House Bill No. 248

Introduced By harper

A Bill for an Act entitled: An Act clarifying terms and conditions of board of investments loans to state agencies; increasing the bonding limit of the board of investments from $50 million to $75 million for the purposes of the Municipal Finance Consolidation Act; PROVIDING AUTHORITY FOR FUNDING LOW-INCOME HOUSING UNITS; amending section

17-5-1608, MCA; and providing an immediate effective date.

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 17-5-1608, MCA, is amended to read:

"17-5-1608.  Limitations on amounts. The board may not issue any bonds or notes that cause the total outstanding indebtedness of the board under this part (except for bonds or notes issued to fund or refund other outstanding bonds or notes or to purchase registered warrants or tax or revenue anticipation notes of a local government as defined in 7-6-1101) to exceed $50 $75 million."

Section 2.  Loans to state agencies.  An agency responsible for the procurement and provision of vehicles and equipment using an enterprise fund or an internal service fund, as described in 17-2-102, is authorized to enter into contracts, loan agreements, or other forms of indebtedness payable over a term not to exceed 7 years for the purpose of financing the cost of the vehicles and equipment and to pledge to the repayment of the indebtedness the revenue of the enterprise fund or internal service fund if:

(1) the term of the indebtedness does not exceed the useful life of the items being financed; and

(2) at the time that the indebtedness is incurred, the projected revenue of the fund, based on the fees and charges approved by the legislature and other available fund revenue, will be sufficient to repay the indebtedness over the proposed term and to maintain the operation of the enterprise.

Section 3.  Low-income housing. Subject to available funding, the board of investments may initiate a deferred loan, in conjunction with other financing, to preserve affordable multifamily housing as originally provided for under the Emergency Low Income Housing Preservation Act of 1987 and the Low-Income Housing Preservation and Resident Homeownership Act of 1990. Variable rate bonds may be issued under Title 17, chapter 5, part 15, to be used as part of the financing arrangement. The bonds may be secured by the bonding mechanism under 17-5-1516. The housing units, formerly provided for under both acts, must remain as low-income units for the entire length of the bonds or 30 years, whichever is longer. Any mortgages securing the bonds must either be insured or guaranteed by a federal agency. Variable rate bonds must be secured by mortgages having a maximum interest rate of 5%. The bond indenture must provide a mechanism to reduce the likelihood of drawing upon the capital reserve account under 17-5-1516. The board may not make any loans or issue any bonds to finance housing units under this section unless the income from the financial properties, after deducting the expenses for the operation and maintenance of the housing units, is projected to be sufficient to repay the loans and bonds.

Section 4.  Codification instruction. [Section 2] is intended to be codified as an integral part of Title 17, chapter 5, and the provisions of Title 17, chapter 5, apply to [section 2].

Section 5.  Effective date. [This act] is effective on passage and approval.