Bill Text: IL HB2830 | 2013-2014 | 98th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Housing Development Act. Removes from the definition of the term "limited-profit entity" limited-profit entities having articles of incorporation which provide that if the limited-profit entity receives a loan from the Illinois Housing Development Authority, the Chairman of the Authority shall have the power, if he determines that any such loan is in jeopardy of not being repaid, or that the proposed development for which such loan was made is in jeopardy of not being constructed, or the limited-profit entity is otherwise in violation of rules and regulations promulgated by the Authority, to appoint to the board of directors or other comparable controlling body of such limited-profit entity a number of new directors or persons, which number shall be sufficient to constitute a voting majority of such board or controlling body. Removes provisions prohibiting a limited-profit entity which receives loans from the Authority from making distributions in any one year with respect to a development financed by the Authority in excess of 6% of its equity in such development. Adds language providing that the equity in a development shall consist of the difference between the amount of the mortgage loan and the total cost of the development. Provides that the Authority shall approve a tenant selection plan submitted by the applicant for the loan prior to disbursing any funds in connection with the acquisition, rehabilitation, or construction of a development (rather than providing that prior to making a loan commitment for a development, the Authority shall approve a tenant selection plan submitted by the applicant for the loan). Effective immediately.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0260 [HB2830 Detail]
Download: Illinois-2013-HB2830-Introduced.html
Bill Title: Amends the Illinois Housing Development Act. Removes from the definition of the term "limited-profit entity" limited-profit entities having articles of incorporation which provide that if the limited-profit entity receives a loan from the Illinois Housing Development Authority, the Chairman of the Authority shall have the power, if he determines that any such loan is in jeopardy of not being repaid, or that the proposed development for which such loan was made is in jeopardy of not being constructed, or the limited-profit entity is otherwise in violation of rules and regulations promulgated by the Authority, to appoint to the board of directors or other comparable controlling body of such limited-profit entity a number of new directors or persons, which number shall be sufficient to constitute a voting majority of such board or controlling body. Removes provisions prohibiting a limited-profit entity which receives loans from the Authority from making distributions in any one year with respect to a development financed by the Authority in excess of 6% of its equity in such development. Adds language providing that the equity in a development shall consist of the difference between the amount of the mortgage loan and the total cost of the development. Provides that the Authority shall approve a tenant selection plan submitted by the applicant for the loan prior to disbursing any funds in connection with the acquisition, rehabilitation, or construction of a development (rather than providing that prior to making a loan commitment for a development, the Authority shall approve a tenant selection plan submitted by the applicant for the loan). Effective immediately.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0260 [HB2830 Detail]
Download: Illinois-2013-HB2830-Introduced.html
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1 | AN ACT concerning State government.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Housing Development Act is amended | ||||||||||||||||||||||||||||
5 | by changing Sections 2, 8, and 10 as follows:
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6 | (20 ILCS 3805/2) (from Ch. 67 1/2, par. 302)
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7 | Sec. 2. As used in this Act:
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8 | (a) "Authority" means the Illinois Housing Development | ||||||||||||||||||||||||||||
9 | Authority created
in this Act.
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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.
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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
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15 | satisfactory to the Authority and which will meet the | ||||||
16 | requirements and
purposes of this Act.
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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.
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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
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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.
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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.
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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.
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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.
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2 | (i) "Low rentals" means rent charges at least 10% lower | ||||||
3 | than moderate
rentals.
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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.
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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,
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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
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17 | an agreement with the Authority providing for regulations with | ||||||
18 | respect to
rents, profits, dividends and disposition of | ||||||
19 | property or franchises. :
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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
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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
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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.
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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,
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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:
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6 | (1) that the corporation has been organized to provide | ||||||
7 | housing
facilities for persons of low and moderate income;
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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
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12 | private individual, firm, corporation, partnership, or | ||||||
13 | association;
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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;
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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;
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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
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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,
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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
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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
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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
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2 | dwelling units required by applicable federal or State law.
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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.
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6 | (n) "State" means the State of Illinois.
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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.
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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.
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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
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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
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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,
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9 | hotels, financial institutions, service health care, | ||||||
10 | education, recreation
or research establishments or any other | ||||||
11 | commercial purpose.
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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;
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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
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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.
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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
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9 | whole or in part, of Trust Fund Moneys dedicated or
otherwise | ||||||
10 | made available to the Authority.
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11 | (t) "Trust Fund Moneys" has the meaning given to that term | ||||||
12 | in Section 3 of
the Illinois Affordable Housing Act.
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13 | (Source: P.A. 87-250; 88-93.)
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14 | (20 ILCS 3805/8) (from Ch. 67 1/2, par. 308)
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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
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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
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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.
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23 | (Source: P.A. 87-250.)
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24 | (20 ILCS 3805/10) (from Ch. 67 1/2, par. 310)
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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
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2 | manner specified for registration of titles, be binding upon | ||||||
3 | any subsequent
owners of the development as provided by its | ||||||
4 | terms.
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5 | (Source: P.A. 87-250.)
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6 | Section 99. Effective date. This Act takes effect upon | ||||||
7 | becoming law.
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