housing and Urban Development's section 8 existing voucher and certificate program or a nonprofit or for-profit organization experienced in housing management. (f) "Public assistance" means aid to families with dependent children, family general assistance, or family work readiness. (g) "Self-sufficiency program" means a program operated by a certified employment and training service provider as defined in section 256.736, subdivision 1a, paragraph (e), an employability program administered by a community action agency, or courses of study at an accredited institution of higher education pursued with at least half-time student status. Sec. 8. Minnesota Statutes 1992, section 462A.205, subdivision 3, is amended to read: Subd. 3. [LOCAL HOUSING AGENCYORGANIZATION.] The agency may contract with a local housing agencyorganization to administer the rent assistance under this section. The agency may pay the local housing agency must be paidorganization an administrative fee. The administrative fee is equal to the greater of ten percent of the amount of the subsidy or $15may not exceed $40 per unit per month. Sec. 9. Minnesota Statutes 1992, section 462A.205, subdivision 4, is amended to read: Subd. 4. [AMOUNT AND PAYMENT OF RENT ASSISTANCE.] (a) This subdivision applies to both the voucher option and the project-based voucher option. (b) Within the limits of available appropriations, eligible families may receive monthly rent assistance for a 36-month period starting with the month the family first receives rent assistance under this section. The amount of the family's portion of the rental payment is equal to at least 30 percent of gross income. (c) The rent assistance must be paid by the local housing agencyorganization to the property owner. (d) Subject to the limitations in paragraph (e), the amount of rent assistance is the difference between the rent and the family's portion of the rental payment. (e) In no case: (1) may the amount of monthly rent assistance be more than $200; (2) may the owner receive more rent for assisted units than for comparable unassisted units; nor (3) may the amount of monthly rent assistance be more than the difference between the family's portion of the rental payment and the fair market rent for the unit as determined by the Department of Housing and Urban Development. Sec. 10. Minnesota Statutes 1992, section 462A.205, is amended by adding a subdivision to read: Subd. 4a. [ADDITIONAL AUTHORIZED EXPENSES.] In addition to the monthly rent assistance authorized under subdivision 4, rent assistance may include up to $200 for a security deposit. Sec. 11. Minnesota Statutes 1992, section 462A.205, subdivision 5, is amended to read: Subd. 5. [VOUCHER OPTION.] At least one-half of the appropriated funds must be made available for a voucher option. Under the voucher option, the Minnesota housing finance agency, in consultation with the department of human services, will award a number of vouchers to self-sufficiency program administrators for participating families. Families may use the voucher for any rental housing that is certified by the local housing agencyorganization as meeting section 8 existing housing quality standards. Sec. 12. Minnesota Statutes 1992, section 462A.205, subdivision 6, is amended to read: Subd. 6. [PROJECT-BASED VOUCHER OPTION.] A portion of the appropriated funds must be made available for a project-based voucher option. Under the project-based voucher option, the Minnesota housing finance agency, in consultation with the department of human services, will award a number of vouchers to self-sufficiency program administrators for participating families who live in designated rental property that is certified by a local housing agencyorganization as meeting section 8 existing housing quality standards. The Minnesota housing finance agency and local housing agenciesorganizations must work with self-sufficiency program administrators to identify rental property that has received rental rehabilitation assistance since January 1, 1987. The agency may set aside a portion of the funds to be used in connection with rental rehabilitation projects which will be completed by July 1, 1992. Sec. 13. Minnesota Statutes 1992, section 462A.205, subdivision 7, is amended to read: Subd. 7. [PROPERTY OWNER.] In order to receive rent assistance payments, the property owner must enter into a standard lease agreement with the family which includes a clause providing for good cause evictions only. Otherwise, the lease may be any standard lease agreement. The agency and local housing agenciesorganizations must make model lease agreements available to participating families and property owners. Sec. 14. Minnesota Statutes 1992, section 462A.205, is amended by adding a subdivision to read: Subd. 8. [AUTHORIZED LEVERAGE OF MONEY.] The agency may leverage federal program money with program money from the family stabilization demonstration project authorized under this section. Sec. 15. [462A.206] [COMMUNITY REHABILITATION FUND ACCOUNT.] Subdivision 1. [ACCOUNT.] The community rehabilitation fund account is established as a separate account in the housing development fund. Money in the account is appropriated to the agency for the purposes specified in this section. Subd. 2. [AUTHORIZATION.] The agency may make grants or loans to cities for the purposes of construction, acquisition, rehabilitation, demolition, permanent financing, refinancing, or gap financing of single or multifamily housing. Gap financing is financing for the difference between the cost of the improvement of the blighted property, including acquisition, demolition, rehabilitation, and construction, and the market value of the property upon sale. The agency shall take into account the amount of money that the city leverages from other sources in awarding grants and loans. Cities may use the grants and loans to establish revolving loan funds and to provide grants and loans to eligible mortgagors. The city may determine the terms and conditions of the grants and loans. An agency loan may only be used by a city to make loans. Subd. 3. [REQUIREMENTS.] Grants or loans made under this section must be used for housing rented to or owned by persons or families with income less than or equal to 115 percent of the greater of state or area median income as determined by the United States Department of Housing and Urban Development. If a grant or loan is used for demolition, the cleared land must be used for the construction of housing to be rented to or owned by persons or for other housing related purposes primarily for the benefit of persons residing in the adjacent housing. Subd. 4. [DESIGNATED AREAS.] For the purposes of focusing resources, a city located in a metropolitan statistical area must designate neighborhoods within which the grants or loans may be used, and a city located outside of a metropolitan statistical area must designate a geographic area within which the grants or loans may be used. Subd. 5. [OTHER ELIGIBLE ORGANIZATIONS.] A nonprofit organization is eligible to apply directly for grants or loans from the community rehabilitation fund account if the city within which it is located enacts a resolution authorizing the organization to apply on the city's behalf. Sec. 16. Minnesota Statutes 1992, section 462A.21, subdivision 8c, is amended to read: Subd. 8c. [RENTAL HOUSING FOR INDIVIDUALS.] It may establish a rental housing assistance program for persons of low income or for persons with a mental illness to provideor families that include an adult family member with a mental illness. Rental assistance may be in the form of loans or direct rental subsidies for housing for individualspersons or families with incomes of up to 3050 percent of area median income as determined by the United States Department of Housing and Urban Development, adjusted for families of five or more. Priority must be given to developments with the lowest income residents. Housing for the mentally ill must be operated in coordination with social service providers who provide services torequested by tenants. The developments may be financed by the agency or other public or private entities. Direct rental subsidies must be administered by the agency for the benefit of eligible tenants. Financial assistance provided under this subdivision must be in the form of vendor payments whenever possible. Loans and direct rental subsidies under this subdivision may be made only with specific appropriations by the legislature. The limitations on eligible mortgagors contained in section 462A.03, subdivision 13, do not apply to loans for the rehabilitation of existing housing under this subdivision. Sec. 17. Minnesota Statutes 1992, section 462A.21, is amended by adding a subdivision to read: Subd. 8d. [AUTHORIZED LEVERAGE OF MONEY.] The agency may leverage federal program money with program money from the family rental housing assistance program established under subdivision 8b and the rental housing assistance program established under subdivision 8c. Sec. 18. Minnesota Statutes 1992, section 462C.04, subdivision 2, is amended to read: Subd. 2. [PROGRAM REVIEW.] A public hearing shall be held on each program after one publication of notice in a newspaper circulating generally in the city, at least 15 days before the hearing. On or before the day on which notice of the public hearing is published, the city shall submit the program to the metropolitan council, if the city is located in the metropolitan area as defined in section 473.121, subdivision 2, or to the regional development commission for the area in which the city is located, if any, for review and comment. The appropriate reviewing agency shall comment on: (a) whether the program is consistent with the housing plan of the city; and (b) whether the program is consistent with the metropolitan development guide, if the city is located in the metropolitan area, or adopted policies of the regional development commission. Review of the program may be conducted either by the board of the reviewing agency or by the staff of the agency. Any comment submitted by the reviewing agency to the city must be presented to the body considering the proposed program at the public hearing held on the program. A member or employee of the reviewing agency shall be permitted to present the comments of the reviewing agency at the public hearing. After conducting the public hearing, the program may be adopted with or without amendment, provided that any amendments must not be inconsistent with the comments, if any, of the reviewing agency and must not contain any material changes from the program submitted to the reviewing agency other than changes in the financial aspects of any proposed issue of bonds or obligations. If any material change other than a change in the financial aspects of a proposed issue of bonds or obligations, or any change which is inconsistent with the comments of the reviewing agency is adopted, the amended program shall be resubmitted to the appropriate reviewing agency for review and comment, and a public hearing shall be held on the amended program after one publication of notice in a newspaper circulating generally in the city at least 15 days before the hearing. The amended program shall be considered after the public hearing in the same manner as consideration of the initial program. Each program shall be submitted to the Minnesota housing finance agency for review. The agency shall reject any program that: (a) does not comply with statewide housing policies; (b) if implemented will cause a material adverse effect on financing programs of the agency, will subject the interest on future bonds of the agency to federal income tax under any limitations imposed at the time by federal law; (c) provides for administrative and bond issuance costs that are unreasonable; or (d) does not comply with all other requirements of sections 462C.01 to 462C.08. The agency shall have 30 days from submission to complete its review and reject a program. Submission shall be the date on which a complete document describing the program is submitted to the agency. If the agency rejects a program it shall communicate the fact of that rejection, in writing, to the city within 15 days of the rejection. If the agency fails to reject a program within 30 days of submission, or fails to communicate a rejection, in writing, to the city within 15 days of the rejection, then the agency is precluded from rejecting the program. For purposes of sections 462C.01 to 462C.08, the agency's failure to reject a program is considered an approval of the program. The agency may collect reasonable fees and charges in connection with its review of a city's housing program. The fees and charges shall be limited to the amounts required to pay the actual costs to the agency.Subd. 3. [CITY REPORT.] Within 30 days after the bonds are issued for a housing program, the city shall submit a report to the Minnesota housing finance agency. The report must include a program description, the amount of bonds issued, the income limits, and the rent levels. Subd. 4. [ANNUAL LEGISLATIVE REPORT.] The Minnesota housing finance agency, in cooperation with the metropolitan council and the regional development commissions, shall report annually to the legislature on the number and amounts of bond issues and the number of housing programs established pursuant to sections 462C.01 to 462C.08. Sec. 19. [REPEALER.] Minnesota Statutes 1992, sections 462A.05, subdivision 37; and 462A.32, are repealed. Sec. 20. [EFFECTIVE DATE.] Sections 1 to 19 are effective the day following final enactment. Section 8 applies to contracts entered into after May 1, 1992. Presented to the governor May 14, 1993 Signed by the governor May 17, 1993, 4:42 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes