Key: (1) language to be deleted (2) new language
CHAPTER 211-S.F.No. 1821
An act relating to housing; modifying provision for
amending zoning ordinance by cities of the first
class; modifying housing finance agency provisions;
authorizing agency to make equity take-out loans to
owners of federally subsidized housing under certain
circumstances; allowing participants to receive rental
assistance for family stabilization for up to 60
months; clarifying purposes for which community
rehabilitation funds may be used; establishing account
to provide homeownership opportunities for disabled;
modifying low-income housing credits; amending
Minnesota Statutes 1998, sections 462.357, subdivision
5; 462A.05, subdivision 14; 462A.073, subdivisions 2
and 4; 462A.205, subdivisions 1, 2, 4, 5, 6, and 9;
462A.206, subdivision 2; 462A.21, by adding a
subdivision; 462A.222, subdivision 3; and 462A.223,
subdivision 2; repealing Minnesota Statutes 1998,
section 462A.073, subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 462.357,
subdivision 5, is amended to read:
Subd. 5. [AMENDMENT; CERTAIN CITIES OF THE FIRST CLASS.]
The provisions of this subdivision apply to cities of the first
class, except a city of the first class in which a different
process is provided through the operation of the city's home
rule charter. In such cities a city to which this subdivision
applies, amendments to a zoning ordinance shall be made in
conformance with this section but only after there shall have
been filed in the office of the city clerk a written consent of
the owners of two-thirds of the several descriptions of real
estate situate within 100 feet of the total contiguous
descriptions of real estate held by the same owner or any party
purchasing any such contiguous property within one year
preceding the request, and after the affirmative vote in favor
thereof by a majority of the members of the governing body of
any such city. The governing body of such city may, by a
two-thirds vote of its members, after hearing, adopt a new
zoning ordinance without such written consent whenever the
planning commission or planning board of such city shall have
made a survey of the whole area of the city or of an area of not
less than 40 acres, within which the new ordinance or the
amendments or alterations of the existing ordinance would take
effect when adopted, and shall have considered whether the
number of descriptions of real estate affected by such changes
and alterations renders the obtaining of such written consent
impractical, and such planning commission or planning board
shall report in writing as to whether in its opinion the
proposals of the governing body in any case are reasonably
related to the overall needs of the community, to existing land
use, or to a plan for future land use, and shall have conducted
a public hearing on such proposed ordinance, changes or
alterations, of which hearing published notice shall have been
given in a daily newspaper of general circulation at least once
each week for three successive weeks prior to such hearing,
which notice shall state the time, place and purpose of such
hearing, and shall have reported to the governing body of the
city its findings and recommendations in writing.
Sec. 2. Minnesota Statutes 1998, section 462A.05,
subdivision 14, is amended to read:
Subd. 14. [REHABILITATION LOANS.] It may agree to
purchase, make, or otherwise participate in the making, and may
enter into commitments for the purchase, making, or
participation in the making, of eligible loans for
rehabilitation to persons and families of low and moderate
income, and to owners of existing residential housing for
occupancy by such persons and families, for the rehabilitation
of existing residential housing owned by them. The loans may be
insured or uninsured and may be made with security, or may be
unsecured, as the agency deems advisable. The loans may be in
addition to or in combination with long-term eligible mortgage
loans under subdivision 3. They may be made in amounts
sufficient to refinance existing indebtedness secured by the
property, if refinancing is determined by the agency to be
necessary to permit the owner to meet the owner's housing cost
without expending an unreasonable portion of the owner's income
thereon. No loan for rehabilitation shall be made unless the
agency determines that the loan will be used primarily to make
the housing more desirable to live in, to increase the market
value of the housing, for compliance with state, county or
municipal building, housing maintenance, fire, health or similar
codes and standards applicable to housing, or to accomplish
energy conservation related improvements. In unincorporated
areas and municipalities not having codes and standards, the
agency may, solely for the purpose of administering the
provisions of this chapter, establish codes and standards.
Except for accessibility improvements under this subdivision and
subdivisions 14a and 24, clause (1), no secured loan for
rehabilitation of any property shall be made in an amount which,
with all other existing indebtedness secured by the property,
would exceed 110 percent of its market value, as determined by
the agency. No loan under this subdivision shall be denied
solely because the loan will not be used for placing the
residential housing in full compliance with all state, county,
or municipal building, housing maintenance, fire, health, or
similar codes and standards applicable to housing.
Rehabilitation loans shall be made only when the agency
determines that financing is not otherwise available, in whole
or in part, from private lenders upon equivalent terms and
conditions. Accessibility rehabilitation loans authorized under
this subdivision may be made to eligible persons and families
without limitations relating to the maximum incomes of the
borrowers if:
(1) the borrower or a member of the borrower's family
requires a level of care provided in a hospital, skilled nursing
facility, or intermediate care facility for persons with mental
retardation or related conditions;
(2) home care is appropriate; and
(3) the improvement will enable the borrower or a member of
the borrower's family to reside in the housing.
Sec. 3. Minnesota Statutes 1998, section 462A.073,
subdivision 2, is amended to read:
Subd. 2. [LIMITATION; ORIGINATION PERIOD.] During the
first ten months of an origination period, the agency may make
loans financed with proceeds of mortgage bonds for the purchase
of existing housing. Loans financed with the proceeds of
mortgage bonds for new housing in the metropolitan area may be
made during the first ten months of an origination period only
if at least one of the following conditions is met:
(1) the new housing is located in a redevelopment area;
(2) the new housing is replacing a structurally substandard
structure or structures;
(3) the new housing is part of a housing affordability
initiative, other than those financed with the proceeds from the
sale of bonds, in which federal, state, or local assistance is
used to substantially improve the terms of the financing or to
substantially write down the purchase price of the new housing;
or
(4) the new housing is accessible housing and the borrower
or a member of the borrower's family is a person with a
disability. For the purposes of this clause, "accessible
housing" means a dwelling unit with the modifications necessary
to enable a person with a disability to function in a
residential setting. "A person with a disability" means a
person who has a permanent physical condition which is not
correctable and which substantially reduces the person's ability
to function in a residential setting. A person with a physical
condition which does not require the use of a device to increase
mobility must be deemed a person with a disability upon written
certification of a licensed physician that the physical
condition substantially limits the person's ability to function
in a residential setting; or
(5) the new housing is part of an effort to meet the
affordable housing goals negotiated under section 473.254.
Upon expiration of the first ten-month period, the agency
may make loans financed with the proceeds of mortgage bonds for
the purchase of new and existing housing.
Sec. 4. Minnesota Statutes 1998, section 462A.073,
subdivision 4, is amended to read:
Subd. 4. [LIMITATION; COMMITMENTS AND LOANS TO BUILDERS
AND DEVELOPERS.] The agency may not make available, provide
set-asides, or commit to make available proceeds of mortgage
bonds for the exclusive use of builders or developers for loans
to eligible purchasers for new housing except for new housing
described in subdivision 2, clauses (1) and (2). This
prohibition is in effect for the total origination period.
Sec. 5. Minnesota Statutes 1998, section 462A.205,
subdivision 1, is amended to read:
Subdivision 1. [FAMILY STABILIZATION DEMONSTRATION
PROJECT.] The agency, in consultation with the department of
human services, may establish a rent assistance for family
stabilization demonstration project. The purpose of the project
is to provide rental assistance to families who, at the time of
initial eligibility for rental assistance under this section,
were receiving public assistance, and had a caretaker parent
participating in a self-sufficiency program who was complying
with the parent's job search support plan or employment plan and
at least one minor child and to provide rental assistance to
families who, at the time of initial eligibility for rental
assistance under this section, were receiving public assistance,
and had a caretaker parent who had earned income and with at
least one minor child. The demonstration project is limited to
counties with high average housing costs. The program must
offer two options: a voucher option and a project-based voucher
option. The funds may be distributed on a request for proposal
basis.
Sec. 6. Minnesota Statutes 1998, section 462A.205,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For the purposes of this section,
the following terms have the meanings 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, or its
successor program.
(b) "County agency" means the agency designated by the
county board to implement financial assistance for current
public assistance programs and for the Minnesota family
investment program statewide.
(c) "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.
(d) "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.
(e) "Earned income" for a family receiving rental
assistance under this section means cash or in-kind income
earned through the receipt of wages, salary, commissions, profit
from employment activities, net profit from self-employment
activities, payments made by an employer for regularly accrued
vacation or sick leave, and any other profit from activity
earned through effort or labor.
(f) "Employment and training service provider" means a
provider as defined in chapter 256J.
(g) "Employment plan" means a plan as defined in chapter
256J.
(h) "Family or participating family" means a family that at
the time it begins receiving rent assistance has at least one
member who is a recipient of public assistance, and:
(1) a family with a caretaker parent who is participating
in a self-sufficiency program complying with the parent's job
search support plan or employment plan and with at least one
minor child;
(2) a family that, at the time it began receiving rent
assistance under this section, had a caretaker parent
participating in a self-sufficiency program complying with the
parent's job search support plan or employment plan and had at
least one minor child;
(3) a family with a caretaker parent who is receiving
public assistance and has earned income and with at least one
minor child; or
(4) a family that, at the time it began receiving rent
assistance under this section, had a caretaker parent who had
earned income and at least one minor child.
(g) (i) "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, reemployment insurance, the cash assistance
portion of public assistance payments, alimony, and child
support, and income from assets received by the family.
(h) (j) "Local housing organization" 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.
(i) (k) "Public assistance" means aid to families with
dependent children, or its successor program, family general
assistance, or its successor program, or family work readiness,
or its successor program.
(j) "Self-sufficiency program" means a program operated by
an employment and training service provider as defined in
chapter 256J, 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. 7. Minnesota Statutes 1998, 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
60-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
organization 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
$250 for housing located within the metropolitan area, as
defined in section 473.121, subdivision 2, or more than $200 for
housing located outside of the metropolitan area;
(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. 8. Minnesota Statutes 1998, 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 employment and training service providers for
participating families and to county agencies for participating
families with earned income. Families may use the voucher for
any rental housing that is certified by the local housing
organization as meeting section 8 existing housing quality
standards.
Sec. 9. Minnesota Statutes 1998, 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 and to county
agencies employment and training service providers for
participating families who live in designated rental property
that is certified by a local housing organization as meeting
section 8 existing housing quality standards.
Sec. 10. Minnesota Statutes 1998, section 462A.205,
subdivision 9, is amended to read:
Subd. 9. [VOUCHERS FOR FAMILIES WITH A CARETAKER PARENT
WITH EARNED INCOME.] (a) Applications to provide the rental
assistance for families with a caretaker parent with earned
income under either the voucher or project-based option must be
submitted jointly by a local housing organization and a county
agency an employment and training service provider. The
application must include a description of how the caretaker
parent participants will be selected.
(b) County agencies Employment and training service
providers awarded vouchers must select the caretaker parents
with earned income whose families will receive the rental
assistance. The county agency employment and training service
provider must notify the local housing organization and the
agency if:
(1) at the time of annual recertification, the caretaker
parent no longer has earned income and is not in compliance with
the caretaker parent's employment plan or job search plan; and
(2) for a period of six months after the annual
recertification, the caretaker parent has no earned income and
has failed to comply with the job search support plan or
employment plan.
(c) The county agency local housing organization must
provide the caretaker parent who, at the time of annual
recertification, has no earned income and is not in compliance
with the job search support plan or employment plan with the
notice specified in Minnesota Rules, part 4900.3379. The county
agency local housing organization must send a subsequent notice
to the caretaker parent, the local housing organization, and the
Minnesota housing finance agency 60 days before the termination
of rental assistance.
(d) If the local housing organization receives notice from
a county agency an employment and training service provider that
a caretaker parent whose initial eligibility for rental
assistance was based on the receipt of earned income no longer
has earned income and for a period of six months after the
termination of earned income annual recertification has failed
to comply with the caretaker parent's job search plan or
employment plan, the local housing organization must notify the
property owner that rental assistance may terminate and notify
the caretaker parent of the termination of rental assistance
under Minnesota Rules, part 4900.3380.
(e) The county agency employment and training service
provider awarded vouchers for families with a caretaker parent
with earned income must comply with the provisions of Minnesota
Rules, part 4900.3377.
(f) For families whose initial eligibility for rental
assistance was based on the receipt of earned income, rental
assistance must be terminated under any of the following
conditions:
(1) the family is evicted from the property for cause;
(2) the caretaker parent no longer has earned income and,
after six months after an annual recertification, is not in
compliance with the parent's job search or employment plan;
(3) 30 percent of the family's gross income equals or
exceeds the amount of the housing costs for two or more
consecutive months;
(4) the family has received rental assistance under this
section for a 36-month 60-month period; or
(5) the rental unit no longer meets federal section 8
existing housing quality standards, the owner refused to make
necessary repairs or alterations to bring the rental unit into
compliance within a reasonable time, and the caretaker parent
refused to relocate to a qualifying unit.
(g) If a county agency an employment and training service
provider determines that a caretaker parent no longer has earned
income and is not in compliance with the parent's job search or
employment plan, the county agency employment and training
service provider must notify the caretaker parent of that
determination. The notice must be in writing and must explain
the effect of not having earned income or failing to be in
compliance with the job search or employment plan will have on
the rental assistance. The notice must:
(1) state that rental assistance will end six months after
earned income has ended an annual recertification;
(2) specify the date the rental assistance will end;
(3) explain that after the date specified, the caretaker
parent will be responsible for the total housing costs;
(4) describe the actions the caretaker parent may take to
avoid termination of rental assistance; and
(5) inform the caretaker parent of the caretaker parent's
responsibility to notify the county agency employment and
training service provider if the caretaker parent has earned
income.
Sec. 11. Minnesota Statutes 1998, section 462A.206,
subdivision 2, is amended to read:
Subd. 2. [AUTHORIZATION.] The agency may make grants or
loans to cities or nonprofit organizations for the purposes of
construction, acquisition, rehabilitation, demolition, permanent
financing, refinancing, construction financing, gap financing of
single or multifamily housing, or full cycle home ownership
services, as defined in section 462A.209, subdivision 2. 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 or nonprofit
organization leverages from other sources in awarding grants and
loans. The agency shall also consider the extent to which the
grant or loan recipient will coordinate use of the funds with
its other housing-related efforts or other housing-related
efforts in the recipient's geographic area. The city or
nonprofit organization must indicate in its application how the
proposed project is consistent with the consolidated housing
plan. Not less than ten days before submitting its application
to the agency, a nonprofit organization must notify the city in
which the project will be located of its intent to apply for
funds. The city may submit to the agency its written comments
on the nonprofit organization's application and the agency shall
consider the city's comments in reviewing the application.
Cities and nonprofit organizations may use the grants and loans
to establish revolving loan funds and to provide grants and
loans to eligible mortgagors. The city or nonprofit
organization may determine the terms and conditions of the
grants and loans. An agency loan may only be used by a city or
nonprofit organization to make loans.
Sec. 12. Minnesota Statutes 1998, section 462A.21, is
amended by adding a subdivision to read:
Subd. 25. [CONSUMER-OWNED HOUSING REVOLVING ACCOUNT.] The
agency may create a consumer-owned housing revolving account:
(1) to assist in paying delinquent mortgage payments of persons
participating in the federal National Mortgage Association pilot
program for homeownership of persons with disabilities; or (2)
for other activities that support homeownership activities for
persons with disabilities.
Sec. 13. Minnesota Statutes 1998, section 462A.222,
subdivision 3, is amended to read:
Subd. 3. [ALLOCATION PROCEDURE.] (a) Projects will be
awarded tax credits in three two competitive rounds on an annual
basis. The date for applications for each round must be
determined by the agency. No allocating agency may award tax
credits prior to the application dates established by the agency.
(b) Each allocating agency must meet the requirements of
section 42(m) of the Internal Revenue Code of 1986, as amended
through December 31, 1989, for the allocation of tax credits and
the selection of projects.
(c) For projects that are eligible for an allocation of
credits pursuant to section 42(h)(4) of the Internal Revenue
Code of 1986, as amended, tax credits may only be allocated if
the project satisfies the requirements of the allocating
agency's qualified allocation plan. For projects that are
eligible for an allocation of credits pursuant to section
42(h)(4) of the Internal Revenue Code of 1986, as amended, for
which the agency is the issuer of the bonds for the project, or
the issuer of the bonds for the project is located outside the
jurisdiction of a city or county that has received reserved tax
credits, the applicable allocation plan is the agency's
qualified allocation plan.
(d) For applications submitted for the first round, an
allocating agency may allocate tax credits only to the following
types of projects:
(1) in the metropolitan area:
(i) new construction or substantial rehabilitation of
projects in which, for the term of the extended use period, at
least 75 percent of the total tax credit units are single-room
occupancy, efficiency, or one bedroom units and which are
affordable by households whose income does not exceed 30 percent
of the median income;
(ii) new construction or substantial rehabilitation family
housing projects that are not restricted to persons who are 55
years of age or older and in which, for the term of the extended
use period, at least 75 percent of the tax credit units contain
two or more bedrooms and at least one-third of the 75 percent
contain three or more bedrooms; or
(iii) substantial rehabilitation projects in neighborhoods
targeted by the city for revitalization;
(2) outside the metropolitan area, projects which meet a
locally identified housing need and which are in short supply in
the local housing market as evidenced by credible data submitted
with the application;
(3) projects that are not restricted to persons of a
particular age group and in which, for the term of the extended
use period, a percentage of the units are set aside and rented
to persons:
(i) with a serious and persistent mental illness as defined
in section 245.462, subdivision 20, paragraph (c);
(ii) with a developmental disability as defined in United
States Code, title 42, section 6001, paragraph (5), as amended
through December 31, 1990;
(iii) who have been assessed as drug dependent persons as
defined in section 254A.02, subdivision 5, and are receiving or
will receive care and treatment services provided by an approved
treatment program as defined in section 254A.02, subdivision 2;
(iv) with a brain injury as defined in section 256B.093,
subdivision 4, paragraph (a); or
(v) with permanent physical disabilities that substantially
limit one or more major life activities, if at least 50 percent
of the units in the project are accessible as provided under
Minnesota Rules, chapter 1340;
(4) projects, whether or not restricted to persons of a
particular age group, which preserve existing subsidized
housing, if the use of tax credits is necessary to prevent
conversion to market rate use or to remedy physical
deterioration of the project which would result in loss of
existing federal subsidies; or
(5) projects financed by the Farmers Home Administration,
or its successor agency, which meet statewide distribution goals.
(e) Before the date for applications for the second final
round, the allocating agencies other than the agency shall
return all uncommitted and unallocated tax credits to the pool
from which they were allocated, along with copies of any
allocation or commitment. In the second round, the agency shall
allocate the remaining credits from the regional pools to
projects from the respective regions a unified pool for
allocation by the agency on a statewide basis.
(f) In the third round, all unallocated tax credits must be
transferred to a unified pool for allocation by the agency on a
statewide basis.
(g) Unused portions of the state ceiling for low-income
housing tax credits reserved to cities and counties for
allocation may be returned at any time to the agency for
allocation.
(h) (g) If an allocating agency determines, at any time
after the initial commitment or allocation for a specific
project, that a project is no longer eligible for all or a
portion of the low-income housing tax credits committed or
allocated to the project, the credits must be transferred to the
agency to be reallocated pursuant to the procedures established
in paragraphs (e) to (g); provided that if the tax credits for
which the project is no longer eligible are from the current
year's annual ceiling and the allocating agency maintains a
waiting list, the allocating agency may continue to commit or
allocate the credits until not later than October 1 the date of
applications for the final round, at which time any uncommitted
credits must be transferred to the agency.
Sec. 14. Minnesota Statutes 1998, section 462A.223,
subdivision 2, is amended to read:
Subd. 2. [DESIGNATED AGENCY.] The agency is designated as
a housing credit agency to allocate the portion of the state
ceiling for low-income housing tax credits (1) not reserved to
cities and counties under section 462A.222; (2) not accepted for
allocation by eligible cities and counties; (3) returned to the
agency for allocation; and (4) not otherwise reserved to the
agency for allocation under subdivision 1. Low-income housing
tax credits shall be allocated by the agency as provided in
section 462A.222. The agency shall make no allocation for
projects located within the jurisdiction of the cities or
counties that have received tax credits under section 462A.222,
subdivision 1, except from the percentage set-aside for projects
involving a qualified nonprofit organization as provided under
section 42 of the Internal Revenue Code of 1986, as amended
through December 31, 1989, until the amounts reserved to the
cities and counties for allocation have been allocated or
committed or returned to the agency for allocation. In order
that all of a project's credits are allocated by a single
allocating agency, the agency may reserve apportion additional
tax credits to a city or county that has received tax credits
under section 462A.222, subdivision 1, for a project that has
already received a commitment or allocation of tax credits from
an eligible city or county, if all of the tax credits reserved
to the eligible city or county have been committed or
allocated. A city or county that has received tax credits under
section 462A.222, subdivision 1, may apportion tax credits to
the agency for a project located within the jurisdiction of the
city or county.
Sec. 15. [EQUITY TAKE-OUT LOANS.]
(a) The agency may make equity take-out loans to owners of
federally assisted rental property who agree to participate in
the federal assistance program but extend the low-income
affordability restrictions on the housing for less than the
maximum term of the federal assistance contract if:
(1) fewer than 30 percent of the units in the rental
property are federally assisted; and
(2) the units, in the agency's judgment, are at risk of
conversion to market rate housing.
(b) This section expires August 1, 2001.
Sec. 16. [REPORT.]
The agency must report annually to the legislature on loans
made under Minnesota Statutes, section 462A.05, subdivision 14.
Sec. 17. [REPEALER.]
Minnesota Statutes 1998, section 462A.073, subdivision 3,
is repealed.
Sec. 18. [EFFECTIVE DATE.]
Sections 3, 4, 13, 14, and 17 are effective the day after
final enactment.
Presented to the governor May 21, 1999
Signed by the governor May 24, 1999, 9:55 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes