HOUSE BILL No. 5303


     February 8, 2000, Introduced by Reps. Byl, Birkholz, Vear, Rick Johnson, Jellema, Scranton, Ehardt, Martinez, Lockwood,
Bovin, Clarke, Hart, Schauer, Pestka, Prusi, Scott, Hager, Van Woerkom, DeRossett, DeWeese, Minore, Hanley, Price, Thomas,
Mortimer, Mead, Bradstreet, Richardville, Jansen, Mans, DeVuyst, Green, Pumford, Geiger, Tesanovich, Richner, Godchaux, Julian,
Quarles, LaForge, Reeves and Lemmons and referred to the Committee on Local Government and Urban Policy.


        A bill to establish the Michigan affordable housing fund in

   the department of treasury; to provide for the administration of

   the fund; to provide for the deposit of certain money in that

   fund; to provide for the distribution of the money in that fund

   and to limit the use of the money in that fund; and to prescribe

   the powers and duties of certain state officials.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 1.  This act shall be known and may be cited as the

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      "Michigan affordable housing fund act".

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           Sec. 2.  As used in this act:

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           (a) "Department" means the department of treasury.

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           (b) "Eligible applicant" means that term as defined in

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      section 58 of the Michigan state housing development authority

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      act of 1966, 1966 PA 346, MCL 125.1458.




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           (c) "MSHDA" means the Michigan state housing development

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      authority.

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           (d) "Michigan affordable housing fund" or "fund" means the

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      Michigan affordable housing fund created in section 3.

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           Sec. 3.  (1) The Michigan affordable housing fund is created

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      as a separate fund in the department.

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           (2) The fund shall be administered by MSHDA and money in the

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      fund shall be expended only as provided in this act.

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           (3) The department shall credit to the fund all amounts

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      appropriated for the purposes under this act and any money

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      received as contributions.

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           (4) The state treasurer shall invest the money in the fund

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      and the earnings from those investments shall be credited to the

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      fund.

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           (5) Money appropriated or money received as contributions to

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      the fund shall be available for disbursement upon appropriation.

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           Sec. 4.  Notwithstanding any other allocations and disburse-

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      ments, an amount equal to the cumulative contributions made to

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      the fund, less any amount appropriated to the department for the

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      purpose of implementing this act, shall be deposited in the fund

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      and shall be appropriated annually solely for the purposes of the

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      fund.

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           Sec. 5.  (1) Money in the fund shall be allocated to organi-

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      zations exempt from taxation under section 501(c)(3) or (4) of

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      the internal revenue code of 1986 for housing projects if the

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      organization has conducted a market study or review to ensure





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      that there is a demand and need for the housing project

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      proposed.

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           (2) Housing developed with money from the fund shall be con-

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      sistent in nature with housing already provided in the area to be

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      developed.

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           (3) MSHDA shall encourage housing projects that are part of

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      a planned community revitalization strategy.

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           Sec. 6.  (1) Money from the fund shall be used to provide

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      grants, mortgage loans, and other loans including, but not

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      limited to, construction loans, bridge loans, and predevelopment

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      loans to provide housing for low income, very low income, and

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      extremely low income households.

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           (2) Money from the fund may be used to provide single-family

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      or multifamily housing.

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           (3) A portion of the allocations each year, as determined by

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      MSHDA, shall be used to provide housing for all of the

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      following:

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           (a) Homeless persons.

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           (b) Persons with physical and mental disabilities.

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           (c) Persons living in distressed or rural areas.

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           (4) Money in the fund may be used for all of the following:

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           (a) Acquisition of land and buildings.

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           (b) New construction or rehabilitation of existing

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      buildings.

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           (c) Predevelopment and development costs.

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           (d) Costs to preserve existing housing units.





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           (e) Infrastructure and community facilities that directly

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      support housing development.

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           (f) Insurance premiums.

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           (g) Operating and replacement reserves.

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           (h) Down payment and security deposit assistance.

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           (i) Supportive services.

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           Sec. 7.  (1) MSHDA shall develop annual priorities based on

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      the allowable purposes under section 7 and allocate the money in

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      the fund based upon those priorities.

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           (2) Each year, prior to the allocation of money from the

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      fund, MSHDA shall hold public hearings in at least 3 separate

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      locations throughout this state on the priorities and proposed

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      allocations for the upcoming year.

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           Sec. 8.  (1) MSHDA shall develop an allocation plan each

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      year based on the annual priorities developed under section 8

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      that includes but is not limited to how MSHDA will identify,

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      select, and make financing available to applicants to develop

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      fundable projects.  The plan shall include how MSHDA will allo-

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      cate money to provide technical assistance to eligible

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      applicants.

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           (2) The allocation plan shall include all of the following:

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           (a) A list of the organizations and types of organizations

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      eligible to receive money from the fund.

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           (b) Any preferences for identified special population

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      groups.

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           (c) Any geographic targeting in designated revitalization

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      areas including, but not limited to, MSHDA's neighborhood



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      preservation program areas, renaissance zones, federally

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      designated empowerment and enterprise zones, and community or

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      homeownership zones.

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           (d) The allocation funding formula as prescribed in subsec-

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      tion (3).

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           (3) MSHDA shall determine a formula for allocating money

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      throughout the state using all of the following factors:

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           (a) The number of persons in poverty in a geographic area.

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           (b) The level of housing distress in a geographic area.

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           (c) Any other factor that supports the need for affordable

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      housing as determined by MSHDA and included in the allocation

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      plan.

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           Sec. 9.  Any balance remaining in the fund at the end of any

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      fiscal year shall not revert to the general fund but shall remain

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      in the fund and continue to be available for the purposes autho-

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      rized in this act.

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           Enacting section 1.  This act does not take effect unless

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      Senate Bill No. _____ or House Bill No. 5304  (request

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      no. 04558'99 b *) of the 90th Legislature is enacted into law.



















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