ARIZONA STATE SENATE
Phoenix, Arizona
Purpose
Enables public housing authorities to participate in federal low-income tax credit financing by permitting joint ownership relationships. Makes technical and clarifying changes to the housing statutes.
Background
Laws 2001, Chapter 22 established the Arizona Department of Housing (DOH) and the Arizona Housing Finance Authority (HFA). An interim phase transferred all existing housing development programs and related monies from the Department of Commerce to the Governor’s Office of Housing Development beginning January 1, 2002 and then ultimately to DOH on October 1, 2002. H.B. 2672 makes additional changes and clarifications to the housing legislation passed last year.
The Low-Income Housing Tax Credit (LIHTC) is a tool for funding new construction or rehabilitation of affordable rental units nationwide. The State of Arizona, through the Governor’s Office of Housing Development, is the housing credit agency in Arizona responsible for allocating the tax credits to specific projects that comply with the Internal Revenue Code. Tax credits are awarded to developers of low-income housing, who, in turn, offer the credits to investors. Investors, who become partners in the project, obtain a dollar for dollar reduction in their federal tax liability in exchange for providing equity to finance the development of qualified, affordable rental housing. Since county housing departments or authorities are not stand-alone entities, concern has been raised that the county housing authorities are currently not permitted to participate in such programs unless they bring in another agency to take over as the general partner. H.B. 2672 authorizes public housing authorities to participate in LIHTC financing by allowing joint ownership relationships.
There is no anticipated fiscal impact to the state general fund associated with this bill.
Provisions
1. Authorizes unreserved portions of the mortgage revenue bond or mortgage credit certificate allocation for rural areas of the state to be awarded jointly to the HFA and one or more corporations that have a cooperative agreement.
2. Expands the responsibilities of the Governor’s Office of Housing Development under the direction of the Director to include the preparation and publication of guidelines for local government housing assistant programs if requested by a local government entity.
3. Allows the Governor’s Office of Housing Development and ultimately DOH to allocate housing development fund monies for prison communities for advancing down payments, closing costs or mortgage amount reductions.
4. Modifies the definition of “housing facility” by removing the requirement that such facilities provide for balanced community development, or for sound economic or commercial development of a community.
5. Stipulates that guidelines established by the Director of DOH relating to the construction or financing of housing do not apply to the Department’s activities relating to the issuance of tax exempt bonds in Arizona intended to finance multifamily residential rental projects and other specified facilities.
6. Specifies that all powers and duties concerning any bonds issued by the former Arizona Housing Finance Review Board and any assets received with respect to the bonds are transferred to HFA.
7. Enables public housing authorities to participate in federal low-income tax credit financing by permitting joint venture/ownership relationships.
8. Reduces the commissioner terms from five to four years.
9. Makes technical changes.
10. Establishes an effective date of October 1, 2002 for the provisions relating to the housing development fund monies and guidelines governing the construction or financing of housing.
11. Provides for a general effective date, except as otherwise noted.
Amendments
Adopted by Commerce Committee
1. Enables public housing authorities to participate in federal low-income tax credit financing by permitting joint venture/ownership relationships.
2. Reduces the commissioner terms from five to four years.
3. Makes technical changes.
CED 3/18/02 DP 10-0-0-0 COM 4/3/02 DPA 5-0-1-0
3rd Read 3/27/02 51-5-4-0 APPROP 4/9/02 DPA 12-0-0-0
Prepared by Senate Staff
April 9, 2002