March 27, 2008, Introduced by Senators JANSEN, HARDIMAN, BIRKHOLZ and KAHN and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1966 PA 346, entitled
"State housing development authority act of 1966,"
by amending the title and sections 2, 11, 58, 58a, 58b, and 58c
(MCL 125.1402, 125.1411, 125.1458, 125.1458a, 125.1458b, and
125.1458c), the title as amended and sections 58, 58a, 58b, and 58c
as added by 2004 PA 480 and section 11 as amended by 2004 PA 549,
and by adding section 58e; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An
act to create a state community
and 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.
Sec.
2. This act shall be known and may be cited as the "state
community and housing development authority act of 1966".
Sec. 11. As used in this act:
(a)
"Authority" means the Michigan state community and housing
development authority created in this act.
(b) "Development costs" means the costs that have been
approved by the authority as appropriate expenditures, and
includes:
(i) Payments for options to purchase properties on the proposed
housing project site, deposits on contracts of purchase, or, with
the prior approval of the authority, payments for the purchases of
those properties.
(ii) Legal, organizational, and marketing expenses, including
payment of attorneys' fees, project manager and clerical staff
salaries, office rent, and other incidental expenses.
(iii) Payment of fees for preliminary feasibility studies,
advances for planning, engineering, and architectural work.
(iv) Expenses for surveys as to need, and market analyses.
(v) Necessary application and other fees to federal and other
government agencies.
(vi) Other expenses incurred by the nonprofit housing
corporation, consumer housing cooperative, limited dividend housing
corporation, mobile home park corporation, or mobile home park
association that the authority considers appropriate to effectuate
the purposes of this act.
(c) "Federally-aided mortgage" means any of the following:
(i) A below market interest rate mortgage insured, purchased,
or held by the secretary of the department of housing and urban
development.
(ii) A market interest rate mortgage insured by the secretary
of the department of housing and urban development and augmented by
a program of rent supplements.
(iii) A mortgage receiving interest reduction payments provided
by the secretary of the department of housing and urban
development.
(iv) A mortgage on a housing project to which the authority
allocates low income housing tax credits under section 22b.
(v) A mortgage receiving special benefits under other federal
law designated specifically to develop low and moderate income
housing, consistent with this act.
(d) "Fund" means the housing development fund created by this
act.
(e) "Project cost" means the sum total of all reasonable or
necessary costs incurred by the nonprofit housing corporation,
consumer housing cooperative, limited dividend housing corporation,
mobile home park corporation, or mobile home park association for
carrying out all works and undertakings for the completion of a
housing project and approved by the authority. In addition to other
reasonable and necessary costs, "project costs" includes costs for
all of the following: studies and surveys; plans, specifications,
and architectural and engineering services; legal, organization,
marketing, or other special services; financing, acquisition,
demolition, construction, equipment, and site development of new
and rehabilitated buildings; movement of existing buildings to
other sites; rehabilitation, reconstruction, repair, or remodeling
of existing buildings; carrying charges during construction; the
cost of placement of tenants or occupants, and relocation services
in connection with a housing project; and, to the extent not
already included, all development costs.
(f) "Housing project" means any of the following:
(i) Residential real property developed or to be developed or
receiving benefits under this act.
(ii) A specific work or improvement either for rental or for
subsequent sale to an individual purchaser undertaken by a
nonprofit housing corporation, consumer housing cooperative,
limited dividend housing corporation, mobile home park corporation,
or mobile home park association pursuant to or receiving benefits
under this act to provide dwelling accommodations, including the
acquisition, construction, or rehabilitation of lands, buildings,
and improvements.
(iii) Social, recreational, commercial, and communal facilities
that the authority finds necessary to serve and improve a
residential area in which housing described in subparagraph (i) or
(ii) is located or is planned to be located, thereby enhancing the
viability of the housing.
(g) "Low income or moderate income persons" means families and
persons who cannot afford to pay the amounts at which private
enterprise, without federally-aided mortgages or loans from the
authority, is providing a substantial supply of decent, safe, and
sanitary housing and who fall within income limitations set in this
act or by the authority in its rules. Among low income or moderate
income persons, preference shall be given to the elderly and those
displaced by urban renewal, slum clearance, or other governmental
action.
(h) "Municipality" means a city, village, or township in this
state.
(i) "County" means a county within this state.
(j) "Governing body" means in the case of a city, the council
or commission of the city; in the case of a village, the council,
commission, or board of trustees of the village; in the case of a
township, the township board; and in the case of a county, the
county board of commissioners.
(k) "Nonprofit housing corporation" means a nonprofit
corporation incorporated under the corporation laws of this state
and chapter 4.
(l) "Consumer housing cooperative" means a nonprofit
corporation incorporated pursuant to the corporation laws of this
state and chapter 5.
(m) "Annual shelter rent" means the total collections during
an agreed annual period from all occupants of a housing project
representing rent or occupancy charges, exclusive of charges for
gas, electricity, heat, or other utilities furnished to the
occupants.
(n) "Taxing jurisdiction" means a municipality, county, or
district, including a school district or any special district
having the power to levy or collect taxes upon real property or in
whose behalf taxes may be levied or collected.
(o) "Elderly" means a single person who is 55 years of age or
older or a household in which at least 1 member is 55 years of age
or older and all other members are 50 years of age or older.
(p) "Housing development" means a development that contains a
significant element of housing for persons of low or moderate
income and elements of other housing and commercial, recreational,
industrial, communal, and educational facilities that the authority
determines improve the quality of the development as it relates to
housing for persons of low or moderate income.
(q) "Limited dividend housing corporation" means a corporation
incorporated or qualified pursuant to the corporation laws of this
state and chapter 6 and a limited dividend housing association
organized and qualified pursuant to chapter 7.
(r) "Residential real property" means real property located in
this state, used for residential purposes, and improved or to be
improved by a residential structure. Residential real property
includes a mobile home, a mobile home park, and a mobile home
condominium project. When the terms "rehabilitate" or
"rehabilitation" are used in conjunction with residential real
property, residential real property refers to property improved by
a residential structure.
(s) "Rehabilitation" means all or part of those repairs and
improvements necessary to make residential real property safe,
sanitary, or adequate.
(t) "Deferred payment loan" means a loan that is repayable or
partially repayable upon the occurrence of a specified event as
determined by the authority.
(u) "Eligible distressed area" means any of the following:
(i) An area located in a city with a population of at least
10,000, which area is either designated as a "blighted area" by a
local legislative body pursuant to 1945 PA 344, MCL 125.71 to
125.84, or which area is determined by the authority to be blighted
or largely vacant by reason of clearance of blight, if, with
respect to the area, the authority determines all of the following:
(A) That private enterprise has failed to provide a supply of
adequate, safe, and sanitary dwellings sufficient to meet market
demand.
(B) That approval of elimination of income limits applicable
in connection with authority loans has been received from the city
in the form of either a resolution adopted by the highest
legislative body of the city or, if the city charter provides for
the mayor to be elected at large with that office specifically
designated on the ballot, provides that the office of mayor is a
full-time position, and provides that the mayor has the power to
veto legislative actions of the legislative body of that city, a
written communication from the mayor of that city.
(ii) A municipality that meets all of the following
requirements:
(A) The municipality shows a negative population change from
1970 to the date of the most recent federal decennial census.
(B) The municipality shows an overall increase in the state
equalized value of real and personal property of less than the
statewide average increase since 1972.
(C) The municipality has a poverty rate, as defined by the
most recent federal decennial census, greater than the statewide
average.
(D) The municipality has had an unemployment rate higher than
the statewide average unemployment rate for 3 of the preceding 5
years.
(iii) An area located in a local unit of government certified by
the Michigan enterprise zone authority as meeting the criteria
prescribed in section 2(d) of the neighborhood enterprise zone act,
1992 PA 147, MCL 207.772.
(v) "Mobile home" means a structure, transportable in 1 or
more sections, that is built on a chassis and is designed to be
used as a dwelling with or without permanent foundation, when
connected to the required utilities, and includes the plumbing,
heating, air conditioning, and electrical systems contained in the
structure. Mobile home may, but need not, include the real property
to which the mobile home may be attached. Mobile home does not
include a recreational vehicle.
(w) "Mobile home condominium project" means a condominium
project in which mobile homes are intended to be located upon
separate sites that constitute individual condominium units and
that complies with the condominium act, 1978 PA 59, MCL 559.101 to
559.276.
(x) "Mobile home park" means a parcel or tract of land under
the control of a person or entity upon which 3 or more mobile homes
are located on a continual, nonrecreational, residential basis and
that is offered to the public for general public use for continual,
nonrecreational, residential purposes regardless of whether a
charge is made for that use, together with any social,
recreational, commercial, and communal facilities used or intended
for use incident to the occupancy of a mobile home. Mobile home
park does not include trailer parks and courts for use on a
transient basis.
(y) "Mobile home park association" means a mobile home park
association organized and qualified in accordance with chapter 9.
(z) "Mobile home park corporation" means a corporation
incorporated pursuant to the corporation laws of this state and
qualified in accordance with chapter 8.
(aa) "Housing unit" means living accommodations that are
intended for occupancy by up to 4 families, with a separate
dwelling unit for each family, that may be site constructed or may
be a mobile home or other form of manufactured housing, and with
respect to which either of the following applies:
(i) The owner of the housing occupies at least 1 of the
dwelling units.
(ii) A cooperative shareholder or member has a proprietary
lease of the housing unit.
(bb) "Moderate cost residential rental property" means
dwelling units for which the rental payments are equal to or less
than that established from time to time as the fair market rents
for existing housing in accordance with 1 of the following:
(i) The section 8 leased housing program established under
section 8 of the United States housing act of 1937, 42 USC 1437f,
and the regulations promulgated under that act, or a substantially
equivalent successor federal program.
(ii) A determination made by the authority of the average fair
market rent for existing rental property.
(cc) "Area of chronic economic distress" means an area that
qualifies as a "qualified census tract" or an "area of chronic
economic distress" as defined in former section 103A(k) of the
internal revenue code, or an eligible distressed area.
(dd) "Mortgage lender" means a state or national bank, state
or federal savings and loan association, mortgage company,
insurance company, state pension fund, or any other financial
institution, intermediary, or entity authorized to make mortgage
loans in this state.
(ee) "Authority-aided mortgage" means a mortgage made, held,
purchased, or assisted by the authority.
(ff) "Subsidiary nonprofit housing corporation" means an
entity created under section 22c.
(gg) "Family income" means all income that is included in a
determination of family income under section 143(f) of the internal
revenue code, 26 USC 143(f), together with the income of all adults
who will reside in the residence, which income might otherwise be
excluded from consideration because the individual was not expected
to both live in the residence and be primarily or secondarily
liable on the mortgage note.
(hh) "Statewide median gross income" means the statewide
median gross income as determined under section 143(f) of the
internal revenue code, 26 USC 143(f).
(ii) "Mutual housing association" means a corporation
organized in accordance with chapter 10.
(jj) "Internal revenue code" means the United States internal
revenue code of 1986.
(kk) "Internal revenue code of 1954" means the United States
internal revenue code of 1954 as in effect on the day immediately
before the effective date of the internal revenue code of 1986.
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) "Adjacent neighborhood" means a residential area
immediately adjoining or near a downtown area.
(b) (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) "Downtown area" means an area where 20 or more contiguous
properties have been planned, zoned, or used for commercial
purposes for 50 or more years and where the buildings are built
adjacent to each other and up to the public right-of-way. In order
to be a downtown area, the area must contain a significant number
of multilevel, mixed use buildings and must be owned by no fewer
than 3 private owners.
(d) (c)
"Eligible applicant"
means a not-for-profit
corporation, a for-profit corporation, a municipality, a land bank
established under the land bank fast track act, 2003 PA 258, MCL
124.751 to 124.774, 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, or impoverished households or projects
located in a downtown area or adjacent neighborhood.
(e) (d)
"Extremely low income
household" means a person, a
family, or unrelated persons living together whose adjusted
household
income is not more than 25% 30%
of the median income, as
determined by the authority.
(f) (e)
"Fund" means the Michigan
housing and community
development fund created in section 58a.
(g) "Impoverished household" means a person, a family, or
unrelated persons living together who have adjusted household
income that is not greater than 15% of the area median income as
determined by the authority.
(h) (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.
(i) "Mixed use building" means a building that can be used for
more than 1 purpose and in any combination, including, but not
limited to, residential housing combined with either commercial or
retail space.
(j) (g)
"Multifamily housing"
means a building or buildings
providing housing to 2 or more households, none of which is owner
occupied.
(k) "Project" means activities identified in section 58c.
(l) "Small town" means a city or village with a population of
less than 20,000.
(m) (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.
(1) The Michigan community and housing development fund is
created as a separate fund in the authority.
(2) The fund shall be administered by the authority, and money
in the fund shall be expended only as provided in this act.
(3) The authority shall credit to the fund all amounts
appropriated and any other money made available to the authority
for the fund from any other source for the purposes under this act.
(4) The authority shall invest the money and credit the
earnings from the investments to the fund in accordance with
section 22.
(5) Money appropriated under this section to the fund shall be
available for disbursement upon appropriation.
(6) All balances in the fund at the end of the fiscal year
shall be carried over as part of the fund and shall not revert to
the general fund.
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, or impoverished households and to finance
projects located in a downtown area or adjacent neighborhood 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, or impoverished
households and for projects located in a downtown area or adjacent
neighborhood. 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, MCL 24.201 to
24.328,
providing for the terms and conditions under which
assistance
made under this chapter shall be recaptured.
(3) (4)
The authority shall develop an
annual a biennial
allocation 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, economic, and housing distress in
various regions of the state.
(b)
The allocation plan shall identify eligible applicants,
preference for special population groups described in section
58c(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 Every other year, the authority shall hold public
hearings
in at least 3 separate locations throughout in this
state
on
the priorities and draft prepare a biennial allocation plan. for
the
upcoming year. After the public hearings, the 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, the number of homeless persons served, the number
of persons with special needs served, and the number of downtown
areas and adjacent neighborhoods that received financing.
(7)
In addition to the rules promulgated under subsection (3),
the
The authority shall may 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, and impoverished households and with respect to projects
located in a downtown area or adjacent neighborhoods:
(a) Acquisition of land and buildings.
(b) Rehabilitation.
(c) New construction.
(d) Development and predevelopment costs.
(e) Preservation of existing housing.
(f)
Infrastructure Community
development projects, including,
but not limited to, infrastructure improvements, economic
development projects, blight elimination, 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.
(k) Foreclosure prevention and assistance.
(l) Individual development accounts established under the
individual or family development account program act, 2006 PA 513,
MCL 206.701 to 206.711.
(m) Activities related to ending homelessness.
(n) Technical assistance to nonprofit organizations,
municipalities, and land banks.
(o) Predatory lending.
(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 eligible 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 to eligible
applicants
for housing units for very low income, or
extremely low
income, or impoverished households within multifamily housing that
is
occupied partly by very low income, or extremely low income, or
impoverished households and partly by households that do not
qualify
as very low income, or extremely low income, or
impoverished 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. 58e. (1) The Michigan community and housing development
fund advisory committee is created. The committee shall have 9
members. Two members shall be appointed by the senate majority
leader, 2 members shall be appointed by the speaker of the house of
representatives, and 5 members shall be appointed by the governor.
(2) The committee shall be composed of a broad representation
of community interest. There shall be at least 1 representative of
each of the following sectors:
(a) Housing lenders.
(b) Housing developers.
(c) Housing construction.
(d) Local government.
(e) Local housing organizations.
(f) Nonprofit organizations.
(3) Of the members initially appointed, 3 members shall be
appointed for a term of 3 years, 3 members shall be appointed for a
term of 2 years, and 3 members shall be appointed for a term of 1
year. After the initial appointments are made, appointed members
shall serve 3-year terms. Committee members may be appointed for 2
successive terms but shall not serve more than 2 successive terms.
Former committee members may be reappointed if it has been at least
3 years since they last served on the committee.
(4) A committee member may be removed for misfeasance,
malfeasance, or willful neglect of duty. A committee member may
resign at any time by sending a written notice of resignation to
the authority. Vacancies shall be filled in the same manner as the
original appointment. A person filling a vacancy shall serve the
remaining term of the person he or she replaced.
(5) Committee members shall be reimbursed by the authority for
necessary and reasonable expenses for performance of committee
duties but shall otherwise serve without compensation.
(6) The committee shall select a chairperson to serve a 1-year
term by vote or consensus. A chairperson may be reselected for each
term or a new chairperson may be selected. The chairperson shall
call for committee meetings and shall run each meeting of the
committee.
(7) The committee shall have the following duties and powers:
(a) The committee shall develop and make recommendations for
the implementation of a biennial allocation plan for the fund.
(b) Monitor the process of awards granted by the authority
board and provide input to the authority board about all of the
following:
(i) Fair and equitable award allocation.
(ii) Whether the proposed awards meet the housing needs and
priorities of this state.
(iii) Whether the proposed awards meet the economic development
needs and priorities of the community to which the proposed award
is directed.
(c) Meet with representatives of the authority, including
staff and members of the authority board, on a regular basis to
discuss and advise on the needs of the industry.
(8) The authority shall provide the committee with a meeting
place, supplies, and whatever staff assistance that the committee
requests. The authority board shall weigh heavily the
recommendations of the committee concerning awards from the fund.
The authority board shall make the final decision on awards from
the fund.
Enacting section 1. The Michigan housing and community
development fund act, 2004 PA 479, MCL 125.2821 to 125.2829, is
repealed.