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Minnesota Legislature

Office of the Revisor of Statutes

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.