HF 1607

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/13/2017 06:04pm

A bill for an act
relating to housing; authorizing the creation of housing trust funds by local
governments; requiring reports; appropriating money; proposing coding for new
law in Minnesota Statutes, chapter 462C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

[462C.16] HOUSING TRUST FUNDS FOR LOCAL HOUSING
DEVELOPMENT.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have
the meanings given to them.

(b) "Commissioner" means the commissioner of the Minnesota Housing Finance Agency.

(c) "Fund" means a local housing trust fund or a regional housing trust fund.

(d) "Local government" means any statutory or home rule charter city or a county.

(e) "Local housing trust fund" means a fund established by a local government with one
or more dedicated sources of public revenue for housing.

(f) "Regional housing trust fund" means a fund established and administered under a
joint powers agreement entered into by two or more local governments with one or more
dedicated sources of public revenue for housing.

Subd. 2.

Creation and administration.

(a) A local government may establish a local
housing trust fund by ordinance or participate in a joint powers agreement to establish a
regional housing trust fund.

(b) A local or regional housing trust fund may be, but is not required to be, administered
through a nonprofit organization. If administered through a nonprofit organization, that
organization shall encourage private charitable donations to the fund.

Subd. 3.

Authorized expenditures.

Money in a local or regional housing trust fund may
be used only to:

(1) pay for administrative expenses, but not more than ten percent of the balance of the
fund may be spent on administration;

(2) make grants, loans, and loan guarantees for the development, rehabilitation, or
financing of housing;

(3) match other funds from federal, state, or private resources for housing projects; or

(4) provide down payment assistance, rental assistance, and homebuyer counseling
services.

Subd. 4.

Funding.

(a) A local government may finance its local or regional housing
trust fund with any money available to the local government, unless expressly prohibited
by state law. Sources of these funds include, but are not limited to:

(1) donations;

(2) bond proceeds;

(3) grants and loans from a state, federal, or private source;

(4) appropriations by a local government to the fund;

(5) investment earnings of the fund; and

(6) housing and redevelopment authority levies.

(b) The local government may alter a source of funding for the local or regional housing
trust fund, but only if, once altered, sufficient funds will exist to cover the projected debts
or expenditures authorized by the fund in its budget.

Subd. 5.

Matching contributions.

(a) In fiscal year 2018 and fiscal year 2019 only, if
a local or regional housing trust fund receives funds from a housing and redevelopment
authority levy or special tax pursuant to sections 469.001 to 469.047 or section 469.033,
subdivision 6, at the end of the fiscal year, the commissioner must transfer to the trust:

(1) 100 percent of the amount not exceeding $100,000 that the trust receives in a fiscal
year under this paragraph; and

(2) 50 percent of the amount over $100,000 and not exceeding $500,000 that the trust
receives in a fiscal year under this paragraph.

(b) Matching contributions from the state under this subdivision must be expended on
authorized expenditures listed in subdivision 3 within eight years of being collected and
may only be used for activities serving individuals and households with incomes at or below
115 percent of the state median income. Amounts not expended within this time period
must be transferred to the Minnesota Housing Finance Agency.

Subd. 6.

Reports.

(a) A local or regional housing trust fund established under this section
must report annually to the local government that created the fund. The local government
or governments must post this report on its public Web site.

(b) A local or regional housing trust fund that receives matching contributions under
subdivision 5, paragraph (a), must report annually to the commissioner its compliance with
the income restrictions in subdivision 5, paragraph (b).

Subd. 7.

Effect of legislation on existing local or regional housing trust funds.

A
local or regional housing trust fund existing on the effective date of this section is not
required to alter the existing terms of its governing documents or take any additional
authorizing actions required by subdivision 2.

Sec. 2. APPROPRIATION.

$1,000,000 in fiscal year 2018 and $1,000,000 in fiscal year 2019 are appropriated from
the general fund to the commissioner of the Minnesota Housing Finance Agency for transfers
required under Minnesota Statutes, section 462C.16, subdivision 5. If the amount appropriated
under this section is not sufficient to make all of the required transfers, the commissioner
must proportionately reduce the amount transferred to each fund. This is a onetime
appropriation.