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H.B. 36





Sponsor: Steven R. Mascaro

             5      This act modifies the Community and Economic Development Code. This act permits
             6      the Division of Community Development to assist local governments in the development
             7      of accessible housing. This act modifies the elements to be considered by the Private
             8      Activity Bond Review Board when allocating the state's private activity bond volume cap
             9      and modifies the powers of housing authorities. This act modifies the allowable uses of
             10      the Olene Walker Housing Loan Fund. This act allows the Department of Community
             11      and Economic Development and the Utah Housing Corporation to give consideration to
             12      projects that increase the supply of accessible housing. This act provides definitions.
             13      This act affects sections of Utah Code Annotated 1953 as follows:
             14      AMENDS:
             15          9-4-102, as enacted by Chapter 241, Laws of Utah 1992
             16          9-4-202, as last amended by Chapter 286, Laws of Utah 2000
             17          9-4-505, as last amended by Chapter 95, Laws of Utah 2000
             18          9-4-609, as renumbered and amended by Chapter 241, Laws of Utah 1992
             19          9-4-705, as last amended by Chapter 181, Laws of Utah 2001
             20          9-4-707, as last amended by Chapter 181, Laws of Utah 2001
             21          9-4-910, as last amended by Chapter 319, Laws of Utah 2001
             22      Be it enacted by the Legislature of the state of Utah:
             23          Section 1. Section 9-4-102 is amended to read:
             24           9-4-102. Definitions.
             25          As used in this chapter:
             26          (1) "Accessible housing" means housing which has been constructed or modified to be
             27      accessible, as described in the construction codes adopted under Section 58-56-4 .

             28          [(1)] (2) "Director" means the director of the division.
             29          [(2)] (3) "Division" means the Division of Community Development.
             30          Section 2. Section 9-4-202 is amended to read:
             31           9-4-202. Powers and duties of division.
             32          (1) The division shall:
             33          (a) assist local governments and citizens in the planning, development, and
             34      maintenance of necessary public infrastructure and services;
             35          (b) cooperate with, and provide technical assistance to, counties, cities, towns, regional
             36      planning commissions, area-wide clearinghouses, zoning commissions, parks or recreation
             37      boards, community development groups, community action agencies, and other agencies
             38      created for the purpose of aiding and encouraging an orderly, productive, and coordinated
             39      development of the state and its political subdivisions;
             40          (c) assist the governor in coordinating the activities of state agencies which have an
             41      impact on the solution of community development problems and the implementation of
             42      community plans;
             43          (d) serve as a clearinghouse for information, data, and other materials which may be
             44      helpful to local governments in discharging their responsibilities and provide information on
             45      available federal and state financial and technical assistance;
             46          (e) carry out continuing studies and analyses of the problems faced by communities
             47      within the state and develop such recommendations for administrative or legislative action as
             48      appear necessary;
             49          (f) assist in funding affordable housing and addressing problems of homelessness;
             50          (g) support economic development activities through grants, loans, and direct programs
             51      financial assistance;
             52          (h) certify project funding at the local level in conformance with federal, state, and
             53      other requirements;
             54          (i) utilize the capabilities and facilities of public and private universities and colleges
             55      within the state in carrying out its functions;
             56          (j) assist and support local governments, community action agencies, and citizens in
             57      the planning, development, and maintenance of home weatherization, energy efficiency, and
             58      antipoverty activities; and

             59          (k) assist and support volunteer efforts in the state.
             60          (2) The division may:
             61          (a) accept for and on behalf of, and bind the state to, any federal program in which the
             62      state is invited, permitted, or authorized to participate in the distribution, disbursement, or
             63      administration of any fund or service advanced, offered, or contributed in whole or in part, by
             64      the federal government for purposes consistent with the powers and duties of the department;
             65          (b) if any federal program requires the expenditure of state funds as a condition to
             66      participation by the state in any fund, property, or service, with the governor's approval, expend
             67      whatever funds are necessary out of the money provided by the Legislature for the use of the
             68      department; [and]
             69          (c) in accordance with Part 13, Domestic Violence Shelters, assist in developing,
             70      constructing, and improving shelters for victims of domestic violence, as described in Section
             71      77-36-1 , through loans and grants to nonprofit and governmental entities[.]; and
             72          (d) assist, when requested by a county or municipality, in the development of
             73      accessible housing.
             74          Section 3. Section 9-4-505 is amended to read:
             75           9-4-505. Allocation of volume cap.
             76          (1) (a) Subject to Subsection (1)(b), the volume cap for each year shall be distributed
             77      by the board of review to the various allotment accounts as set forth in Section 9-4-506 .
             78          (b) The board of review may distribute up to 50% of each increase in the volume cap
             79      that occurs after the effective date of this Subsection (1)(b) for use in development that occurs
             80      in quality growth areas, depending upon the board's analysis of the relative need for additional
             81      volume cap between development in quality growth areas and the allotment accounts under
             82      Section 9-4-506 .
             83          (2) To obtain an allocation of the volume cap, issuing authorities shall submit to the
             84      board of review an application containing information required by the procedures and
             85      processes of the board of review.
             86          (3) The board of review shall establish criteria for making allocations of volume cap
             87      that are consistent with the purposes of the code and this part. In making an allocation of
             88      volume cap the board of review shall consider the following:
             89          (a) the principal amount of the bonds proposed to be issued;

             90          (b) the nature and the location of the project or the type of program;
             91          (c) the likelihood that the bonds will be sold and the timeframe of bond issuance;
             92          (d) whether the project or program could obtain adequate financing without an
             93      allocation of volume cap;
             94          (e) the degree to which an allocation of volume cap is required for the project or
             95      program to proceed or continue;
             96          (f) the social, health, economic, and educational effects of the project or program on
             97      the local community and state as a whole;
             98          (g) the anticipated economic development created or retained within the local
             99      community and the state as a whole;
             100          (h) the anticipated number of jobs, both temporary and permanent, created or retained
             101      within the local community and the state as a whole;
             102          (i) if the project is a residential rental project, the degree to which the residential rental
             103      project:
             104          (i) targets lower income populations; h [ and ] h
             105          (ii) is accessible housing; and
             106          (j) whether the project meets the principles of quality growth recommended by the
             107      Quality Growth Commission created under Section 11-38-201 .
             108          (4) The board of review shall evidence an allocation of volume cap by issuing a
             109      certificate in accordance with Section 9-4-507 .
             110          (5) (a) From January 1 to June 30, the board shall set aside at least 50% of the Small
             111      Issue Bond Account that may be allocated only to manufacturing projects.
             112          (b) From July 1 to August 15, the board shall set aside at least 50% of the Pool
             113      Account that may be allocated only to manufacturing projects.
             114          Section 4. Section 9-4-609 is amended to read:
             115           9-4-609. Powers of housing authority.
             116          (1) Each authority shall have perpetual succession and all the powers necessary or
             117      convenient to carry out and effectuate the purposes and provisions of this part.
             118          (2) Any authority may:
             119          (a) sue and be sued;
             120          (b) have a seal and alter it;

             121          (c) make and execute contracts and other instruments necessary or convenient to the
             122      exercise of its powers;
             123          (d) make, amend, and repeal bylaws and rules;
             124          (e) within its area of operation, prepare, carry out, and operate projects and provide for
             125      the acquisition, construction, reconstruction, rehabilitation, improvement, extension, alteration
             126      or repair of any project;
             127          (f) undertake and carry out studies and analyses of housing needs within its area of
             128      operation and ways of meeting these needs, including data with respect to population and
             129      family groups and its distribution according to income groups, the amount and quality of
             130      available housing, including accessible housing, and its distribution according to rentals and
             131      sales prices, employment, wages and other factors affecting the local housing needs and
             132      meeting these needs;
             133          (g) make the results of studies and analyses available to the public and the building,
             134      housing, and supply industries and engage in research and disseminate information on housing
             135      programs;
             136          (h) utilize, contract with, act through, assist, and cooperate or deal with any person,
             137      agency, institution, or organization, public or private, for the provision of services, privileges,
             138      works, or facilities, or in connection with its projects;
             139          (i) notwithstanding anything to the contrary contained in this part or in any other
             140      provision of law, agree to any conditions attached to federal financial assistance relating to the
             141      determination of prevailing salaries or wages or payment of not less than prevailing salaries or
             142      wages or compliance with labor standards in the development or administration of projects,
             143      include in any contract awarded or entered into in connection with a project stipulations
             144      requiring that the contractor and all subcontractors comply with requirements as to minimum
             145      salaries or wages and maximum hours of labor, and comply with any conditions attached to the
             146      financial aid of the project;
             147          (j) lease, rent, sell, or lease with option to purchase any dwellings, lands, buildings,
             148      structures, or facilities embraced in any project;
             149          (k) subject to the limitations contained in this part with respect to the rental or charges
             150      for dwellings in housing projects, establish and revise the rents or charges therefor;
             151          (l) own, hold, and improve real or personal property;

             152          (m) purchase, lease, obtain options upon, acquire by gift, grant, bequest, devise, or
             153      otherwise any real or personal property or any interest in it;
             154          (n) sell, lease, exchange, transfer, assign, pledge, or dispose of any real or personal
             155      property or any interest in it;
             156          (o) make loans for the provision of housing for occupancy by persons of medium and
             157      low income;
             158          (p) make loans or grants for the development and construction of accessible housing;
             159          [(p)] (q) insure or provide for the insurance, in stock or mutual companies, of any real
             160      or personal property or operations of the authority against any risks or hazards;
             161          [(q)] (r) procure or agree to the procurement of government insurance or guarantees of
             162      the payment of any bonds, in whole or in part, issued by the authority, including the power to
             163      pay premiums on any insurance;
             164          [(r)] (s) invest any funds held in reserves, sinking funds, or any funds not required for
             165      immediate disbursement in property or securities in which savings banks may legally invest
             166      funds subject to their control;
             167          [(s)] (t) redeem its bonds at the redemption price established or purchase its bonds at
             168      less than redemption price, with all bonds so redeemed or purchased to be canceled;
             169          [(t)] (u) within its area of operation, determine where blighted areas exist or where
             170      there is unsafe, insanitary, or overcrowded housing;
             171          [(u)] (v) make studies and recommendations relating to the problem of clearing,
             172      replanning, and reconstructing blighted areas, and the problem of eliminating unsafe,
             173      insanitary, or overcrowded housing and providing dwelling accommodations and maintaining a
             174      wholesome living environment for persons of medium and low income, and cooperate with any
             175      public body or the private sector in action taken in connection with those problems;
             176          [(v)] (w) acting through one or more commissioners or other persons designated by the
             177      authority, conduct examinations and investigations and hear testimony and take proof under
             178      oath at public or private hearings on any matter material for its information;
             179          [(w)] (x) administer oaths, issue subpoenas requiring the attendance of witnesses or the
             180      production of books and papers, and issue commissions for the examination of witnesses
             181      outside the state who are unable to appear before the authority or are excused from attendance;
             182          [(x)] (y) make available to appropriate agencies, including those charged with the duty

             183      of abating or requiring the correction of nuisances or like conditions or of demolishing unsafe
             184      or insanitary structures within its area of operation, its findings and recommendations with
             185      regard to any building or property where conditions exist that are dangerous to the public
             186      health, morals, safety, or welfare; and
             187          [(y)] (z) exercise all or any part or combination of the powers granted under this part.
             188          (3) No provision of law with respect to the acquisition, operation, or disposition of
             189      property by other public bodies is applicable to an authority unless the Legislature specifically
             190      states that it is.
             191          Section 5. Section 9-4-705 is amended to read:
             192           9-4-705. Activities authorized to receive fund moneys -- Powers of the executive
             193      director.
             194          At the direction of the board, the executive director may:
             195          (1) provide fund moneys to any of the following activities:
             196          (a) acquisition, rehabilitation, or new construction of low-income housing units;
             197          (b) matching funds for social services projects directly related to providing housing for
             198      special-need renters in assisted projects;
             199          (c) the development and construction of accessible housing designed for low-income
             200      persons;
             201          [(c)] (d) shelters and transitional housing for the homeless; and
             202          [(d)] (e) other activities that will assist in improving the availability or quality of
             203      housing in the state for low-income persons;
             204          (2) do any act necessary or convenient to the exercise of the powers granted by this part
             205      or reasonably implied therefrom including:
             206          (a) making or executing contracts and other instruments necessary or convenient for
             207      the performance of the executive director and board's duties and the exercise of the executive
             208      director and board's powers and functions under this part, including contracts or agreements for
             209      the servicing and originating of mortgage loans;
             210          (b) procuring insurance against any loss in connection with property or other assets
             211      held by the fund, including mortgage loans, in amounts and from insurers it considers
             212      desirable;
             213          (c) entering into agreements with any department, agency, or instrumentality of the

             214      United States or this state and with mortgagors and mortgage lenders for the purpose of
             215      planning and regulating and providing for the financing and refinancing, purchase,
             216      construction, reconstruction, rehabilitation, leasing, management, maintenance, operation, sale,
             217      or other disposition of any residential housing undertaken with the assistance of the department
             218      under this part;
             219          (d) proceeding with a foreclosure action, to own, lease, clear, reconstruct, rehabilitate,
             220      repair, maintain, manage, operate, assign, encumber, sell, or otherwise dispose of any real or
             221      personal property obtained by the fund due to the default on any mortgage loan held by the
             222      fund in preparation for disposition of the property, taking assignments of leases and rentals,
             223      proceeding with foreclosure actions, and taking other actions necessary or incidental to the
             224      performance of its duties; and
             225          (e) selling, at a public or private sale, with public bidding, any mortgage or other
             226      obligation held by the fund.
             227          Section 6. Section 9-4-707 is amended to read:
             228           9-4-707. Application process and priorities.
             229          (1) (a) In each calendar year that moneys are available from the fund for distribution by
             230      the executive director under the direction of the board, the director shall, at least once in that
             231      year, announce a grant and loan application period by sending notice to interested persons.
             232          (b) The executive director shall accept applications which are received in a timely
             233      manner.
             234          (2) The executive director shall give first priority to applications for projects and
             235      activities that use existing privately-owned housing stock, including privately owned housing
             236      stock purchased by nonprofit public development authorities.
             237          (3) Preference shall be given to applications that demonstrate the following:
             238          (a) a high degree of leverage with other sources of financing;
             239          (b) high recipient contributions to total project costs, including allied contributions
             240      from other sources such as professional, craft and trade services, and lender interest rate
             241      subsidies;
             242          (c) high local government project contributions in the form of infrastructure
             243      improvements, or other assistance;
             244          (d) projects that encourage ownership, management, and other project-related

             245      responsibility opportunities;
             246          (e) projects that demonstrate a strong probability of serving the original target group or
             247      income level for a period of at least 15 years;
             248          (f) projects where the applicant has demonstrated the ability, stability, and resources to
             249      complete the project;
             250          (g) projects that appear to serve the greatest need;
             251          (h) projects that provide housing for persons and families with the lowest income;
             252          (i) projects that promote economic development benefits;
             253          (j) projects that allow integration into a local government housing plan; and
             254          (k) projects that would mitigate or correct existing health, safety, or welfare problems.
             255          (4) Consideration may be given to projects that increase the supply of accessible
             256      housing.
             257          Section 7. Section 9-4-910 is amended to read:
             258           9-4-910. Corporation -- Powers.
             259          The corporation has and may exercise all powers necessary or appropriate to carry out
             260      the purposes of this part, including the following:
             261          (1) to have perpetual succession as a body politic and corporate, constituting a public
             262      corporation, and to adopt, amend, and repeal rules, policies, and procedures for the regulation
             263      of its affairs and the conduct of its business;
             264          (2) to sue and be sued in its own name;
             265          (3) to have an official seal and power to alter that seal at will;
             266          (4) to maintain an office at any place or places within this state it may designate;
             267          (5) to adopt, amend, and repeal bylaws and rules, not inconsistent with this part, to
             268      carry into effect the powers and purposes of the corporation and the conduct of its business;
             269          (6) to make and execute contracts and all other instruments necessary or convenient for
             270      the performance of its duties and the exercise of its powers and functions under this part,
             271      including contracts or agreements for the servicing and originating of mortgage loans;
             272          (7) to employ advisers, consultants, and agents, including financial experts,
             273      independent legal counsel, and any advisers, consultants, and agents as may be necessary in its
             274      judgment and to fix their compensation;
             275          (8) to procure insurance against any loss in connection with its property and other

             276      assets, including mortgage loans, in amounts and from insurers it considers desirable;
             277          (9) to borrow money and to issue bonds and notes or other evidences of indebtedness
             278      as provided in this part;
             279          (10) to receive and accept aid or contributions from any source of money, property,
             280      labor, or other things of value to be held, used, loaned, granted, and applied to carry out the
             281      purposes of this part subject to the conditions, if any, upon which the grants and contributions
             282      are made, including gifts or grants from any department, agency, or instrumentality of the
             283      United States or of this state for any purpose consistent with this part;
             284          (11) to enter into agreements with any local public body, any housing sponsor, any
             285      department, agency, or instrumentality of the United States or this state, or with mortgagors
             286      and mortgage lenders for the purpose of planning and regulating and providing for the
             287      financing and refinancing, construction, rehabilitation, leasing, management, maintenance,
             288      operation, sale, or other disposition of, any residential housing undertaken with the assistance
             289      of the corporation under this part;
             290          (12) to exercise all of its remedies following the default under any mortgage loan,
             291      including:
             292          (a) proceeding with a foreclosure action or private sale to obtain title to the real and
             293      personal property held as collateral and taking assignments of leases and rentals;
             294          (b) to own, lease, clear, reconstruct, rehabilitate, repair, maintain, manage, and operate
             295      this property in preparation for its disposition; and
             296          (c) to assign, encumber, sell, or otherwise dispose of this property;
             297          (13) to invest any funds not required for immediate disbursement, including funds held
             298      in reserve, in a manner consistent with applicable provisions of Title 51, Chapter 7, State
             299      Money Management Act [of 1974];
             300          (14) to provide technical and financial assistance to housing sponsors and advisory
             301      committees in the development or operation of housing for low and moderate income persons;
             302          (15) to gather and distribute data and information concerning the housing needs of low
             303      and moderate income families within the various communities of this state;
             304          (16) to the extent permitted under any contract with the holders of bonds, notes, and
             305      other obligations of the corporation, to consent to any modification with respect to rate of
             306      interest, time and payment of any installment of principal or interest security, or any other term

             307      of any contract, mortgage, mortgage loan, mortgage loan commitment, contract, or agreement
             308      of any kind to which the corporation is a party;
             309          (17) to the extent permitted under any contract with the holders of bonds, notes, and
             310      other obligations of the corporation, to enter into contracts with any mortgagor or housing
             311      sponsor containing provisions enabling the mortgagor to reduce the rental or carrying charges
             312      to persons unable to pay the regular schedule of charges where, by reason of other income or
             313      payment by any department, agency, or instrumentality of the United States or of this state, the
             314      reduction can be made without jeopardizing the economic stability of residential housing being
             315      financed;
             316          (18) to acquire property within this state for the purpose of holding it for subsequent
             317      disposition to a housing sponsor or other entity that can use it for residential housing for low
             318      and moderate income persons, except that if no person can be found to use it in this manner,
             319      the corporation may dispose of the property to any person;
             320          (19) to purchase, own and operate residential housing for the benefit, in whole or in
             321      part, of low and moderate income persons, so long as the corporation makes reasonable efforts
             322      to sell that residential housing to a housing sponsor;
             323          (20) to incorporate or form one or more subsidiaries of the corporation for the purpose
             324      of carrying out any of the powers of the corporation and accomplishing any of the purposes of
             325      the corporation, to invest in and provide financial assistance to these subsidiaries, to borrow
             326      from these subsidiaries, to guarantee the obligations of these subsidiaries, and to enter into
             327      agreements with these subsidiaries to carry out any of the corporation's powers under this part;
             328          (21) to enter into partnership and limited liability company agreements, to purchase
             329      and sell interests in housing sponsors, to serve as general partner of a partnership, and to serve
             330      as a manager of a limited liability company to carry out any of the corporation's powers under
             331      this part;
             332          (22) to require that persons receiving a mortgage loan or financial assistance from the
             333      corporation subject the property involved to restrictive covenants that shall be considered to be
             334      running with the land, regardless of whether or not the corporation enjoys privity of estate or
             335      whether or not the covenant touches and concerns the burdened property;
             336          (23) to enter into management agreements with any person or entity for the
             337      performance by the person or entity for the corporation of any of its functions or powers, with

             338      terms and conditions as may be mutually agreeable;
             339          (24) to sell, at public or private sale, with or without public bidding, any mortgage loan
             340      or other obligation held by the corporation;
             341          (25) to sell or convey real property owned by the corporation to low or moderate
             342      income persons and housing sponsors, without consideration if the sale or conveyance will
             343      inure primarily to the benefit of low or moderate income persons living in a housing
             344      development;
             345          (26) upon making a determination that the financial status of a housing development
             346      will jeopardize any economic interest of the corporation in the housing development, to assume
             347      managerial and financial control of the property or the owner and to supervise and prescribe the
             348      activities of the property or the owner in a manner and under terms and conditions as the
             349      corporation may stipulate in any contract;
             350          (27) to supervise housing sponsors of housing developments;
             351          (28) to service mortgage loans; [and]
             352          (29) to give consideration to those activities which promote the availability of
             353      accessible housing; and
             354          [(29)] (30) to do any act necessary or convenient to the exercise of the powers granted
             355      in or reasonably implied from this part.

Legislative Review Note
    as of 12-3-02 9:19 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

Interim Committee Note
    as of 12-12-02 4:42 PM

The Health and Human Services Interim Committee recommended this bill.

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