HOUSE BILL No. 5304 February 8, 2000, Introduced by Reps. Byl, Birkholz, Vear, Rick Johnson, Jellema, Ehardt, Scranton, Martinez, Lockwood, Bovin, Clarke, Hart, Schauer, Pestka, Prusi, Scott, Van Woerkom, Hager, DeRossett, DeWeese, Minore, Hanley, Price, Mortimer, Mead, Bradstreet, Richardville, Jansen, Mans, DeVuyst, Green, Pumford, Geiger, Tesanovich, Thomas, Richner, Godchaux, Julian, Quarles, LaForge, Reeves and Lemmons and referred to the Committee on Local Government and Urban Policy. A bill to amend 1966 PA 346, entitled "State housing development authority act of 1966," (MCL 125.1401 to 125.1499c) by amending the title, as amended by 1984 PA 215, and by adding chapter 3A. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 TITLE 2 An act to create a state housing development authority; to 3 define the powers and duties of the authority; to establish a 4 housing development revolving fund; to establish a land acquisi- 5 tion and development fund; to establish a rehabilitation fund; to 6 establish a conversion condominium fund; TO CREATE CERTAIN OTHER 7 FUNDS AND PROVIDE FOR THE EXPENDITURE OF CERTAIN FUNDS; to autho- 8 rize the making and purchase of loans, deferred payment loans, 9 and grants to qualified developers, sponsors, individuals, 10 mortgage lenders, and municipalities; to establish and provide 04558'99 b * LTB 2 1 acceleration and foreclosure procedures; to provide tax 2 exemption; to authorize payments in lieu of taxes by nonprofit 3 housing corporations, consumer housing cooperatives, limited div- 4 idend housing corporations, mobile home park corporations, and 5 mobile home park associations; and to prescribe criminal penal- 6 ties for violations of this act. 7 CHAPTER 3A 8 SEC. 58. (1) THE DEFINITIONS IN SECTION 11 APPLY TO THIS 9 CHAPTER UNLESS OTHERWISE PROVIDED IN THIS CHAPTER. 10 (2) AS USED IN THIS CHAPTER: 11 (A) "ADJUSTED HOUSEHOLD INCOME" MEANS THAT TERM AS DEFINED 12 IN RULES OF THE AUTHORITY. 13 (B) "AFFORDABLE HOUSING" MEANS RESIDENTIAL HOUSING THAT IS 14 OCCUPIED BY LOW INCOME, VERY LOW INCOME, OR EXTREMELY LOW INCOME 15 HOUSEHOLDS, AND RESULTS IN MONTHLY HOUSING COSTS EQUAL TO NO MORE 16 THAN 30% OF THE ADJUSTED HOUSEHOLD INCOME OF THE OCCUPYING 17 HOUSEHOLD. 18 (C) "ELIGIBLE APPLICANT" MEANS A NOT-FOR-PROFIT CORPORATION 19 OR A PARTNERSHIP THAT INCLUDES A NOT-FOR-PROFIT CORPORATION ORGA- 20 NIZED FOR THE PURPOSE OF DEVELOPING AND SUPPORTING AFFORDABLE 21 HOUSING FOR LOW INCOME, VERY LOW INCOME, OR EXTREMELY LOW INCOME 22 HOUSEHOLDS, WHICH HOUSING IS UNDER THE MANAGING CONTROL OF THE 23 NOT-FOR-PROFIT CORPORATION. 24 (D) "EXTREMELY LOW INCOME HOUSEHOLD" MEANS A PERSON, A 25 FAMILY, OR UNRELATED PERSONS LIVING TOGETHER WHOSE ADJUSTED 26 HOUSEHOLD INCOME IS NOT MORE THAN 25% OF THE MEDIAN INCOME, AS 27 DETERMINED BY THE AUTHORITY. 04558'99 b * 3 1 (E) "FUND" MEANS THE MICHIGAN AFFORDABLE HOUSING FUND 2 CREATED IN SECTION 58A. 3 (F) "LOW INCOME HOUSEHOLD" MEANS A PERSON, A FAMILY, OR 4 UNRELATED PERSONS LIVING TOGETHER WHOSE ADJUSTED HOUSEHOLD INCOME 5 IS MORE THAN 50% BUT NOT MORE THAN 60% OF THE MEDIAN INCOME, AS 6 DETERMINED BY THE AUTHORITY. 7 (G) "MULTIFAMILY HOUSING" MEANS A BUILDING OR BUILDINGS PRO- 8 VIDING HOUSING TO 2 OR MORE HOUSEHOLDS, NONE OF WHICH IS OWNER 9 OCCUPIED. 10 (H) "VERY LOW INCOME HOUSEHOLD" MEANS A PERSON, A FAMILY, OR 11 UNRELATED PERSONS LIVING TOGETHER WHOSE ADJUSTED HOUSEHOLD INCOME 12 IS MORE THAN 25% BUT NOT MORE THAN 50% OF THE MEDIAN INCOME, AS 13 DETERMINED BY THE AUTHORITY. 14 SEC. 58A. (1) THE MICHIGAN AFFORDABLE HOUSING FUND IS CRE- 15 ATED IN THE DEPARTMENT OF TREASURY. THE FUND SHALL BE ADMINIS- 16 TERED BY THE AUTHORITY AND SHALL BE EXPENDED ONLY AS PROVIDED IN 17 THIS CHAPTER. 18 (2) THE STATE TREASURER SHALL CREDIT TO THE FUND ALL OF THE 19 FOLLOWING: 20 (A) ALL RECEIPTS, INCLUDING, BUT NOT LIMITED TO, DIVIDENDS 21 AND INTEREST ON THE INVESTMENT OF MONEY IN THE FUND AND PRINCIPAL 22 AND INTEREST PAYMENTS FROM LOANS OR AGREEMENTS MADE FROM THE 23 FUND. 24 (B) ALL PROCEEDS OF ASSETS RECEIVED BY THE AUTHORITY AS A 25 RESULT OF THE DEFAULT OF LOANS OR AGREEMENTS MADE UNDER THIS 26 CHAPTER. 04558'99 b * 4 1 (C) ALL APPROPRIATIONS, GRANTS, OR GIFTS OF MONEY OR 2 PROPERTY MADE TO THE FUND. 3 (D) ALL FEES OR CHARGES COLLECTED BY THE AUTHORITY PURSUANT 4 TO ACTIVITIES AUTHORIZED UNDER THIS CHAPTER. 5 (E) OTHER REVENUE AS PROVIDED BY LAW. 6 (3) ALL BALANCES IN THE FUND AT THE END OF A FISCAL YEAR 7 SHALL BE CARRIED OVER AS A PART OF THE FUND AND SHALL NOT REVERT 8 TO THE GENERAL FUND OF THE STATE. 9 SEC. 58B. (1) THE AUTHORITY SHALL CREATE AND IMPLEMENT THE 10 MICHIGAN AFFORDABLE HOUSING PROGRAM FOR THE PURPOSE OF DEVELOPING 11 AND COORDINATING PUBLIC AND PRIVATE RESOURCES TO MEET THE AFFORD- 12 ABLE HOUSING NEEDS OF LOW INCOME, VERY LOW INCOME, AND EXTREMELY 13 LOW INCOME HOUSEHOLDS IN THIS STATE. 14 (2) THE AUTHORITY SHALL IDENTIFY, SELECT, AND MAKE FINANCING 15 AVAILABLE TO ELIGIBLE APPLICANTS FROM MONEY IN THE FUND OR FROM 16 MONEY SECURED BY THE FUND FOR AFFORDABLE HOUSING FOR LOW INCOME, 17 VERY LOW INCOME, AND EXTREMELY LOW INCOME HOUSEHOLDS. THIS SUB- 18 SECTION DOES NOT PRECLUDE THE AUTHORITY FROM USING OTHER 19 RESOURCES IN CONJUNCTION WITH THE FUND FOR PURPOSES AUTHORIZED 20 UNDER THIS CHAPTER. 21 (3) THE AUTHORITY SHALL PROMULGATE RULES PURSUANT TO THE 22 ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 23 24.328, PROVIDING FOR THE TERMS AND CONDITIONS UNDER WHICH 24 ASSISTANCE MADE UNDER THIS CHAPTER SHALL BE RECAPTURED. 25 (4) THE AUTHORITY SHALL DEVELOP AN ANNUAL PLAN PROVIDING FOR 26 THE ALLOCATION OF MONEY FROM THE FUND, IN ACCORDANCE WITH ALL OF 27 THE FOLLOWING: 04558'99 b * 5 1 (A) THE ALLOCATION PLAN SHALL CONTAIN A FORMULA FOR 2 DISTRIBUTING MONEY THROUGHOUT THE STATE BASED ON THE NUMBER OF 3 PERSONS EXPERIENCING POVERTY AND HOUSING DISTRESS IN VARIOUS 4 REGIONS OF THE STATE. 5 (B) THE ALLOCATION PLAN SHALL IDENTIFY ELIGIBLE APPLICANTS, 6 PREFERENCE FOR SPECIAL POPULATION GROUPS DESCRIBED IN SECTION 7 58C(2), AND PREFERENCE FOR GEOGRAPHIC TARGETING IN DESIGNATED 8 REVITALIZATION AREAS INCLUDING, BUT NOT LIMITED TO, NEIGHBORHOOD 9 PRESERVATION AREAS, STATE RENAISSANCE ZONES, AND 10 FEDERALLY-DESIGNATED ENTERPRISE COMMUNITY OR HOMEOWNERSHIP 11 ZONES. 12 (C) NOT LESS THAN 30% OF THE FUND SHALL BE EARMARKED FOR 13 PROJECTS THAT TARGET EXTREMELY LOW INCOME HOUSEHOLDS AND INCLUDE 14 AT A MINIMUM BOTH OF THE FOLLOWING ACTIVITIES: 15 (i) DEVELOPING HOUSING FOR THE HOMELESS, TRANSITIONAL HOUS- 16 ING, AND PERMANENT HOUSING. 17 (ii) PROVIDING SECURITY DEPOSITS, SUPPORTIVE SERVICES, AND 18 TECHNICAL ASSISTANCE TO ELIGIBLE APPLICANTS. 19 (D) A RENTAL HOUSING PROJECT ASSISTED BY THE FUND MUST PRO- 20 VIDE AFFORDABLE HOUSING FOR HOUSEHOLDS EARNING NO MORE THAN 50% 21 OF THE MEDIAN INCOME. 22 (E) A HOME OWNERSHIP PROJECT ASSISTED BY THE FUND MUST PRO- 23 VIDE AFFORDABLE HOUSING FOR HOUSEHOLDS EARNING NO MORE THAN 60% 24 OF THE MEDIAN INCOME. 25 (F) MONEY THAT HAS NOT BEEN COMMITTED AT THE END OF A FISCAL 26 YEAR SHALL NOT BE CARRIED OVER IN THE CATEGORY TO WHICH IT HAD 27 BEEN ALLOCATED DURING THAT FISCAL YEAR, BUT SHALL BE REALLOCATED 04558'99 b * 6 1 FOR THE NEXT FISCAL YEAR IN ACCORDANCE WITH THE NEXT FISCAL 2 YEAR'S ALLOCATION PLAN. 3 (5) THE AUTHORITY SHALL HOLD PUBLIC HEARINGS ON THE ANNUAL 4 ALLOCATION PLAN BEFORE EXPENDING MONEY FROM THE FUND. AFTER THE 5 PUBLIC HEARINGS, THE AUTHORITY MAY MAKE MINOR MODIFICATIONS TO 6 THE ALLOCATION PLAN AS NECESSARY TO FACILITATE THE ADMINISTRATION 7 OF THE MICHIGAN AFFORDABLE HOUSING PROGRAM OR TO ADDRESS UNFORE- 8 SEEN CIRCUMSTANCES. 9 (6) THE AUTHORITY SHALL ISSUE AN ANNUAL REPORT TO THE GOVER- 10 NOR AND THE LEGISLATURE SUMMARIZING THE EXPENDITURES OF THE FUND 11 FOR THE PRIOR FISCAL YEAR INCLUDING AT A MINIMUM A DESCRIPTION OF 12 THE ELIGIBLE APPLICANTS THAT RECEIVED FUNDING, THE NUMBER OF 13 HOUSING UNITS THAT WERE PRODUCED, AND THE INCOME LEVELS OF THE 14 HOUSEHOLDS THAT WERE SERVED. 15 (7) IN ADDITION TO THE RULES PROMULGATED UNDER SUBSECTION 16 (3), THE AUTHORITY SHALL PROMULGATE RULES IN ACCORDANCE WITH THE 17 ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 18 24.328, TO IMPLEMENT THIS CHAPTER. 19 SEC. 58C. (1) THE AUTHORITY SHALL EXPEND MONEY IN THE FUND 20 TO MAKE GRANTS, MORTGAGE LOANS, OR OTHER LOANS TO ELIGIBLE APPLI- 21 CANTS AS PROVIDED IN THIS SECTION TO ENABLE ELIGIBLE APPLICANTS 22 TO FINANCE ANY OF THE FOLLOWING WITH RESPECT TO HOUSING FOR LOW 23 INCOME, VERY LOW INCOME, AND EXTREMELY LOW INCOME HOUSEHOLDS: 24 (A) ACQUISITION OF LAND AND BUILDINGS. 25 (B) REHABILITATION. 26 (C) NEW CONSTRUCTION. 04558'99 b * 7 1 (D) DEVELOPMENT AND PREDEVELOPMENT COSTS. 2 (E) PRESERVATION OF EXISTING HOUSING. 3 (F) INFRASTRUCTURE AND COMMUNITY FACILITIES THAT DIRECTLY 4 SUPPORT HOUSING DEVELOPMENT. 5 (G) INSURANCE. 6 (H) OPERATING AND REPLACEMENT RESERVES. 7 (I) DOWN PAYMENT ASSISTANCE. 8 (J) SECURITY DEPOSIT ASSISTANCE. 9 (K) SUPPORTIVE SERVICES. 10 (2) THE AUTHORITY SHALL EXPEND A PORTION OF THE FUND FOR 11 HOUSING FOR SPECIAL NEEDS POPULATIONS INCLUDING, BUT NOT LIMITED 12 TO, THE HOMELESS, PERSONS WITH PHYSICAL OR MENTAL HANDICAPS, AND 13 PERSONS LIVING IN RURAL OR DISTRESSED AREAS. 14 (3) THE AUTHORITY MAY MAKE A LOAN TO AN ELIGIBLE APPLICANT 15 FROM THE FUND AT NO INTEREST OR AT BELOW MARKET INTEREST RATES, 16 WITH OR WITHOUT SECURITY, AND MAY MAKE A LOAN FOR PREDEVELOPMENT 17 FINANCING. 18 (4) THE AUTHORITY MAY PROVIDE ASSISTANCE FOR HOUSING UNITS 19 FOR VERY LOW INCOME OR EXTREMELY LOW INCOME HOUSEHOLDS WITHIN 20 MULTIFAMILY HOUSING THAT IS OCCUPIED PARTLY BY VERY LOW INCOME OR 21 EXTREMELY LOW INCOME HOUSEHOLDS AND PARTLY BY HOUSEHOLDS THAT DO 22 NOT QUALIFY AS VERY LOW INCOME OR EXTREMELY LOW INCOME HOUSE- 23 HOLDS, SUBJECT TO THE RULES PROMULGATED BY THE AUTHORITY. 24 (5) THE AUTHORITY SHALL PROVIDE FUNDING FOR PROJECTS WITH 50 25 UNITS OR LESS AND PROVIDE INCENTIVES TO ENCOURAGE ECONOMICALLY 26 DIVERSE HOUSING DEVELOPMENTS THAT RESPOND TO COMMUNITY 27 PRIORITIES. THE AUTHORITY MAY PROVIDE FUNDING FOR PROJECTS WITH 04558'99 b * 8 1 MORE THAN 50 UNITS IN CERTAIN CIRCUMSTANCES THAT THE AUTHORITY 2 DETERMINES. 3 SEC. 58D. THE AUTHORITY SHALL NOT PROVIDE ASSISTANCE FOR 4 HOUSING UNDER THIS CHAPTER UNLESS BOTH OF THE FOLLOWING CIRCUM- 5 STANCES EXIST: 6 (A) IF THE HOUSING IS MULTIFAMILY HOUSING, THE OWNER OR MAN- 7 AGER AGREES IN WRITING NOT TO EVICT TENANTS WITHOUT JUST CAUSE, 8 AS DEFINED IN SECTION 44A OF 1933 (EX SESS) PA 18, MCL 125.694A. 9 (B) THE HOUSING IS SOLD OR RENTED WITH A DEED RESTRICTION, 10 AGREEMENT, OR OTHER LEGAL DOCUMENT THAT PROVIDES FOR THE RECAP- 11 TURE OF SOME OR ALL OF THE ASSISTANCE PROVIDED UNDER THIS CHAPTER 12 UPON TERMS AND CONDITIONS SPECIFIED IN RULES OF THE AUTHORITY 13 PROMULGATED UNDER SECTION 58B(3). 04558'99 b * Final page. LTB