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Public Act 098-0260
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| HB2830 Enrolled | LRB098 09742 KTG 39891 b |
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AN ACT concerning State government.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Housing Development Act is amended |
by changing Sections 2, 8, and 10 as follows:
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(20 ILCS 3805/2) (from Ch. 67 1/2, par. 302)
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Sec. 2. As used in this Act:
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(a) "Authority" means the Illinois Housing Development |
Authority created
in this Act.
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(b) "Development costs" means the costs approved by the |
Authority as
appropriate expenditures which may be incurred |
prior to commitment and
initial closing of assisted mortgage |
financing or of housing related
commercial facilities, |
including but not limited to: (1) payments for
options to |
purchase properties for the proposed development or |
facilities,
deposits on contracts of purchase, or, with the |
prior approval
of the Authority, payments for the purchases of |
such properties; (2) legal,
organizational and consultants' |
expenses; (3) payment of fees for
preliminary feasibility |
studies and engineering and architectural work; (4)
necessary |
application and other fees to federal, State and local |
government
agencies; and (5) such other expenses as the |
Authority may deem appropriate
to effectuate the purposes of |
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this Act.
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(c) "Assisted mortgage financing" means a below market |
interest rate
mortgage insured or purchased, or a loan made, by |
the Secretary of the
United States Department of Housing and |
Urban Development or by any other
federal agency or |
governmental corporation or by any political subdivision
of the |
State of Illinois or by any Illinois public corporation; a |
market
interest rate mortgage insured or purchased, or a loan |
made in combination
with, or as augmented by, a program of rent |
supplements, interest
subsidies, leasing, contributions or |
grants, or other programs as are now
or hereafter authorized by |
federal law to serve low or moderate income
persons; a mortgage |
or loan made pursuant to this Act; or a mortgage or
loan from |
any private or public source with an interest rate and terms
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satisfactory to the Authority and which will meet the |
requirements and
purposes of this Act.
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(d) "Lending institution" means any bank, trust company, |
savings bank,
savings and loan association, credit union, |
national banking association,
mortgage banking association, |
federal savings and loan association or federal
credit unit |
maintaining an
office in the State, any insurance company or |
any other entity or
organization which makes or acquires loans |
secured by real property.
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(e) "Residential mortgage" means a loan owed to a lending |
institution,
to the Authority or to a trustee for holders of |
bonds or notes of the Authority
or to a trustee for owners of |
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pools of mortgages, and secured by a
lien on real property |
located in the State and improved by a residential
structure or |
a mixed residential and commercial structure, or unimproved if
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the proceeds of such loan shall be used for the erection of a |
residential
structure or a mixed residential and commercial |
structure thereon, whether
or not such loan is insured or |
guaranteed by the United States of America
or any agency or |
corporation thereof.
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(f) "Development" means a specific work or improvement |
undertaken to
provide dwelling accommodations, including the |
acquisition, construction or
rehabilitation of lands, |
buildings and community facilities and in
connection therewith |
to provide nonhousing facilities which are a
part of a planned |
large-scale project or new community.
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(g) "Persons and families of low and moderate income" and |
"Low income or
moderate income persons" means families and |
persons who cannot afford to
pay the amounts at which private |
enterprise, without assisted mortgage
financing, is providing |
a substantial supply of decent, safe and sanitary
housing. The |
income limits for the admission of such families and persons
to |
developments shall be those established pursuant to the rules |
applicable
to the assisted mortgage financing program under |
which such developments
are financed.
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(h) "Moderate rentals" means rent charges less than those |
rents
generally charged for new dwelling units of comparable |
size and location
built by the unassisted efforts of private |
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enterprise and financed at then
current market interest rates.
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(i) "Low rentals" means rent charges at least 10% lower |
than moderate
rentals.
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(j) "Rents" or "Rentals" shall mean fees or charges paid |
for use
of a development under this Act, whether the |
development is operated on a
landlord-tenant basis or as a |
condominium or cooperative.
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(k) "Limited-profit entity" means any individual, joint |
venture,
partnership, limited partnership, trust or |
corporation organized or
existing under the laws of the State |
of Illinois or authorized to do
business in this State and |
having articles of incorporation or comparable
documents of |
organization or a written agreement with the Authority which,
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in addition to other requirements of law, provide that if the |
limited-profit entity receives any loan from the
Authority as |
provided for in this Act, it shall be authorized to enter into
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an agreement with the Authority providing for regulations with |
respect to
rents, profits, dividends and disposition of |
property or franchises. :
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(1) that if the limited-profit entity receives any loan |
from the
Authority as provided for in this Act, it shall be |
authorized to enter into
an agreement with the Authority |
providing for regulations with respect to
rents, profits, |
dividends and disposition of property or franchises; and
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(2) that if the limited-profit entity receives a loan, |
as provided for
in this Act, the Chairman of the Authority, |
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acting with the prior approval
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
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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, |
notwithstanding any
other provisions of the limited-profit |
entity's articles of incorporation
or other documents of |
organization, or of any other provisions of law,
provided |
that this requirement set forth in this paragraph (2) is |
not
mandatory in the case of loans made solely with monies |
from the Authority's
administrative fund.
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(l) "Land development" means the process of clearing and |
grading land,
making, installing, or constructing waterlines |
and water supply
installations, sewerlines and sewage disposal |
installations, steam, gas,
and electric lines and |
installations, roads, streets, curbs, gutters,
sidewalks, |
storm drainage facilities, and other installations or work,
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whether on or off the site, necessary or desirable to prepare |
land for
residential, commercial, industrial, or other uses, or |
to provide
facilities for public or common use.
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(m) "Nonprofit corporation" means a nonprofit corporation |
incorporated
pursuant to the provisions of the Illinois General |
Not For Profit
Corporation Act or the State Housing Act of 1933 |
and having articles of
incorporation which, in addition to |
other requirements of law, provide:
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(1) that the corporation has been organized to provide |
housing
facilities for persons of low and moderate income;
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(2) that all income and earnings of the corporation |
shall be used
exclusively for corporation purposes and that |
no part of the net income or
net earnings of the |
corporation shall inure to the benefit or profit of any
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private individual, firm, corporation, partnership, or |
association;
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(3) that the corporation is in no manner controlled or |
under the
direction or acting in the substantial interest |
of private individuals,
firms, corporations, partnerships, |
or associations seeking to derive profit
or gain therefrom |
or seeking to eliminate or minimize losses in any
dealings |
or transactions therewith;
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(4) that if the corporation receives any loan or |
advance from the
Authority as provided for in this Act, it |
shall be authorized to enter into
an agreement with the |
Authority providing for regulation with respect to
rents, |
profits, dividends, and disposition of property or |
franchises;
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(5) that if the corporation receives a loan or advance, |
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as provided for
in this Act, the chairman of the Authority, |
acting with the prior approval
of the majority of the |
members of the Authority, shall have the power if he
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determines that any such loan or advance is in jeopardy of |
not being
repaid, or that the proposed development for |
which such loan or advance was
made is in jeopardy of not |
being constructed, or that some part of the net
income or |
net earnings of the corporation is inuring to the benefit |
of any
private individual, firm, corporation, partnership, |
or association, or that
the corporation is in some manner |
controlled or under the direction of or
acting in the |
substantial interest of any private individual, firm,
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corporation, partnership, or association seeking to derive |
benefit or gain
therefrom or seeking to eliminate or |
minimize losses in any dealings or
transactions therewith, |
or is in violation of rules and regulations
promulgated by |
the Authority to appoint to the board of directors of such
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corporation a number of new directors, which number shall |
be sufficient to
constitute a majority of such board, |
notwithstanding any other provisions
of such articles of |
incorporation or of any other provisions of law; and
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(6) that each development of such corporation shall be |
operated
exclusively for the benefit of the persons who are |
housed in such
development which shall include families or |
persons of low or moderate
income as required by this Act, |
and that such development shall reserve for
families or |
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persons of low or moderate income the number and types of
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dwelling units required by applicable federal or State law.
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The requirements contained in paragraphs (2), (3), (5) and |
(6) are
not mandatory in the case of loans made solely from the |
Authority's
administrative fund.
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(n) "State" means the State of Illinois.
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(o) "Community facilities" means the land, buildings, |
improvements and
equipment for land development, for health, |
welfare, recreational, social,
educational and commercial |
activities, and for public, common or municipal
services.
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(p) "Sinking fund payment" means the amount of money |
specified in
the resolution or resolutions authorizing term |
bonds as payable into a
sinking fund during a particular period |
for the retirement of term
bonds at maturity after such period, |
but shall not include
any amount payable by reason only of the |
maturity of a bond.
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(q) "Housing related commercial facilities" means |
commercial
facilities which are or are to be related to a |
development. Commercial
facilities are related to a |
development if they are, in the sole judgment
of the Authority, |
located in the same area as the development and (i)
necessary |
or desirable in order to provide services for residents of that
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area in which the development is located; or (ii) a portion of |
the revenues
of the commercial facilities are to be used to |
provide funds for paying
costs of construction, acquisition, |
rehabilitation, operation, maintenance
of or payment of debt |
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service on the development or (iii) necessary or
desirable in |
order to make the development successful, such as, without
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limitation, eliminating or preventing slum or blighted |
conditions,
preserving historic structures or ensuring that |
facilities are not
inconsistent with the development. For |
purposes of this Section,
"commercial facilities" includes |
land, buildings, improvements, equipment
and all ancillary |
facilities for use for offices, stores, retirement homes,
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hotels, financial institutions, service health care, |
education, recreation
or research establishments or any other |
commercial purpose.
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(r) "Rate protection contract" means interest rate |
exchange
agreements; currency exchange agreements; forward |
payment conversion
agreements; contracts providing for payment |
or receipt of funds based on
levels of, or changes in, interest |
rates, currency exchange rates, stock or
other indices; |
contracts to exchange cash flows or a series of payments;
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contracts, including without limitation, interest rate caps; |
interest rate
floors; interest rate locks; interest rate |
collars; rate of return
guarantees or assurances, to manage |
payment, currency, rate, spread or
similar exposure; the |
obligation, right, or option to issue, put, lend,
sell, grant a |
security interest in, buy, borrow or otherwise acquire, a
bond, |
note or other security or interest therein as an investment, as
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collateral, as a hedge, or otherwise as a source or assurance |
of payment to
or by the Authority or as a reduction of the |
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Authority's or an obligor's
risk exposure; repurchase |
agreements; securities lending agreements; and
other |
agreements or arrangements similar to the foregoing.
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(s) "Affordable Housing Program Trust Fund Bonds or Notes" |
means bonds or
notes issued by the Authority pursuant to the |
provisions of this Act for the
purposes of providing affordable |
housing to low and very low income persons as
provided in the |
Illinois Affordable Housing Act through the use or pledge, in
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whole or in part, of Trust Fund Moneys dedicated or
otherwise |
made available to the Authority.
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(t) "Trust Fund Moneys" has the meaning given to that term |
in Section 3 of
the Illinois Affordable Housing Act.
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(Source: P.A. 87-250; 88-93.)
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(20 ILCS 3805/8) (from Ch. 67 1/2, par. 308)
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Sec. 8.
The Authority may, pursuant to its rules or |
regulations, or pursuant to
agreements with persons to whom it |
makes mortgage or other loans, provide
for methods of limiting |
profits or cash flow or other distributions
available to |
limited-profit entities to whom it has made or will make such |
loans. A limited-profit entity which receives loans from the |
Authority
may not make distributions in any one year with |
respect to a development
financed by the Authority in excess of |
6% of its equity in such
development, except that the right to |
such distribution shall be
cumulative. This distribution |
limitation may not be increased above 6%
during the life of the |
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Authority's loan, whether the loan is outstanding on
or is made |
after the effective date of this amendatory Act of 1991, |
unless,
by resolution of the members, the Authority determines |
that an increase is
necessary to preserve the development as |
affordable to low and moderate
income persons and families or |
that an increase provides for the creation
of additional units |
of housing affordable to low or moderate income persons
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families in the development or otherwise in this State. The |
equity in a
development shall consist of the difference between |
the amount of the
mortgage loan and the total cost of the |
development. The total cost of the
development shall include |
construction or rehabilitation costs including
job overhead |
and a builder's and sponsor's profit and risk fee,
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architectural, engineering, legal and accounting costs, |
organizational
expenses, land value, interest and financing |
charges paid during
construction, the cost of landscaping and |
off-site improvements, whether or
not such costs have been paid |
in cash or in a form other than cash. With
respect to every |
development the Authority shall, by resolution, establish
the |
entity's equity at the time of making of the final mortgage |
advance
and, for purposes of this paragraph, that figure shall
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remain constant during the life of the Authority's loan with |
respect to
such development, unless adjusted pursuant to a |
resolution of the members
based on criteria set forth in the |
Authority's rules or regulations.
The Authority may, pursuant |
to its rules or regulations, or pursuant to
agreements with |
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persons to whom it makes mortgage or other loans, provide
for |
methods of limiting profits or cash flow or other distributions
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available to the person. Such alternative methods may include, |
without
limitation, a limitation which may vary from period to |
period based on
changes in the costs of borrowing money and may |
be changed from time to
time. Such alternative methods may be |
in lieu of the 6% limitation as
provided in this Section. With |
respect to mortgage loans to limited profit
entities, the |
alternative method shall be such as shall, in the sole
judgment |
of the Authority, result in the lowest rents consistent with
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attracting private enterprise to acquire, construct, |
rehabilitate, operate
and maintain the development. The equity |
in a development shall consist of the difference between the |
amount of the mortgage loan and the total cost of the |
development. The total cost of the development shall include |
construction or rehabilitation costs including job overhead |
and a builder's and sponsor's profit and risk fee, |
architectural, engineering, legal, and accounting costs, |
organizational expenses, land value, interest and financing |
charges paid during construction, and the cost of landscaping |
and off-site improvements, whether or not such costs have been |
paid in cash or in a form other than cash.
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(Source: P.A. 87-250.)
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(20 ILCS 3805/10) (from Ch. 67 1/2, par. 310)
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Sec. 10.
The Prior to making a loan commitment for a |
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development under this
Act, 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. |
The Authority shall formulate regulations from time
to time |
setting forth the criteria for tenant selection plans. These
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criteria shall include income limits, which may vary with the |
size and
circumstances of the family unit of tenants. The |
income limits shall be
sufficiently flexible to avoid undue |
economic homogeneity among the tenants
of a development. The |
Authority may formulate regulations from time to time
for the |
alteration of occupancies of tenants who exceed established |
income
limits. The tenant selection plan shall specify how many |
units in the
development shall be held available for rentals to |
persons of low or
moderate income, as defined in this Act.
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In determining the number of units which shall be so held |
available for
rental to persons of low or moderate income, the |
Authority shall require
that the number of dwelling units so |
held reserved for them in each
development shall not be less |
than the number required by applicable federal
and State law.
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In connection with any mortgage loan for a development, the |
Authority
may enter into an agreement with the owner of the |
development as a part of
the loan providing that as long as the |
loan remains outstanding or such
longer period as is set forth |
in the agreement, the development shall be
held available for |
such rentals. Any such agreement shall, upon being
recorded in |