1.1    .................... moves to amend H. F. No. 301 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. [463.270] DEFINITIONS.
1.4    Subdivision 1. Scope. As used in sections 463.270 to 463.276, the terms defined in
1.5this section have the meanings given them.
1.6    Subd. 2. Last known address. "Last known address" includes the address where
1.7the property is located or the address as listed in the tax records.
1.8    Subd. 3. Low- or moderate-income housing renters or buyers. "Low- or
1.9moderate-income housing renters or buyers" means housing for persons and families
1.10whose income does not exceed 80 percent of the greater of state median income or area or
1.11county median income as determined by the federal Department of Housing and Urban
1.12Development.
1.13    Subd. 4. Nonprofit housing organization. "Nonprofit housing organization" or
1.14"organization" means a nonprofit corporation organized under chapter 317A or similar law
1.15of another state that has as one of its purposes the improvement of housing. Nonprofit
1.16housing organization includes a church, or convention or association of churches, or
1.17an organization operated primarily for religious purposes that is operated, supervised,
1.18controlled, or principally supported by a church or convention or association of churches
1.19described in United States Code, title 26, section 501(c)(3), of the federal Internal Revenue
1.20Code and exempt from income tax under section 501(a).
1.21    Subd. 5. Nuisance. "Nuisance" means any property that because of its physical
1.22condition or use is a public nuisance, or any property that constitutes a blight on the
1.23surrounding area, or any property that is not fit for human habitation under the applicable
1.24fire, building, and housing codes. Nuisance also means any property on which any illegal
1.25activity involving controlled substances as defined in section 152.01, subdivision 4, or
2.1marijuana takes place or any property on which any illegal activity by a criminal gang,
2.2as defined in section 609.229, subdivision 1, takes place.
2.3    Subd. 6. Parties in interest. "Parties in interest" means any owner or owners of
2.4record, judgment creditor, tax purchaser, or other party having any legal or equitable
2.5title or interest in the property.
2.6    Subd. 7. Property. "Property" means any residential real estate that has been
2.7continuously unoccupied by persons legally in possession for the preceding year.
2.8    Subd. 8. Rehabilitation. "Rehabilitation" means the process of improving the
2.9property including, but not limited to, bringing property into compliance with applicable
2.10fire, housing, and building codes.

2.11    Sec. 2. [463.271] PETITION FOR TEMPORARY POSSESSION.
2.12    Subdivision 1. General requirements. (a) A nonprofit housing organization may
2.13bring a petition for temporary possession of property if:
2.14    (1) the property has been continuously unoccupied by persons legally in possession
2.15for the preceding year;
2.16    (2) the property is a nuisance;
2.17    (3) the organization intends to rehabilitate the property and use the property as
2.18housing for low- and moderate-income persons and families; and
2.19    (4) the organization has sent notice to the parties in interest of the property, by
2.20certified or registered mail, mailed to the parties' last known address and posted on the
2.21property at least 30 but not more than 60 days before the date the petition is brought, of
2.22the organization's intent to bring a petition for possession under section 463.272.
2.23    (b) A proceeding under this section may be commenced as a civil action in
2.24district court in the county in which the property is located. The petition must allege
2.25the conditions specified in paragraph (a). All parties in interest of the property must be
2.26named as respondents in the petition. Before a hearing on the petition, the petitioner shall
2.27record a notice of the pendency of the petition with the county recorder or the registrar
2.28of titles in the case of registered property and shall publish at least one notice of the
2.29petition in a qualified newspaper.
2.30    (c) The appointment of the organization as the temporary possessor is not a taking of
2.31the property, but rather a judicial and legislative remedy to abate the nuisance.
2.32    Subd. 2. Hearing. (a) At the hearing on the petition, the organization shall submit
2.33to the court a plan for the rehabilitation of the property and present evidence that the
2.34organization has adequate resources to rehabilitate and manage the property. For the
3.1purpose of developing a plan, representatives of the organization may be permitted entry
3.2onto the property by the court at times and on terms as the court deems appropriate.
3.3    (b) Upon request, the court shall grant a respondent 120 days to bring the property
3.4into compliance with applicable fire, housing, and building codes, provided that the
3.5respondent submits a plan to the court that is reasonably sufficient for these purposes. The
3.6court may, for good cause shown, extend the compliance period. If the property is brought
3.7into compliance within the compliance period, the court shall dismiss the petition. If the
3.8respondent fails to bring the property into compliance within the compliance period, the
3.9court shall consider the petition.

3.10    Sec. 3. [463.272] REHABILITATION ORDER.
3.11    (a) If the court approves the petition, the court shall enter an order approving the
3.12rehabilitation plan and granting temporary possession of the property to the organization.
3.13    (b) The organization shall have the following powers:
3.14    (1) to collect rents from residential tenants, evict residential tenants for nonpayment
3.15of rent or other cause, enter into leases for vacant dwelling units, and exercise other
3.16powers necessary and appropriate to carry out the purposes of this section;
3.17    (2) to contract for the reasonable cost of materials, labor, and services including
3.18utility services provided by a third party necessary for the rehabilitation of the property to
3.19maintain safe and habitable conditions over the useful life of the property, and disburse
3.20money for these purposes from funds available for the purpose;
3.21    (3) to provide services to the residential tenants that a landlord is obligated to
3.22provide and pay for them from funds available for the purpose;
3.23    (4) to petition the court, after notice to the parties, for an order allowing the
3.24organization to encumber the property to secure funds to the extent necessary to cover the
3.25costs described in clause (2), including reasonable fees for the organization's services, and
3.26to pay for the costs from funds derived from the encumbrance. The encumbrance shall
3.27become a first lien as provided in section 463.277; and
3.28    (5) to petition the court, after notice to the parties, for an order allowing the
3.29organization to receive funds made available for this purpose by the federal or state
3.30governing body or the municipality to the extent necessary to cover the costs described in
3.31clause (2) and pay for them from funds derived from this source.
3.32The municipality shall recover disbursements under clause (5) by special assessment on
3.33the real estate affected, bearing interest at the rate determined by the municipality, but not
3.34to exceed the rate established for finance charges for open-end credit sales under section
3.35334.16, subdivision 1, paragraph (b). The assessment, interest, and any penalties shall
4.1be collected as are special assessments made for other purposes under state statute or
4.2municipal charter.
4.3    (c) The organization shall bring the property into compliance with applicable fire,
4.4housing, and building codes, and obtain all necessary permits. The organization shall
4.5complete the code compliance work no later than six months from taking temporary
4.6possession. The court may, for good cause shown, extend the compliance period.

4.7    Sec. 4. [463.273] ANNUAL REPORT.
4.8    The organization shall file an annual report with the court in relation to the
4.9rehabilitation and use of the property. The court shall require reports and status updates to
4.10be filed as it deems appropriate under the circumstances but no less frequently than once
4.11per year. The report shall include statements of all expenditures made by the organization
4.12including, but not limited to, payments for the rehabilitation, operation, and maintenance
4.13of and repairs to the property, and for real estate taxes, and payments to mortgagees and
4.14lienholders during the preceding year, and shall include statements of all income and
4.15receipts from the property for the preceding year.

4.16    Sec. 5. [463.274] RIGHTS OF OWNER.
4.17    An owner is entitled to regain possession of the property by petitioning to the court
4.18for restoration of possession and, upon due notice to the organization, for a hearing on the
4.19petition. At the hearing, the court shall determine proper compensation to the organization
4.20for its expenditures, including management fees, based on the organization's reports to
4.21the court. The court, in determining the proper compensation to the organization, may
4.22consider income or receipts received from the property, and the increase in the market
4.23value of the property resulting from the rehabilitation by the organization. In no event
4.24shall the amount paid be less than the amount spent by the organization plus management
4.25fees and interest. After the owner pays the compensation to the organization as determined
4.26by the court, the owner shall resume possession of the property, subject to all existing
4.27rental agreements, whether written or verbal, entered into by the organization.

4.28    Sec. 6. [463.275] PROPERTY REDEMPTION.
4.29    If the property is sold for unpaid taxes, an organization with temporary possession
4.30may redeem the property in the same manner as the owner is permitted, and amounts paid
4.31to redeem the property shall be included as expenditures in the organization's report to
4.32the court.

4.33    Sec. 7. [463.276] PETITION FOR TRANSFER OF OWNERSHIP.
4.34    If an owner takes no action to regain possession of the property in the six months
4.35following entry of an order granting temporary possession of the property to the
5.1organization, the organization may file a petition for an order transferring ownership of
5.2the property to the organization. Upon due notice to the named respondents, an order
5.3may be entered transferring ownership to the organization. The order must specify that
5.4the property be used for low- and moderate-income housing for at least a ten-year period
5.5after the order is entered, if the organization is renting the property. The organization
5.6may sell the property to low- or moderate-income home buyers, as defined in section
5.7463.270, subdivision 3. The ten-year restrictive covenant does not transfer to the low-
5.8or moderate-income buyer. The organization must record the deed at the county. The
5.9title shall be incontestable to the purchaser.

5.10    Sec. 8. [463.277] PRIORITY OF LIENS.
5.11    Pursuant to the police powers vested in the state for the abatement of nuisances, all
5.12rehabilitation and administration expenses incurred by the organization with temporary
5.13possession of the property and any notes issued for rehabilitation are a first lien upon
5.14the property."
5.15Amend the title accordingly