Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF1093 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to housing; creating various grant programs to fund municipal housing
3	3	1.3 projects and initiatives; creating an excise tax imposed on the sale of residential
4	4	1.4 property when the buyer is a corporate entity; increasing the maximum amount a
5	5	1.5 housing and redevelopment authority may levy; authorizing housing infrastructure
6	6	1.6 bonds to finance affordable housing to low-income households; authorizing the
7	7	1.7 issuance of additional housing infrastructure bonds; adding workforce housing as
8	8	1.8 an eligible project for housing and redevelopment authorities; creating standards
9	9	1.9 and procedures for municipal relocation assistance programs; modifying regulations
10	10	1.10 on revenue derived from tax increments in tax increment financing districts;
11	11	1.11 authorizing the sale and issuance of bonds; appropriating money; amending
12	12	1.12 Minnesota Statutes 2022, sections 462A.37, subdivisions 2, 5, by adding a
13	13	1.13 subdivision; 469.002, subdivision 12, by adding a subdivision; 469.033, subdivision
14	14	1.14 6; 469.1763, subdivision 2; proposing coding for new law in Minnesota Statutes,
15	15	1.15 chapters 116J; 462A; 471; proposing coding for new law as Minnesota Statutes,
16	16	1.16 chapter 287A.
17	17	1.17BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
18	18	1.18 Section 1. [116J.4315] GREATER MINNESOTA HOUSING INFRASTRUCTURE
19	19	1.19GRANT PROGRAM.
20	20	1.20 Subdivision 1.Grant program established.The commissioner may make grants to
21	21	1.21cities to provide up to 50 percent of the capital costs of public infrastructure necessary for
22	22	1.22an eligible workforce housing development project. The commissioner may make a grant
23	23	1.23award only after determining that nonstate resources are committed to complete the project.
24	24	1.24The nonstate contribution may be either cash or in kind. In-kind contributions may include
25	25	1.25the value of the site, whether the site is prepared before or after the law appropriating money
26	26	1.26for the grant is enacted.
27	27	1.27 Subd. 2.Definitions.(a) For the purposes of this section, the following terms have the
28	28	1.28meanings given.
29	29	1Section 1.
30	30	23-01482 as introduced01/06/23 REVISOR MS/NS
31	31	SENATE
32	32	STATE OF MINNESOTA
33	33	S.F. No. 1093NINETY-THIRD SESSION
34	34	(SENATE AUTHORS: PORT and Dziedzic)
35	35	OFFICIAL STATUSD-PGDATE
36	36	Introduction and first reading02/02/2023
37	37	Referred to Housing and Homelessness Prevention 2.1 (b) "City" means a statutory or home rule charter city located outside the metropolitan
38	38	2.2area, as defined in section 473.121, subdivision 2.
39	39	2.3 (c) "Housing infrastructure" means publicly owned physical infrastructure necessary to
40	40	2.4support housing development projects, including but not limited to sewers, water supply
41	41	2.5systems, utility extensions, streets, wastewater treatment systems, stormwater management
42	42	2.6systems, and facilities for pretreatment of wastewater to remove phosphorus.
43	43	2.7 Subd. 3.Eligible projects.Housing projects eligible for a grant under this section may
44	44	2.8be single-family or multifamily housing developments, and either owner-occupied or a
45	45	2.9rental.
46	46	2.10 Subd. 4.Application.(a) The commissioner must develop forms and procedures for
47	47	2.11soliciting and reviewing applications for grants under this section. At a minimum, a city
48	48	2.12must include in its application a resolution of the city council certifying that the required
49	49	2.13nonstate match is available. The commissioner must evaluate complete applications for
50	50	2.14funding for eligible projects to determine that:
51	51	2.15 (1) the project is necessary to increase sites available for housing development that will
52	52	2.16provide adequate housing stock for the current or future workforce; and
53	53	2.17 (2) the increase in workforce housing will result in substantial public and private capital
54	54	2.18investment in the city in which the project would be located.
55	55	2.19 (b) The determination of whether to make a grant for a site is within the discretion of
56	56	2.20the commissioner, subject to this section. The commissioner's decisions and application of
57	57	2.21the criteria are not subject to judicial review, except for abuse of discretion.
58	58	2.22 Subd. 5.Maximum grant amount.A city may receive no more than $30,000 per lot
59	59	2.23for single-family, duplex, triplex, or fourplex housing developed and no more than $60,000
60	60	2.24per lot for multifamily housing with more than four units per building. A city may receive
61	61	2.25no more than $500,000 in two years for one or more housing developments.
62	62	2.26 Subd. 6.Cancellation of grant; return of grant money.If, after five years, the
63	63	2.27commissioner determines that a project has not proceeded in a timely manner and is unlikely
64	64	2.28to be completed, the commissioner must cancel the grant and require the grantee to return
65	65	2.29all grant money awarded for that project.
66	66	2.30 Subd. 7.Appropriation.Grant money returned to the commissioner is appropriated to
67	67	2.31the commissioner to make additional grants under this section.
68	68	2.32 EFFECTIVE DATE.This section is effective the day following final enactment.
69	69	2Section 1.
70	70	23-01482 as introduced01/06/23 REVISOR MS/NS 3.1 Sec. 2. [287A.03] REAL ESTATE EXCISE TAX.
71	71	3.2 Subdivision 1.Imposition.(a) A tax is imposed on the sale of real property classified
72	72	3.3as class 1a under section 273.13, subdivision 22, when the buyer is a corporate entity. For
73	73	3.4the purposes of this section, "corporate entity" means any partnership, corporation, or limited
74	74	3.5liability company.
75	75	3.6 (b) Payment of the tax is due and payable immediately at the time of sale and must be
76	76	3.7collected with the taxes imposed under chapter 287. The tax is the obligation of the buyer.
77	77	3.8 Subd. 2.Rates.The tax imposed under subdivision 1 is at the following rates:
78	78	3.9 (1) ... percent of the portion of the selling price less than or equal to $200,000;
79	79	3.10 (2) ... percent of the portion of the selling price above $200,000 and less than or equal
80	80	3.11to $350,000;
81	81	3.12 (3) ... percent of the portion of the selling price above $350,000 and less than or equal
82	82	3.13to $500,000; and
83	83	3.14 (4) ... percent of the portion of the selling price above $500,000.
84	84	3.15 Subd. 3.Deposit of funds.(a) All taxes paid to the county treasurer must be apportioned,
85	85	3.16with 97 percent to the general fund of the state and three percent to the county revenue fund.
86	86	3.17 (b) On or before the 20th day of each month, the county treasurer shall determine and
87	87	3.18pay to the commissioner of revenue for deposit in the state treasury and credit to the general
88	88	3.19fund the state's portion of the receipts from this tax during the preceding month subject to
89	89	3.20the electronic payment requirements of section 270C.42. The county treasurer shall provide
90	90	3.21any related reports requested by the commissioner of revenue.
91	91	3.22 Subd. 4.Violations; civil penalties.(a) A buyer liable for the tax imposed by this section
92	92	3.23who fails to pay the full amount of tax owed, unless the failure is shown to be due to
93	93	3.24reasonable cause, is liable for a civil penalty of $....... or 100 percent of the tax for each
94	94	3.25failure, whichever is less.
95	95	3.26 (b) A person or entity who willfully attempts to evade or defeat the tax imposed under
96	96	3.27this section or the payment thereof is, in addition to the penalty provided in subdivision 1,
97	97	3.28liable for a penalty of 50 percent of the total amount of the underpayment of the tax.
98	98	3.29 Subd. 5.Exemptions.The following entities are exempt from the tax imposed under
99	99	3.30this section:
100	100	3.31 (1) a corporate entity that owns fewer than five class 1a nonhomesteaded residential
101	101	3.32properties;
102	102	3Sec. 2.
103	103	23-01482 as introduced01/06/23 REVISOR MS/NS 4.1 (2) a corporate entity that is a community land trust under section 462A.31; and
104	104	4.2 (3) a nonprofit corporation under chapter 317A.
105	105	4.3 EFFECTIVE DATE.This section is effective July 1, 2023.
106	106	4.4 Sec. 3. Minnesota Statutes 2022, section 462A.37, subdivision 2, is amended to read:
107	107	4.5 Subd. 2.Authorization.(a) The agency may issue up to $30,000,000 in aggregate
108	108	4.6principal amount of housing infrastructure bonds in one or more series to which the payment
109	109	4.7made under this section may be pledged. The housing infrastructure bonds authorized in
110	110	4.8this subdivision may be issued to fund loans, or grants for the purposes of clause (4), on
111	111	4.9terms and conditions the agency deems appropriate, made for one or more of the following
112	112	4.10purposes:
113	113	4.11 (1) to finance the costs of the construction, acquisition, and rehabilitation of supportive
114	114	4.12housing for individuals and families who are without a permanent residence;
115	115	4.13 (2) to finance the costs of the acquisition and rehabilitation of foreclosed or abandoned
116	116	4.14housing to be used for affordable rental housing and the costs of new construction of rental
117	117	4.15housing on abandoned or foreclosed property where the existing structures will be demolished
118	118	4.16or removed;
119	119	4.17 (3) to finance that portion of the costs of acquisition of property that is attributable to
120	120	4.18the land to be leased by community land trusts to low- and moderate-income home buyers;
121	121	4.19 (4) to finance the acquisition, improvement, and infrastructure of manufactured home
122	122	4.20parks under section 462A.2035, subdivision 1b;
123	123	4.21 (5) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
124	124	4.22of senior housing;
125	125	4.23 (6) to finance the costs of acquisition and rehabilitation of federally assisted rental
126	126	4.24housing and for the refinancing of costs of the construction, acquisition, and rehabilitation
127	127	4.25of federally assisted rental housing, including providing funds to refund, in whole or in part,
128	128	4.26outstanding bonds previously issued by the agency or another government unit to finance
129	129	4.27or refinance such costs; and
130	130	4.28 (7) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
131	131	4.29of single-family housing.; and
132	132	4.30 (8) to finance the costs of construction, acquisition, and rehabilitation of permanent
133	133	4.31housing that is affordable to households with incomes at or below 50 percent of the area
134	134	4.32median income. For purposes of this section, "area median income" means the area median
135	135	4Sec. 3.
136	136	23-01482 as introduced01/06/23 REVISOR MS/NS 5.1income for the applicable county or metropolitan area as published by the United States
137	137	5.2Department of Housing and Urban Development, as adjusted for household size.
138	138	5.3 (b) Among comparable proposals for permanent supportive housing, preference shall
139	139	5.4be given to permanent supportive housing for veterans and other individuals or families
140	140	5.5who:
141	141	5.6 (1) either have been without a permanent residence for at least 12 months or at least four
142	142	5.7times in the last three years; or
143	143	5.8 (2) are at significant risk of lacking a permanent residence for 12 months or at least four
144	144	5.9times in the last three years.
145	145	5.10 (c) Among comparable proposals for senior housing, the agency must give priority to
146	146	5.11requests for projects that:
147	147	5.12 (1) demonstrate a commitment to maintaining the housing financed as affordable to
148	148	5.13seniors;
149	149	5.14 (2) leverage other sources of funding to finance the project, including the use of
150	150	5.15low-income housing tax credits;
151	151	5.16 (3) provide access to services to residents and demonstrate the ability to increase physical
152	152	5.17supports and support services as residents age and experience increasing levels of disability;
153	153	5.18 (4) provide a service plan containing the elements of clause (3) reviewed by the housing
154	154	5.19authority, economic development authority, public housing authority, or community
155	155	5.20development agency that has an area of operation for the jurisdiction in which the project
156	156	5.21is located; and
157	157	5.22 (5) include households with incomes that do not exceed 30 percent of the median
158	158	5.23household income for the metropolitan area.
159	159	5.24 (d) Of comparable proposals for permanent housing, the agency must give preference
160	160	5.25to projects that will provide housing that is affordable to households at or below 30 percent
161	161	5.26of the area median income.
162	162	5.27 (e) To the extent practicable, the agency shall balance the loans made between projects
163	163	5.28in the metropolitan area and projects outside the metropolitan area. Of the loans made to
164	164	5.29projects outside the metropolitan area, the agency shall, to the extent practicable, balance
165	165	5.30the loans made between projects in counties or cities with a population of 20,000 or less,
166	166	5.31as established by the most recent decennial census, and projects in counties or cities with
167	167	5.32populations in excess of 20,000.
168	168	5Sec. 3.
169	169	23-01482 as introduced01/06/23 REVISOR MS/NS 6.1 EFFECTIVE DATE.This section is effective the day following final enactment.
170	170	6.2 Sec. 4. Minnesota Statutes 2022, section 462A.37, is amended by adding a subdivision to
171	171	6.3read:
172	172	6.4 Subd. 2i.Additional authorization.In addition to the amounts authorized in subdivisions
173	173	6.52 to 2h, the agency may issue up to $400,000,000 in housing infrastructure bonds in one or
174	174	6.6more series to which the payments under this section may be pledged.
175	175	6.7 EFFECTIVE DATE.This section is effective the day following final enactment.
176	176	6.8 Sec. 5. Minnesota Statutes 2022, section 462A.37, subdivision 5, is amended to read:
177	177	6.9 Subd. 5.Additional appropriation.(a) The agency must certify annually to the
178	178	6.10commissioner of management and budget the actual amount of annual debt service on each
179	179	6.11series of bonds issued under this section.
180	180	6.12 (b) Each July 15, beginning in 2015 and through 2037, if any housing infrastructure
181	181	6.13bonds issued under subdivision 2a remain outstanding, the commissioner of management
182	182	6.14and budget must transfer to the housing infrastructure bond account established under section
183	183	6.15462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $6,400,000
184	184	6.16annually. The amounts necessary to make the transfers are appropriated from the general
185	185	6.17fund to the commissioner of management and budget.
186	186	6.18 (c) Each July 15, beginning in 2017 and through 2038, if any housing infrastructure
187	187	6.19bonds issued under subdivision 2b remain outstanding, the commissioner of management
188	188	6.20and budget must transfer to the housing infrastructure bond account established under section
189	189	6.21462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $800,000
190	190	6.22annually. The amounts necessary to make the transfers are appropriated from the general
191	191	6.23fund to the commissioner of management and budget.
192	192	6.24 (d) Each July 15, beginning in 2019 and through 2040, if any housing infrastructure
193	193	6.25bonds issued under subdivision 2c remain outstanding, the commissioner of management
194	194	6.26and budget must transfer to the housing infrastructure bond account established under section
195	195	6.27462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $2,800,000
196	196	6.28annually. The amounts necessary to make the transfers are appropriated from the general
197	197	6.29fund to the commissioner of management and budget.
198	198	6.30 (e) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure
199	199	6.31bonds issued under subdivision 2d remain outstanding, the commissioner of management
200	200	6.32and budget must transfer to the housing infrastructure bond account established under section
201	201	6Sec. 5.
202	202	23-01482 as introduced01/06/23 REVISOR MS/NS 7.1462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
203	203	7.2to make the transfers are appropriated from the general fund to the commissioner of
204	204	7.3management and budget.
205	205	7.4 (f) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure
206	206	7.5bonds issued under subdivision 2e remain outstanding, the commissioner of management
207	207	7.6and budget must transfer to the housing infrastructure bond account established under section
208	208	7.7462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
209	209	7.8to make the transfers are appropriated from the general fund to the commissioner of
210	210	7.9management and budget.
211	211	7.10 (g) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure
212	212	7.11bonds issued under subdivision 2f remain outstanding, the commissioner of management
213	213	7.12and budget must transfer to the housing infrastructure bond account established under section
214	214	7.13462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
215	215	7.14to make the transfers are appropriated from the general fund to the commissioner of
216	216	7.15management and budget.
217	217	7.16 (h) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure
218	218	7.17bonds issued under subdivision 2g remain outstanding, the commissioner of management
219	219	7.18and budget must transfer to the housing infrastructure bond account established under section
220	220	7.19462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
221	221	7.20to make the transfers are appropriated from the general fund to the commissioner of
222	222	7.21management and budget.
223	223	7.22 (i) Each July 15, beginning in 2023 and through 2044, if any housing infrastructure
224	224	7.23bonds issued under subdivision 2h remain outstanding, the commissioner of management
225	225	7.24and budget must transfer to the housing infrastructure bond account established under section
226	226	7.25462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
227	227	7.26to make the transfers are appropriated from the general fund to the commissioner of
228	228	7.27management and budget.
229	229	7.28 (j) Each July 15, beginning in 2024 and through 2045, if any housing infrastructure
230	230	7.29bonds issued under subdivision 2i remain outstanding, the commissioner of management
231	231	7.30and budget must transfer to the housing infrastructure bond account established under section
232	232	7.31462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary
233	233	7.32to make the transfers are appropriated from the general fund to the commissioner of
234	234	7.33management and budget.
235	235	7Sec. 5.
236	236	23-01482 as introduced01/06/23 REVISOR MS/NS 8.1 (j) (k) The agency may pledge to the payment of the housing infrastructure bonds the
237	237	8.2payments to be made by the state under this section.
238	238	8.3 EFFECTIVE DATE.This section is effective the day following final enactment.
239	239	8.4 Sec. 6. [462A.41] HOUSING COST REDUCTION INCENTIVE PROGRAM.
240	240	8.5 Subdivision 1.Grant program established.The agency must establish and administer
241	241	8.6the housing cost reduction incentive program for the purpose of reimbursing cities for fee
242	242	8.7waivers or reductions provided to qualified multifamily housing developments and
243	243	8.8single-family, owner-occupied housing developments through local fee waiver and
244	244	8.9inclusionary housing programs.
245	245	8.10 Subd. 2.Definitions.(a) For the purposes of this section, the following terms have the
246	246	8.11meanings given.
247	247	8.12 (b) "Applicant" means any statutory or home rule charter city and any county.
248	248	8.13 (c) "Inclusionary housing program" means a program that requires at least ... percent of
249	249	8.14new construction to be affordable to households with incomes at or below 80 percent of the
250	250	8.15area median income for multifamily housing developments or 115 percent of the area median
251	251	8.16income for single-family, owner-occupied housing developments.
252	252	8.17 (d) "Local fee waiver program" means a program established by a statutory or home
253	253	8.18rule charter city that waives or reduces fees for developers of qualified multifamily housing
254	254	8.19developments and single-family, owner-occupied housing developments.
255	255	8.20 (e) "Multifamily housing development" has the meaning given in section 462C.02,
256	256	8.21subdivision 5, except that only new construction qualifies.
257	257	8.22 (f) "Program" means the housing cost reduction incentive program established in this
258	258	8.23section.
259	259	8.24 (g) "Single-family, owner-occupied housing" has the meaning given in section 462C.02,
260	260	8.25subdivision 4, except that only new construction qualifies.
261	261	8.26 Subd. 3.Application.(a) The agency must develop forms and procedures for soliciting
262	262	8.27and reviewing applications for grants under this section. An application of a city must
263	263	8.28include, at a minimum, information about the local fee waiver and inclusionary housing
264	264	8.29programs under which the city issued fee waivers or reductions.
265	265	8.30 (b) The agency must evaluate complete applications for funding for reimbursement for
266	266	8.31eligible fee waivers or reductions to determine whether the fee waiver or reduction is
267	267	8Sec. 6.
268	268	23-01482 as introduced01/06/23 REVISOR MS/NS 9.1necessary to increase the number of multifamily housing developments and single-family,
269	269	9.2owner-occupied housing developments within the applicant's boundaries.
270	270	9.3 (c) The determination of whether to award a grant for reimbursement of fee waivers or
271	271	9.4reductions is within the discretion of the agency, subject to this section. The agency's decision
272	272	9.5and application of the criteria are not subject to judicial review, except for abuse of discretion.
273	273	9.6 Subd. 4.Grant amount.The commissioner may award grants to applicants in an amount
274	274	9.7up to 50 percent of the amount of the development impact fee waived or reduced by a city
275	275	9.8for a qualified rental housing development. A city may receive no more than $....... per
276	276	9.9multifamily housing development or single-family, owner-occupied housing.
277	277	9.10 Sec. 7. Minnesota Statutes 2022, section 469.002, subdivision 12, is amended to read:
278	278	9.11 Subd. 12.Project."Project" means a housing project, a housing development project,
279	279	9.12a workforce housing project, or a redevelopment project, or any combination of those
280	280	9.13projects. The term "project" also may be applied to all real and personal property, assets,
281	281	9.14cash, or other funds, held or used in connection with the development or operation of the
282	282	9.15project. The term "project" also includes an interest reduction program authorized by section
283	283	9.16469.012, subdivision 7.
284	284	9.17 Sec. 8. Minnesota Statutes 2022, section 469.002, is amended by adding a subdivision to
285	285	9.18read:
286	286	9.19 Subd. 25.Workforce housing project.(a) "Workforce housing project" means any
287	287	9.20work or undertaking by an authority located in an eligible project area to develop market
288	288	9.21rate residential rental properties, as defined in section 462A.39, subdivision 2, paragraph
289	289	9.22(d), or single-family housing, as defined under section 462C.02, subdivision 4.
290	290	9.23 (b) For the purposes of this paragraph, "eligible project area" means an area that meets
291	291	9.24the criteria under section 462A.39, subdivisions 2, paragraph (b), and 4, paragraph (a).
292	292	9.25 Sec. 9. Minnesota Statutes 2022, section 469.033, subdivision 6, is amended to read:
293	293	9.26 Subd. 6.Operation area as taxing district, special tax.All of the territory included
294	294	9.27within the area of operation of any authority shall constitute a taxing district for the purpose
295	295	9.28of levying and collecting special benefit taxes as provided in this subdivision. All of the
296	296	9.29taxable property, both real and personal, within that taxing district shall be deemed to be
297	297	9.30benefited by projects to the extent of the special taxes levied under this subdivision. Subject
298	298	9.31to the consent by resolution of the governing body of the city in and for which it was created,
299	299	9.32an authority may levy a tax upon all taxable property within that taxing district. The tax
300	300	9Sec. 9.
301	301	23-01482 as introduced01/06/23 REVISOR MS/NS 10.1shall be extended, spread, and included with and as a part of the general taxes for state,
302	302	10.2county, and municipal purposes by the county auditor, to be collected and enforced therewith,
303	303	10.3together with the penalty, interest, and costs. As the tax, including any penalties, interest,
304	304	10.4and costs, is collected by the county treasurer it shall be accumulated and kept in a separate
305	305	10.5fund to be known as the "housing and redevelopment project fund." The money in the fund
306	306	10.6shall be turned over to the authority at the same time and in the same manner that the tax
307	307	10.7collections for the city are turned over to the city, and shall be expended only for the purposes
308	308	10.8of sections 469.001 to 469.047. It shall be paid out upon vouchers signed by the chair of
309	309	10.9the authority or an authorized representative. The amount of the levy shall be an amount
310	310	10.10approved by the governing body of the city, but shall not exceed 0.0185 0.037 percent of
311	311	10.11estimated market value. The authority shall each year formulate and file a budget in
312	312	10.12accordance with the budget procedure of the city in the same manner as required of executive
313	313	10.13departments of the city or, if no budgets are required to be filed, by August 1. The amount
314	314	10.14of the tax levy for the following year shall be based on that budget.
315	315	10.15Sec. 10. Minnesota Statutes 2022, section 469.1763, subdivision 2, is amended to read:
316	316	10.16 Subd. 2.Expenditures outside district.(a) For each tax increment financing district,
317	317	10.17an amount equal to at least 75 percent of the total revenue derived from tax increments paid
318	318	10.18by properties in the district must be expended on activities in the district or to pay bonds,
319	319	10.19to the extent that the proceeds of the bonds were used to finance activities in the district or
320	320	10.20to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other
321	321	10.21than redevelopment districts for which the request for certification was made after June 30,
322	322	10.221995, the in-district percentage for purposes of the preceding sentence is 80 percent. Not
323	323	10.23more than 25 percent of the total revenue derived from tax increments paid by properties
324	324	10.24in the district may be expended, through a development fund or otherwise, on activities
325	325	10.25outside of the district but within the defined geographic area of the project except to pay,
326	326	10.26or secure payment of, debt service on credit enhanced bonds. For districts, other than
327	327	10.27redevelopment districts for which the request for certification was made after June 30, 1995,
328	328	10.28the pooling percentage for purposes of the preceding sentence is 20 percent. The revenues
329	329	10.29derived from tax increments paid by properties in the district that are expended on costs
330	330	10.30under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating
331	331	10.31the percentages that must be expended within and without the district.
332	332	10.32 (b) In the case of a housing district, a housing project, as defined in section 469.174,
333	333	10.33subdivision 11, is an activity in the district. The following are considered activities in the
334	334	10.34district:
335	335	10Sec. 10.
336	336	23-01482 as introduced01/06/23 REVISOR MS/NS 11.1 (1) a housing project, as defined in section 469.174, subdivision 11; and
337	337	11.2 (2) a transfer of increments to an affordable housing trust fund established pursuant to
338	338	11.3section 462C.16 for expenditures made in conformity with the political subdivision's
339	339	11.4ordinance and policy establishing the trust fund. Any transfers made pursuant to this clause
340	340	11.5are not subject to the annual reporting requirements imposed by section 469.175.
341	341	11.6 (c) All administrative expenses are for activities outside of the district, except that if the
342	342	11.7only expenses for activities outside of the district under this subdivision are for the purposes
343	343	11.8described in paragraph (d), administrative expenses will be considered as expenditures for
344	344	11.9activities in the district.
345	345	11.10 (d) The authority may elect, in the tax increment financing plan for the district, to increase
346	346	11.11by up to ten 25 percentage points the permitted amount of expenditures for activities located
347	347	11.12outside the geographic area of the district under paragraph (a). As permitted by section
348	348	11.13469.176, subdivision 4k, the expenditures, including the permitted expenditures under
349	349	11.14paragraph (a), need not be made within the geographic area of the project. Expenditures
350	350	11.15that meet the requirements of this paragraph are legally permitted expenditures of the district,
351	351	11.16notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. To qualify for the increase
352	352	11.17under this paragraph, the expenditures must:
353	353	11.18 (1) be used exclusively to assist housing that meets the requirement for a qualified
354	354	11.19low-income building, as that term is used in section 42 of the Internal Revenue Code; and
355	355	11.20 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of the
356	356	11.21Internal Revenue Code, less the amount of any credit allowed under section 42 of the Internal
357	357	11.22Revenue Code; and
358	358	11.23 (3) be used to:
359	359	11.24 (i) acquire and prepare the site of the housing;
360	360	11.25 (ii) acquire, construct, or rehabilitate the housing; or
361	361	11.26 (iii) make public improvements directly related to the housing; or
362	362	11.27 (4) be used to develop housing:
363	363	11.28 (i) if the market value of the housing does not exceed the lesser of:
364	364	11.29 (A) 150 percent of the average market value of single-family homes in that municipality;
365	365	11.30or
366	366	11.31 (B) $200,000 for municipalities located in the metropolitan area, as defined in section
367	367	11.32473.121, or $125,000 for all other municipalities; and
368	368	11Sec. 10.
369	369	23-01482 as introduced01/06/23 REVISOR MS/NS 12.1 (ii) if the expenditures are used to pay the cost of site acquisition, relocation, demolition
370	370	12.2of existing structures, site preparation, and pollution abatement on one or more parcels, if
371	371	12.3the parcel contains a residence containing one to four family dwelling units that has been
372	372	12.4vacant for six or more months and is in foreclosure as defined in section 325N.10, subdivision
373	373	12.57, but without regard to whether the residence is the owner's principal residence, and only
374	374	12.6after the redemption period has expired; or
375	375	12.7 (5) to assist owner-occupied housing that meets the requirements of section 469.1761,
376	376	12.8subdivision 2.
377	377	12.9 (e) The authority under paragraph (d), clause (4), expires on December 31, 2016.
378	378	12.10Increments may continue to be expended under this authority after that date, if they are used
379	379	12.11to pay bonds or binding contracts that would qualify under subdivision 3, paragraph (a), if
380	380	12.12December 31, 2016, is considered to be the last date of the five-year period after certification
381	381	12.13under that provision.
382	382	12.14 EFFECTIVE DATE.This section is effective the day following final enactment.
383	383	12.15Sec. 11. [471.9994] RELOCATION ASSISTANCE FOR AFFORDABLE HOUSING
384	384	12.16UNIT TENANTS.
385	385	12.17 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
386	386	12.18the meanings given.
387	387	12.19 (b) "Affordable housing unit" means a rental unit that rents for an amount that is
388	388	12.20affordable to households whose income at the time of initial occupancy does not exceed 50
389	389	12.21percent of the greater of area or state median income, adjusted for family size, as determined
390	390	12.22by the United States Department of Housing and Urban Development.
391	391	12.23 (c) "City" means a statutory or home rule charter city.
392	392	12.24 Subd. 2.Relocation assistance.(a) A city may by ordinance require a property owner
393	393	12.25to provide relocation assistance consistent with the provisions of Code of Federal Regulations,
394	394	12.26title 49, sections 24.201 to 24.209, to tenants of affordable housing units upon the:
395	395	12.27 (1) sale;
396	396	12.28 (2) demolition;
397	397	12.29 (3) substantial rehabilitation, whether due to code enforcement or any other reason; or
398	398	12.30 (4) change of use of the property in which the affordable housing units are located when
399	399	12.31the property owner changes the units in the property from affordable housing units to market
400	400	12.32rate units.
401	401	12Sec. 11.
402	402	23-01482 as introduced01/06/23 REVISOR MS/NS 13.1 (b) A city that adopts an ordinance under this subdivision must adopt policies, procedures,
403	403	13.2or regulations to implement the requirements of the ordinance. Such policies, procedures,
404	404	13.3or regulations must include provisions for an administrative hearing process to timely resolve
405	405	13.4disputes between tenants and property owners relating to relocation assistance or unlawful
406	406	13.5detainer actions during relocation. A party who feels aggrieved by a decision of an
407	407	13.6administrative hearing process may appeal within 15 days as provided for civil actions in
408	408	13.7district court.
409	409	13.8 Subd. 3.Notice of transfer of ownership.For property that includes an affordable
410	410	13.9housing unit, a city may by ordinance require an owner to provide a written notice of a
411	411	13.10transfer of ownership of the property to the tenant of each affordable housing unit.
412	412	13.11Sec. 12. APPROPRIATION; HOUSING COST REDUCTION INCENTIVE
413	413	13.12PROGRAM.
414	414	13.13 $....... in fiscal year 2024 is appropriated from the general fund to the commissioner of
415	415	13.14the Minnesota Housing Finance Agency for deposit in the housing development fund for
416	416	13.15grants to cities and counties under Minnesota Statutes, section 462A.41, for reimbursement
417	417	13.16of fee waivers or reductions to qualified housing developments. This is a onetime
418	418	13.17appropriation.
419	419	13.18Sec. 13. MINNESOTA HOUSING FINANCE AGENCY; CHALLENGE PROGRAM.
420	420	13.19 $22,425,000 in fiscal year 2024 is appropriated from the general fund to the commissioner
421	421	13.20of the Minnesota Housing Finance Agency for deposit in the housing development fund for
422	422	13.21the economic development and housing challenge program under Minnesota Statutes, section
423	423	13.22462A.33.
424	424	13.23 EFFECTIVE DATE.This section is effective July 1, 2023.
425	425	13.24Sec. 14. HOUSING INFRASTRUCTURE GRANT PROGRAM.
426	426	13.25 $2,500,000 in fiscal year 2024 is appropriated from the general fund to the commissioner
427	427	13.26of employment and economic development for grants under the greater Minnesota housing
428	428	13.27infrastructure grant program under Minnesota Statutes, section 116J.4315.
429	429	13.28 EFFECTIVE DATE.This section is effective the day following final enactment.
430	430	13Sec. 14.
431	431	23-01482 as introduced01/06/23 REVISOR MS/NS 14.1 Sec. 15. HOUSING FINANCE AGENCY; NOAH APPROPRIATION.
432	432	14.2 Subdivision 1.Naturally Occurring Affordable Housing; appropriation.$50,000,000
433	433	14.3in fiscal year 2024 is appropriated from the general fund to the commissioner of the
434	434	14.4Minnesota Housing Finance Agency: (1) to make loans or grants to owners of Naturally
435	435	14.5Occurring Affordable Housing (NOAH) preservation properties that have demonstrated
436	436	14.6experience and capacity in owning and operating quality and well-managed affordable
437	437	14.7housing; or (2) to make a grant to a statewide intermediary to make loans or grants for the
438	438	14.8same purposes. A loan or grant must be used to acquire and rehabilitate a NOAH property
439	439	14.9that the agency or the statewide intermediary determines is at risk of increased rents and
440	440	14.10that is occupied by tenants at risk of involuntary displacement. The agency must determine
441	441	14.11how much of the appropriation may be used for grants and how much may be used for loans.
442	442	14.12This appropriation is available until June 30, 2026.
443	443	14.13 Subd. 2.Requirements; terms.(a) A funding applicant must demonstrate that the
444	444	14.14applicant will have sufficient capital and capital reserves to improve and maintain the
445	445	14.15property for the term of the loan if funding is in the form of a loan, but in all cases for at
446	446	14.16least 15 years.
447	447	14.17 (b) A funding recipient must be contractually obligated by means of a deed restriction
448	448	14.18to maintain for at least 15 years one of the following three levels of affordability:
449	449	14.19 (1) at least 75 percent of the units must be at rents affordable to households with incomes
450	450	14.20at or less than 80 percent of the area median income, and at least 51 percent of units must
451	451	14.21be at rents affordable to households with incomes at or less than 60 percent of the area
452	452	14.22median income;
453	453	14.23 (2) at least 15 percent of the units or 15 units, whichever is fewer, must be at rents
454	454	14.24affordable to households with incomes at or less than 30 percent of the area median income,
455	455	14.25and at least 51 percent of the units must be at rents affordable to households with incomes
456	456	14.26at or less than 60 percent of the area median income; or
457	457	14.27 (3) at least 75 percent of the units must be at rents affordable to households with incomes
458	458	14.28at 50 percent or less of the area median income, and 100 percent of the units must be at
459	459	14.29rents affordable to households with incomes at or less than 80 percent of the area median
460	460	14.30income.
461	461	14.31 (c) A funding applicant must provide to the agency or statewide intermediary
462	462	14.32administering the grant and loan program the details of the total financing package.
463	463	14Sec. 15.
464	464	23-01482 as introduced01/06/23 REVISOR MS/NS 15.1 (d) Properties that receive funds must accept vouchers under section 8 of the United
465	465	15.2States Housing Act of 1937, as amended, if the subsidy payment standard is no more than
466	466	15.3five percent below marketplace rent levels.
467	467	15.4 (e) The agency or statewide intermediary may require other criteria and application
468	468	15.5information that will promote NOAH preservation.
469	469	15.6 (f) A loan or grant may be for up to 40 percent of the total acquisition cost of the NOAH
470	470	15.7property but no more than $50,000 per individual rental housing unit acquired.
471	471	15.8 (g) The agency, or the statewide intermediary making loans or grants under this section,
472	472	15.9may give priority to applications that reserve at least 15 units to provide homes for homeless
473	473	15.10households.
474	474	15.11 (h) A loan may have a term of up to 15 years at no- or low-interest rates at the discretion
475	475	15.12of the agency or statewide intermediary.
476	476	15.13 Subd. 3.Report.A recipient of a grant or loan under this section must report to the
477	477	15.14agency or statewide intermediary information required by the agency as a condition of the
478	478	15.15loan or grant.
479	479	15.16Sec. 16. PUBLIC HOUSING REHABILITATION.
480	480	15.17 Subdivision 1.Appropriation.$100,000,000 is appropriated from the bond proceeds
481	481	15.18fund to the commissioner of the Minnesota Housing Finance Agency for transfer to the
482	482	15.19housing development fund to finance the costs of rehabilitation to preserve public housing
483	483	15.20under Minnesota Statutes, section 462A.202, subdivision 3a. For the purposes of this section,
484	484	15.21"public housing" means housing for low-income persons and households financed by the
485	485	15.22federal government and publicly owned. The agency may give priority to proposals that
486	486	15.23maximize federal or local resources to finance the capital costs and requests that prioritize
487	487	15.24health, safety, and energy improvements. The priority in Minnesota Statutes, section
488	488	15.25462A.202, subdivision 3a, for projects to increase the supply of affordable housing and the
489	489	15.26restrictions of Minnesota Statutes, section 462A.202, subdivision 7, does not apply to this
490	490	15.27appropriation.
491	491	15.28 Subd. 2.Bond sale.To provide the money appropriated in this section from the bond
492	492	15.29proceeds fund, the commissioner of management and budget shall sell and issue bonds of
493	493	15.30the state in an amount up to $100,000,000 in the manner, upon the terms, and with the effect
494	494	15.31prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
495	495	15.32Constitution, article XI, sections 4 to 7.
496	496	15.33 EFFECTIVE DATE.This section is effective the day following final enactment.
497	497	15Sec. 16.
498	498	23-01482 as introduced01/06/23 REVISOR MS/NS 16.1 Sec. 17. LOCAL HOUSING TRUST FUND GRANTS.
499	499	16.2 (a) $10,000,000 in fiscal year 2024 is appropriated from the general fund to the
500	500	16.3commissioner of the Minnesota Housing Finance Agency for deposit in the housing
501	501	16.4development fund for grants to local housing trust funds established under Minnesota
502	502	16.5Statutes, section 462C.16, to incentivize local funding. This is a onetime appropriation.
503	503	16.6 (b) A grantee is eligible to receive a grant amount equal to 100 percent of the public
504	504	16.7revenue committed to the local housing trust fund from any source other than the state or
505	505	16.8federal government, up to $150,000, and, in addition, an amount equal to 50 percent of the
506	506	16.9public revenue committed to the local housing trust fund from any source other than the
507	507	16.10state or federal government that is more than $150,000 but not more than $300,000.
508	508	16.11 (c) $100,000 of this appropriation is for technical assistance grants to local and regional
509	509	16.12housing trust funds. A housing trust fund may apply for a technical assistance grant at the
510	510	16.13time and in the manner and form required by the agency. The agency shall make grants on
511	511	16.14a first-come, first-served basis. A technical assistance grant must not exceed $5,000.
512	512	16.15 (d) A grantee must use grant funds within eight years of receipt for purposes (1)
513	513	16.16authorized under Minnesota Statutes, section 462C.16, subdivision 3, and (2) benefiting
514	514	16.17households with incomes at or below 115 percent of the state median income. A grantee
515	515	16.18must return any grant funds not used for these purposes within eight years of receipt to the
516	516	16.19commissioner of the Minnesota Housing Finance Agency for deposit into the housing
517	517	16.20development fund.
518	518	16.21 EFFECTIVE DATE.This section is effective July 1, 2023.
519	519	16.22Sec. 18. APPROPRIATION; PILOT PROGRAM FOR HOUSING
520	520	16.23INFRASTRUCTURE GRANTS.
521	521	16.24 $5,000,000 in fiscal year 2024 is appropriated from the general fund to the commissioner
522	522	16.25of the Minnesota Housing Finance Agency for a pilot program to provide grants to
523	523	16.26municipalities for up to 50 percent of the costs of infrastructure that would otherwise be
524	524	16.27required to be paid by the developer for new housing developments. The grants shall be
525	525	16.28limited to 16 housing units in the municipality and a maximum of $12,000 per housing unit.
526	526	16.29This appropriation is onetime and is available until June 30, 2024.
527	527	16Sec. 18.
528	528	23-01482 as introduced01/06/23 REVISOR MS/NS