Representative Steve Eliason proposes the following substitute bill:


1     
OLENE WALKER HOUSING LOAN FUND AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Todd Weiler

5     
House Sponsor: Francis D. Gibson

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions relating to the Olene Walker Housing Loan Fund and
10     other housing issues.
11     Highlighted Provisions:
12          This bill:
13          ▸     prohibits a municipality from adopting an ordinance that prohibits a homeless
14     shelter from operating year-round;
15          ▸     prioritizes certain applications for grants or loans from the Olene Walker Housing
16     Loan Fund;
17          ▸     addresses how the executive director of the Department of Workforce Services
18     distributes fund money;
19          ▸     modifies the activities for which the executive director of the Department of
20     Workforce Services may distribute money from the Olene Walker Housing Loan
21     Fund;
22          ▸     provides a sunset date for certain provisions related to homeless shelters; and
23          ▸     makes technical and conforming changes.
24     Money Appropriated in this Bill:
25          None
26     Other Special Clauses:
27          This bill provides a special effective date.
28     Utah Code Sections Affected:
29     AMENDS:
30          35A-8-504, as last amended by Laws of Utah 2012, Chapter 347 and renumbered and
31     amended by Laws of Utah 2012, Chapter 212
32          35A-8-505, as renumbered and amended by Laws of Utah 2012, Chapter 212
33          35A-8-507, as renumbered and amended by Laws of Utah 2012, Chapter 212
34          63I-1-210, as renumbered and amended by Laws of Utah 2008, Chapter 382
35     ENACTS:
36          10-9a-526, Utah Code Annotated 1953
37     

38     Be it enacted by the Legislature of the state of Utah:
39          Section 1. Section 10-9a-526 is enacted to read:
40          10-9a-526. Homeless shelters.
41          (1) As used in this section, "homeless shelter" means a facility that:
42          (a) is located within a municipality;
43          (b) provides temporary shelter to homeless families with children;
44          (c) has capacity to provide temporary shelter to at least 200 individuals per night; and
45          (d) began operation on or before January 1, 2016.
46          (2) A municipality may not adopt or enforce an ordinance or other regulation that
47     prohibits a homeless shelter from operating year-round.
48          Section 2. Section 35A-8-504 is amended to read:
49          35A-8-504. Distribution of fund money.
50          (1) The executive director shall:
51          (a) make grants and loans from the fund for any of the activities authorized by Section
52     35A-8-505, as directed by the board;
53          (b) establish the criteria with the approval of the board by which loans and grants will
54     be made; and
55          (c) determine with the approval of the board the order in which projects will be funded.
56          (2) The executive director shall distribute, as directed by the board, any federal money
57     contained in the fund according to the procedures, conditions, and restrictions placed upon the
58     use of the money by the federal government.
59          (3) (a) The executive director shall distribute, as directed by the board, any funds
60     received under Section 17C-1-412 to pay the costs of providing income targeted housing within
61     the community that created the community development and renewal agency under Title 17C,
62     Limited Purpose Local Government Entities - Community Development and Renewal
63     Agencies Act.
64          (b) As used in Subsection (3)(a):
65          (i) "Community" [has the meaning as] means the same as that term is defined in
66     Section 17C-1-102.
67          (ii) "Income targeted housing" [has the meaning as] means the same as that term is
68     defined in Section 17C-1-102.
69          (4) Except for federal money and money received under Section 17C-1-412, the
70     executive director shall distribute, as directed by the board, money [from] in the fund according
71     to the following requirements:
72          [(a) Not less than 30% of all fund money shall be distributed to rural areas of the
73     state.]
74          [(b) At least 50% of the money in the fund shall be distributed as loans to be repaid to
75     the fund by the entity receiving them.]
76          [(i) (A) Of the fund money distributed as loans, at least 50% shall be distributed to
77     benefit persons whose annual income is at or below 50% of the median family income for the
78     state.]
79          [(B) The remaining loan money shall be distributed to benefit persons whose annual
80     income is at or below 80% of the median family income for the state.]
81          [(ii) The executive director or the executive director's designee shall lend money in
82     accordance with this Subsection (4) at a rate based upon the borrower's ability to pay.]
83          [(c) Any fund money not distributed as loans shall be distributed as grants.]
84          [(i) At least 90% of the fund money distributed as grants shall be distributed to benefit
85     persons whose annual income is at or below 50% of the median family income for the state.]
86          [(ii) The remaining fund money distributed as grants may be used by the executive
87     director to obtain federal matching funds or for other uses consistent with the intent of this part,
88     including the payment of reasonable loan servicing costs, but no more than 3% of the revenues
89     of the fund may be used to offset other department or board administrative expenses.]
90          (a) the executive director shall distribute at least 30% of the money in the fund to rural
91     areas of the state;
92          (b) the executive director shall distribute at least 70% of the money in the fund to
93     benefit persons whose annual income is at or below 50% of the median family income for the
94     state;
95          (c) the executive director may not use more than 3% of the revenues of the fund to
96     offset department or board administrative expenses;
97          (d) the executive director shall distribute any remaining money in the fund to benefit
98     persons whose annual income is at or below 80% of the median family income for the state;
99     and
100          (e) if the executive director or the executive director's designee makes a loan in
101     accordance with this section, the interest rate of the loan shall be based on the borrower's
102     ability to pay.
103          (5) The executive director may, with the approval of the board:
104          (a) enact rules to establish procedures for the grant and loan process by following the
105     procedures and requirements of Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
106     and
107          (b) service or contract, under Title 63G, Chapter 6a, Utah Procurement Code, for the
108     servicing of loans made by the fund.
109          Section 3. Section 35A-8-505 is amended to read:
110          35A-8-505. Activities authorized to receive fund money -- Powers of the executive
111     director.
112          At the direction of the board, the executive director may:
113          (1) provide fund money to any of the following activities:
114          (a) the acquisition, rehabilitation, or new construction of low-income housing units;
115          (b) matching funds for social services projects directly related to providing housing for
116     special-need renters in assisted projects;
117          (c) the development and construction of accessible housing designed for low-income
118     persons;
119          [(d) shelters and transitional housing for the homeless; and]
120          (d) the construction or improvement of a shelter or transitional housing facility that
121     provides services intended to prevent or minimize homelessness among members of a specific
122     homeless subpopulation; and
123          (e) other activities that will assist in minimizing homelessness or improving the
124     availability or quality of housing in the state for low-income persons;
125          (2) do any act necessary or convenient to the exercise of the powers granted by this part
126     or reasonably implied from those granted powers, including:
127          (a) making or executing contracts and other instruments necessary or convenient for
128     the performance of the executive director and board's duties and the exercise of the executive
129     director and board's powers and functions under this part, including contracts or agreements for
130     the servicing and originating of mortgage loans;
131          (b) procuring insurance against a loss in connection with property or other assets held
132     by the fund, including mortgage loans, in amounts and from insurers it considers desirable;
133          (c) entering into agreements with a department, agency, or instrumentality of the
134     United States or this state and with mortgagors and mortgage lenders for the purpose of
135     planning and regulating and providing for the financing and refinancing, purchase,
136     construction, reconstruction, rehabilitation, leasing, management, maintenance, operation, sale,
137     or other disposition of residential housing undertaken with the assistance of the department
138     under this part;
139          (d) proceeding with a foreclosure action, to own, lease, clear, reconstruct, rehabilitate,
140     repair, maintain, manage, operate, assign, encumber, sell, or otherwise dispose of real or
141     personal property obtained by the fund due to the default on a mortgage loan held by the fund
142     in preparation for disposition of the property, taking assignments of leases and rentals,
143     proceeding with foreclosure actions, and taking other actions necessary or incidental to the
144     performance of its duties; and
145          (e) selling, at a public or private sale, with public bidding, a mortgage or other
146     obligation held by the fund.
147          Section 4. Section 35A-8-507 is amended to read:
148          35A-8-507. Application process and priorities.
149          (1) (a) In each calendar year that money is available from the fund for distribution by
150     the executive director under the direction of the board, the executive director shall, at least
151     once in that year, announce a grant and loan application period by sending notice to interested
152     persons.
153          (b) The executive director shall accept applications that are received in a timely
154     manner.
155          (2) The executive director shall give [first] priority to applications for projects and
156     activities in the following order:
157          (a) first, to applications for projects and activities intended to minimize homelessness;
158          (b) second, to applications for projects and activities that use existing privately owned
159     housing stock, including privately owned housing stock purchased by a nonprofit public
160     development [authorities.] authority; and
161          (c) third, to all other applications.
162          (3) [The] Within each level of priority described in Subsection (2), the executive
163     director shall give preference to applications that demonstrate the following:
164          (a) a high degree of leverage with other sources of financing;
165          (b) high recipient contributions to total project costs, including allied contributions
166     from other sources such as professional, craft, and trade services and lender interest rate
167     subsidies;
168          (c) high local government project contributions in the form of infrastructure
169     improvements, or other assistance;
170          (d) projects that encourage ownership, management, and other project-related
171     responsibility opportunities;
172          (e) projects that demonstrate a strong probability of serving the original target group or
173     income level for a period of at least 15 years;
174          (f) projects where the applicant has demonstrated the ability, stability, and resources to
175     complete the project;
176          (g) projects that appear to serve the greatest need;
177          (h) projects that provide housing for persons and families with the lowest income;
178          (i) projects that promote economic development benefits;
179          (j) projects that [allow integration into a local government housing plan] align with a
180     local government plan to address housing and homeless services; and
181          (k) projects that would mitigate or correct existing health, safety, or welfare problems.
182          (4) The executive director may give consideration to projects that increase the supply
183     of accessible housing.
184          Section 5. Section 63I-1-210 is amended to read:
185          63I-1-210. Repeal dates, Title 10.
186           Section 10-9a-526 is repealed December 31, 2020.
187          Section 6. Effective date.
188          If approved by two-thirds of all the members elected to each house, this bill takes effect
189     upon approval by the governor, or the day following the constitutional time limit of Utah
190     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
191     the date of veto override.