General Assembly Raised Bill No. 5106
February Session, 2012 LCO No. 996
*_____HB05106CE_HSG030212____*
Referred to Committee on Commerce
Introduced by:
(CE)
General Assembly
Raised Bill No. 5106
February Session, 2012
LCO No. 996
*_____HB05106CE_HSG030212____*
Referred to Committee on Commerce
Introduced by:
(CE)
AN ACT CONCERNING THE PRIVATE RENTAL INVESTMENT MORTGAGE AND EQUITY PROGRAM.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 8-400 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
As used in sections 8-400 to 8-405, inclusive, as amended by this act:
(1) "Authority" means the Connecticut Housing Finance Authority as created under section 8-244;
(2) "Developer", "mortgagor" or "eligible mortgagor" means (A) a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing, and having articles of incorporation approved by the authority in accordance with the provisions of chapter 134; (B) any business corporation incorporated pursuant to chapter 601 or any predecessor statutes thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing, and having articles of incorporation approved by the authority in accordance with the provisions of said chapter 134; (C) any limited liability company, partnership, limited partnership, joint venture, sole proprietorship, trust or association having as one of its purposes the construction, rehabilitation, ownership or operation of housing, and having basic documents of organization approved by the authority in accordance with the provisions of said chapter 134; or (D) a family or persons approved by the authority as qualified to own, construct, rehabilitate, manage and maintain housing under a mortgage loan made or insured by the authority under the provisions of said chapter 134 and under an agreement entered into pursuant to the provisions of sections 8-400 to 8-405, inclusive, as amended by this act;
(3) "Housing", "housing project", "development" or "project" means any undertaking having as its principal purpose the construction or substantial rehabilitation of safe and adequate housing and related facilities for low and moderate income families and persons, including housing that provides dwelling accommodations in addition to the primary purpose of providing dwelling accommodations for low and moderate income families and persons;
(4) "Related facilities" means retail, commercial, office, health, administrative, recreational, community and service facilities incidental to housing or the neighborhood in which the housing is located, as determined by the authority;
(5) "Rent" means the charges, excluding security deposits, paid to a landlord for occupancy of housing financed or assisted under sections 8-400 to 8-405, inclusive, as amended by this act;
(6) "Project cost" means the total of all costs incurred in the development of a housing project and any related facilities, which are approved by the authority and the Commissioner of Economic and Community Development as reasonable and necessary, including, but not limited to (A) costs of land acquisition, including any buildings located thereon; (B) costs of site preparation, demolition and development; (C) architectural, engineering, legal and other fees and charges incurred in connection with the planning, execution and financing of the project; (D) the cost of studies, surveys, plans and permits required in connection with the project; (E) insurance, interest, financing, tax and assessment costs and other operating costs incurred during construction; (F) the cost of construction or reconstruction, including the cost of fixtures and equipment related to such construction or reconstruction; (G) the cost of land improvements; (H) necessary expenses incurred in connection with the initial occupancy of the project; (I) a reasonable profit or fee to the builder and developer; (J) an allowance established by the authority for working capital, replacement and contingency reserves, and reserves for any anticipated operating deficits during the first two years of occupancy; (K) the cost of such other items, including tenant relocation, as the authority and the Commissioner of Economic and Community Development shall deem to be reasonable and necessary for the development of the project, less the amount of net rents and other net revenues received from the operation of any real and personal property located on the project site during construction;
(7) "Low income unit" means a unit of housing rented to a tenant whose income is below the aggregate family income standards established in sections 8-400 to 8-405, inclusive, as amended by this act;
(8) "Mortgage" means a mortgage deed or other instrument which shall constitute a lien, whether first or second, on real property or on a leasehold under a lease having a remaining term at the time such mortgage is acquired which does not expire for a number of years beyond the maturity date of the obligation secured by such mortgage that is equal to the number of years remaining until the maturity date of such obligation;
(9) "First mortgage" means such classes of first liens as are commonly given to secure loans on, or the unpaid purchase price of, real property under the laws of the state, together with appropriate credit instruments;
(10) "Bonds" means any bonds, notes, interim certificates, debentures or other obligations issued by the state pursuant to sections 8-400 to 8-405, inclusive, as amended by this act;
(11) "Aggregate family income" means the total family income of all members of a family, from whatever source derived, including but not limited to pensions, annuities, retirement benefits and social security benefits, provided the authority and the Commissioner of Economic and Community Development may exclude from such income, (A) reasonable allowances for dependents, (B) reasonable allowances for medical expenses, (C) all or any part of the earnings of gainfully employed minors or family members other than the chief wage earner, (D) income not regularly received and (E) such other expenses as the Commissioner of Economic and Community Development may allow;
(12) "Tenant" means the occupant of any housing unit financed or assisted under sections 8-400 to 8-405, inclusive, as amended by this act;
(13) "Second mortgage" means any class of second liens ranking immediately after a first mortgage or class of first liens on the same property, without any intervening liens, as are commonly given to secure loans on real property, or the unpaid purchase price of real property under the laws of the state, together with appropriate credit instruments to insure or guarantee repayment in the event of default by the mortgagor.
Sec. 2. Section 8-401 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
Upon preliminary approval by the State Bond Commission pursuant to the provisions of section 3-20, the state, acting by and through the Commissioner of Economic and Community Development, may enter into a contract with a developer, the authority [to provide] or mortgagor of the authority for state financial assistance in the form of grants-in-aid or deferred loans to housing projects financed by the authority through the means of a loan secured by a first mortgage. [; provided, any such financial assistance to be funded with proceeds of bonds authorized by public or special acts effective on or after July 1, 1995, shall be provided as set forth in this section. Commencing October 1, 1995, upon preliminary approval of the State Bond Commission pursuant to the provisions of section 3-20, the state, acting by and through the department may provide a grant-in-aid to the authority for purposes of permitting the authority to extend state financial assistance to a developer or mortgagor of the authority in the form of grants-in-aid or deferred loans to housing projects financed by the authority through means of a loan secured by a first mortgage.] Such grants or deferred loans made to a developer or mortgagor of the authority under this section shall be for construction or rehabilitation of developments containing rental units. The total amount of such grants or deferred loans awarded to a single project shall not exceed an amount equal to one-half of the cost of the project divided by the number of rental units in the project multiplied by the number of low-income units in the project. The total number of low-income units in any project receiving financial assistance under this section shall be not less than twenty per cent and [, for projects receiving assistance prior to October 1, 1995, and for projects receiving assistance from the proceeds of bonds authorized by public or special acts effective prior to July 1, 1995,] shall not be more than forty per cent of the total number of rental units in the project. No project receiving financial assistance under this section shall contain less than twenty-five rental units. Any grant or deferred loan awarded under this section shall be used to reduce the cost of the project. Loan repayments shall be paid to the State Treasurer and deposited in the General Fund.
Sec. 3. Section 8-402 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
The state, acting by and through the [Department] Commissioner of Economic and Community Development, may enter into a contract with the authority, developer, or mortgagor of the authority and the authority may enter into a contract with a developer or mortgagor of the authority to provide state financial assistance in the form of rental subsidy certificates for each low-income unit in the project. Any commitment to provide such subsidy shall be an obligation of the state or the authority, as the case may be, for a period of not less than fifteen years, and the amount of such subsidy shall be equal to the difference between the amount of rent plus an allowance for heat and utilities not included in the rent approved by the commissioner or the authority, as the case may be, and thirty per cent of the annual aggregate family income of the tenant residing in the low-income unit for each such unit on an annual basis. The rent charged for a low-income unit may not be increased without the approval of the commissioner or the authority, as the case may be. The annual aggregate family income of a tenant for the year prior to the occupancy of a low-income unit by the tenant shall not exceed fifty per cent of the area median income, adjusted for family size, as determined by the commissioner or the authority, as the case may be. If such annual aggregate family income after occupancy exceeds seventy per cent of the area median income, adjusted for family size, the unit occupied by the tenant will no longer be considered a low-income unit and the next available unit will be rented to a tenant with an aggregate family income of less than fifty per cent of the area median income, adjusted for family size. No tenant residing in a project will receive financial assistance through a rental subsidy certificate under this section if the aggregate family income of the tenant in the prior year exceeds sixty per cent of the area median income, adjusted for family size.
Sec. 4. Section 8-403 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
Upon preliminary approval by the State Bond Commission pursuant to the provisions of section 3-20, the state, acting by and through the [Department] Commissioner of Economic and Community Development, may enter into a contract with a developer, the authority [to provide] or a mortgagor of the authority for state financial assistance [to a mortgagor of the authority] in the form of a loan secured by a second mortgage for any housing project for which the authority has provided financial assistance in the form of a loan secured by a first mortgage. [; provided any such financial assistance to be funded with proceeds of bonds authorized by public or special acts effective on or after July 1, 1995, shall be provided as follows: Commencing October 1, 1995, upon preliminary approval of the State Bond Commission pursuant to the provisions of section 3-20, the state, acting by and through the Department of Economic and Community Development may provide a grant-in-aid to the authority, for purposes of permitting the authority to extend state financial assistance to the developer or mortgagor of the authority in the form of a loan secured by a second mortgage for any housing project for which the authority has provided financial assistance in the form of a loan secured by a first mortgage.] Such loan shall be made for the purpose of providing additional financing for the project. Any loan made under this section shall bear interest payable quarterly on the first days of January, April, July and October for the preceding calendar quarter, or at such other times as are determined by the commissioner or the authority, as the case may be, at a rate determined by the State Bond Commission under subsection (t) of section 3-20 and shall be repayable in such installments as may be determined by the commissioner or the authority, as the case may be, within fifty years from the date of completion of the project. Loan repayments shall be paid to the State Treasurer and deposited in the General Fund.
Sec. 5. Section 8-404 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
Any contract for financial assistance awarded under sections 8-400 to 8-405, inclusive, as amended by this act, [which is funded with proceeds of bonds of the state authorized by public or special acts effective prior to July 1, 1995, or which is funded prior to October 1, 1995, shall, and any other contract may] shall contain the requirement that the state or the authority, as the case may be, shall receive, in exchange for any such assistance, a financial participation in the project. Such financial participation shall be in a proportion which shall not be less than the proportion that the number of low-income units in the project bears to the total rental units in the project. Any sale of the project, any interest in the project or any of its units shall require the approval of the Commissioner of Economic and Community Development or the authority, as the case may be, and shall be made upon such terms and conditions as the commissioner or the authority, as the case may be, may approve.
Sec. 6. Section 8-405 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):
The proceeds from the sale of any bonds issued for the purposes of sections 8-401, as amended by this act, and 8-403, as amended by this act, issued pursuant to any authorization, allocation or approval of the State Bond Commission made [prior to July 1, 1990] after July 1, 2012, and of any notes issued in anticipation thereof as may be required for such purposes shall be applied to the payment of the principal of any such notes then outstanding and unpaid, and the remaining proceeds of any such sale shall be deposited in [a fund designated as the "Private Rental Investment Mortgage and Equity Fund" which fund shall be used to make loans or grants authorized by sections 8-401 and 8-403] the Housing Repayment and Revolving Loan Fund established pursuant to section 8-37qq. Payments [from the Private Rental Investment Mortgage and Equity Fund] to the developer, [or] the authority or the mortgagor of the authority shall be made by the State Treasurer on certification of the Commissioner of Economic and Community Development in accordance with the contract for financial assistance between the state and the authority, [or] the developer or the mortgagor of the authority. All payments of state service charges for any housing project as authorized by the commissioner financed from the proceeds of the state's general obligation bonds issued pursuant to any authorization, allocation or approval of the State Bond Commission made [prior to July 1, 1990] after July 1, 2012, shall be paid to the State Treasurer for deposit in said fund. Subject to the approval of the Governor, any expense incurred by the state in connection with the carrying out of the provisions of this chapter, including the hiring of necessary employees and entering upon necessary contracts, may be paid from [the Private Rental Investment Mortgage and Equity Fund] said Housing Repayment and Revolving Loan Fund.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2012 8-400
Sec. 2 July 1, 2012 8-401
Sec. 3 July 1, 2012 8-402
Sec. 4 July 1, 2012 8-403
Sec. 5 July 1, 2012 8-404
Sec. 6 July 1, 2012 8-405
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2012
8-400
Sec. 2
July 1, 2012
8-401
Sec. 3
July 1, 2012
8-402
Sec. 4
July 1, 2012
8-403
Sec. 5
July 1, 2012
8-404
Sec. 6
July 1, 2012
8-405
CE Joint Favorable C/R HSG
CE
Joint Favorable C/R
HSG