AN ACT ESTABLISHING AN AFFORDABLE HOUSING LOAN FUND ADMINISTERED BY THE MONTANA BOARD OF HOUSING; PROVIDING RULEMAKING AUTHORITY AND DIRECTION TO THE BOARD; AND PROVIDING AN EFFECTIVE DATE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Legislative declaration. (1) The legislature finds that current economic conditions, federal housing policies, and declining resources at the federal, state, and local levels adversely affect the ability of low-income and moderate-income persons to obtain safe, decent, and affordable housing.

(2) The legislature further finds that the state will lose substantial sums allocated to it by the federal government for affordable housing for low-income and moderate-income households unless matching funds are provided.

(3) The legislature declares that it is in the public interest to establish a continuously renewable financial resource known as an affordable housing revolving loan fund to assist low- and moderate-income citizens in meeting their basic housing needs.

Section 2. Definitions. (1) As used in [sections 1 through 6], the following definitions apply:

(1) "Board" means the board of housing created in 2-15-1814.

(2) "Housing development" means the same as in 90-6-103.

(3) "Loan account" means the affordable housing revolving loan account created in [section 3].

(4) "Low-income" means households whose incomes do not exceed 80% of the median income in the area, as determined by the United States department of housing and urban development, with adjustments for smaller or larger families.

(5) "Moderate-income" means households whose incomes are between 81% and 95% of the median income for the area, as determined by the United States department of housing and urban development, with adjustments for smaller and larger families.

Section 3. Revolving loan account -- administration. (1) There is an affordable housing revolving loan account in the state special revenue fund in the state treasury. The money in the loan account is allocated to the board for the purpose of providing loans to eligible applicants.

(2) Funds deposited in the loan account must be used for the program authorized in [section 4] and may not be used to pay the expenses of any other program or service administered by the board.

(3) The board may determine the rate of interest to be charged for any loan made under the provisions of [sections 1 through 6].

(4) The board may accept contributions, gifts, and grants for deposit into the loan account. The money must be used in accordance with the provisions of [section 4].

(5) The costs incurred by the board in administering the loan fund must be paid from the loan account.

(6) Interest and principal on loans from the fund must be repaid to the loan fund.

(7) Interest income generated by investment of the principal of the loan fund is retained in the loan fund account.

Section 4. Housing loan program -- loan capital restricted to interest on principal -- eligible applicants. (1) The money in the loan fund must be used to provide financial assistance in the form of direct loans by the board to eligible applicants.

(2) After the initial principal is loaned to eligible applicants, the amount of loans made in a fiscal year is contingent on the repayment of loan principal and on the amount of interest income generated by the principal of the loan fund.

(3) Money from the loan fund must be used to provide:

(a) matching funds for public or private money available from other sources for the development of low-income and moderate-income housing;

(b) bridge financing necessary to make a low-income housing development or a moderate-income housing development financially feasible;

(c) acquisition of existing housing for the purpose of preservation of or conversion to low-income or moderate-income housing; or

(d) preconstruction technical assistance to eligible recipients in rural areas and small cities and towns.

(4) (a) Technical assistance under subsection (3)(d) may include but is not limited to:

(i) financial planning and packaging for housing developments and projects;

(ii) project design, architectural planning, and siting;

(iii) compliance with planning and permitting requirements; or

(iv) maximizing local government contributions to project development in the form of land donations, infrastructure improvements, zoning variances, or creative local planning.

(b) The board may contract with a nonprofit organization to provide this technical assistance.

(5) Money from the loan fund may not be used to replace existing or available sources of funding for eligible activities.

(6) Organizations eligible for loans from the loan fund are local governments, tribal governments, local housing authorities, nonprofit community- or neighborhood-based organizations, regional or statewide nonprofit housing assistance organizations, or for-profit housing developers.

Section 5. Coordination with other programs. The board shall ensure that all housing assistance activities supported through the loan program are coordinated with other housing assistance programs administered by the board, the federal government, state agencies, tribal governments, local public housing authorities, and local governments.

Section 6. Administrative rules. The board shall adopt rules to implement [sections 1 through 6]. The rules must address:

(1) the development of eligibility criteria for applicants;

(2) the development of an application process for requesting financial assistance;

(3) the establishment of a procedure for disbursing financial assistance;

(4) the establishment of the terms and conditions of a loan, including the method and schedule of repayment and the applicable rate of interest;

(5) the development of a process for awarding technical assistance contracts; and

(6) other matters necessary for the administration of [sections 1 through 6].

Section 7. Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations and to the Little Shell band of Chippewa.

Section 8. Codification instruction. [Sections 1 through 6] are intended to be codified as an integral part of Title 90, chapter 6, part 1, and the provisions of Title 90, chapter 6, part 1, apply to [sections 1 through 6].

Section 9. Effective date. [This act] is effective July 1, 1999.

- END -

I hereby certify that the within bill,

SB 0349, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 349

INTRODUCED BY C. CHRISTIAENS, L. GRINDE, E. BERGSAGEL, D. BERRY, A. BISHOP,

V. COCCHIARELLA, S. DOHERTY, J. ELLINGSON, M. HALLIGAN, J. HARP, J. MCKENNEY,

W. MCNUTT, K. OHS, F. THOMAS

AN ACT ESTABLISHING AN AFFORDABLE HOUSING LOAN FUND ADMINISTERED BY THE MONTANA BOARD OF HOUSING; PROVIDING RULEMAKING AUTHORITY AND DIRECTION TO THE BOARD; AND PROVIDING AN EFFECTIVE DATE.