Act No. 480

Public Acts of 2004

Approved by the Governor

December 21, 2004

Filed with the Secretary of State

December 28, 2004

EFFECTIVE DATE: December 28, 2004

STATE OF MICHIGAN

92ND LEGISLATURE

REGULAR SESSION OF 2004

Introduced by Reps. Kooiman, Tobocman, Murphy, Vander Veen, Farhat, Hart, Brandenburg, Nitz, Voorhees, Huizenga, Minore, Reeves, Anderson, Kolb, Jamnick, Lipsey, Meyer, Gaffney, Hunter, Law, Condino, Gleason and Nofs

ENROLLED HOUSE BILL No. 4787

AN ACT to amend 1966 PA 346, entitled "An act to create a state housing development authority; to define the powers and duties of the authority; to establish a housing development revolving fund; to establish a land acquisition and development fund; to establish a rehabilitation fund; to establish a conversion condominium fund; to authorize the making and purchase of loans, deferred payment loans, and grants to qualified developers, sponsors, individuals, mortgage lenders, and municipalities; to establish and provide acceleration and foreclosure procedures; to provide tax exemption; to authorize payments in lieu of taxes by nonprofit housing corporations, consumer housing cooperatives, limited dividend housing corporations, mobile home park corporations, and mobile home park associations; and to prescribe criminal penalties for violations of this act," (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:

TITLE

An act to create a state housing development authority; to define the powers and duties of the authority; to establish a housing development revolving fund; to establish a land acquisition and development fund; to establish a rehabilitation fund; to establish a conversion condominium fund; to create certain other funds and provide for the expenditure of certain funds; to authorize the making and purchase of loans, deferred payment loans, and grants to qualified developers, sponsors, individuals, mortgage lenders, and municipalities; to establish and provide acceleration and foreclosure procedures; to provide tax exemption; to authorize payments instead of taxes by nonprofit housing corporations, consumer housing cooperatives, limited dividend housing corporations, mobile home park corporations, and mobile home park associations; and to prescribe criminal penalties for violations of this act.

CHAPTER 3A

Sec. 58. (1) The definitions in section 11 apply to this chapter unless otherwise provided in this chapter.

(2) As used in this chapter:

(a) "Adjusted household income" means that term as defined in rules of the authority.

(b) "Affordable housing" means residential housing that is occupied by low income, very low income, or extremely low income households, and results in monthly housing costs equal to no more than approximately 1/3 of the adjusted household income of the occupying household.

(c) "Eligible applicant" means a not-for-profit corporation, a for-profit corporation, or a partnership that is approved by the authority and that is organized for the purpose of developing and supporting affordable housing for low income, very low income, or extremely low income households.

(d) "Extremely low income household" means a person, a family, or unrelated persons living together whose adjusted household income is not more than 25% of the median income, as determined by the authority.

(e) "Fund" means the Michigan housing and community development fund created in section 58a.

(f) "Low income household" means a person, a family, or unrelated persons living together whose adjusted household income is more than 50% but not more than 60% of the median income, as determined by the authority.

(g) "Multifamily housing" means a building or buildings providing housing to 2 or more households, none of which is owner occupied.

(h) "Very low income household" means a person, a family, or unrelated persons living together whose adjusted household income is more than 25% but not more than 50% of the median income, as determined by the authority.

Sec. 58a. (1) The Michigan housing and community development fund is created in the department of treasury. The fund shall be administered by the authority and shall be expended only as provided in this chapter.

(2) The state treasurer shall credit to the fund all of the following:

(a) All receipts, including, but not limited to, dividends and interest on the investment of money in the fund and principal and interest payments from loans or agreements made from the fund.

(b) All proceeds of assets received by the authority as a result of the default of loans or agreements made under this chapter.

(c) All appropriations, grants, or gifts of money or property made to the fund.

(d) All fees or charges collected by the authority pursuant to activities authorized under this chapter.

(e) Other revenue as provided by law.

(3) All balances in the fund at the end of a fiscal year shall be carried over as a part of the fund and shall not revert to the general fund of the state.

Sec. 58b. (1) The authority shall create and implement the Michigan housing and community development program for the purpose of developing and coordinating public and private resources to meet the affordable housing needs of low income, very low income, and extremely low income households in this state.

(2) The authority shall identify, select, and make financing available to eligible applicants from money in the fund or from money secured by the fund for affordable housing for low income, very low income, and extremely low income households. This subsection does not preclude the authority from using other resources in conjunction with the fund for a purpose authorized under this chapter.

(3) The authority shall promulgate rules according to the administrative procedures act of 1969, 1969 PA 306, MCL24.201 to 24.328, providing for the terms and conditions under which assistance made under this chapter shall be recaptured.

(4) The authority shall develop an annual plan providing for the allocation of money from the fund, according to all of the following:

(a) The allocation plan shall contain a formula for distributing money throughout the state based on the number of persons experiencing poverty and housing distress in various regions of the state.

(b) The allocation plan shall identify eligible applicants, preference for special population groups described in section58c(2), and preference for geographic targeting in designated revitalization areas including, but not limited to, neighborhood preservation areas, state renaissance zones, core communities, and federally-designated enterprise community or homeownership zones.

(c) Not less than 25% of the fund shall be earmarked for rental housing projects that do not qualify under preferences for special population groups, geographic preferences, or other preferences contained in the allocation plan.

(d) Not less than 30% of the fund shall be earmarked for projects that target extremely low income households and include at a minimum both of the following activities:

(i) Developing housing for the homeless, transitional housing, and permanent housing.

(ii) Providing security deposits, supportive services, and technical assistance to eligible applicants.

(e) A rental housing project assisted by the fund must provide affordable housing for households earning no more than 60% of the median income.

(f) A home ownership project assisted by the fund must provide affordable housing for households earning no more than 60% of the median income.

(g) Money that has not been committed at the end of a fiscal year shall not be carried over in the category to which the money had been allocated during that fiscal year, but shall be reallocated for the next fiscal year according to the next fiscal year's allocation plan.

(5) Each year, the authority shall hold public hearings in at least 3 separate locations throughout this state on the priorities and draft allocation plan for the upcoming year. After the public hearings, the authority may make minor modifications to the allocation plan necessary to facilitate the administration of the Michigan housing and community development program or to address unforeseen circumstances.

(6) The authority shall issue an annual report to the governor and the legislature summarizing the expenditures of the fund for the prior fiscal year including at a minimum a description of the eligible applicants that received funding, the number of housing units that were produced, and the income levels of the households that were served.

(7) In addition to the rules promulgated under subsection (3), the authority shall promulgate rules according to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to implement this chapter.

Sec. 58c. (1) The authority shall expend money in the fund to make grants, mortgage loans, or other loans to eligible applicants as provided in this section to enable eligible applicants to finance any of the following with respect to housing or home ownership for low income, very low income, and extremely low income households:

(a) Acquisition of land and buildings.

(b) Rehabilitation.

(c) New construction.

(d) Development and predevelopment costs.

(e) Preservation of existing housing.

(f) Infrastructure improvements, economic development projects, or community facilities that support housing development.

(g) Insurance.

(h) Operating and replacement reserves.

(i) Down payment assistance.

(j) Security deposit assistance.

(k) Supportive services.

(2) The authority shall expend a portion of the fund for housing for special needs populations including, but not limited to, the homeless, persons with physical or mental handicaps, and persons living in rural or distressed areas.

(3) The authority may make a loan to an eligible applicant from the fund at no interest or at below market interest rates, with or without security, and may make a loan for predevelopment financing.

(4) The authority may provide assistance for housing units for very low income or extremely low income households within multifamily housing that is occupied partly by very low income or extremely low income households and partly by households that do not qualify as very low income or extremely low income households, subject to the rules promulgated by the authority.

(5) The authority may provide funding for projects with 50 units or less and provide incentives to encourage project feasibility and mixed income housing projects that respond to community priorities.

Sec. 58d. The authority shall not provide assistance for housing under this chapter unless both of the following circumstances exist:

(a) If the housing is multifamily housing, the owner or manager agrees in writing not to evict a tenant without just cause, as defined in section 44a of 1933 (Ex Sess) PA 18, MCL 125.694a.

(b) The housing is sold or rented with a deed restriction, agreement, or other legal document that provides for the recapture of some or all of the assistance provided under this chapter upon terms and conditions specified in rules of the authority promulgated under section 58b(3).

This act is ordered to take immediate effect.

Clerk of the House of Representatives

Secretary of the Senate

Approved

Governor