2000 Legislation
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HOUSE BILL NO. 684 – Housing/Finance Assn, nonprofits


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H0684......................................................by STATE AFFAIRS
IDAHO HOUSING AND FINANCE ASSOCIATION - Amends existing law to remove
powers of the Idaho Housing and Finance Association to organize nonprofit
corporations to assist the association in providing for housing projects;
and to provide limits on conflict of interest.
02/24    House intro - 1st rdg - to printing
02/25    Rpt prt - to St Aff

Bill Text

  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-fifth Legislature                  Second Regular Session - 2000
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 684
                                 BY STATE AFFAIRS COMMITTEE
  1                                        AN ACT
  9        DATE.
 10    Be It Enacted by the Legislature of the State of Idaho:
 11        SECTION 1.  That Section 67-6206, Idaho Code, be, and the same  is  hereby
 12    amended to read as follows:
 13        67-6206.  POWERS OF ASSOCIATION. The housing and finance association is an
 14    independent public body corporate and politic, exercising public and essential
 15    governmental functions, and having all the powers which are hereby declared to
 16    be  public  purposes  necessary  or convenient to carry out and effectuate the
 17    purposes and provisions of this act, including the following powers  in  addi-
 18    tion to others herein granted:
 19        (a)  To sue and to be sued; to have a seal and to alter the same at pleas-
 20    ure;  to  have  perpetual  succession; to make and execute contracts and other
 21    instruments necessary or convenient to the exercise of the powers of the asso-
 22    ciation; and to make and from time to time amend and repeal bylaws, rules, not
 23    inconsistent with this act, to carry into effect the powers  and  purposes  of
 24    the association.
 25        (b)  To  conduct  its  operations within any or all of the counties of the
 26    state.
 27        (c)  To cooperate with housing authorities throughout Idaho in the  devel-
 28    opment of housing projects.
 29        (d)  To  assign priorities for action and revise or modify said priorities
 30    from time to time.
 31        (e)  To make and execute agreements, contracts and other instruments  nec-
 32    essary  or convenient in the exercise of the powers and functions of the asso-
 33    ciation under this act, including contracts with any housing sponsor, mortgage
 34    lender, person, firm, corporation, governmental agency, or other  entity;  and
 35    to  include  in  any  contract  let in connection with a project, stipulations
 36    requiring that the contractor and any subcontractors comply with  requirements
 37    as to minimum wages and maximum hours of labor, and comply with any conditions
 38    which  the  federal  government  may have attached to its financial aid of the
 39    project and to designate mortgage lenders to act for  and  in  behalf  of  the
 40    association,  with respect to originating or servicing and processing mortgage
 41    loans of the association, and to pay the reasonable value of service  rendered
 42    to  the  association by such mortgage lenders pursuant to contracts with mort-
 43    gage lenders.
  1        (f)  To lease, sell, construct, finance, reconstruct,  restore,  rehabili-
  2    tate, operate or rent any housing projects, nonprofit facilities or any dwell-
  3    ings,  houses,  accommodations,  lands,  buildings,  structures  or facilities
  4    embraced in any housing project or nonprofit facilities and,  subject  to  the
  5    limitations  contained  in  this  act,  to  establish  and revise the rents or
  6    charges therefor.
  7        (g)  To own, hold and improve real  or  personal  property;  to  purchase,
  8    lease,  obtain  options upon, acquire by gift, grant, bequest, devise, eminent
  9    domain or otherwise, any real or personal property or any interest therein.
 10        (h)  To acquire any real property; to  sell,  lease,  exchange,  transfer,
 11    assign,    pledge  or dispose of any real or personal property or any interest
 12    therein.
 13        (i)  To insure or provide for the insurance of any real or personal  prop-
 14    erty or operation of the association against any risks or hazards, and to pro-
 15    cure  or  agree to the procurement of insurance or guarantees from the federal
 16    government or other source for the payment or purchase of any bonds  or  parts
 17    thereof  issued  by  the  association, including the power to pay for any such
 18    insurance or guarantees.
 19        (j)  To invest any funds held in reserves or sinking funds, or  any  funds
 20    not  required for immediate disbursement, in property or securities in which a
 21    bank, as defined in the "bank act," title 26, Idaho Code, may  legally  invest
 22    funds  including  without  limitation, to agree to purchase the obligations of
 23    any federal, state or local government upon such conditions as the association
 24    may determine to be prudent and in its best interest.
 25        (k)  Within its area of operation: to investigate  into  living,  dwelling
 26    and housing conditions and into the means and methods of improving such condi-
 27    tions;  to  determine  where  slum areas exist or where there is a shortage of
 28    adequate, safe and sanitary dwelling accommodations for persons of low-income;
 29    to make studies and recommendations  relating  to  the  problem  of  clearing,
 30    replanning  and  reconstruction  of  slum  areas  and the problem of providing
 31    dwelling accommodations for persons of low-income, and to cooperate  with  the
 32    city,  the  county,  the  state or any political subdivision thereof in action
 33    taken in connection with such problems; and to engage in research, studies and
 34    experimentation on the subject of housing.
 35        (l)  To participate in cooperative ventures with any  agencies,  organiza-
 36    tions  and individuals in order to undertake the provision of housing for per-
 37    sons of low-income or to undertake the provision of nonprofit facilities.
 38        (m)  To provide research and technical assistance  to  eligible  agencies,
 39    organizations  and  individuals  eligible  to  develop low cost housing and to
 40    research new low cost housing development and construction methods.
 41        (n)  To make and undertake commitments to make or participate in the  mak-
 42    ing  of  mortgage  loans  to  persons  of  low-income and to housing sponsors,
 43    including without limitation federally insured mortgage  loans,  and  to  make
 44    temporary  loans  and  advances  in anticipation of permanent loans to housing
 45    sponsors; said mortgage loans to housing sponsors shall be made to finance the
 46    construction, improvement, or rehabilitation of housing projects  for  persons
 47    of  low-income, and/or mixed income housing projects upon the terms and condi-
 48    tions set forth in this act; provided, however, that such loans shall be  made
 49    only  upon  the  determination  by the association that mortgage loans are not
 50    otherwise available, wholly or in part, from private lenders  upon  reasonably
 51    equivalent terms and conditions.
 52        (o)  To  purchase,  or  make commitments to purchase or participate in the
 53    purchase of mortgage loans from mortgage lenders which loans  have  been  made
 54    for  the  construction, improvement, or rehabilitation of housing projects for
 55    persons of low-income and/or mixed income housing projects or loans which have
  1    been made to persons of low-income for residential  housing,  upon  terms  set
  2    forth  in  this  act;  provided, however, that any such purchase shall be made
  3    only upon the determination by the association that the mortgage loans  to  be
  4    made  are not otherwise being made by mortgage lenders upon reasonably equiva-
  5    lent terms and conditions. Also, to purchase, or make commitments to  purchase
  6    or participate in the purchase of mortgage loans from mortgage lenders whether
  7    or  not said loans were made to persons of low-income, upon terms set forth in
  8    this act; provided, however, that the  proceeds  from  such  purchase  or  the
  9    equivalent  thereof  shall be reinvested in obligations of the association, in
 10    mortgage loans to persons of low-income or in mortgage loans for housing proj-
 11    ects for persons of low-income and/or mixed income housing projects, and  pro-
 12    vided  that any such purchase shall be made only upon the determination by the
 13    association that the mortgage loans to be made are not otherwise being made by
 14    mortgage lenders upon reasonably equivalent terms and conditions.
 15        (p)  To provide interim financing for  housing  projects  including  mixed
 16    income housing projects approved by the association, provided that the associ-
 17    ation has determined that such financing is not otherwise available from mort-
 18    gage lenders upon reasonably equivalent terms and conditions.
 19        (q)  To prescribe rules and policies in connection with the performance of
 20    its functions and duties.
 21        (r)  To  do  all other things deemed necessary and desirable to accomplish
 22    the objectives of this act.
 23        (s)  To borrow money and issue bonds and notes or  other  obligations,  to
 24    invest  the  proceeds  thereof  in any lawful manner and to fund or refund the
 25    same, and to provide for the rights of the holders of its obligations as  pro-
 26    vided  in  this  act  and  in connection therewith, to waive, by resolution or
 27    other document of the association, the exemption from federal income  taxation
 28    of  interest  on any of the association's obligations under existing or future
 29    federal law and to establish, maintain and preserve the association's  general
 30    obligation rating and any rating on its bonds, notes or other obligations.
 31        (t)  To receive and accept aid or contributions from any source.
 32        (u)  To employ architects, engineers, attorneys, accountants, housing con-
 33    struction  and  financial  experts  and  such  other advisors, consultants and
 34    agents as may be necessary in its judgment and to fix their compensation.
 35        (v)  To insure mortgage payments of any mortgage loan made for the purpose
 36    of constructing, rehabilitating, purchasing, leasing, or  refinancing  housing
 37    projects upon such terms and conditions as the association may prescribe.
 38        (w)  To  fix  and revise from time to time and charge and collect fees and
 39    charges in connection with loans made or other services provided by the  asso-
 40    ciation  pursuant  to  this  act, and to make and publish rules respecting the
 41    making and purchase of mortgage loans.
 42        (x)  To organize a nonprofit corporation to assist the association in pro-
 43    viding for housing projects.
 44        (y)  To enter upon and inspect  any  housing  project,  including  housing
 45    projects  undertaken by housing sponsors, for the purpose of investigating the
 46    physical and financial condition thereof, and  its  construction,  rehabilita-
 47    tion,  operation,  management  and  maintenance,  and to examine all books and
 48    records with respect to capitalization,  income  and  other  matters  relating
 49    thereto.
 50        (zy)  To order such alterations, changes or repairs as may be necessary to
 51    protect  the  security  of  its investment in a housing project or the health,
 52    safety, and welfare of the occupants thereof.
 53        (aaz) To make secured loans for the purpose of providing temporary or per-
 54    manent financing or refinancing of all or part of the  project  costs  of  any
 55    nonprofit  facility,  including  the refunding of any outstanding obligations,
  1    mortgages or advances issued, made or given by  any  person  for  the  project
  2    costs of a nonprofit facility; and to charge and collect interest on the loans
  3    for  the loan payments upon such terms and conditions, including without limi-
  4    tation bond rating and issuance conditions, as the board of commissioners con-
  5    siders advisable which are not in conflict with this chapter.
  6        (bbaa) As security for the payment of the principal of and interest on any
  7    revenue bonds issued and any agreements made in connection therewith, to mort-
  8    gage, pledge, or otherwise encumber any or all of nonprofit facilities or  any
  9    part  or  parts  thereof,  whether  then  owned or thereafter acquired, and to
 10    assign any mortgage and repledge any security conveyed to the association,  to
 11    secure  any  loan  made  by  the  association  and  to pledge the revenues and
 12    receipts therefrom.
 13        (ccbb) To issue bonds for the purpose of financing  all  or  part  of  the
 14    project  cost on any nonprofit facility and to secure the payment of the bonds
 15    as provided in this chapter.
 16        (ddcc) To purchase or sell by installment contract or otherwise, and  con-
 17    vey all or any part of any nonprofit facility for such purchase price and upon
 18    such  terms  and conditions as this board of commissioners considers advisable
 19    which are not in conflict with this chapter.
 20        (eedd) To lease all or any part of any nonprofit facility for such rentals
 21    and upon such terms and conditions, including  options  to  purchase,  as  the
 22    board of commissioners considers advisable and not in conflict with this chap-
 23    ter.
 24        (ffee) To construct and maintain one (1) or more nonprofit facilities that
 25    the  association  shall not operate any nonprofit facility as a business other
 26    than as lessor, seller or lender. The purchase, holding and enforcing of mort-
 27    gages, deeds of trust, or other security interests  and  contracting  for  any
 28    servicing thereof is not considered the operation of a nonprofit facility as a
 29    business.
 30        (ggff) To  act  as  the  designated  housing resource clearinghouse in the
 31    state for matters relating to affordable housing.
 32        (hhgg) To coordinate the development and maintenance of a  housing  policy
 33    for the state.
 34        SECTION  2.  That  Section 67-6221, Idaho Code, be, and the same is hereby
 35    amended to read as follows:
 36        67-6221.  CONFLICT OF  INTEREST.  Any  member,  commissioner,  officer  or
 37    employee  of  the association who is interested either directly or indirectly,
 38    or who is an officer or employee of, or has an ownership interest in any  firm
 39    or  agency interested directly or indirectly in any contract with the associa-
 40    tion, including any loan to any housing sponsor, shall disclose  this  dispose
 41    of  such  interest to the association. This interest shall be set forth in the
 42    minutes of the association, and the member, officer  or  employee  having  the
 43    interest  shall  not participate before taking any action whatsoever on behalf
 44    of the association, in the authorization of any such contract except  that  an
 45    interest which is limited to a single family loan shall be allowed.
 46        SECTION  3.  That Section 67-6224A, Idaho Code, be, and the same is hereby
 47    amended to read as follows:
 48        67-6224A.  LEGISLATIVE CONSTRUCTION. Neither this act nor anything  herein
 49    contained  is  or  shall  be construed as a restriction or limitation upon any
 50    powers which the association might otherwise  have  under  any  laws  of  this
 51    state,  and  this act is cumulative to any such powers. Provided however, that
  1    the association shall have no power or authority under any law of  this  state
  2    to organize a nonprofit corporation to assist the association in providing for
  3    housing  projects. This act does and shall be construed to provide a complete,
  4    additional,  and alternative method for the doing  of  the  things  authorized
  5    thereby  and  shall  be regarded as supplemental and additional to powers con-
  6    ferred by other laws. However, the issuance of bonds, notes and other  obliga-
  7    tions  and  refunding  bonds  under the provisions of this act need not comply
  8    with the requirements of any other state law applicable  to  the  issuance  of
  9    bonds,  notes  and  other  obligations  and contracts for the construction and
 10    acquisition of any housing projects undertaken pursuant to this act  and  need
 11    not  comply with the provisions of any other state law applicable to contracts
 12    for the construction and acquisition of state-owned property. No  proceedings,
 13    notice  or approval shall be required for the issuance of any bonds, notes and
 14    other obligations or any instrument as security therefor, except  as  is  pro-
 15    vided in this act.
 16        SECTION  4.  This  act shall be in full force and effect on and after July
 17    1, 2000.

Statement of Purpose / Fiscal Impact

                 STATEMENT OF PURPOSE
                       RS 09735 
          The Chairman of the Board of Commissioners of the Idaho Housing and
     Finance Association (IHFA) and the Executive Director of IHFA are the
     Chairman and President respectively of a private corporation called The Housing
     Company (THC) and several private subsidiary corporations. THC and its
     subsidiary corporations own and operate millions of dollars of worth of apartment
     complexes throughout Idaho. Most of the financing, allocation and compliance of
     millions of tax dollars to THC are as a result of applications to and allocation
     from IHFA. All compliance and audit functions for millions of tax dollars on
     THC properties are performed by IHFA. 
          Statues governing IHFA include a conflict of interest code provision, but
     does not prohibit this type of activity. This legislation would not allow IHFA to
     allocate millions of tax dollars to organizations run by its' officers and/or
     employees by amending the conflict of interest section of IHFA statutes to
     specifically disallow such activity. Additionally, this legislation would prevent
     IHFA from establishing a non-profit corporation. 
                    FISCAL IMPACT
     No fiscal impact.
     Name: Representative Lenore Hardy Barrett 
                                             STATEMENT OF PURPOSE/FISCAL NOTE                                 H 684