Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF1093 Compare Versions

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11 1.1 A bill for an act​
22 1.2 relating to housing; creating various grant programs to fund municipal housing​
33 1.3 projects and initiatives; creating an excise tax imposed on the sale of residential​
44 1.4 property when the buyer is a corporate entity; increasing the maximum amount a​
55 1.5 housing and redevelopment authority may levy; authorizing housing infrastructure​
66 1.6 bonds to finance affordable housing to low-income households; authorizing the​
77 1.7 issuance of additional housing infrastructure bonds; adding workforce housing as​
88 1.8 an eligible project for housing and redevelopment authorities; creating standards​
99 1.9 and procedures for municipal relocation assistance programs; modifying regulations​
1010 1.10 on revenue derived from tax increments in tax increment financing districts;​
1111 1.11 authorizing the sale and issuance of bonds; appropriating money; amending​
1212 1.12 Minnesota Statutes 2022, sections 462A.37, subdivisions 2, 5, by adding a​
1313 1.13 subdivision; 469.002, subdivision 12, by adding a subdivision; 469.033, subdivision​
1414 1.14 6; 469.1763, subdivision 2; proposing coding for new law in Minnesota Statutes,​
1515 1.15 chapters 116J; 462A; 471; proposing coding for new law as Minnesota Statutes,​
1616 1.16 chapter 287A.​
1717 1.17BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:​
1818 1.18 Section 1. [116J.4315] GREATER MINNESOTA HOUSING INFRASTRUCTURE​
1919 1.19GRANT PROGRAM.​
2020 1.20 Subdivision 1.Grant program established.The commissioner may make grants to​
2121 1.21cities to provide up to 50 percent of the capital costs of public infrastructure necessary for​
2222 1.22an eligible workforce housing development project. The commissioner may make a grant​
2323 1.23award only after determining that nonstate resources are committed to complete the project.​
2424 1.24The nonstate contribution may be either cash or in kind. In-kind contributions may include​
2525 1.25the value of the site, whether the site is prepared before or after the law appropriating money​
2626 1.26for the grant is enacted.​
2727 1.27 Subd. 2.Definitions.(a) For the purposes of this section, the following terms have the​
2828 1.28meanings given.​
2929 1​Section 1.​
3030 23-01482 as introduced​01/06/23 REVISOR MS/NS​
3131 SENATE​
3232 STATE OF MINNESOTA​
3333 S.F. No. 1093​NINETY-THIRD SESSION​
3434 (SENATE AUTHORS: PORT and Dziedzic)​
3535 OFFICIAL STATUS​D-PG​DATE​
3636 Introduction and first reading​02/02/2023​
3737 Referred to Housing and Homelessness Prevention​ 2.1 (b) "City" means a statutory or home rule charter city located outside the metropolitan​
3838 2.2area, as defined in section 473.121, subdivision 2.​
3939 2.3 (c) "Housing infrastructure" means publicly owned physical infrastructure necessary to​
4040 2.4support housing development projects, including but not limited to sewers, water supply​
4141 2.5systems, utility extensions, streets, wastewater treatment systems, stormwater management​
4242 2.6systems, and facilities for pretreatment of wastewater to remove phosphorus.​
4343 2.7 Subd. 3.Eligible projects.Housing projects eligible for a grant under this section may​
4444 2.8be single-family or multifamily housing developments, and either owner-occupied or a​
4545 2.9rental.​
4646 2.10 Subd. 4.Application.(a) The commissioner must develop forms and procedures for​
4747 2.11soliciting and reviewing applications for grants under this section. At a minimum, a city​
4848 2.12must include in its application a resolution of the city council certifying that the required​
4949 2.13nonstate match is available. The commissioner must evaluate complete applications for​
5050 2.14funding for eligible projects to determine that:​
5151 2.15 (1) the project is necessary to increase sites available for housing development that will​
5252 2.16provide adequate housing stock for the current or future workforce; and​
5353 2.17 (2) the increase in workforce housing will result in substantial public and private capital​
5454 2.18investment in the city in which the project would be located.​
5555 2.19 (b) The determination of whether to make a grant for a site is within the discretion of​
5656 2.20the commissioner, subject to this section. The commissioner's decisions and application of​
5757 2.21the criteria are not subject to judicial review, except for abuse of discretion.​
5858 2.22 Subd. 5.Maximum grant amount.A city may receive no more than $30,000 per lot​
5959 2.23for single-family, duplex, triplex, or fourplex housing developed and no more than $60,000​
6060 2.24per lot for multifamily housing with more than four units per building. A city may receive​
6161 2.25no more than $500,000 in two years for one or more housing developments.​
6262 2.26 Subd. 6.Cancellation of grant; return of grant money.If, after five years, the​
6363 2.27commissioner determines that a project has not proceeded in a timely manner and is unlikely​
6464 2.28to be completed, the commissioner must cancel the grant and require the grantee to return​
6565 2.29all grant money awarded for that project.​
6666 2.30 Subd. 7.Appropriation.Grant money returned to the commissioner is appropriated to​
6767 2.31the commissioner to make additional grants under this section.​
6868 2.32 EFFECTIVE DATE.This section is effective the day following final enactment.​
6969 2​Section 1.​
7070 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 3.1 Sec. 2. [287A.03] REAL ESTATE EXCISE TAX.​
7171 3.2 Subdivision 1.Imposition.(a) A tax is imposed on the sale of real property classified​
7272 3.3as class 1a under section 273.13, subdivision 22, when the buyer is a corporate entity. For​
7373 3.4the purposes of this section, "corporate entity" means any partnership, corporation, or limited​
7474 3.5liability company.​
7575 3.6 (b) Payment of the tax is due and payable immediately at the time of sale and must be​
7676 3.7collected with the taxes imposed under chapter 287. The tax is the obligation of the buyer.​
7777 3.8 Subd. 2.Rates.The tax imposed under subdivision 1 is at the following rates:​
7878 3.9 (1) ... percent of the portion of the selling price less than or equal to $200,000;​
7979 3.10 (2) ... percent of the portion of the selling price above $200,000 and less than or equal​
8080 3.11to $350,000;​
8181 3.12 (3) ... percent of the portion of the selling price above $350,000 and less than or equal​
8282 3.13to $500,000; and​
8383 3.14 (4) ... percent of the portion of the selling price above $500,000.​
8484 3.15 Subd. 3.Deposit of funds.(a) All taxes paid to the county treasurer must be apportioned,​
8585 3.16with 97 percent to the general fund of the state and three percent to the county revenue fund.​
8686 3.17 (b) On or before the 20th day of each month, the county treasurer shall determine and​
8787 3.18pay to the commissioner of revenue for deposit in the state treasury and credit to the general​
8888 3.19fund the state's portion of the receipts from this tax during the preceding month subject to​
8989 3.20the electronic payment requirements of section 270C.42. The county treasurer shall provide​
9090 3.21any related reports requested by the commissioner of revenue.​
9191 3.22 Subd. 4.Violations; civil penalties.(a) A buyer liable for the tax imposed by this section​
9292 3.23who fails to pay the full amount of tax owed, unless the failure is shown to be due to​
9393 3.24reasonable cause, is liable for a civil penalty of $....... or 100 percent of the tax for each​
9494 3.25failure, whichever is less.​
9595 3.26 (b) A person or entity who willfully attempts to evade or defeat the tax imposed under​
9696 3.27this section or the payment thereof is, in addition to the penalty provided in subdivision 1,​
9797 3.28liable for a penalty of 50 percent of the total amount of the underpayment of the tax.​
9898 3.29 Subd. 5.Exemptions.The following entities are exempt from the tax imposed under​
9999 3.30this section:​
100100 3.31 (1) a corporate entity that owns fewer than five class 1a nonhomesteaded residential​
101101 3.32properties;​
102102 3​Sec. 2.​
103103 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 4.1 (2) a corporate entity that is a community land trust under section 462A.31; and​
104104 4.2 (3) a nonprofit corporation under chapter 317A.​
105105 4.3 EFFECTIVE DATE.This section is effective July 1, 2023.​
106106 4.4 Sec. 3. Minnesota Statutes 2022, section 462A.37, subdivision 2, is amended to read:​
107107 4.5 Subd. 2.Authorization.(a) The agency may issue up to $30,000,000 in aggregate​
108108 4.6principal amount of housing infrastructure bonds in one or more series to which the payment​
109109 4.7made under this section may be pledged. The housing infrastructure bonds authorized in​
110110 4.8this subdivision may be issued to fund loans, or grants for the purposes of clause (4), on​
111111 4.9terms and conditions the agency deems appropriate, made for one or more of the following​
112112 4.10purposes:​
113113 4.11 (1) to finance the costs of the construction, acquisition, and rehabilitation of supportive​
114114 4.12housing for individuals and families who are without a permanent residence;​
115115 4.13 (2) to finance the costs of the acquisition and rehabilitation of foreclosed or abandoned​
116116 4.14housing to be used for affordable rental housing and the costs of new construction of rental​
117117 4.15housing on abandoned or foreclosed property where the existing structures will be demolished​
118118 4.16or removed;​
119119 4.17 (3) to finance that portion of the costs of acquisition of property that is attributable to​
120120 4.18the land to be leased by community land trusts to low- and moderate-income home buyers;​
121121 4.19 (4) to finance the acquisition, improvement, and infrastructure of manufactured home​
122122 4.20parks under section 462A.2035, subdivision 1b;​
123123 4.21 (5) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction​
124124 4.22of senior housing;​
125125 4.23 (6) to finance the costs of acquisition and rehabilitation of federally assisted rental​
126126 4.24housing and for the refinancing of costs of the construction, acquisition, and rehabilitation​
127127 4.25of federally assisted rental housing, including providing funds to refund, in whole or in part,​
128128 4.26outstanding bonds previously issued by the agency or another government unit to finance​
129129 4.27or refinance such costs; and​
130130 4.28 (7) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction​
131131 4.29of single-family housing.; and​
132132 4.30 (8) to finance the costs of construction, acquisition, and rehabilitation of permanent​
133133 4.31housing that is affordable to households with incomes at or below 50 percent of the area​
134134 4.32median income. For purposes of this section, "area median income" means the area median​
135135 4​Sec. 3.​
136136 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 5.1income for the applicable county or metropolitan area as published by the United States​
137137 5.2Department of Housing and Urban Development, as adjusted for household size.​
138138 5.3 (b) Among comparable proposals for permanent supportive housing, preference shall​
139139 5.4be given to permanent supportive housing for veterans and other individuals or families​
140140 5.5who:​
141141 5.6 (1) either have been without a permanent residence for at least 12 months or at least four​
142142 5.7times in the last three years; or​
143143 5.8 (2) are at significant risk of lacking a permanent residence for 12 months or at least four​
144144 5.9times in the last three years.​
145145 5.10 (c) Among comparable proposals for senior housing, the agency must give priority to​
146146 5.11requests for projects that:​
147147 5.12 (1) demonstrate a commitment to maintaining the housing financed as affordable to​
148148 5.13seniors;​
149149 5.14 (2) leverage other sources of funding to finance the project, including the use of​
150150 5.15low-income housing tax credits;​
151151 5.16 (3) provide access to services to residents and demonstrate the ability to increase physical​
152152 5.17supports and support services as residents age and experience increasing levels of disability;​
153153 5.18 (4) provide a service plan containing the elements of clause (3) reviewed by the housing​
154154 5.19authority, economic development authority, public housing authority, or community​
155155 5.20development agency that has an area of operation for the jurisdiction in which the project​
156156 5.21is located; and​
157157 5.22 (5) include households with incomes that do not exceed 30 percent of the median​
158158 5.23household income for the metropolitan area.​
159159 5.24 (d) Of comparable proposals for permanent housing, the agency must give preference​
160160 5.25to projects that will provide housing that is affordable to households at or below 30 percent​
161161 5.26of the area median income.​
162162 5.27 (e) To the extent practicable, the agency shall balance the loans made between projects​
163163 5.28in the metropolitan area and projects outside the metropolitan area. Of the loans made to​
164164 5.29projects outside the metropolitan area, the agency shall, to the extent practicable, balance​
165165 5.30the loans made between projects in counties or cities with a population of 20,000 or less,​
166166 5.31as established by the most recent decennial census, and projects in counties or cities with​
167167 5.32populations in excess of 20,000.​
168168 5​Sec. 3.​
169169 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 6.1 EFFECTIVE DATE.This section is effective the day following final enactment.​
170170 6.2 Sec. 4. Minnesota Statutes 2022, section 462A.37, is amended by adding a subdivision to​
171171 6.3read:​
172172 6.4 Subd. 2i.Additional authorization.In addition to the amounts authorized in subdivisions​
173173 6.52 to 2h, the agency may issue up to $400,000,000 in housing infrastructure bonds in one or​
174174 6.6more series to which the payments under this section may be pledged.​
175175 6.7 EFFECTIVE DATE.This section is effective the day following final enactment.​
176176 6.8 Sec. 5. Minnesota Statutes 2022, section 462A.37, subdivision 5, is amended to read:​
177177 6.9 Subd. 5.Additional appropriation.(a) The agency must certify annually to the​
178178 6.10commissioner of management and budget the actual amount of annual debt service on each​
179179 6.11series of bonds issued under this section.​
180180 6.12 (b) Each July 15, beginning in 2015 and through 2037, if any housing infrastructure​
181181 6.13bonds issued under subdivision 2a remain outstanding, the commissioner of management​
182182 6.14and budget must transfer to the housing infrastructure bond account established under section​
183183 6.15462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $6,400,000​
184184 6.16annually. The amounts necessary to make the transfers are appropriated from the general​
185185 6.17fund to the commissioner of management and budget.​
186186 6.18 (c) Each July 15, beginning in 2017 and through 2038, if any housing infrastructure​
187187 6.19bonds issued under subdivision 2b remain outstanding, the commissioner of management​
188188 6.20and budget must transfer to the housing infrastructure bond account established under section​
189189 6.21462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $800,000​
190190 6.22annually. The amounts necessary to make the transfers are appropriated from the general​
191191 6.23fund to the commissioner of management and budget.​
192192 6.24 (d) Each July 15, beginning in 2019 and through 2040, if any housing infrastructure​
193193 6.25bonds issued under subdivision 2c remain outstanding, the commissioner of management​
194194 6.26and budget must transfer to the housing infrastructure bond account established under section​
195195 6.27462A.21, subdivision 33, the amount certified under paragraph (a), not to exceed $2,800,000​
196196 6.28annually. The amounts necessary to make the transfers are appropriated from the general​
197197 6.29fund to the commissioner of management and budget.​
198198 6.30 (e) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure​
199199 6.31bonds issued under subdivision 2d remain outstanding, the commissioner of management​
200200 6.32and budget must transfer to the housing infrastructure bond account established under section​
201201 6​Sec. 5.​
202202 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 7.1462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
203203 7.2to make the transfers are appropriated from the general fund to the commissioner of​
204204 7.3management and budget.​
205205 7.4 (f) Each July 15, beginning in 2020 and through 2041, if any housing infrastructure​
206206 7.5bonds issued under subdivision 2e remain outstanding, the commissioner of management​
207207 7.6and budget must transfer to the housing infrastructure bond account established under section​
208208 7.7462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
209209 7.8to make the transfers are appropriated from the general fund to the commissioner of​
210210 7.9management and budget.​
211211 7.10 (g) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure​
212212 7.11bonds issued under subdivision 2f remain outstanding, the commissioner of management​
213213 7.12and budget must transfer to the housing infrastructure bond account established under section​
214214 7.13462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
215215 7.14to make the transfers are appropriated from the general fund to the commissioner of​
216216 7.15management and budget.​
217217 7.16 (h) Each July 15, beginning in 2022 and through 2043, if any housing infrastructure​
218218 7.17bonds issued under subdivision 2g remain outstanding, the commissioner of management​
219219 7.18and budget must transfer to the housing infrastructure bond account established under section​
220220 7.19462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
221221 7.20to make the transfers are appropriated from the general fund to the commissioner of​
222222 7.21management and budget.​
223223 7.22 (i) Each July 15, beginning in 2023 and through 2044, if any housing infrastructure​
224224 7.23bonds issued under subdivision 2h remain outstanding, the commissioner of management​
225225 7.24and budget must transfer to the housing infrastructure bond account established under section​
226226 7.25462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
227227 7.26to make the transfers are appropriated from the general fund to the commissioner of​
228228 7.27management and budget.​
229229 7.28 (j) Each July 15, beginning in 2024 and through 2045, if any housing infrastructure​
230230 7.29bonds issued under subdivision 2i remain outstanding, the commissioner of management​
231231 7.30and budget must transfer to the housing infrastructure bond account established under section​
232232 7.31462A.21, subdivision 33, the amount certified under paragraph (a). The amounts necessary​
233233 7.32to make the transfers are appropriated from the general fund to the commissioner of​
234234 7.33management and budget.​
235235 7​Sec. 5.​
236236 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 8.1 (j) (k) The agency may pledge to the payment of the housing infrastructure bonds the​
237237 8.2payments to be made by the state under this section.​
238238 8.3 EFFECTIVE DATE.This section is effective the day following final enactment.​
239239 8.4 Sec. 6. [462A.41] HOUSING COST REDUCTION INCENTIVE PROGRAM.​
240240 8.5 Subdivision 1.Grant program established.The agency must establish and administer​
241241 8.6the housing cost reduction incentive program for the purpose of reimbursing cities for fee​
242242 8.7waivers or reductions provided to qualified multifamily housing developments and​
243243 8.8single-family, owner-occupied housing developments through local fee waiver and​
244244 8.9inclusionary housing programs.​
245245 8.10 Subd. 2.Definitions.(a) For the purposes of this section, the following terms have the​
246246 8.11meanings given.​
247247 8.12 (b) "Applicant" means any statutory or home rule charter city and any county.​
248248 8.13 (c) "Inclusionary housing program" means a program that requires at least ... percent of​
249249 8.14new construction to be affordable to households with incomes at or below 80 percent of the​
250250 8.15area median income for multifamily housing developments or 115 percent of the area median​
251251 8.16income for single-family, owner-occupied housing developments.​
252252 8.17 (d) "Local fee waiver program" means a program established by a statutory or home​
253253 8.18rule charter city that waives or reduces fees for developers of qualified multifamily housing​
254254 8.19developments and single-family, owner-occupied housing developments.​
255255 8.20 (e) "Multifamily housing development" has the meaning given in section 462C.02,​
256256 8.21subdivision 5, except that only new construction qualifies.​
257257 8.22 (f) "Program" means the housing cost reduction incentive program established in this​
258258 8.23section.​
259259 8.24 (g) "Single-family, owner-occupied housing" has the meaning given in section 462C.02,​
260260 8.25subdivision 4, except that only new construction qualifies.​
261261 8.26 Subd. 3.Application.(a) The agency must develop forms and procedures for soliciting​
262262 8.27and reviewing applications for grants under this section. An application of a city must​
263263 8.28include, at a minimum, information about the local fee waiver and inclusionary housing​
264264 8.29programs under which the city issued fee waivers or reductions.​
265265 8.30 (b) The agency must evaluate complete applications for funding for reimbursement for​
266266 8.31eligible fee waivers or reductions to determine whether the fee waiver or reduction is​
267267 8​Sec. 6.​
268268 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 9.1necessary to increase the number of multifamily housing developments and single-family,​
269269 9.2owner-occupied housing developments within the applicant's boundaries.​
270270 9.3 (c) The determination of whether to award a grant for reimbursement of fee waivers or​
271271 9.4reductions is within the discretion of the agency, subject to this section. The agency's decision​
272272 9.5and application of the criteria are not subject to judicial review, except for abuse of discretion.​
273273 9.6 Subd. 4.Grant amount.The commissioner may award grants to applicants in an amount​
274274 9.7up to 50 percent of the amount of the development impact fee waived or reduced by a city​
275275 9.8for a qualified rental housing development. A city may receive no more than $....... per​
276276 9.9multifamily housing development or single-family, owner-occupied housing.​
277277 9.10 Sec. 7. Minnesota Statutes 2022, section 469.002, subdivision 12, is amended to read:​
278278 9.11 Subd. 12.Project."Project" means a housing project, a housing development project,​
279279 9.12a workforce housing project, or a redevelopment project, or any combination of those​
280280 9.13projects. The term "project" also may be applied to all real and personal property, assets,​
281281 9.14cash, or other funds, held or used in connection with the development or operation of the​
282282 9.15project. The term "project" also includes an interest reduction program authorized by section​
283283 9.16469.012, subdivision 7.​
284284 9.17 Sec. 8. Minnesota Statutes 2022, section 469.002, is amended by adding a subdivision to​
285285 9.18read:​
286286 9.19 Subd. 25.Workforce housing project.(a) "Workforce housing project" means any​
287287 9.20work or undertaking by an authority located in an eligible project area to develop market​
288288 9.21rate residential rental properties, as defined in section 462A.39, subdivision 2, paragraph​
289289 9.22(d), or single-family housing, as defined under section 462C.02, subdivision 4.​
290290 9.23 (b) For the purposes of this paragraph, "eligible project area" means an area that meets​
291291 9.24the criteria under section 462A.39, subdivisions 2, paragraph (b), and 4, paragraph (a).​
292292 9.25 Sec. 9. Minnesota Statutes 2022, section 469.033, subdivision 6, is amended to read:​
293293 9.26 Subd. 6.Operation area as taxing district, special tax.All of the territory included​
294294 9.27within the area of operation of any authority shall constitute a taxing district for the purpose​
295295 9.28of levying and collecting special benefit taxes as provided in this subdivision. All of the​
296296 9.29taxable property, both real and personal, within that taxing district shall be deemed to be​
297297 9.30benefited by projects to the extent of the special taxes levied under this subdivision. Subject​
298298 9.31to the consent by resolution of the governing body of the city in and for which it was created,​
299299 9.32an authority may levy a tax upon all taxable property within that taxing district. The tax​
300300 9​Sec. 9.​
301301 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 10.1shall be extended, spread, and included with and as a part of the general taxes for state,​
302302 10.2county, and municipal purposes by the county auditor, to be collected and enforced therewith,​
303303 10.3together with the penalty, interest, and costs. As the tax, including any penalties, interest,​
304304 10.4and costs, is collected by the county treasurer it shall be accumulated and kept in a separate​
305305 10.5fund to be known as the "housing and redevelopment project fund." The money in the fund​
306306 10.6shall be turned over to the authority at the same time and in the same manner that the tax​
307307 10.7collections for the city are turned over to the city, and shall be expended only for the purposes​
308308 10.8of sections 469.001 to 469.047. It shall be paid out upon vouchers signed by the chair of​
309309 10.9the authority or an authorized representative. The amount of the levy shall be an amount​
310310 10.10approved by the governing body of the city, but shall not exceed 0.0185 0.037 percent of​
311311 10.11estimated market value. The authority shall each year formulate and file a budget in​
312312 10.12accordance with the budget procedure of the city in the same manner as required of executive​
313313 10.13departments of the city or, if no budgets are required to be filed, by August 1. The amount​
314314 10.14of the tax levy for the following year shall be based on that budget.​
315315 10.15Sec. 10. Minnesota Statutes 2022, section 469.1763, subdivision 2, is amended to read:​
316316 10.16 Subd. 2.Expenditures outside district.(a) For each tax increment financing district,​
317317 10.17an amount equal to at least 75 percent of the total revenue derived from tax increments paid​
318318 10.18by properties in the district must be expended on activities in the district or to pay bonds,​
319319 10.19to the extent that the proceeds of the bonds were used to finance activities in the district or​
320320 10.20to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other​
321321 10.21than redevelopment districts for which the request for certification was made after June 30,​
322322 10.221995, the in-district percentage for purposes of the preceding sentence is 80 percent. Not​
323323 10.23more than 25 percent of the total revenue derived from tax increments paid by properties​
324324 10.24in the district may be expended, through a development fund or otherwise, on activities​
325325 10.25outside of the district but within the defined geographic area of the project except to pay,​
326326 10.26or secure payment of, debt service on credit enhanced bonds. For districts, other than​
327327 10.27redevelopment districts for which the request for certification was made after June 30, 1995,​
328328 10.28the pooling percentage for purposes of the preceding sentence is 20 percent. The revenues​
329329 10.29derived from tax increments paid by properties in the district that are expended on costs​
330330 10.30under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating​
331331 10.31the percentages that must be expended within and without the district.​
332332 10.32 (b) In the case of a housing district, a housing project, as defined in section 469.174,​
333333 10.33subdivision 11, is an activity in the district. The following are considered activities in the​
334334 10.34district:​
335335 10​Sec. 10.​
336336 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 11.1 (1) a housing project, as defined in section 469.174, subdivision 11; and​
337337 11.2 (2) a transfer of increments to an affordable housing trust fund established pursuant to​
338338 11.3section 462C.16 for expenditures made in conformity with the political subdivision's​
339339 11.4ordinance and policy establishing the trust fund. Any transfers made pursuant to this clause​
340340 11.5are not subject to the annual reporting requirements imposed by section 469.175.​
341341 11.6 (c) All administrative expenses are for activities outside of the district, except that if the​
342342 11.7only expenses for activities outside of the district under this subdivision are for the purposes​
343343 11.8described in paragraph (d), administrative expenses will be considered as expenditures for​
344344 11.9activities in the district.​
345345 11.10 (d) The authority may elect, in the tax increment financing plan for the district, to increase​
346346 11.11by up to ten 25 percentage points the permitted amount of expenditures for activities located​
347347 11.12outside the geographic area of the district under paragraph (a). As permitted by section​
348348 11.13469.176, subdivision 4k, the expenditures, including the permitted expenditures under​
349349 11.14paragraph (a), need not be made within the geographic area of the project. Expenditures​
350350 11.15that meet the requirements of this paragraph are legally permitted expenditures of the district,​
351351 11.16notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. To qualify for the increase​
352352 11.17under this paragraph, the expenditures must:​
353353 11.18 (1) be used exclusively to assist housing that meets the requirement for a qualified​
354354 11.19low-income building, as that term is used in section 42 of the Internal Revenue Code; and​
355355 11.20 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of the​
356356 11.21Internal Revenue Code, less the amount of any credit allowed under section 42 of the Internal​
357357 11.22Revenue Code; and​
358358 11.23 (3) be used to:​
359359 11.24 (i) acquire and prepare the site of the housing;​
360360 11.25 (ii) acquire, construct, or rehabilitate the housing; or​
361361 11.26 (iii) make public improvements directly related to the housing; or​
362362 11.27 (4) be used to develop housing:​
363363 11.28 (i) if the market value of the housing does not exceed the lesser of:​
364364 11.29 (A) 150 percent of the average market value of single-family homes in that municipality;​
365365 11.30or​
366366 11.31 (B) $200,000 for municipalities located in the metropolitan area, as defined in section​
367367 11.32473.121, or $125,000 for all other municipalities; and​
368368 11​Sec. 10.​
369369 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 12.1 (ii) if the expenditures are used to pay the cost of site acquisition, relocation, demolition​
370370 12.2of existing structures, site preparation, and pollution abatement on one or more parcels, if​
371371 12.3the parcel contains a residence containing one to four family dwelling units that has been​
372372 12.4vacant for six or more months and is in foreclosure as defined in section 325N.10, subdivision​
373373 12.57, but without regard to whether the residence is the owner's principal residence, and only​
374374 12.6after the redemption period has expired; or​
375375 12.7 (5) to assist owner-occupied housing that meets the requirements of section 469.1761,​
376376 12.8subdivision 2.​
377377 12.9 (e) The authority under paragraph (d), clause (4), expires on December 31, 2016.​
378378 12.10Increments may continue to be expended under this authority after that date, if they are used​
379379 12.11to pay bonds or binding contracts that would qualify under subdivision 3, paragraph (a), if​
380380 12.12December 31, 2016, is considered to be the last date of the five-year period after certification​
381381 12.13under that provision.​
382382 12.14 EFFECTIVE DATE.This section is effective the day following final enactment.​
383383 12.15Sec. 11. [471.9994] RELOCATION ASSISTANCE FOR AFFORDABLE HOUSING​
384384 12.16UNIT TENANTS.​
385385 12.17 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have​
386386 12.18the meanings given.​
387387 12.19 (b) "Affordable housing unit" means a rental unit that rents for an amount that is​
388388 12.20affordable to households whose income at the time of initial occupancy does not exceed 50​
389389 12.21percent of the greater of area or state median income, adjusted for family size, as determined​
390390 12.22by the United States Department of Housing and Urban Development.​
391391 12.23 (c) "City" means a statutory or home rule charter city.​
392392 12.24 Subd. 2.Relocation assistance.(a) A city may by ordinance require a property owner​
393393 12.25to provide relocation assistance consistent with the provisions of Code of Federal Regulations,​
394394 12.26title 49, sections 24.201 to 24.209, to tenants of affordable housing units upon the:​
395395 12.27 (1) sale;​
396396 12.28 (2) demolition;​
397397 12.29 (3) substantial rehabilitation, whether due to code enforcement or any other reason; or​
398398 12.30 (4) change of use of the property in which the affordable housing units are located when​
399399 12.31the property owner changes the units in the property from affordable housing units to market​
400400 12.32rate units.​
401401 12​Sec. 11.​
402402 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 13.1 (b) A city that adopts an ordinance under this subdivision must adopt policies, procedures,​
403403 13.2or regulations to implement the requirements of the ordinance. Such policies, procedures,​
404404 13.3or regulations must include provisions for an administrative hearing process to timely resolve​
405405 13.4disputes between tenants and property owners relating to relocation assistance or unlawful​
406406 13.5detainer actions during relocation. A party who feels aggrieved by a decision of an​
407407 13.6administrative hearing process may appeal within 15 days as provided for civil actions in​
408408 13.7district court.​
409409 13.8 Subd. 3.Notice of transfer of ownership.For property that includes an affordable​
410410 13.9housing unit, a city may by ordinance require an owner to provide a written notice of a​
411411 13.10transfer of ownership of the property to the tenant of each affordable housing unit.​
412412 13.11Sec. 12. APPROPRIATION; HOUSING COST REDUCTION INCENTIVE​
413413 13.12PROGRAM.​
414414 13.13 $....... in fiscal year 2024 is appropriated from the general fund to the commissioner of​
415415 13.14the Minnesota Housing Finance Agency for deposit in the housing development fund for​
416416 13.15grants to cities and counties under Minnesota Statutes, section 462A.41, for reimbursement​
417417 13.16of fee waivers or reductions to qualified housing developments. This is a onetime​
418418 13.17appropriation.​
419419 13.18Sec. 13. MINNESOTA HOUSING FINANCE AGENCY; CHALLENGE PROGRAM.​
420420 13.19 $22,425,000 in fiscal year 2024 is appropriated from the general fund to the commissioner​
421421 13.20of the Minnesota Housing Finance Agency for deposit in the housing development fund for​
422422 13.21the economic development and housing challenge program under Minnesota Statutes, section​
423423 13.22462A.33.​
424424 13.23 EFFECTIVE DATE.This section is effective July 1, 2023.​
425425 13.24Sec. 14. HOUSING INFRASTRUCTURE GRANT PROGRAM.​
426426 13.25 $2,500,000 in fiscal year 2024 is appropriated from the general fund to the commissioner​
427427 13.26of employment and economic development for grants under the greater Minnesota housing​
428428 13.27infrastructure grant program under Minnesota Statutes, section 116J.4315.​
429429 13.28 EFFECTIVE DATE.This section is effective the day following final enactment.​
430430 13​Sec. 14.​
431431 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 14.1 Sec. 15. HOUSING FINANCE AGENCY; NOAH APPROPRIATION.​
432432 14.2 Subdivision 1.Naturally Occurring Affordable Housing; appropriation.$50,000,000​
433433 14.3in fiscal year 2024 is appropriated from the general fund to the commissioner of the​
434434 14.4Minnesota Housing Finance Agency: (1) to make loans or grants to owners of Naturally​
435435 14.5Occurring Affordable Housing (NOAH) preservation properties that have demonstrated​
436436 14.6experience and capacity in owning and operating quality and well-managed affordable​
437437 14.7housing; or (2) to make a grant to a statewide intermediary to make loans or grants for the​
438438 14.8same purposes. A loan or grant must be used to acquire and rehabilitate a NOAH property​
439439 14.9that the agency or the statewide intermediary determines is at risk of increased rents and​
440440 14.10that is occupied by tenants at risk of involuntary displacement. The agency must determine​
441441 14.11how much of the appropriation may be used for grants and how much may be used for loans.​
442442 14.12This appropriation is available until June 30, 2026.​
443443 14.13 Subd. 2.Requirements; terms.(a) A funding applicant must demonstrate that the​
444444 14.14applicant will have sufficient capital and capital reserves to improve and maintain the​
445445 14.15property for the term of the loan if funding is in the form of a loan, but in all cases for at​
446446 14.16least 15 years.​
447447 14.17 (b) A funding recipient must be contractually obligated by means of a deed restriction​
448448 14.18to maintain for at least 15 years one of the following three levels of affordability:​
449449 14.19 (1) at least 75 percent of the units must be at rents affordable to households with incomes​
450450 14.20at or less than 80 percent of the area median income, and at least 51 percent of units must​
451451 14.21be at rents affordable to households with incomes at or less than 60 percent of the area​
452452 14.22median income;​
453453 14.23 (2) at least 15 percent of the units or 15 units, whichever is fewer, must be at rents​
454454 14.24affordable to households with incomes at or less than 30 percent of the area median income,​
455455 14.25and at least 51 percent of the units must be at rents affordable to households with incomes​
456456 14.26at or less than 60 percent of the area median income; or​
457457 14.27 (3) at least 75 percent of the units must be at rents affordable to households with incomes​
458458 14.28at 50 percent or less of the area median income, and 100 percent of the units must be at​
459459 14.29rents affordable to households with incomes at or less than 80 percent of the area median​
460460 14.30income.​
461461 14.31 (c) A funding applicant must provide to the agency or statewide intermediary​
462462 14.32administering the grant and loan program the details of the total financing package.​
463463 14​Sec. 15.​
464464 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 15.1 (d) Properties that receive funds must accept vouchers under section 8 of the United​
465465 15.2States Housing Act of 1937, as amended, if the subsidy payment standard is no more than​
466466 15.3five percent below marketplace rent levels.​
467467 15.4 (e) The agency or statewide intermediary may require other criteria and application​
468468 15.5information that will promote NOAH preservation.​
469469 15.6 (f) A loan or grant may be for up to 40 percent of the total acquisition cost of the NOAH​
470470 15.7property but no more than $50,000 per individual rental housing unit acquired.​
471471 15.8 (g) The agency, or the statewide intermediary making loans or grants under this section,​
472472 15.9may give priority to applications that reserve at least 15 units to provide homes for homeless​
473473 15.10households.​
474474 15.11 (h) A loan may have a term of up to 15 years at no- or low-interest rates at the discretion​
475475 15.12of the agency or statewide intermediary.​
476476 15.13 Subd. 3.Report.A recipient of a grant or loan under this section must report to the​
477477 15.14agency or statewide intermediary information required by the agency as a condition of the​
478478 15.15loan or grant.​
479479 15.16Sec. 16. PUBLIC HOUSING REHABILITATION.​
480480 15.17 Subdivision 1.Appropriation.$100,000,000 is appropriated from the bond proceeds​
481481 15.18fund to the commissioner of the Minnesota Housing Finance Agency for transfer to the​
482482 15.19housing development fund to finance the costs of rehabilitation to preserve public housing​
483483 15.20under Minnesota Statutes, section 462A.202, subdivision 3a. For the purposes of this section,​
484484 15.21"public housing" means housing for low-income persons and households financed by the​
485485 15.22federal government and publicly owned. The agency may give priority to proposals that​
486486 15.23maximize federal or local resources to finance the capital costs and requests that prioritize​
487487 15.24health, safety, and energy improvements. The priority in Minnesota Statutes, section​
488488 15.25462A.202, subdivision 3a, for projects to increase the supply of affordable housing and the​
489489 15.26restrictions of Minnesota Statutes, section 462A.202, subdivision 7, does not apply to this​
490490 15.27appropriation.​
491491 15.28 Subd. 2.Bond sale.To provide the money appropriated in this section from the bond​
492492 15.29proceeds fund, the commissioner of management and budget shall sell and issue bonds of​
493493 15.30the state in an amount up to $100,000,000 in the manner, upon the terms, and with the effect​
494494 15.31prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota​
495495 15.32Constitution, article XI, sections 4 to 7.​
496496 15.33 EFFECTIVE DATE.This section is effective the day following final enactment.​
497497 15​Sec. 16.​
498498 23-01482 as introduced​01/06/23 REVISOR MS/NS​ 16.1 Sec. 17. LOCAL HOUSING TRUST FUND GRANTS.​
499499 16.2 (a) $10,000,000 in fiscal year 2024 is appropriated from the general fund to the​
500500 16.3commissioner of the Minnesota Housing Finance Agency for deposit in the housing​
501501 16.4development fund for grants to local housing trust funds established under Minnesota​
502502 16.5Statutes, section 462C.16, to incentivize local funding. This is a onetime appropriation.​
503503 16.6 (b) A grantee is eligible to receive a grant amount equal to 100 percent of the public​
504504 16.7revenue committed to the local housing trust fund from any source other than the state or​
505505 16.8federal government, up to $150,000, and, in addition, an amount equal to 50 percent of the​
506506 16.9public revenue committed to the local housing trust fund from any source other than the​
507507 16.10state or federal government that is more than $150,000 but not more than $300,000.​
508508 16.11 (c) $100,000 of this appropriation is for technical assistance grants to local and regional​
509509 16.12housing trust funds. A housing trust fund may apply for a technical assistance grant at the​
510510 16.13time and in the manner and form required by the agency. The agency shall make grants on​
511511 16.14a first-come, first-served basis. A technical assistance grant must not exceed $5,000.​
512512 16.15 (d) A grantee must use grant funds within eight years of receipt for purposes (1)​
513513 16.16authorized under Minnesota Statutes, section 462C.16, subdivision 3, and (2) benefiting​
514514 16.17households with incomes at or below 115 percent of the state median income. A grantee​
515515 16.18must return any grant funds not used for these purposes within eight years of receipt to the​
516516 16.19commissioner of the Minnesota Housing Finance Agency for deposit into the housing​
517517 16.20development fund.​
518518 16.21 EFFECTIVE DATE.This section is effective July 1, 2023.​
519519 16.22Sec. 18. APPROPRIATION; PILOT PROGRAM FOR HOUSING​
520520 16.23INFRASTRUCTURE GRANTS.​
521521 16.24 $5,000,000 in fiscal year 2024 is appropriated from the general fund to the commissioner​
522522 16.25of the Minnesota Housing Finance Agency for a pilot program to provide grants to​
523523 16.26municipalities for up to 50 percent of the costs of infrastructure that would otherwise be​
524524 16.27required to be paid by the developer for new housing developments. The grants shall be​
525525 16.28limited to 16 housing units in the municipality and a maximum of $12,000 per housing unit.​
526526 16.29This appropriation is onetime and is available until June 30, 2024.​
527527 16​Sec. 18.​
528528 23-01482 as introduced​01/06/23 REVISOR MS/NS​