Full Text of SB2172 98th General Assembly
SB2172eng 98TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Housing Development Act is amended | 5 | | by changing Sections 2, 8, and 10 as follows:
| 6 | | (20 ILCS 3805/2) (from Ch. 67 1/2, par. 302)
| 7 | | Sec. 2. As used in this Act:
| 8 | | (a) "Authority" means the Illinois Housing Development | 9 | | Authority created
in this Act.
| 10 | | (b) "Development costs" means the costs approved by the | 11 | | Authority as
appropriate expenditures which may be incurred | 12 | | prior to commitment and
initial closing of assisted mortgage | 13 | | financing or of housing related
commercial facilities, | 14 | | including but not limited to: (1) payments for
options to | 15 | | purchase properties for the proposed development or | 16 | | facilities,
deposits on contracts of purchase, or, with the | 17 | | prior approval
of the Authority, payments for the purchases of | 18 | | such properties; (2) legal,
organizational and consultants' | 19 | | expenses; (3) payment of fees for
preliminary feasibility | 20 | | studies and engineering and architectural work; (4)
necessary | 21 | | application and other fees to federal, State and local | 22 | | government
agencies; and (5) such other expenses as the | 23 | | Authority may deem appropriate
to effectuate the purposes of |
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| 1 | | this Act.
| 2 | | (c) "Assisted mortgage financing" means a below market | 3 | | interest rate
mortgage insured or purchased, or a loan made, by | 4 | | the Secretary of the
United States Department of Housing and | 5 | | Urban Development or by any other
federal agency or | 6 | | governmental corporation or by any political subdivision
of the | 7 | | State of Illinois or by any Illinois public corporation; a | 8 | | market
interest rate mortgage insured or purchased, or a loan | 9 | | made in combination
with, or as augmented by, a program of rent | 10 | | supplements, interest
subsidies, leasing, contributions or | 11 | | grants, or other programs as are now
or hereafter authorized by | 12 | | federal law to serve low or moderate income
persons; a mortgage | 13 | | or loan made pursuant to this Act; or a mortgage or
loan from | 14 | | any private or public source with an interest rate and terms
| 15 | | satisfactory to the Authority and which will meet the | 16 | | requirements and
purposes of this Act.
| 17 | | (d) "Lending institution" means any bank, trust company, | 18 | | savings bank,
savings and loan association, credit union, | 19 | | national banking association,
mortgage banking association, | 20 | | federal savings and loan association or federal
credit unit | 21 | | maintaining an
office in the State, any insurance company or | 22 | | any other entity or
organization which makes or acquires loans | 23 | | secured by real property.
| 24 | | (e) "Residential mortgage" means a loan owed to a lending | 25 | | institution,
to the Authority or to a trustee for holders of | 26 | | bonds or notes of the Authority
or to a trustee for owners of |
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| 1 | | pools of mortgages, and secured by a
lien on real property | 2 | | located in the State and improved by a residential
structure or | 3 | | a mixed residential and commercial structure, or unimproved if
| 4 | | the proceeds of such loan shall be used for the erection of a | 5 | | residential
structure or a mixed residential and commercial | 6 | | structure thereon, whether
or not such loan is insured or | 7 | | guaranteed by the United States of America
or any agency or | 8 | | corporation thereof.
| 9 | | (f) "Development" means a specific work or improvement | 10 | | undertaken to
provide dwelling accommodations, including the | 11 | | acquisition, construction or
rehabilitation of lands, | 12 | | buildings and community facilities and in
connection therewith | 13 | | to provide nonhousing facilities which are a
part of a planned | 14 | | large-scale project or new community.
| 15 | | (g) "Persons and families of low and moderate income" and | 16 | | "Low income or
moderate income persons" means families and | 17 | | persons who cannot afford to
pay the amounts at which private | 18 | | enterprise, without assisted mortgage
financing, is providing | 19 | | a substantial supply of decent, safe and sanitary
housing. The | 20 | | income limits for the admission of such families and persons
to | 21 | | developments shall be those established pursuant to the rules | 22 | | applicable
to the assisted mortgage financing program under | 23 | | which such developments
are financed.
| 24 | | (h) "Moderate rentals" means rent charges less than those | 25 | | rents
generally charged for new dwelling units of comparable | 26 | | size and location
built by the unassisted efforts of private |
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| 1 | | enterprise and financed at then
current market interest rates.
| 2 | | (i) "Low rentals" means rent charges at least 10% lower | 3 | | than moderate
rentals.
| 4 | | (j) "Rents" or "Rentals" shall mean fees or charges paid | 5 | | for use
of a development under this Act, whether the | 6 | | development is operated on a
landlord-tenant basis or as a | 7 | | condominium or cooperative.
| 8 | | (k) "Limited-profit entity" means any individual, joint | 9 | | venture,
partnership, limited partnership, trust or | 10 | | corporation organized or
existing under the laws of the State | 11 | | of Illinois or authorized to do
business in this State and | 12 | | having articles of incorporation or comparable
documents of | 13 | | organization or a written agreement with the Authority which,
| 14 | | in addition to other requirements of law, provide that if the | 15 | | limited-profit entity receives any loan from the
Authority as | 16 | | provided for in this Act, it shall be authorized to enter into
| 17 | | an agreement with the Authority providing for regulations with | 18 | | respect to
rents, profits, dividends and disposition of | 19 | | property or franchises. :
| 20 | | (1) that if the limited-profit entity receives any loan | 21 | | from the
Authority as provided for in this Act, it shall be | 22 | | authorized to enter into
an agreement with the Authority | 23 | | providing for regulations with respect to
rents, profits, | 24 | | dividends and disposition of property or franchises; and
| 25 | | (2) that if the limited-profit entity receives a loan, | 26 | | as provided for
in this Act, the Chairman of the Authority, |
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| 1 | | acting with the prior approval
of the Authority, shall have | 2 | | the power, if he determines that any such loan
is in | 3 | | jeopardy of not being repaid, or that the proposed | 4 | | development for
which such loan was made is in jeopardy of | 5 | | not being constructed, or the
limited-profit entity is | 6 | | otherwise in violation of rules and regulations
| 7 | | promulgated by the Authority, to appoint to the board of | 8 | | directors or other
comparable controlling body of such | 9 | | limited-profit entity a number of new
directors or persons, | 10 | | which number shall be sufficient to constitute a
voting | 11 | | majority of such board or controlling body, | 12 | | notwithstanding any
other provisions of the limited-profit | 13 | | entity's articles of incorporation
or other documents of | 14 | | organization, or of any other provisions of law,
provided | 15 | | that this requirement set forth in this paragraph (2) is | 16 | | not
mandatory in the case of loans made solely with monies | 17 | | from the Authority's
administrative fund.
| 18 | | (l) "Land development" means the process of clearing and | 19 | | grading land,
making, installing, or constructing waterlines | 20 | | and water supply
installations, sewerlines and sewage disposal | 21 | | installations, steam, gas,
and electric lines and | 22 | | installations, roads, streets, curbs, gutters,
sidewalks, | 23 | | storm drainage facilities, and other installations or work,
| 24 | | whether on or off the site, necessary or desirable to prepare | 25 | | land for
residential, commercial, industrial, or other uses, or | 26 | | to provide
facilities for public or common use.
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| 1 | | (m) "Nonprofit corporation" means a nonprofit corporation | 2 | | incorporated
pursuant to the provisions of the Illinois General | 3 | | Not For Profit
Corporation Act or the State Housing Act of 1933 | 4 | | and having articles of
incorporation which, in addition to | 5 | | other requirements of law, provide:
| 6 | | (1) that the corporation has been organized to provide | 7 | | housing
facilities for persons of low and moderate income;
| 8 | | (2) that all income and earnings of the corporation | 9 | | shall be used
exclusively for corporation purposes and that | 10 | | no part of the net income or
net earnings of the | 11 | | corporation shall inure to the benefit or profit of any
| 12 | | private individual, firm, corporation, partnership, or | 13 | | association;
| 14 | | (3) that the corporation is in no manner controlled or | 15 | | under the
direction or acting in the substantial interest | 16 | | of private individuals,
firms, corporations, partnerships, | 17 | | or associations seeking to derive profit
or gain therefrom | 18 | | or seeking to eliminate or minimize losses in any
dealings | 19 | | or transactions therewith;
| 20 | | (4) that if the corporation receives any loan or | 21 | | advance from the
Authority as provided for in this Act, it | 22 | | shall be authorized to enter into
an agreement with the | 23 | | Authority providing for regulation with respect to
rents, | 24 | | profits, dividends, and disposition of property or | 25 | | franchises;
| 26 | | (5) that if the corporation receives a loan or advance, |
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| 1 | | as provided for
in this Act, the chairman of the Authority, | 2 | | acting with the prior approval
of the majority of the | 3 | | members of the Authority, shall have the power if he
| 4 | | determines that any such loan or advance is in jeopardy of | 5 | | not being
repaid, or that the proposed development for | 6 | | which such loan or advance was
made is in jeopardy of not | 7 | | being constructed, or that some part of the net
income or | 8 | | net earnings of the corporation is inuring to the benefit | 9 | | of any
private individual, firm, corporation, partnership, | 10 | | or association, or that
the corporation is in some manner | 11 | | controlled or under the direction of or
acting in the | 12 | | substantial interest of any private individual, firm,
| 13 | | corporation, partnership, or association seeking to derive | 14 | | benefit or gain
therefrom or seeking to eliminate or | 15 | | minimize losses in any dealings or
transactions therewith, | 16 | | or is in violation of rules and regulations
promulgated by | 17 | | the Authority to appoint to the board of directors of such
| 18 | | corporation a number of new directors, which number shall | 19 | | be sufficient to
constitute a majority of such board, | 20 | | notwithstanding any other provisions
of such articles of | 21 | | incorporation or of any other provisions of law; and
| 22 | | (6) that each development of such corporation shall be | 23 | | operated
exclusively for the benefit of the persons who are | 24 | | housed in such
development which shall include families or | 25 | | persons of low or moderate
income as required by this Act, | 26 | | and that such development shall reserve for
families or |
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| 1 | | persons of low or moderate income the number and types of
| 2 | | dwelling units required by applicable federal or State law.
| 3 | | The requirements contained in paragraphs (2), (3), (5) and | 4 | | (6) are
not mandatory in the case of loans made solely from the | 5 | | Authority's
administrative fund.
| 6 | | (n) "State" means the State of Illinois.
| 7 | | (o) "Community facilities" means the land, buildings, | 8 | | improvements and
equipment for land development, for health, | 9 | | welfare, recreational, social,
educational and commercial | 10 | | activities, and for public, common or municipal
services.
| 11 | | (p) "Sinking fund payment" means the amount of money | 12 | | specified in
the resolution or resolutions authorizing term | 13 | | bonds as payable into a
sinking fund during a particular period | 14 | | for the retirement of term
bonds at maturity after such period, | 15 | | but shall not include
any amount payable by reason only of the | 16 | | maturity of a bond.
| 17 | | (q) "Housing related commercial facilities" means | 18 | | commercial
facilities which are or are to be related to a | 19 | | development. Commercial
facilities are related to a | 20 | | development if they are, in the sole judgment
of the Authority, | 21 | | located in the same area as the development and (i)
necessary | 22 | | or desirable in order to provide services for residents of that
| 23 | | area in which the development is located; or (ii) a portion of | 24 | | the revenues
of the commercial facilities are to be used to | 25 | | provide funds for paying
costs of construction, acquisition, | 26 | | rehabilitation, operation, maintenance
of or payment of debt |
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| 1 | | service on the development or (iii) necessary or
desirable in | 2 | | order to make the development successful, such as, without
| 3 | | limitation, eliminating or preventing slum or blighted | 4 | | conditions,
preserving historic structures or ensuring that | 5 | | facilities are not
inconsistent with the development. For | 6 | | purposes of this Section,
"commercial facilities" includes | 7 | | land, buildings, improvements, equipment
and all ancillary | 8 | | facilities for use for offices, stores, retirement homes,
| 9 | | hotels, financial institutions, service health care, | 10 | | education, recreation
or research establishments or any other | 11 | | commercial purpose.
| 12 | | (r) "Rate protection contract" means interest rate | 13 | | exchange
agreements; currency exchange agreements; forward | 14 | | payment conversion
agreements; contracts providing for payment | 15 | | or receipt of funds based on
levels of, or changes in, interest | 16 | | rates, currency exchange rates, stock or
other indices; | 17 | | contracts to exchange cash flows or a series of payments;
| 18 | | contracts, including without limitation, interest rate caps; | 19 | | interest rate
floors; interest rate locks; interest rate | 20 | | collars; rate of return
guarantees or assurances, to manage | 21 | | payment, currency, rate, spread or
similar exposure; the | 22 | | obligation, right, or option to issue, put, lend,
sell, grant a | 23 | | security interest in, buy, borrow or otherwise acquire, a
bond, | 24 | | note or other security or interest therein as an investment, as
| 25 | | collateral, as a hedge, or otherwise as a source or assurance | 26 | | of payment to
or by the Authority or as a reduction of the |
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| 1 | | Authority's or an obligor's
risk exposure; repurchase | 2 | | agreements; securities lending agreements; and
other | 3 | | agreements or arrangements similar to the foregoing.
| 4 | | (s) "Affordable Housing Program Trust Fund Bonds or Notes" | 5 | | means bonds or
notes issued by the Authority pursuant to the | 6 | | provisions of this Act for the
purposes of providing affordable | 7 | | housing to low and very low income persons as
provided in the | 8 | | Illinois Affordable Housing Act through the use or pledge, in
| 9 | | whole or in part, of Trust Fund Moneys dedicated or
otherwise | 10 | | made available to the Authority.
| 11 | | (t) "Trust Fund Moneys" has the meaning given to that term | 12 | | in Section 3 of
the Illinois Affordable Housing Act.
| 13 | | (Source: P.A. 87-250; 88-93.)
| 14 | | (20 ILCS 3805/8) (from Ch. 67 1/2, par. 308)
| 15 | | Sec. 8.
The Authority may, pursuant to its rules or | 16 | | regulations, or pursuant to
agreements with persons to whom it | 17 | | makes mortgage or other loans, provide
for methods of limiting | 18 | | profits or cash flow or other distributions
available to | 19 | | limited-profit entities to whom it has made or will make such | 20 | | loans. A limited-profit entity which receives loans from the | 21 | | Authority
may not make distributions in any one year with | 22 | | respect to a development
financed by the Authority in excess of | 23 | | 6% of its equity in such
development, except that the right to | 24 | | such distribution shall be
cumulative. This distribution | 25 | | limitation may not be increased above 6%
during the life of the |
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| 1 | | Authority's loan, whether the loan is outstanding on
or is made | 2 | | after the effective date of this amendatory Act of 1991, | 3 | | unless,
by resolution of the members, the Authority determines | 4 | | that an increase is
necessary to preserve the development as | 5 | | affordable to low and moderate
income persons and families or | 6 | | that an increase provides for the creation
of additional units | 7 | | of housing affordable to low or moderate income persons
and | 8 | | families in the development or otherwise in this State. The | 9 | | equity in a
development shall consist of the difference between | 10 | | the amount of the
mortgage loan and the total cost of the | 11 | | development. The total cost of the
development shall include | 12 | | construction or rehabilitation costs including
job overhead | 13 | | and a builder's and sponsor's profit and risk fee,
| 14 | | architectural, engineering, legal and accounting costs, | 15 | | organizational
expenses, land value, interest and financing | 16 | | charges paid during
construction, the cost of landscaping and | 17 | | off-site improvements, whether or
not such costs have been paid | 18 | | in cash or in a form other than cash. With
respect to every | 19 | | development the Authority shall, by resolution, establish
the | 20 | | entity's equity at the time of making of the final mortgage | 21 | | advance
and, for purposes of this paragraph, that figure shall
| 22 | | remain constant during the life of the Authority's loan with | 23 | | respect to
such development, unless adjusted pursuant to a | 24 | | resolution of the members
based on criteria set forth in the | 25 | | Authority's rules or regulations.
The Authority may, pursuant | 26 | | to its rules or regulations, or pursuant to
agreements with |
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| 1 | | persons to whom it makes mortgage or other loans, provide
for | 2 | | methods of limiting profits or cash flow or other distributions
| 3 | | available to the person. Such alternative methods may include, | 4 | | without
limitation, a limitation which may vary from period to | 5 | | period based on
changes in the costs of borrowing money and may | 6 | | be changed from time to
time. Such alternative methods may be | 7 | | in lieu of the 6% limitation as
provided in this Section. With | 8 | | respect to mortgage loans to limited profit
entities, the | 9 | | alternative method shall be such as shall, in the sole
judgment | 10 | | of the Authority, result in the lowest rents consistent with
| 11 | | attracting private enterprise to acquire, construct, | 12 | | rehabilitate, operate
and maintain the development. The equity | 13 | | in a development shall consist of the difference between the | 14 | | amount of the mortgage loan and the total cost of the | 15 | | development. The total cost of the development shall include | 16 | | construction or rehabilitation costs including job overhead | 17 | | and a builder's and sponsor's profit and risk fee, | 18 | | architectural, engineering, legal, and accounting costs, | 19 | | organizational expenses, land value, interest and financing | 20 | | charges paid during construction, and the cost of landscaping | 21 | | and off-site improvements, whether or not such costs have been | 22 | | paid in cash or in a form other than cash.
| 23 | | (Source: P.A. 87-250.)
| 24 | | (20 ILCS 3805/10) (from Ch. 67 1/2, par. 310)
| 25 | | Sec. 10.
The Prior to making a loan commitment for a |
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| 1 | | development under this
Act, the Authority shall approve a | 2 | | tenant selection plan submitted by the
applicant for the loan | 3 | | prior to disbursing any funds in connection with the | 4 | | acquisition, rehabilitation, or construction of a development . | 5 | | The Authority shall formulate regulations from time
to time | 6 | | setting forth the criteria for tenant selection plans. These
| 7 | | criteria shall include income limits, which may vary with the | 8 | | size and
circumstances of the family unit of tenants. The | 9 | | income limits shall be
sufficiently flexible to avoid undue | 10 | | economic homogeneity among the tenants
of a development. The | 11 | | Authority may formulate regulations from time to time
for the | 12 | | alteration of occupancies of tenants who exceed established | 13 | | income
limits. The tenant selection plan shall specify how many | 14 | | units in the
development shall be held available for rentals to | 15 | | persons of low or
moderate income, as defined in this Act.
| 16 | | In determining the number of units which shall be so held | 17 | | available for
rental to persons of low or moderate income, the | 18 | | Authority shall require
that the number of dwelling units so | 19 | | held reserved for them in each
development shall not be less | 20 | | than the number required by applicable federal
and State law.
| 21 | | In connection with any mortgage loan for a development, the | 22 | | Authority
may enter into an agreement with the owner of the | 23 | | development as a part of
the loan providing that as long as the | 24 | | loan remains outstanding or such
longer period as is set forth | 25 | | in the agreement, the development shall be
held available for | 26 | | such rentals. Any such agreement shall, upon being
recorded in |
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| 1 | | the manner provided for recording of deeds or registered in the
| 2 | | manner specified for registration of titles, be binding upon | 3 | | any subsequent
owners of the development as provided by its | 4 | | terms.
| 5 | | (Source: P.A. 87-250.)
| 6 | | Section 99. Effective date. This Act takes effect upon | 7 | | becoming law.
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