This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0137a.WMC
DATE: 12/1/2021
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 137 Florida Housing Financial Corporation Revenue Bonds
SPONSOR(S): Roth
TIED BILLS: IDEN./SIM. BILLS: SB 196
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 17 Y, 0 N LaTorre Aldridge
2) State Affairs Committee
3) Appropriations Committee
SUMMARY ANALYSIS
The Florida Housing Finance Corporation (Florida Housing) is a public corporation created by the Legislature
to assist in providing a range of affordable housing opportunities for Florida residents. Florida Housing
administers federal and state resources to make loans, guarantees of loans, and to issue bonds to finance the
development and preservation of affordable homeowner and rental housing.
The bill makes the following amendments regarding Florida Housing bond financed transactions:
Designates Florida Housing as the state fiscal agency to make the determinations required by s. 16,
Article VII of the State Constitution, in connection with the issuance of Florida Housing bonds;
Removes the authority of the State Board of Administration to authorize interest rates in excess of the
maximum; and
Removes the requirement that the claims paying rating classification be consistent with rules adopted
by the State Board of Administration.
The bill does not appear to have a fiscal impact on state or local governments. STORAGE NAME: h0137a.WMC PAGE: 2
DATE: 12/1/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Florida Housing Finance Corporation
The Florida Housing Finance Corporation (Florida Housing) is a public corporation created by the
Legislature to assist in providing a range of affordable housing opportunities for Florida residents.
Florida Housing administers federal and state resources to make loans, guarantees of loans, and to
issue bonds to finance the development and preservation of affordable homeowner and rental housing
and assist homebuyers with financing and down payment assistance.
1
Florida Housing Bonds
Florida Housing facilitates the issuance of bonds by serving in a conduit capacity. Each bond indenture
is for a single purpose entity and the bonds are secured solely by the revenues, assets and guarantees
associated with each bond.
2
The bonds are not an obligation of the state as they are not secured by the
full faith and credit of the state.
3
Section 420.509, F.S., designates the State Board of Administration (SBA) as the state fiscal agency to
make the determinations required by section 16, Art. VII, of the State Constitution, in connection with
the issuance of Florida Housing bonds. The required fiscal determination is that in no state fiscal year
will the debt service requirements of the bonds proposed to be issued, and all other bonds secured by
the same pledged revenues, exceed the pledged revenues available for such debt service
requirements. This section also authorizes Florida Housing to bear interest on the bonds that are
issued. However, the rate or rates may not exceed the interest rate limitation set forth in s. 215.84,
F.S., unless authorized by the SBA.
4
Before a bond is issued, the Florida Housing’s Board of Directors must approve the requirements for a
bond financed development. Upon the Board’s approval, a cash flow analysis is prepared and
submitted to the SBA for approval of fiscal determination. Once the cash flow analysis is received, the
Governor and the Florida Cabinet, functioning as the SBA, places the report on the next scheduled
Cabinet meeting’s agenda. Upon approval by the Cabinet, the bond transaction can proceed to closing.
Florida Affordable Housing Guarantee Program
The Florida Affordable Housing Guarantee Program (Guarantee Program or Program) was created in
1992 by the Legislature. The purpose of the Guarantee Program is to stimulate private sector lending in
an effort to overcome the lack of available credit enhancement for the production of affordable housing
in Florida and, in turn, reduce the cost of financing housing projects.
5
The cost savings are achieved by the Guarantee Program guaranteeing the payment of obligations
made to finance or refinance the purchase, construction, or rehabilitation of eligible housing. This
1
See Overview of Florida Housing Finance Corporation, Florida Housing Finance Corporation, available at
https://www.floridahousing.org/docs/default-source/aboutflorida/august2017/august2017/tab8.pdf, (last visited November
23, 2021).
2
Affordable Housing Work Group, Overview of the State’s Implementation of Rental Programs (August 2017) available at
tab7.pdf (www.floridahousing.org) (last visited November 23, 2021). Chapter 2017-71, Laws of Fla., established the
Workgroup to develop recommendations to address the state’s affordable housing needs.
3
Sections 420.509, and 420.51, F.S., and Section 16, Article VII, Florida Constitution.
4
Section 420.509(4), F.S.
5
Guarantee Program, Florida Housing Finance Corporation, available at, Guarantee Program (www.floridahousing.org),
(last visited November 23, 2021). STORAGE NAME: h0137a.WMC PAGE: 3
DATE: 12/1/2021
includes guaranteeing mortgages that secure multifamily mortgage revenue bonds.
6
Florida Housing
uses proceeds from the issuance of bonds to establish a “guarantee fund” to guarantee the payment of
such obligations. Current law defines the guarantee fund, as the Affordable Housing Guarantee Fund
created and established with proceeds of revenue bonds issued by Florida Housing to implement the
Florida Affordable Housing Guarantee Program.
7
When combined with bond insurance, Guarantee Program enhanced securities typically received a
“AAA” rating.
8
The ratings are given by independent rating classification services, such as Standard &
Poor’s, to rate a company’s fiscal soundness and strength and its ability to pay claims. A “AAA” rating is
typically the strongest financial strength rating.
Under current law, if the claims payment obligations under the affordable housing guarantees from
amounts on deposit in the guarantee fund would cause the claims paying rating assigned to the
guarantee fund to be less than the third-highest rating classification on any nationally recognized rating
service, which classifications being consistent with s. 215.84(3), F.S., and rules adopted by the State
Board of Administration, Florida Housing must certify to the Chief Financial Officer (CFO) the amount of
such claims payment obligations. Upon receipt of certification, the CFO is required transfer to the
guarantee fund the amount certified as necessary to meet such obligations.
9
Effect of the Bill
Florida Housing Bonds
The bill amends section 420.509, F.S., to designate the Florida Housing Finance Corporation as the
state fiscal agency to make the determinations required by s. 16, Article VII of the State Constitution, in
connection with the issuance of Florida Housing bonds and removes the authority of the SBA to
authorize an interest rate in excess of the maximum.
Florida Affordable Housing Guarantee Program
The bill removes the requirement that the claims paying rating classification be consistent with rules
adopted by the State Board of Administration.
B. SECTION DIRECTORY:
Section 1: Amends s. 420.509, F.S., to designate the Florida Housing Finance Corporation as the
state fiscal agency to make determinations required by s. 16, Article VII of the State
Constitution, in connection with the issuance of Florida Housing bonds; revises the
authority for interest rates on Florida Housing bonds; and remove the authority of the
SBA to increase interest rates in excess of the maximum.
Section 2: Amends s. 420.5092, F.S., to remove the requirement that certain bond rating
classifications be consistent with rules adopted by the SBA.
Section 3: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
6
Guarantee Program, Florida Housing Finance Corporation, available at, Guarantee Program (www.floridahousing.org),
(last visited November 23, 2021).
7
Section 420.5092(2)(e), F.S.
8
Having a “AAA” or strong financial rating, helps lower the overall cost of borrowing, which ultimately allows for a
reduction in the rents to individual earing lower incomes. Guarantee Program, Florida Housing Finance Corporation,
available at, Guarantee Program (www.floridahousing.org), (last visited November 23, 2021).
9
Section 420.5092(6)(b), F.S., requires the CFO upon receipt of certification to transfer funds to the guarantee fund from
the first available taxes distributed to the State Housing Trust Fund pursuant to s. 201.15(4)(c) and (d), F.S., during the
ensuing state fiscal year. STORAGE NAME: h0137a.WMC PAGE: 4
DATE: 12/1/2021
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
N/A
2. Other:
N/A
B. RULE-MAKING AUTHORITY:
The bill does not provide rulemaking authority or require executive branch rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES