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ARIZONA STATE SENATE
RESEARCH
STAFF
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JULIE SZPERLING LEGISLATIVE RESEARCH ANALYST COMMERCE COMMITTEE Telephone: (602) 542-3171 Facsimile: (602) 542-7833 |
APPROPRIATIONS COMMITTEE
DATE: March 2, 2001
SUBJECT: Strike Everything Amendment to S.B. 1517
Purpose
Transfers existing housing development programs from the Arizona Department of Commerce to the Office of Housing Development created in the Governor’s Office and, ultimately, to a new Arizona Department of Housing. Establishes the Arizona Housing Finance Authority, a bond issuance authority to specialize in affordable single-family and multifamily housing programs for rural Arizona.
Background
One of the Arizona Housing Commission’s chief recommendations in its 2000 State of Housing Report was a call for state leadership and the creation of a state housing agency. According to the Commission, this action is intended to help combat the impending housing affordability crisis that is anticipated because of the widening gap between income and housing costs.
The strike everything amendment to S.B. 1517 proposes to transfer existing housing development programs from the Arizona Department of Commerce (DOC) to the Office of Housing Development created in the Governor’s Office and ultimately to a new Arizona Department of Housing (DOH), and to attach administratively to the agency a bond issuance authority, the Arizona Housing Finance Authority (HFA), to specialize in affordable single-family and multifamily housing programs for rural Arizona.
More specifically, the strike everything amendment to S.B. 1517:
· Establishes an Office of Housing Development (Office) in the Governor’s Office, DOH and HFA, with their powers and duties.
· Transfers, from DOC to the Office and ultimately DOH, existing duties and programs, as follows:
â Arizona’s “housing credit agency,” which administers the low-income housing tax credit program.
â The authority to allocate to Arizona’s bond issuers the rights to issue tax-exempt mortgage revenue bonds and mortgage credit certificates.
â Other existing housing programs, such as the State Public Housing Authority, housing trust fund and the housing development fund.
â Staffing of the Commission, which would be a policy advisory board.
The strike everything amendment to S.B. 1517 also gives the new HFA the ability to undertake three other programs. The first two programs would be in rural areas only, the last statewide:
· First-time homebuyer single family mortgage program.
· Below-market financing of multifamily housing through tax-exempt bonds.
· HUD Risk-sharing Program (multi-family mortgage insurance).
According to representatives of DOC, no new or additional state funds or state-funded staff would be required. The programs would be financed by fee revenue generated by the housing programs plus the present level of general fund support.
Provisions
Office of Housing Development in the Governor’s Office
and Arizona Department of Housing
1. Transfers to the Office of Housing Development (Office) in the Governor’s Office and ultimately to the newly established Arizona Department of Housing (DOH) all the responsibilities, powers and duties of the Office of Housing Development in the Arizona Department of Commerce (DOC). (41-1505 & 41-3952)
2. Prescribes the authority, powers and duties of the Director of DOH. (41-3952)
3. Expands, and transfers to the Office and ultimately DOH, the responsibilities of the DOC Office of Housing Development, including establishing policies, procedures and programs to address the affordable housing issues confronting this state, housing affordability, including housing issues of low income families, moderate income families, special needs populations and decaying housing stock, and providing assistance for safe, decent and affordable housing. (41-1505 & 41-3953)
4. Expands, and transfers to the Office and ultimately DOH, the duties of the DOC Office of Housing Development, including:
· providing staff and coordination support to HFA.
· performing the duties pertaining to the review of multifamily bonds, administration of the low-income housing tax credit program, allocation of mortgage revenue bond and mortgage credit certificate volume cap and neighborhood preservation.
· stimulating and encouraging cooperation and correlation of office plans, programs and operations among local, state, regional and federal governmental entities and private persons and enterprises.
· conducting research, providing information and advice and making recommendations on matters concerning objectives.
· making annual reports to the Governor and the Legislature on its activities.
· contracting and subcontracting for financial work and other duties.
· using differing forms of communications in furtherance of objectives.
· accepting gifts, grants and monies from public and private agencies or persons in furtherance of objectives and programs.
· establishing and collecting fees and receiving reimbursement of costs in connection with programs and duties.
· allowing for the construction, operation or rehabilitation of any housing unit as necessary to protect the collateral or security interest arising out of any program.
· requiring the guidelines for the construction or financing of affordable housing and low and moderate income households to meet or exceed all applicable state or local and, if applicable, federal building and health and safety code requirements.
· expanding the obligation of monies as loans or grants for the purpose of providing housing opportunities to moderate income households, housing affordability, or to prevent or combat decaying housing stock. (41-1505 & 41-3953)
5. Designates the Office and ultimately DOH as the state public housing agency. (41-1505 & 41-3953)
6. Eliminates the blanket prohibition on the Office and ultimately DOH from administering Section 8 housing assistance in an area of the State where there is a local public housing authority, and permits such administration, subject to prescribed restrictions. (41-1505 & 41- 3953)
7. Differentiates two types of housing assistance programs authorized by HUD tenant-based rental housing assistance and project-based rental housing assistance.(41-1505 & 41-3953)
8. Allows the Office and ultimately DOH to administer monies authorized under Section 8 project-based housing assistance program in all areas of the State. (41-1505 & 41-3953)
9. Allows the Office and ultimately DOH to administer monies authorized under a Section 8 tenant-based housing assistance program in an area of the State where a local PHA is established, if assistance is limited to persons with SMI or other disabilities.(41-1505 & 41-3953)
10. Requires notice to and comment from a city, town, county or tribal government for specified programs or projects planned for its jurisdiction. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations. (41-1505 & 41-3953)
11. Exempts DOC, the Office and ultimately DOH from the procurement code and contracting restrictions. (35-729, 41-1505, 41-3953)
Transfers of Existing Commission, Programs and Funds
12. Transfers from DOC to the Office and ultimately DOH the enabling statute for the Arizona Housing Commission. (41-1505.11 & 41-3954)
13. Transfers from DOC to the Office and ultimately DOH the responsibility to review and approve or deny the issuance of tax exempt bonds in Arizona intended to finance multifamily residential rental projects, sanitariums, clinics, medical hotels, rest homes, nursing homes, skilled nursing facilities or life care facilities. (35-726)
14. Requires the Office and ultimately DOH to transmit monies collected from applicants for this review together with reimbursement of costs incurred in the review to the State Treasurer for deposit in the newly established DOH program fund. (35-726)
15. Transfers from DOC to the Office and ultimately DOH the authority to act as the state’s housing credit agency, administering for the state the federal low-income housing tax credit program. (35-728)
16. Requires notice to and consent from a city, town, county or tribal government for a multifamily rental project planned for its jurisdiction. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations. (35-728)
17. Requires the Office and ultimately DOH to transmit monies collected from applicants in connection with its review of applications and monitoring compliance with the low-income housing tax credit program to the State Treasurer for deposit in the newly established DOH program fund. (35-728)
18. Transfers from DOC to the Office and ultimately DOH the responsibility of allocating mortgage revenue bond and mortgage credit certificate volume cap. (35-913)
19. Allows HFA to apply annually to the Director of the Office and ultimately DOH for a mortgage revenue bond or mortgage credit certificate allocation for the rural area of the state. (35-913)
20. Extends to March 1 the time allowed for the Director to determine a recipient of and make an unreserved mortgage revenue bond and mortgage credit certificate allocation for rural areas. (35-913)
21. Requires HFA to give notice to a city, town, county or tribal government for issuance of mortgage revenue bonds and mortgage credit certificates for rural counties and metro counties opt-out communities. (35-913)
22. Transfers from DOC to the Office and ultimately DOH the enabling statute for the housing trust fund. (41-1512 & 41-3955)
23. Expands existing developing projects and programs connected with providing housing opportunities to moderate income households and for housing affordability. (41-1512 & 41- 3955)
24. Requires notice to and comment from a city, town, county or tribal government for a housing trust fund program or project planned for its jurisdiction. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations. (41-1512 & 41-3955)
25. Transfers from DOC to DOH the right to receive for the housing trust fund 55 percent of the abandoned property apportioned by the State Treasurer. (44-313)
26. Transfers from DOC to DOH the right to receive for the housing trust fund 35 percent of the interest earned on Federal Deposit Insurance Corporation (FDIC) unclaimed deposits apportioned by the State Treasurer. (44-314)
27. Transfers from DOC to the Office and ultimately DOH the enabling statute for the housing development fund for prison communities. (41-1518 & 41-3956)
28. Stipulates the fund consists of housing trust fund monies and broadens its use to provide long-term housing opportunities for authorized areas. (41-1518 & 41-3956)
29. Requires notice to and comment from a city, town, county or tribal government for a housing development fund project or program planned for its jurisdiction. Prohibits an interference with or an attempt to override the local jurisdictions planning, zoning or land use regulations (41-1518 & 41-3956)
Arizona Department of Housing Program Fund (41-3957)
30. Establishes the Arizona Department of Housing program fund, consisting of account bond review fees, tax credit fees, residual earnings transferred to DOH from HFA and fees earned from other activities undertaken by DOH.
31. Requires DOH to use monies in the fund for administrative costs and, at the Director’s election, to be irrevocably transferred to HFA for deposit in funds in connection with mortgage revenue bond programs or mortgage credit certificate programs.
32. Specifies that the State Treasurer invests the fund, interest is credited to the account and monies in the fund are nonlapsing and continuously appropriated.
Arizona Housing Finance Authority
33. Establishes HFA and its board of directors. (41-3902 & 41-3903)
34. Prescribes the membership of the board and includes provisions for officers, frequency and method of meetings, and reimbursement of members. Stagger the initial terms of board members. (41-3903)
35. Establishes the powers of the board, such as appointing a director and employees, employing consultants, contracting, suing and being sued, issuing bonds and acquiring title to real property if necessary to preserve the affordability of a housing facility. (41-3905)
36. Requires HFA to notify and receive consent from a city, town, county or tribal government for a coinsurance of a HUD HFA risk sharing program multifamily residential rental project is planned for its jurisdiction. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations. (41-3905)
37. Specifies that costs of operation of HFA are not the responsibility of the state and must be paid only from bond proceeds. Exempts HFA and its income from taxation in this state. (41-3906)
38. Expands on the power to issue bonds to cover items such as forms of bonds issued in rural areas,
principal and interest payments, agreements with trustees, bond reserves, and default and receivership. (41-3907)
39. Requires notice to and consent from a city, town, county or tribal government for a multifamily residential rental project planned for its jurisdiction. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations. (41-3907)
40. Allows HFA to enter into intergovernmental or cooperative agreements with IDAs, regardless of geographic limitations, for projects located in urban areas. Prohibits interference with or an attempt to override the local jurisdiction's planning, zoning or land use regulations.(41-3907)
41. Requires the board to establish bond funds consisting of bond proceeds and certificate funds consisting of fees and costs collected in the mortgage credit certificate program to accomplish its objectives. (41-3908)
42. Allows the board to irrevocably transfer any surplus monies in the bond funds and certificate fund to DOH for deposit in the Arizona Department of Housing program fund or the housing trust fund. (41-3907, as amended)
43. Allows HFA to credit enhance its bonds and pay the costs of credit enhancement from bond proceeds or other available funds. (41-3909)
44. Assures bondholders that the state will not limit or alter the rights of HFA or the successor agency while bonds are outstanding. (41-3910)
45. Makes HFA bonds legal investments in this state for government and financial entities. (41-3911)
46. Specifies that HFA bonds are obligations of HFA only and not obligations of this state. (41-3912)
47. Specifies that powers granted to HFA are in addition to those granted it by any other law and are sufficient for it to issue bonds and carry out any other activities relating to the issuance of bonds. (41-3913)
48. Exempts the HFA from the procurement code. (41-3902)
Miscellaneous
49. Eliminates the existing repeal date of December 31, 2005 for the Arizona Housing Commission.
50. Allows all Arizona Housing Commission members on the yet-to-be-determined date of transition between the Office of Housing Development in the Governor’s Office and DOH to continue to serve the balance of their normal terms of office.
51. Terminates DOH on July 1, 2011. (41-3011.01)
52. Schedules the transfer of legal matters, rules, personnel, property, records and appropriated funds from the DOC Office of Housing Development to the Office of Housing Development in the Governor’s Office on January 1, 2002.
53. Schedules the transfer of legal matters, rules, personnel, property, records, appropriated funds, monies in the housing trust fund and the housing development fund and monies in the Arizona Department of Housing program fund from the Office of Housing Development in the Governor’s Office to the DOH on October 1, 2002.
54. Contains a legislative intent clause.
55. Defines terms and makes numerous clarifying, technical and conforming changes.
56. Establishes a January 1, 2002 effective date for provisions relating to the:
· Office of Housing Development in the Governor’s Office
· HFA, except for issuance of bonds or mortgage credit certificates and transfer of excess monies to specified DOH funds
· review of multifamily bonds
· designation as the housing credit agency
· allocator of mortgage revenue bond/mortgage credit certificate volume cap
· exemption from procurement code and contracting restrictions
· Arizona Housing Commission
· housing trust fund
· housing development fund
57. Establishes an October 1, 2002 effective date for provisions relating to the:
· DOH
· HFA issuance of bonds or mortgage credit certificates and transfer of excess monies to specified DOH funds
· State Treasurer apportionment of abandoned property
· State Treasurer apportionment of interest earned on FDIC unclaimed deposits
Amendments
Adopted by Commerce Committee
1. Adopted the strike everything amendment.
2. Requires DOH and HFA to provide for notice and local comment or for notice and local consent from local jurisdictions for respective programs and projects planned for their jurisdictions. Prohibits DOH and HFA from interfering with or attempting to override the local jurisdiction's planning, zoning or land use regulations.
3. Allows for the administration of the project-based Section 8 housing assistance program from HUD in all areas of the state, regardless of whether a local public housing authority has been established.
4. Redefines "rural areas" to mean all areas of the state that is not located within an IDA jurisdiction.
5. Includes "housing affordability" when developing projects and programs connected with providing housing opportunities.
6. Establishes the effective date for the transition between the Office and DOH on October 1, 2002.
7. Makes numerous technical bond counsel changes and clarifications.
8. Makes numerous clarifying, technical and conforming changes.
Senate Action
COM 2/28/01 DPA 5-0-1
Prepared by Senate Staff
March 5, 2001