2005 Legislation
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HOUSE BILL NO. 179 – Transportation projects, financing


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H0179.........................................by TRANSPORTATION AND DEFENSE
TRANSPORTATION - Adds to and amends existing law to provide that the Idaho
Housing and Finance Association may issue bonds or notes to finance
transportation projects that have been approved and recommended by the
Idaho Transportation Board and the germane transportation committees of the
Legislature; and to provide for repayment of the bonds, interest and
related costs using federal highway funds allocated annually to the state
of Idaho.
02/11    House intro - 1st rdg - to printing
02/14    Rpt prt - to Transp

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 179
  1                                        AN ACT
 24    Be It Enacted by the Legislature of the State of Idaho:
 25        SECTION 1.  That Chapter 3, Title 40, Idaho Code,  be,  and  the  same  is
 26    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 27    ignated as Section 40-315, Idaho Code, and to read as follows:
 29    In  order  to  address  the increasing need for timely improvements to Idaho's
 30    highway transportation infrastructure, the board may:
 31        (1)  Enter into agreements with the Idaho housing and finance  association
 32    in  connection  with the funding of highway transportation projects qualifying
 33    for reimbursement from federal funds.
 34        (2)  Approve and recommend federal highway transportation projects to  the
 35    Idaho housing and finance association for financing by the association.
 36        (3)  Prior to issuance by the Idaho housing and finance association of any
 37    bonds  or  notes  to  finance  highway transportation projects, certify to the
 38    association that sufficient federal transportation funds are available to make
 39    any payments required for such bonds or notes. The board shall limit debt ser-
 40    vice on federally-funded highway project financing to twenty percent (20%)  of
 41    anticipated annual revenues from federal transportation funds.
 42        (4)  Prior to issuance by the Idaho housing and finance association of any
 43    bonds  or  notes  to  finance highway transportation projects, the board shall
  1    present the project-specific proposal to a joint meeting of the  house  trans-
  2    portation and defense committee and the senate transportation committee of the
  3    legislature  for  approval.  With  a quorum from each committee in attendance,
  4    during a regular legislative session or a special joint meeting of the two (2)
  5    germane transportation committees called specifically for said purpose, legis-
  6    lative approval shall be by a majority of votes  cast  by  each  committee  in
  7    favor of a motion supporting the project-specific proposal of the Idaho trans-
  8    portation board and the Idaho housing and finance association.
  9        (5)  No  issue of bonds or notes by the Idaho housing and finance associa-
 10    tion shall be reissued, extended, rewritten, or in any way  altered  from  the
 11    original  issue unless both the board and the germane committees of the legis-
 12    lature have approved the action as provided in this section.
 13        SECTION 2.  That Section 40-702, Idaho Code, be, and the  same  is  hereby
 14    amended to read as follows:
 15        40-702.  STATE HIGHWAY ACCOUNT -- ESTABLISHMENT. For the purpose of carry-
 16    ing  out  the  provisions of this title, there is established in the dedicated
 17    fund of the state treasury an  account  to  be  known  as  the  state  highway
 18    account, which account shall include:
 19        (1)  All  moneys  received by the state treasurer for deposit to the state
 20    highway account.
 21        (2)  All fines, penalties  and  forfeitures  incurred  and  collected  for
 22    violations of the provisions of this title, except as otherwise provided.
 23        (3)  All  donations  to the state from any source for the construction and
 24    improvement of highways.
 25        (4)  All moneys received from local boards under joint contracts  for  the
 26    construction of state highways.
 27        (5)  All  federal surface transportation funds received from the U.S. gov-
 28    ernment including, but not limited to, funds received pursuant to chapter 1 of
 29    title 23, United States Code, for the national highway  systems  program,  the
 30    surface  transportation program, the highway bridge program, the minimum guar-
 31    antee program, the federal lands highway program and  other  similar  programs
 32    under successor laws.
 33        (6)  Other  moneys  which  may be provided by law for the construction and
 34    improvement of state highways.
 35        (67)  Interest earned on the investment of idle moneys in the state  high-
 36    way account shall be paid to the state highway account.
 37        SECTION  3.  That  Section  40-707, Idaho Code, be, and the same is hereby
 38    amended to read as follows:
 40    eral  funds  in  the state highway account, there are hereby continually allo-
 41    cated and appropriated first such amounts as from time to time shall be certi-
 42    fied by the Idaho housing and finance association as necessary for payment  of
 43    principal,  interest  and  other  amounts required for transportation bonds or
 44    notes of the Idaho housing and finance association in accordance with  chapter
 45    62,  title 67, Idaho Code, which amounts shall be paid over as directed by the
 46    association. Federal funds remaining in the state highway account  not  needed
 47    for  such  bonds or notes shall then be applied as set forth in subsection (2)
 48    of this section. Any proceeds of the transportation bonds or notes  issued  by
 49    the  Idaho  housing and finance association which are paid over to the depart-
 50    ment or the board are hereby continuously appropriated for the  transportation
 51    projects  approved  and  recommended  by the board, subject to approval of the
  1    legislature as provided in section 40-315, Idaho Code.
  2        (2)  One-half of one percent (.5%) of the  moneys  in  the  state  highway
  3    account  may be utilized to encourage the use of recycled materials including,
  4    but not limited to, recycled  glass,  reclaimed  asphalt,  asphalt  containing
  5    recycled  plastic, recycled rubber tires and paper in highway construction and
  6    maintenance projects. All other moneys  at  any  time  in  the  state  highway
  7    account,  except  those  as  are otherwise required by law to be placed in the
  8    state highway redemption account, are hereby appropriated for the  purpose  of
  9    defraying  the  expenses,  debts and costs incurred in carrying out the powers
 10    and duties of the highway board as provided by law, and for defraying adminis-
 11    trative expenses of the department, including salaries of the board, the  sal-
 12    ary of the director, and salaries and wages of employees of the department and
 13    board  and  expenses  for  traveling. Communication supplies, equipment, fixed
 14    charges and all other necessary expenses of  the  department  and  board,  not
 15    otherwise  provided for and all claims against the state highway account shall
 16    be examined by the department and  certified  to  the  state  controller,  who
 17    shall,  upon  approval of the board of examiners, draw his warrant against the
 18    state highway account for all bills and claims allowed by the board.
 19        SECTION 4.  That Section 67-6201, Idaho Code, be, and the same  is  hereby
 20    amended to read as follows:
 21        67-6201.  PURPOSE. It is hereby declared:
 22        (a)  That  within the state there is a shortage of safe or sanitary dwell-
 23    ing accommodations available which persons of low incomes can afford and  that
 24    such  persons are forced to occupy overcrowded and congested dwelling accommo-
 25    dations; that the aforesaid conditions cause an increase in and spread of dis-
 26    ease and crime, and constitute a menace to the health, safety, morals and wel-
 27    fare of the residents of the state and impair economic values; that these con-
 28    ditions necessitate excessive  and  disproportionate  expenditures  of  public
 29    funds  for crime prevention and punishment, public health and safety, fire and
 30    accident protection, and other public services and facilities.
 31        (b)  That private enterprise has not been able to provide, without  assis-
 32    tance,  an  adequate  supply of safe and sanitary dwellings at prices or rents
 33    which persons and families of low income can afford, or to achieve rehabilita-
 34    tion of much of the present low-income housing. It is imperative that the sup-
 35    ply of housing for persons and families of low income be  increased  and  that
 36    coordination and cooperation among private enterprise, state and local govern-
 37    ment  be encouraged to sponsor, build and rehabilitate residential housing for
 38    such persons and families.
 39        (c)  That the clearance, replanning and reconstruction  of  the  areas  in
 40    which unsanitary or unsafe housing conditions exist, and the providing of safe
 41    and  sanitary  dwelling  accommodations  for  persons  of  low  incomes (which
 42    dwelling-accommodations need not be solely for persons of low incomes in order
 43    to avoid concentrations of such persons in specific localities),   are  public
 44    uses,  and  uses  and purposes for which public money may be spent and private
 45    property acquired, and are governmental functions.
 46        (d)  It is also declared and the legislature hereby finds that charitable,
 47    educational, human service, cultural and other purposes pursued  by  nonprofit
 48    corporations are important public functions and public purposes that should be
 49    encouraged  and  that  financing  of  nonprofit  facilities for these purposes
 50    should be encouraged, without using state funds or lending  the credit of  the
 51    state,  through  the  issuance of nonrecourse revenue bonds and the lending of
 52    the proceeds thereof to nonprofit corporations to promote their purposes.
 53        (e)  It is further declared that in this state:
  1        (1)  There exists an inadequate supply of funds at interest  rates  suffi-
  2        ciently  low  to enable persons engaged in agriculture in this state, par-
  3        ticularly beginning farmers and ranchers, to  pursue  agricultural  opera-
  4        tions at present levels;
  5        (2)  That such inability to pursue agricultural operations lessens reduces
  6        the  supply  of agricultural commodities available to fulfill the needs of
  7        the citizens of this state;
  8        (3)  That  such  inability  to  continue  operations  decreases  available
  9        employment in the agricultural sector of the state and  results  in  unem-
 10        ployment and its attendant problems;
 11        (4)  That  such  conditions prevent the acquisition of an adequate capital
 12        stock of farm and ranch equipment and machinery, therefore  impairing  the
 13        productivity of agricultural land;
 14        (5)  That  such  conditions  are  conducive to consolidation of acreage of
 15        agricultural land with fewer individuals living and farming  and  ranching
 16        on the traditional family farm and ranch;
 17        (6)  That  these  conditions  result in a loss in population, unemployment
 18        and movement of persons from rural to urban  areas  accompanied  by  added
 19        costs to communities for creation of new public facilities and services;
 20        (7)  That there have been recurrent shortages of funds from private market
 21        sources at reasonable rates of interest;
 22        (8)  That  these shortages have made the sale and purchase of agricultural
 23        land to beginning farmers and ranchers a  virtual  impossibility  in  many
 24        parts of the state;
 25        (9)  That  the  ordinary  operations of private enterprise have not in the
 26        past corrected these conditions; and
 27        (10) That a stable supply of adequate funds for agricultural financing  is
 28        required  to  encourage  beginning  farmers and ranchers in an orderly and
 29        sustained manner and to reduce the problems described herein.
 30        (f)  It is hereby further declared that:
 31        (1)  The growth of the economy of this state has prompted  new  and  ever-
 32        increasing uses of public highways, roads, and other transportation infra-
 33        structure,  and  that  the  existing transportation infrastructure of this
 34        state and its municipalities cannot adequately  accommodate  such  greatly
 35        increased uses;
 36        (2)  One  (1)  of  the major concerns of the citizens of this state is the
 37        ability of the state and  its  municipalities  to  address  the  long-term
 38        transportation  infrastructure  needs of this state and its municipalities
 39        that are critical to the continued growth of the state's economy  and  the
 40        maintenance of citizens' quality of life;
 41        (3)  Utilizing  bonds  or notes to finance projects for transportation in-
 42        frastructure results in significant cost savings  to  the  state  and  its
 43        municipalities,  since  such  transportation  projects can be completed at
 44        present day costs and at an accelerated pace, but  such  bonds  and  notes
 45        need to be issued promptly in order to realize these cost savings; and
 46        (4)  It is reasonable and necessary to utilize such bonds or notes for the
 47        financing  of  transportation projects which meet criteria for advancing a
 48        substantial statewide interest. To safeguard substantial statewide  inter-
 49        est,  such  interest  shall be determined by the affirmative action of the
 50        legislature pursuant to section 40-315, Idaho Code. To safeguard  substan-
 51        tial  jurisdictional  interest  at the local level, such interest shall be
 52        determined by a two-thirds (2/3) majority  of  any  local  governing  body
 53        larger  than  three (3) members, or by unanimous approval in the case of a
 54        three (3) member governing body, voting on a resolution  or  ordinance  in
 55        support of a transportation infrastructure project.
  1        (g)  It  is  hereby  further declared that all of the foregoing are public
  2    purposes and uses for which public moneys may be borrowed, expended or granted
  3    and that such activities are governmental functions and serve a public purpose
  4    in improving or otherwise benefiting the people of this state; that the neces-
  5    sity of enacting the provisions hereinafter set forth is in the public  inter-
  6    est  and  is  hereby so declared as a matter of express legislative determina-
  7    tion.
  8        SECTION 5.  That Section 67-6205, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
 10        67-6205.  DEFINITIONS.  The  following terms, wherever used or referred to
 11    in this chapter, shall have the following respective meanings, unless  a  dif-
 12    ferent meaning clearly appears from the context:
 13        (a)  "Association"  or  "housing association" shall mean the Idaho housing
 14    and finance association created by section 67-6202, Idaho Code.
 15        (b)  "Housing project" shall mean any work or undertaking:
 16        (1)  To demolish, clear or remove buildings from any slum area; such  work
 17        or  undertaking  may embrace the adoption of such area to public purposes,
 18        including parks or other recreational or community purposes; or
 19        (2)  To construct, sell, lease, finance,  improve,  operate  or  otherwise
 20        provide  decent, safe and sanitary urban or rural dwellings, apartments or
 21        other living accommodations for persons of low income; such work or under-
 22        taking may include buildings, land, equipment, facilities and  other  real
 23        or personal property which are necessary, convenient or desirable appurte-
 24        nances,  such  as,  but  not  limited  to, streets, sewers, water service,
 25        parks, site preparation,  gardening,  administrative,  community,  health,
 26        recreational, and welfare or other purposes; or
 27        (3)  To accomplish a combination of the foregoing. The term "housing proj-
 28        ect"  also  may  be  applied to the planning of the buildings and improve-
 29        ments, for either single or multi-family housing, the acquisition of prop-
 30        erty, the demolition of existing structures, the construction, reconstruc-
 31        tion, rehabilitation, alteration and repair of the buildings and  improve-
 32        ments and all other work in connection therewith.
 33        (c)  "Governing body" shall mean the city council, board of commissioners,
 34    board  of  trustees  or  other body having charge of the locality in which the
 35    association desires to undertake a housing project.
 36        (d)  "Federal government" shall include the United States of  America,  or
 37    any  other  agency  or  instrumentality, corporate or otherwise, of the United
 38    States of America.
 39        (e)  "City" shall mean any city in the state of Idaho, including each city
 40    having a special charter.
 41        (f)  "County" or "counties" shall include all counties  in  the  state  of
 42    Idaho as designated in chapter 1, title 31, Idaho Code.
 43        (g)  "Clerk" shall mean the clerk of the city or county as the case may be
 44    or the officer charged with the duties customarily imposed on such clerk.
 45        (h)  "Area of operation" shall mean the state of Idaho.
 46        (i)  "Slum" shall mean any area where dwellings predominate which, by rea-
 47    son  of  dilapidation,  overcrowding,  lack  of ventilation, light or sanitary
 48    facilities or any combination of these factors,  are  detrimental  to  safety,
 49    health or morals.
 50        (j)  "Person  of  low-income"  means  persons  deemed  by the association,
 51    including those defined as "elderly" in the United States Housing Act of  1937
 52    [42  U.S.C.,  sec.  1437--1437dd], as amended, to require assistance available
 53    under this act on account of insufficient personal or family  income,  to  pay
  1    the  rents  or  carrying  charges required by the unaided operation of private
  2    enterprise in providing an adequate supply of decent, safe and sanitary  hous-
  3    ing and in making such determination the association shall take into consider-
  4    ation, without limitation, such factors as:
  5        (1)  The  amount of the total income of such persons available for housing
  6        needs;
  7        (2)  The size of the family;
  8        (3)  The cost and condition of housing facilities available;
  9        (4)  Standards established for various federal programs determining eligi-
 10        bility based on income of such persons; and
 11        (5)  The ability of such persons to compete  successfully  in  the  normal
 12        housing  market and to pay the amounts at which private enterprise is pro-
 13        viding decent, safe and sanitary housing.
 14        (k)  "Bonds," "notes" or  "bond  anticipation  notes,"  and  "obligations"
 15    shall  mean  any  bonds, notes, interim certificates, debentures or other evi-
 16    dences of financial indebtedness issued by the association  pursuant  to  this
 17    chapter.
 18        (l)  "Real  property"  shall include all lands, including improvements and
 19    fixtures thereon, and property of any nature, appurtenant thereto, or used  in
 20    connection  therewith,  and every estate, interest and right, legal or equita-
 21    ble, therein, including terms for years and liens by way of judgment, mortgage
 22    or otherwise and the indebtedness secured by such liens.
 23        (m)  "Housing authority" or "authority" means a housing  authority  estab-
 24    lished  pursuant to the "housing authorities and cooperation law" constituting
 25    chapter 19, title 50, Idaho Code.
 26        (n)  "Rent" shall mean the periodic payment made by a person of low-income
 27    in a housing project whether such money is being used  as  rent,  or  for  the
 28    development of equity by such person.
 29        (o)  "Interim financing" means a short-term construction loan for planning
 30    and/or  development of residential housing for persons of low-income and other
 31    persons which loan shall run until financing can be assumed through other fed-
 32    eral, state or private financing.
 33        (p)  "Housing sponsor" means individuals,  joint  ventures,  partnerships,
 34    limited  partnerships,  public  bodies,  trusts, firms, associations, or other
 35    legal entities or any combination thereof, and corporations, cooperatives, and
 36    condominiums, approved by the association as qualified  either  to  own,  con-
 37    struct,  acquire, rehabilitate, operate, manage or maintain a housing project,
 38    subject to the regulatory powers of the association and other terms and condi-
 39    tions set forth in this  chapter.  A  "housing  sponsor"  shall  be  either  a
 40    "limited profit" sponsor or a "nonprofit" sponsor.
 41        (q)  "Mortgage  lender"  means  any  bank  or trust company, savings bank,
 42    mortgage company, mortgage banker, credit union, national banking association,
 43    savings and loan association, building and loan  association,  life  insurance
 44    company,  and  any other financial institution authorized to transact business
 45    in the state.
 46        (r)  "Mortgage loan" means an interest-bearing  obligation  secured  by  a
 47    deed  of trust, a mortgage, bond, note, or other instrument which is a lien on
 48    property in the state except in the case of loans insured by the federal hous-
 49    ing  administration  or the association and which are made for the rehabilita-
 50    tion or improvement of existing dwellings; in such case the loans need not  be
 51    secured by an instrument constituting a lien on property in the state.
 52        (s)  "Mixed income housing project" means a housing project which contains
 53    dwellings  occupied or to be occupied by persons of low-income constituting at
 54    least twenty percent (20%) of such occupancy.
 55        (t)  "Facilities" means  land,  rights  in  land,  buildings,  structures,
  1    equipment,  landscaping, utilities, approaches, roadways and parking, handling
  2    and storage areas, and portions of any of the foregoing and similar  ancillary
  3    facilities.
  4        (u)  "Nonprofit  corporation"  means a nonprofit corporation organized and
  5    operating in accordance with Idaho law or a  nonprofit  corporation  organized
  6    and  operating in accordance with comparable laws within another state or ter-
  7    ritory of the United States.
  8        (v)  "Nonprofit facilities" means facilities owned or used by a  nonprofit
  9    corporation  for a nonprofit purpose of the corporation; provided that facili-
 10    ties for health facilities which may be funded pursuant to chapter  14,  title
 11    39,  Idaho  Code,  shall  not  be included in this definition, except for such
 12    health facilities as may be specifically approved by the Idaho health  facili-
 13    ties  authority.  Facilities owned or used, consistent with its nonprofit pur-
 14    pose, by a nonprofit corporation recognized by a state institution  of  higher
 15    education  as  its  college  or university foundation shall be considered non-
 16    profit facilities under this chapter.
 17        (w)  "Project costs of a nonprofit facility" means costs of:
 18        (1)  Acquisition, construction and improvement of any facilities  included
 19        in a nonprofit facility;
 20        (2)  Architectural,  engineering,  consulting,  accounting and legal costs
 21        related directly to the development, financing and construction of a  non-
 22        profit facility, including costs of studies assessing the feasibility of a
 23        nonprofit facility;
 24        (3)  Finance  costs,  including  discounts,  if  any, the costs of issuing
 25        bonds, and costs incurred in carrying out any provisions thereof;
 26        (4)  Interest during construction and during  the  six  (6)  months  after
 27        estimated  completion  of  construction,  and  capitalized debt service or
 28        repair and replacement or other appropriate reserves;
 29        (5)  The refunding of any outstanding obligations incurred for any of  the
 30        costs outlined in this subsection; and
 31        (6)  Other costs incidental to any of the costs listed in this section.
 32        (x)  "Agricultural  facility  or  facilities"  means land, any building or
 33    other improvement thereon or thereto, to be owned by  a  beginning  farmer  or
 34    rancher  and  any  personal  properties  deemed necessary or suitable for use,
 35    whether or not now in existence in farming  or  ranching,  the  production  of
 36    agricultural commodities, including, without limitation, the products of aqua-
 37    culture,  hydroponics and silviculture, or the treating, processing or storing
 38    of such agricultural commodities when such activities are customarily  engaged
 39    in by beginning farmers or ranchers as a part of farming or ranching.
 40        (y)  "Municipality"  means any county, municipal corporation, highway dis-
 41    trict, taxing district or other political subdivision  of  this  state  having
 42    charge  of the locality in which the association desires to undertake a trans-
 43    portation project.
 44        (z)  "State" means the state of Idaho.
 45        (aa) "State body" means any department, board, commission or agency of the
 46    state of Idaho.
 47        (bb) "Transportation board" means the Idaho transportation board  and  its
 48    successors.
 49        (cc) "Transportation department" means the Idaho transportation department
 50    and its successors.
 51        (dd) "Transportation  project"  means  any  transportation  infrastructure
 52    project  including, without limitation, a road, street, parkway, right-of-way,
 53    bridge, railroad crossing, drainage  structure,  sign,  guardrail,  structure,
 54    interstate, surface, resurface, shoulder, roadside, or any other work, and any
 55    planning  development,  management  and  construction  related thereto, all as
  1    approved or recommended to the association by the transportation board.
  2        SECTION 6.  That Section 67-6206, Idaho Code, be, and the same  is  hereby
  3    amended to read as follows:
  4        67-6206.  POWERS OF ASSOCIATION. The housing and finance association is an
  5    independent public body corporate and politic, exercising public and essential
  6    governmental functions, and having all the powers which are hereby declared to
  7    be  public  purposes  necessary  or convenient to carry out and effectuate the
  8    purposes and provisions of this act, including the following powers  in  addi-
  9    tion to others herein granted:
 10        (a)  To sue and to be sued; to have a seal and to alter the same at pleas-
 11    ure;  to  have  perpetual  succession; to make and execute contracts and other
 12    instruments necessary or convenient to the exercise of the powers of the asso-
 13    ciation; and to make and from time to time amend and repeal bylaws, rules, not
 14    inconsistent with this act, to carry into effect the powers  and  purposes  of
 15    the association.
 16        (b)  To  conduct  its  operations within any or all of the counties of the
 17    state.
 18        (c)  To cooperate with housing authorities throughout Idaho in the  devel-
 19    opment of housing projects.
 20        (d)  To  assign priorities for action and revise or modify said priorities
 21    from time to time.
 22        (e)  To make and execute agreements, contracts and other instruments  nec-
 23    essary  or convenient in the exercise of the powers and functions of the asso-
 24    ciation under this act, including contracts with any housing sponsor, mortgage
 25    lender, person, firm, corporation, governmental agency, or other  entity;  and
 26    to  include  in  any  contract  let in connection with a project, stipulations
 27    requiring that the contractor and any subcontractors comply with  requirements
 28    as to minimum wages and maximum hours of labor, and comply with any conditions
 29    which  the  federal  government  may have attached to its financial aid of the
 30    project and to designate mortgage lenders to act for  and  in  behalf  of  the
 31    association,  with respect to originating or servicing and processing mortgage
 32    loans of the association, and to pay the reasonable value of service  rendered
 33    to  the  association by such mortgage lenders pursuant to contracts with mort-
 34    gage lenders.
 35        (f)  To lease, sell, construct, finance, reconstruct,  restore,  rehabili-
 36    tate, operate or rent any housing projects, nonprofit facilities or any dwell-
 37    ings,  houses,  accommodations,  lands,  buildings,  structures  or facilities
 38    embraced in any housing project or nonprofit facilities and,  subject  to  the
 39    limitations  contained  in  this  act,  to  establish  and revise the rents or
 40    charges therefor.
 41        (g)  To own, hold and improve real  or  personal  property;  to  purchase,
 42    lease,  obtain  options upon, acquire by gift, grant, bequest, devise, eminent
 43    domain or otherwise, any real or personal property or any interest therein.
 44        (h)  To acquire any real property; to  sell,  lease,  exchange,  transfer,
 45    assign,  pledge  or  dispose  of any real or personal property or any interest
 46    therein.
 47        (i)  To insure or provide for the insurance of any real or personal  prop-
 48    erty or operation of the association against any risks or hazards, and to pro-
 49    cure  or  agree to the procurement of insurance or guarantees from the federal
 50    government or other source for the payment or purchase of any bonds  or  parts
 51    thereof  issued  by  the  association, including the power to pay for any such
 52    insurance or guarantees.
 53        (j)  To invest any funds held in reserves or sinking funds, or  any  funds
  1    not  required for immediate disbursement, in property or securities in which a
  2    bank, as defined in the "bank act," title 26, Idaho Code, may  legally  invest
  3    funds  including  without  limitation, to agree to purchase the obligations of
  4    any federal, state or local government upon such conditions as the association
  5    may determine to be prudent and in its best interest.
  6        (k)  Within its area of operation: to investigate  into  living,  dwelling
  7    and housing conditions and into the means and methods of improving such condi-
  8    tions;  to  determine  where  slum areas exist or where there is a shortage of
  9    adequate, safe and sanitary dwelling accommodations for persons of low-income;
 10    to make studies and recommendations  relating  to  the  problem  of  clearing,
 11    replanning  and  reconstruction  of  slum  areas  and the problem of providing
 12    dwelling accommodations for persons of low-income, and to cooperate  with  the
 13    city,  the  county,  the  state or any political subdivision thereof in action
 14    taken in connection with such problems; and to engage in research, studies and
 15    experimentation on the subject of housing.
 16        (l)  To participate in cooperative ventures with any  agencies,  organiza-
 17    tions  and individuals in order to undertake the provision of housing for per-
 18    sons of low-income, to undertake the  provision  of  nonprofit  facilities  or
 19    agricultural facilities.
 20        (m)  To  provide  research  and technical assistance to eligible agencies,
 21    organizations and individuals eligible to develop  low  cost  housing  and  to
 22    research new low cost housing development and construction methods.
 23        (n)  To  make and undertake commitments to make or participate in the mak-
 24    ing of mortgage loans to  persons  of  low-income  and  to  housing  sponsors,
 25    including  without  limitation  federally  insured mortgage loans, and to make
 26    temporary loans and advances in anticipation of  permanent  loans  to  housing
 27    sponsors; said mortgage loans to housing sponsors shall be made to finance the
 28    construction,  improvement,  or rehabilitation of housing projects for persons
 29    of low-income, and/or mixed income housing projects upon the terms and  condi-
 30    tions  set forth in this act; provided, however, that such loans shall be made
 31    only upon the determination by the association that  mortgage  loans  are  not
 32    otherwise  available,  wholly or in part, from private lenders upon reasonably
 33    equivalent terms and conditions.
 34        (o)  To purchase, or make commitments to purchase or  participate  in  the
 35    purchase  of  mortgage  loans from mortgage lenders which loans have been made
 36    for the construction, improvement, or rehabilitation of housing  projects  for
 37    persons of low-income and/or mixed income housing projects or loans which have
 38    been  made  to  persons  of low-income for residential housing, upon terms set
 39    forth in this act; provided, however, that any such  purchase  shall  be  made
 40    only  upon  the determination by the association that the mortgage loans to be
 41    made are not otherwise being made by mortgage lenders upon reasonably  equiva-
 42    lent  terms and conditions. Also, to purchase, or make commitments to purchase
 43    or participate in the purchase of mortgage loans from mortgage lenders whether
 44    or not said loans were made to persons of low-income, upon terms set forth  in
 45    this  act;  provided,  however,  that  the proceeds from  such purchase or the
 46    equivalent thereof shall be reinvested in obligations of the  association,  in
 47    mortgage loans to persons of low-income or in mortgage loans for housing proj-
 48    ects  for persons of low-income and/or mixed income housing projects, and pro-
 49    vided that any such purchase shall be made only upon the determination by  the
 50    association that the mortgage loans to be made are not otherwise being made by
 51    mortgage lenders upon reasonably equivalent terms and conditions.
 52        (p)  To  provide  interim  financing  for housing projects including mixed
 53    income housing projects approved by the association, provided that the associ-
 54    ation has determined that such financing is not otherwise available from mort-
 55    gage lenders upon reasonably equivalent terms and conditions.
  1        (q)  To prescribe rules and policies in connection with the performance of
  2    its functions and duties.
  3        (r)  To do all other things deemed necessary and desirable  to  accomplish
  4    the objectives of this act.
  5        (s)  To  borrow  money  and issue bonds and notes or other obligations, to
  6    invest the proceeds thereof in any lawful manner and to  fund  or  refund  the
  7    same,  and to provide for the rights of the holders of its obligations as pro-
  8    vided in this act and in connection therewith,  to  waive,  by  resolution  or
  9    other  document of the association, the exemption from federal income taxation
 10    of interest on any of the association's obligations under existing  or  future
 11    federal  law and to establish, maintain and preserve the association's general
 12    obligation rating and any rating on its bonds, notes or other obligations.
 13        (t)  To receive and accept aid or contributions from any source.
 14        (u)  To employ architects, engineers, attorneys, accountants, housing con-
 15    struction and financial experts  and  such  other  advisors,  consultants  and
 16    agents as may be necessary in its judgment and to fix their compensation.
 17        (v)  To insure mortgage payments of any mortgage loan made for the purpose
 18    of  constructing,  rehabilitating, purchasing, leasing, or refinancing housing
 19    projects upon such terms and conditions as the association may prescribe.
 20        (w)  To fix and revise from time to time and charge and collect  fees  and
 21    charges  in connection with loans made or other services provided by the asso-
 22    ciation pursuant to this act, and to make and  publish  rules  respecting  the
 23    making and purchase of mortgage loans.
 24        (x)  To organize a nonprofit corporation to assist the association in pro-
 25    viding for housing projects.
 26        (y)  To  enter  upon  and  inspect  any housing project, including housing
 27    projects undertaken by housing sponsors, for the purpose of investigating  the
 28    physical  and  financial  condition thereof, and its construction, rehabilita-
 29    tion, operation, management and maintenance, and  to  examine  all  books  and
 30    records  with  respect  to  capitalization,  income and other matters relating
 31    thereto.
 32        (z)  To order such alterations, changes or repairs as may be necessary  to
 33    protect  the  security  of  its investment in a housing project or the health,
 34    safety, and welfare of the occupants thereof.
 35        (aa) To make or purchase secured loans for the purpose of providing tempo-
 36    rary or permanent financing or refinancing of all or part of the project costs
 37    of any nonprofit facility or agricultural facility, including the refunding of
 38    any outstanding obligations, mortgages or advances issued, made  or  given  by
 39    any  person  for  the  project  costs  of a nonprofit facility or agricultural
 40    facility; and to charge and collect interest on the loans for  the  loan  pay-
 41    ments upon such terms and conditions, including without limitation bond rating
 42    and  issuance    conditions, as the board of commissioners considers advisable
 43    which are not in conflict with this chapter.
 44        (bb) As security for the payment of the principal of and interest  on  any
 45    revenue bonds issued and any agreements made in connection therewith, to mort-
 46    gage,  pledge,  or  otherwise  encumber  any or all of nonprofit facilities or
 47    agricultural facilities or any part or parts thereof, whether  then  owned  or
 48    thereafter acquired, and to assign any mortgage and repledge any security con-
 49    veyed  to  the  association, to secure any loan made by the association and to
 50    pledge the revenues and receipts therefrom.
 51        (cc) To issue bonds for the purpose of financing all or part of the  proj-
 52    ect  cost on any nonprofit facility or agricultural facility and to secure the
 53    payment of the bonds as provided in this chapter.
 54        (dd) To purchase or sell by installment contract or otherwise, and  convey
 55    all  or  any  part of any nonprofit facility or agricultural facility for such
  1    purchase price and upon such terms and conditions as this board of commission-
  2    ers considers advisable which are not in conflict with this chapter.
  3        (ee) To lease all or any part of any nonprofit  facility  or  agricultural
  4    facility  for  such  rentals  and  upon  such  terms and conditions, including
  5    options to purchase, as the board of commissioners considers advisable and not
  6    in conflict with this chapter.
  7        (ff) To construct and maintain one (1) or  more  nonprofit  facilities  or
  8    agricultural  facilities,  provided that the association shall not operate any
  9    nonprofit facility or agricultural facility as a business other than  as  les-
 10    sor, seller or lender. The purchase, holding and enforcing of mortgages, deeds
 11    of  trust,  or  other  security  interests  and  contracting for any servicing
 12    thereof is not considered the operation of a nonprofit  facility  or  agricul-
 13    tural facility as a business.
 14        (gg) To  act as the designated housing resource clearinghouse in the state
 15    for matters relating to affordable housing.
 16        (hh) To coordinate the development and maintenance of a housing policy for
 17    the state.
 18        (ii) To enter into agreements or other  transactions  and  accept  grants,
 19    reimbursements or other payments, with the cooperation of the United States or
 20    any  agency  thereof or of the state of Idaho or any agency thereof or munici-
 21    pality of the state in furtherance of the purposes of this chapter, including,
 22    but not limited to, the development, maintenance, operation and  financing  of
 23    any  transportation project and to do any and all things necessary in order to
 24    avail the association of such aid and cooperation.
 25        (jj) To borrow money and issue bonds  and  notes  or  other  evidences  of
 26    indebtedness  thereof  not exceeding a maturity date of eighteen (18) years as
 27    hereinafter provided to finance transportation projects  approved  and  recom-
 28    mended  by  the  Idaho  transportation board and the germane committees of the
 29    legislature.
 30        SECTION 7.  That Chapter 62, Title 67, Idaho Code, be,  and  the  same  is
 31    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 32    ignated as Section 67-6206A, Idaho Code, and to read as follows:
 34    TION PROJECTS. (a) The association may obtain the aid and cooperation of,  and
 35    contract  with,  the municipalities in which transportation projects are to be
 36    located and shall have the power to enter into such  agreements  and  arrange-
 37    ments  as  the  association  deems  necessary  or advisable to provide for the
 38    financing thereof or to obtain such aid and cooperation in order to carry  out
 39    the provisions of this chapter relating to transportation projects.
 40        (b)  The  association,  the  Idaho  transportation  department,  the Idaho
 41    transportation board or any state body or municipality may join  or  cooperate
 42    with  each other, either jointly or otherwise, in the exercise of any of their
 43    powers for the purposes of financing or facilitating transportation projects.
 44        SECTION 8.  That Section 67-6210, Idaho Code, be, and the same  is  hereby
 45    amended to read as follows:
 46        67-6210.  POWER  TO  ISSUE  BONDS. The association shall have power and is
 47    hereby authorized to issue, from time to time, its negotiable notes and  bonds
 48    in conformity with the applicable provisions of the uniform commercial code in
 49    such  principal  amount as the association shall determine to be necessary for
 50    sufficient funds for achieving any of its corporate  purposes,  including  the
 51    payment  of  interest  on notes and bonds of the association, establishment of
  1    reserves to secure such notes and bonds, and all  other  expenditures  of  the
  2    association  incidental and necessary or convenient to carry out its corporate
  3    purposes and powers; provided, however, that the association shall provide  in
  4    its  resolution authorizing such bonds that all revenues received by the asso-
  5    ciation as a result of the issuance of such bonds shall be  pledged  first  to
  6    the payment of principal and interest on such bonds.
  7        (a)  The association shall have the power, from time to time, to issue:
  8        (1)  notes to renew notes and
  9        (2)  bonds to pay notes, including the interest thereon, and
 10        (3)  whenever  it  deems  refunding  expedient, to refund any bonds by the
 11        issuance of new bonds, whether the bonds to be refunded have or  have  not
 12        matured,  and  to  issue bonds partly to refund bonds then outstanding and
 13        partly for any of its corporate purposes.
 14        The refunding bonds may be:
 15        (1)  exchanged for the bonds to be refunded or
 16        (2)  sold and the proceeds applied to the purchase, redemption or  payment
 17        of such bonds.
 18        (b)  Except  as  may  otherwise  be expressly provided by the association,
 19    every issue of its notes and bonds shall be payable exclusively from the reve-
 20    nues or income of the association, including grants and contributions from the
 21    United States of America, subject only to any agreements with the  holders  of
 22    particular notes or bonds pledging any particular revenues.
 23        (c)  The  notes and bonds shall be authorized by resolution or resolutions
 24    of the association, shall bear such date or dates and  shall  mature  at  such
 25    time  or times as such resolution or resolutions may provide. The bonds may be
 26    issued as serial bonds payable in annual installments or as term bonds or as a
 27    combination thereof. The notes and bonds shall bear interest at such  rate  or
 28    rates, be in such denominations, be in such form, either coupon or registered,
 29    carry  such registration privileges, be executed in such manner, be payable in
 30    such medium of payment, at such place or places, and be subject to such  terms
 31    of  redemption  as  such  resolution or resolutions may provide. The notes and
 32    bonds of the association may be sold by the association, at public or  private
 33    sale, at such price or prices as the association shall determine.
 34        (d)  Any  resolution or resolutions or Idaho transportation board and leg-
 35    islative approval pursuant to section 40-315, Idaho Code, or  local  ordinance
 36    authorizing  any  notes  or bonds or any issue thereof may contain provisions,
 37    which shall be a part of the contract or contracts with the  holders  thereof,
 38    as to:
 39        (1)  pledging all or any part of the revenues to secure the payment of the
 40        notes  or  bonds  or of any issue thereof, subject to such agreements with
 41        noteholders or bondholders as may then exist;
 42        (2)  pledging all or any part of the assets of the  association  including
 43        mortgages  and obligations securing the same, to secure the payment of the
 44        notes or bonds or of any issue of notes or bonds, subject to  such  agree-
 45        ments with noteholders or bondholders as may then exist;
 46        (3)  the  use  and disposition of the gross income from mortgages owned by
 47        the association and payment of principal of mortgages owned by the associ-
 48        ation;
 49        (4)  the setting aside of reserves or sinking funds and the regulation and
 50        disposition thereof;
 51        (5)  limitations on the purpose to which the proceeds of sale of notes  or
 52        bonds  may  be applied and pledging such proceeds to secure the payment of
 53        the notes or bonds or of any issue thereof;
 54        (6)  limitations on the issuance of additional notes or bonds;  the  terms
 55        upon  which  additional  notes or bonds may be issued and secured; and the
  1        refunding of outstanding or other notes or bonds;
  2        (7)  the procedure, if any, by  which  the  terms  of  any  contract  with
  3        noteholders  or  bondholders  may  be  amended or abrogated, the amount of
  4        notes or bonds the holders of which must consent thereto; and  the  manner
  5        in which such consent may be given;
  6        (8)  limitations on the amount of moneys to be expended by the association
  7        for operating expenses of the association;
  8        (9)  vesting  in  a  trustee or trustees such property, rights, powers and
  9        duties in trust as the association may determine, which may include any or
 10        all of the rights, powers and duties of the trustee appointed by the bond-
 11        holders pursuant to this act; and limiting or abrogating the right of  the
 12        bondholders  to  appoint a trustee under this act, or limiting the rights,
 13        powers and duties of such trustee;
 14        (10) defining the acts or  omissions  to  act  which  shall  constitute  a
 15        default in the obligations and duties of the association to the holders of
 16        the  notes or bonds and providing for the rights and remedies of the hold-
 17        ers of the notes or bonds in the event of such  default,  including  as  a
 18        matter  of  right  the  appointment of a receiver; provided, however, that
 19        such rights and remedies shall not be inconsistent with the  general  laws
 20        of the state and the other provisions of this act;
 21        (11) pledging  all or any part of funds allocated to the association under
 22        Idaho law or other revenues or the proceeds of notes or  bonds  to  secure
 23        the  payment  of notes or bonds issued to finance transportation projects,
 24        subject to such agreements with noteholders or  bondholders  as  may  then
 25        exist;
 26        (12) setting  forth the provisions for any contracts relating to its bonds
 27        or notes, including without limitation, any investment  or  interest  rate
 28        contracts,  or any contract providing for a credit enhancement, including,
 29        but not limited to, letters of credit, bond  insurance  and  surety  bonds
 30        provided by private financial institutions;
 31        (13) setting forth the provisions for representations or certifications to
 32        be made by an officer of the association with respect to funds to be allo-
 33        cated  to  the  association for transportation projects and provisions for
 34        the disbursements of the proceeds of the bonds or notes for payment of the
 35        costs of a transportation project, costs of  issuance  and  other  related
 36        costs;
 37        (14) any  other  matters, of like or different character, which in any way
 38        affect the security or protection of the holders of the notes or bonds.
 39        (e)  Any pledge made by the association shall be valid  and  binding  from
 40    the  time when the pledge is made; the revenues, moneys or property so pledged
 41    and thereafter received by the association shall immediately be subject to the
 42    lien of such pledge without any physical delivery thereof or further act,  and
 43    the  lien of any such pledge shall be valid and binding as against all parties
 44    having claims of any kind in tort, contract or otherwise against the  associa-
 45    tion,  irrespective  of  whether such parties have notice thereof. Neither the
 46    resolution nor any other instrument by which  a  pledge  is  created  need  be
 47    recorded.
 48        (f)  Neither  the  commissioners  of  the association nor any other person
 49    executing such notes or bonds shall be subject to any  personal  liability  or
 50    accountability by reason of the issuance thereof.
 51        (g)  The association, subject to such agreements with noteholders or bond-
 52    holders  as may then exist, shall have power out of any funds available there-
 53    for to purchase notes or bonds of the association, which  shall  thereupon  be
 54    canceled, at a price not exceeding:
 55        (1)  if  the notes or bonds are then redeemable, the redemption price then
  1        applicable plus accrued interest to the next interest payment thereon, or
  2        (2)  if the notes or bonds are not then redeemable, the  redemption  price
  3        applicable  on  the first date after such purchase upon which the notes or
  4        bonds become subject to redemption plus accrued interest to such date.
  5        (h)  In the discretion of the association, the bonds may be secured  by  a
  6    trust  indenture by and between the association and a corporate trustee, which
  7    may be any trust company or bank having the power of a trust  company  in  the
  8    state.  Such  trust  indenture  may contain such provisions for protecting and
  9    enforcing the rights and remedies of the bondholders as may be reasonable  and
 10    proper  and  not  in  violation  of law, including covenants setting forth the
 11    duties of the association in relation to the exercise of its corporate  powers
 12    and  the  custody, safeguarding and application of all moneys. The association
 13    may provide by such trust indenture for the payment of  the  proceeds  of  the
 14    bonds  and  the  revenues  to  the trustee under such trust indenture or other
 15    depository, and for the method of disbursement thereof, with  such  safeguards
 16    and  restrictions  as  it may determine. All expenses incurred in carrying out
 17    such trust indenture may be treated as a part of the operating expenses of the
 18    association. If the bonds shall be secured by a trust indenture, the bondhold-
 19    ers shall have no authority to appoint a separate trustee to represent them.
 20        (i)  Whether or not the notes and bonds are of such form and character  as
 21    to  be  negotiable instruments under the terms of the uniform commercial code,
 22    the notes and bonds are hereby made negotiable instruments within the  meaning
 23    of  and  for  all the purposes of the uniform commercial code, subject only to
 24    the provisions of the notes and bonds for registration.
 25        (j)  In case any of the commissioners or officers of the association whose
 26    signatures appear on any notes or bonds or coupons shall cease to be such com-
 27    missioners or officers before the delivery of such notes or bonds, such signa-
 28    tures shall, nevertheless, be valid and sufficient for all purposes, the  same
 29    as  if such commissioners or officers had remained in office until such deliv-
 30    ery.
 31        (k)  The association shall not issue any bonds or notes to finance  trans-
 32    portation projects unless:
 33        (1)  both the Idaho transportation board and the germane committees of the
 34        legislature  have approved and recommended the transportation projects for
 35        financing through the association;
 36        (2)  the Idaho transportation board has certified to the association  that
 37        sufficient funds are available to make the payments required for the bonds
 38        or notes to be issued to finance the transportation projects; and
 39        (3)  the  association and the Idaho transportation board have entered into
 40        an agreement for the association to provide financing of  the  transporta-
 41        tion projects.
 42        (l)  The  association  shall  not  reissue, extend, rewrite, or in any way
 43    alter the original issue of bonds or notes which provide financing  of  trans-
 44    portation  projects unless both the Idaho transportation board and the germane
 45    committees of the legislature have approved the action.
 46        SECTION 9.  An emergency existing  therefor,  which  emergency  is  hereby
 47    declared to exist, this act shall be in full force and effect on and after its
 48    passage and approval.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                             RS 14766

This legislation would amend various sections of Title 40, Chapter 3,
Idaho Code, Title 40, Chapter 7, Idaho Code, and Title 67, Chapter 62,
Idaho Code, to allow the Idaho Transportation Board, with concurrence
of the House and Senate Transportation committees, the authority to
use federal-aid highway funds to pay the principal, interest, and
other costs associated with borrowing by the State to finance specific
eligible highway projects.  The board may select and designate a
transportation project to be funded with bond proceeds and present the
proposal to the joint transportation committees.  After approval by a
majority of both committees, the requirement for "substantial
statewide interest" is deemed to have been satisfied and the board may
proceed with bonding through the Idaho Housing Finance Association.
A 1995 federal law (Title 23, US Code, Section 122) allows states to
use their apportioned federal-aid funds as a debt-financing instrument
known as "GARVEE" (Grant Anticipation Revenue Vehicle) Bonds.
The term of most bonds will likely be eighteen years and eighteen
years is the limit without extension authorized by consent of the two
Legislative Transportation committees.  At current municipal interest
rates, Idaho receives approximately $220 million a year from federal
fuel tax revenues.  Bonding shall be designed so that debt service
shall not exceed 20 percent of the annual allocation of Federal funds
to Idaho.

The Idaho Housing Finance Association (IHFA) is authorized in this
legislation to issue the bonds approved by the Board as well as manage
the issuance and servicing of the bonds.  IHFA has in-house the
trained personnel and systems needed to handle this work.  This
legislation amends the IHFA enabling statute to authorize its

Local highway jurisdictions may also use GARVEE bonding at their

                           FISCAL NOTE

This legislation increases no taxes.  It is anticipated that the
bonding debt service would require the dedication in a range of 10 to
20 percent of the department's total annual budget in the peak year of
debt service.  Delaying construction of needed road infrastructure
projects generally results in substantially higher project costs, due
to inflation in construction costs and right-of-way acquisitions. 
These savings, by accelerated construction, must be weighted against
the cost of debt service, administration of the bonds, and bond
counsel costs.

Name:  Rep. Leon Smith 
Phone: 332-1000

STATEMENT OF PURPOSE/FISCAL NOTE                            H 179