71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
House Bill 3778
Sponsored by Representative MERKLEY; Representatives CARLSON,
MORRISETTE (at the request of Housing and Community Services
Department)
CHAPTER ................
AN ACT
Relating to Housing and Community Services Department; creating
new provisions; and amending ORS 456.578, 456.615, 456.620 and
456.625.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The Legislative Assembly finds and declares
that the primary purpose of financing by the Housing and
Community Services Department is to provide affordable housing
for persons and families of lower income or very low income. + }
SECTION 2. ORS 456.615 is amended to read:
456.615. As used in ORS 456.550 to 456.725, unless the context
requires otherwise:
(1) 'Bonds' means any bonds, notes or other evidence of
indebtedness, including notes or other evidence of indebtedness
issued in anticipation of the issuance of bonds and payable from
the proceeds of bonds issued, issued under ORS 456.515 to
456.725.
(2) 'Capital reserve account' or 'capital reserve accounts'
means one or more of the special trust accounts { - which - }
{ + that + } may be established by the Housing and Community
Services Department within the Housing Finance Fund.
(3) 'Housing finance bond declaration' means a written
instrument signed by the director of the Housing and Community
Services Department and on file with and bearing the certificate
of approval of the State Treasurer, and all housing finance bond
declarations supplemental thereto.
(4) 'Consumer housing cooperative' means a cooperative
corporation formed under ORS chapter 62 and whose articles of
incorporation provide, in addition to the other requirements of
ORS chapter 62, that:
(a) The consumer housing cooperative has been organized
exclusively to provide housing facilities for persons and
families of lower income and such social, recreational,
commercial and communal facilities as may be incidental to such
housing facilities.
(b) All income and earnings of the consumer housing cooperative
shall be used exclusively for consumer housing cooperative
purposes and that no unreasonable part of the net income or net
earnings of the cooperative shall inure to the benefit or profit
of any private individual, firm, corporation, partnership or
association.
Enrolled House Bill 3778 (HB 3778-A) Page 1
(c) The consumer housing cooperative is in no manner controlled
or under the direction of or acting in the substantial interest
of any private individual, firm, corporation, partnership or
association seeking to derive profit or gain therefrom or seeking
to eliminate or minimize losses in any transaction therewith,
except that such limitation shall apply to the members of the
cooperative only to the extent provided by rules of the
department.
(d) The operations of the consumer housing cooperative may be
supervised by the department and that the consumer housing
cooperative shall enter into such agreements with the department
as the department may require to provide regulation by the
department of the planning, development and management of any
housing project undertaken by the cooperative and the disposition
of the property and other interests of the cooperative.
(5) 'Development costs' means the costs that have been approved
by the department as appropriate expenditures and includes, but
is not limited to payments for options to purchase property for
the proposed housing project site, deposits on contracts of
purchase, payments for the purchase of property as approved by
the department, legal, organizational and marketing expenses
including payment of attorney fees, managerial and clerical staff
salaries, office rent and other incidental expenses, payment of
fees for preliminary feasibility studies, advances for planning,
engineering and architectural work; expenses for surveys as to
need and market analyses; and such other expenses incurred by the
qualified housing sponsor as the department may deem necessary
under ORS 456.550 to 456.725.
(6) 'Elderly' means a person or a family whose head of the
household is 58 years of age or older, residing in the state,
whose income is below the level { - which - } { + that + }
the department has determined to be necessary in order to obtain
in the open market decent, safe and sanitary housing, including
the costs of utilities and taxes, for 25 percent of the gross
income of the household { - , as provided in ORS 456.620 (4) - }
.
(7) 'Federally insured security' means an evidence of
indebtedness insured or guaranteed as to repayment of principal
and interest by the United States or an agency or instrumentality
thereof.
(8) 'Housing development' means a development that
{ - primarily - } contains housing units for persons or
families of lower income and such other incidental elements of
{ + residential, + } commercial, recreational, industrial,
communal or educational facilities as the department determines
improve the quality of the development as it relates to housing
for persons or families of lower income and the financial
feasibility of the development. Not more than 50 percent of the
total amount of any financing provided by the department for a
particular development { - shall - } { + may + } be used to
finance commercial, recreational, industrial, communal or
educational facilities. Profits from incidental elements shall be
applied to loans due under ORS 456.550 to 456.725.
(9) 'Housing Finance Fund' means the Housing Finance Fund
established in ORS 456.720 (1).
(10) 'Lending institution' means any bank, mortgage banking
company, trust company, savings bank, savings and loan
association, credit union, national banking association, federal
savings and loan association or federal credit unit maintaining
Enrolled House Bill 3778 (HB 3778-A) Page 2
an office in this state, or any insurance company authorized to
do business in this state.
(11) 'Limited dividend housing sponsor' means a corporation,
trust, partnership, association, other entity, or an individual.
Such mortgagor shall be restricted as to distribution of income
and shall be regulated as to rents, charges, rate of return and
methods of operation as the department determines necessary to
carry out the purposes of ORS 456.550 to 456.725.
(12) 'Lower income families or persons' means the elderly and
families and persons, residing in this state, whose income is
below the level { - which - } { + that + } the department has
determined to be necessary in order to obtain in the open market
decent, safe and sanitary housing, including the costs of
utilities and taxes, for 25 percent of the gross income of such
family or person { - , as provided under ORS 456.620 (4) - } .
The term may also include other families or persons where the
assistance provided is determined by the director to be
incidental to the accomplishment of the department's programs for
lower income families or persons. The department, in cooperation
with affected local governments, shall determine what constitutes
'decent, safe and sanitary housing. '
(13) 'Manufactured housing' means a dwelling unit manufactured
off-site having a minimum width of 10 feet and a minimum area of
400 square feet built on a permanent chassis and designed to be
used for permanent residential occupancy whether or not on a
permanent foundation, { - which dwelling unit - } { + and
that + } contains permanent eating, cooking, sleeping and
sanitary facilities and meets such standards as the department
determines, by rule, are reasonable to maintain the quality,
safety and durability of the dwelling, the sanitary requirements
of the communities in which they are located and the security of
the loans { - which - } { + that + } the department may
finance for the purchase of the dwellings.
(14) 'Nonprofit housing corporation' means an organization
formed under ORS chapter 65 and whose articles of incorporation
provide, in addition to the other requirements of ORS chapter 65,
that:
(a) The corporation has been organized exclusively to provide
housing facilities for persons and families of lower income and
such other social, recreational, commercial and communal
facilities as may be incidental to such housing facilities.
(b) All the 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 - }
{ + may + } inure to the benefit of any private individual,
firm, corporation, partnership or association.
(c) The corporation is in no manner controlled or under the
direction or acting in the substantial interest of any private
individual, firm, partnership or association seeking to derive
profit or gain therefrom or seeking to eliminate or minimize
losses in transactions therewith.
(d) The operations of the corporation may be supervised by the
department and that the corporation shall enter into such
agreements with the department as the department may require to
regulate the planning, development and management of any housing
project undertaken by the corporation and the disposition of the
property and other interests of the corporation.
(15) 'Project cost' or 'costs of the project' means the sum of
all reasonable expenses incurred by a qualified housing sponsor
in undertaking and completing a housing project approved by the
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department. { - Such costs - } { + 'Project costs' or 'costs
of the project' + } include but are not limited to the expenses
incurred by a qualified housing sponsor for { + :
(a) + } Studies and surveys;
{ + (b) + } Plans, specifications, architectural and
engineering services;
{ + (c) + } Legal, organizational and other special services;
{ + (d) + } Financing, acquisition, demolition, construction,
equipment and site development of new and rehabilitated housing
units;
{ + (e) + } Movement of existing buildings to new sites; the
cost of acquisition, or estimated fair market value, of land and
other interests in real estate;
{ + (f) + } Rehabilitation, reconstruction, repair or
remodeling of existing buildings;
{ + (g) + } Estimated carrying charges during construction
and for a reasonable period thereafter;
{ + (h) + } Placement of tenants or occupants and relocation
services in connection with the housing project;
{ + (i) + } Reasonable builder's or sponsor's profit and risk
allowance; and { - , to the extent not already included, all - }
{ + (j) + } Development costs { + not otherwise included in
this subsection + }.
(16) 'Qualified housing sponsor' includes, subject to the
approval of the department, a consumer housing cooperative, a
limited dividend housing sponsor, a nonprofit housing
corporation, a for-profit housing sponsor including, but not
limited to, an individual operating in compliance with the
criteria adopted by the department under ORS 456.620 (1), a
housing authority created by ORS 456.075, an urban renewal agency
created by ORS 457.035 and any city or county governing body or
agency or department designated by the governing body.
(17) 'Residential housing' means a specific work or improvement
within this state undertaken primarily to provide dwelling
accommodations, including land development and acquisition,
construction or rehabilitation of buildings and improvements
thereto, for residential housing, and such other nonhousing
facilities as may be incidental or appurtenant thereto and as the
department determines improve the quality of the development as
it relates to housing for persons or families of lower income and
the financial feasibility of the development. Not more than 50
percent of the total amount of any financing provided by the
department for a particular development { - shall - } { +
may + } be used to finance nonhousing facilities. 'Residential
housing ' includes, but is not limited to, a specific work or
improvement within this state undertaken to provide mobile home
or manufactured dwelling parks as defined in ORS 446.003. As used
in this subsection, 'land development' includes, but is not
limited to, the improvement of streets and alleys and the
construction of surface drains, sewers, curbing and sidewalks.
(18) 'Residential loan' means a loan for the acquisition,
construction, improvement or rehabilitation of residential
housing and, if the loan is for acquisition or construction of
residential housing, { - which - } { + that + } is secured by
a first lien on real property located in the state and improved
by a newly constructed, existing or rehabilitated residential
structure for lower income persons or families, or unimproved if
the proceeds of such loan shall be used for the erection of a
residential structure thereon, whether or not such loan is
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insured or guaranteed by the United States or any instrumentality
or agency thereof. { - The term also - } { + 'Residential
loan' + } includes an insured or guaranteed loan for the
acquisition of manufactured housing { + . + } { - , which - }
{ + The + }insured or guaranteed loan need not be secured by a
first mortgage on real property but shall be secured by a
security interest of first priority. { - The term - } { + '
Residential loan' + } also includes a loan for the purchase of a
proprietary lease and related cooperative shares in a housing
cooperative formed under ORS chapter 62 secured by a security
interest of first priority and a pledge or an assignment of
proprietary leases and related cooperative shares.
(19) 'Revolving account' means the Housing and Community
Services Department Revolving Account created in ORS 456.574.
SECTION 3. ORS 456.620 is amended to read:
456.620. In carrying out housing programs, the Housing and
Community Services Department shall:
(1) With the approval of the State Housing Council, adopt
standards for the planning, development and management of housing
projects for which qualified housing sponsors receive all or a
portion of any required financing under ORS 456.550 to 456.725,
for audits and inspections to determine compliance with such
standards and adopt criteria for the approval of qualified
housing sponsors under ORS 456.550 to 456.725.
(2) Adopt criteria for the approval of qualified housing
sponsors in ORS 456.550 to 456.725.
(3) Enter into agreements with qualified housing sponsors to
regulate the planning, development and management of housing
projects constructed with the assistance of the department under
ORS 456.550 to 456.725.
(4) With the approval of the council, establish maximum { +
household + } income limits { - which shall in no case exceed
120 percent of the median family income level, as determined by
the department, in the area where housing is to be provided. No
more than 20 percent of the units of a housing project shall have
an income level of between 100 and 120 percent of the level
determined by the department. However, the department may waive
the income limits for elderly households seeking residence within
an elderly or disabled housing project if a person in the
household falls within the target population described under ORS
456.515 (10)(b). Where programs of the department are
administered on a statewide basis, - } { + for all or a portion
of the units in housing projects, housing developments or other
residential housing financed in whole or in part by the
department. A maximum of one-third of the units in a housing
project, housing development or other residential housing
financed by the department may be rented to households with an
income level exceeding 120 percent of the median family income
level, as determined by the department. If the income level in
any unit exceeds 120 percent of the median family income, the
department shall, to the extent practicable, require that the
project, development or other housing financed by the department
have a percentage of low income units that is higher than the
minimum percentages established in ORS 456.120 (19) for projects
financed by local housing authorities or income limitations that
are lower than the limits described in ORS 456.120 (19) or a
combination thereof. + } Income limits { + for department
programs administered on a statewide basis + } may be established
by reference to the median family or personal income in the
state, or in various regions in the state, as determined by the
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department. { + This subsection does not restrict the
acquisition of manufactured dwelling parks. + }
(5) With the approval of the council, { - insure - }
{ + ensure + } that financing is provided in the department's
programs for manufactured housing.
SECTION 4. ORS 456.625 is amended to read:
456.625. The Housing and Community Services Department may:
(1) Undertake and carry out studies and analyses of housing
needs within the state and ways of meeting such needs and make
the results of such studies and analyses available to the public,
qualified housing sponsors and the private housing sector.
(2) Prepare proposals on measures it considers necessary to
address administration, housing programs or community services
programs.
(3) With the approval of the State Housing Council, charge fees
or interest in connection with housing programs.
(4) Encourage community organizations to assist in initiating
housing projects for persons and families of lower income.
(5) Encourage the salvage of usable housing scheduled for
demolition or dislocation because of highway, school, urban
renewal or other public projects by seeking authority for the
public agencies involved in such programs to use the funds
provided for the demolition or relocation of such buildings to
enable qualified housing sponsors to relocate and rehabilitate
such buildings for use by persons and families of lower income.
(6) Encourage research and demonstration projects to develop
techniques and methods for increasing the supply of adequate,
decent, safe and sanitary housing for persons and families of
lower income.
(7) Make or participate in the making of residential loans to
qualified individuals or housing sponsors to provide for the
acquisition, construction, improvement, rehabilitation or
permanent financing of residential housing or housing
development; undertake commitments to make residential loans;
purchase and sell residential loans at public or private sale;
modify or alter such mortgages or loans; foreclose on any such
mortgage or security interest or commence any action to protect
or enforce any right conferred upon the department by any law,
mortgage, security, agreement, contract or other agreement and to
bid for and purchase property that is subject to such mortgage or
security interest at any foreclosure or other sale; acquire or
take possession of any such property and complete, administer,
conserve, improve and otherwise use the property to accomplish
the department's purposes, pay the principal and interest on any
obligations incurred in connection with such property and dispose
of such property in such manner as the department determines
necessary to protect its interests under ORS 456.515 to 456.725
and ORS chapter 458.
(8) Unless specifically exempted by the State Treasurer,
deposit with the State Treasurer any funds held in reserve or
sinking funds under ORS 456.515 to 456.725 and ORS chapter 458
and any other moneys not required for immediate use or
disbursement by the department, subject to the provisions of any
agreement with holders of bonds entered into prior to October 15,
1983.
(9) Advise and assist in the creation of any nonprofit housing
corporation, consumer housing cooperative or limited dividend
housing sponsor and give approval of the articles of
incorporation and bylaws of any such organization in carrying out
ORS 456.515 to 456.725.
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(10) Cooperate with and exchange services, personnel and
information with any federal, state or local governmental agency.
(11) Contract for the services of and consultation with
professional persons or organizations, not otherwise available
through federal, state or local governmental agencies, in
carrying out ORS 456.515 to 456.725 and ORS chapter 458.
(12) { + Contract for, act on or + } perform any other duties
that the department considers necessary { - in carrying - }
{ + or appropriate to carry + } out housing programs and
community services programs.
(13) Purchase, service, sell and make commitments to purchase,
service and sell residential loans to the extent permitted by ORS
456.635 and 456.640 (1) to (3).
(14) Initiate or assist appropriate state agencies,
governmental bodies and public or private housing sponsors in the
development, construction, acquisition, ownership, leasing,
rehabilitation or management of housing to carry out the purposes
of ORS 456.515 to 456.725 and ORS chapter 458 where such housing
is not otherwise affordable or available in the area.
{ + (15) Execute and record written instruments that contain
terms, including but not limited to restrictive covenants or
equitable servitudes, pertaining to the use and enjoyment of
housing projects. Notwithstanding any other provision of law, the
executed instruments shall constitute and create restrictive
covenants affecting and running with the property according to
the terms of the instruments when recorded in the records of the
county where the property is located. County clerks shall accept
the instruments for recording when presented by or on behalf of
the department. + }
{ - (15) - } { + (16) + } Subject to the provisions of any
agreement then existing with bondholders, make available funds by
contract, grant, loan or otherwise, including loan guarantees,
insurance or other financial leveraging techniques, from moneys
made available by the department to carry out the purposes of ORS
456.515 to 456.725, if such moneys are not needed for the
operations of the department or otherwise determined by the
director to be a necessary or prudent reserve.
SECTION 5. ORS 456.578 is amended to read:
456.578. (1) Subject to other applicable laws and agreements
entered into with bondholders, amounts received by, or
appropriated to, the Housing and Community Services Department
may be applied to funds and accounts as the director determines
necessary or appropriate for the payment of expenses of programs
administered by the department and to provide reserves against
losses and security for bonds. All amounts deposited in the funds
or accounts administered by the department under ORS 456.515 to
456.725 and ORS chapter 458, are continuously appropriated for
the purposes of ORS 456.515 to 456.725 and ORS chapter 458.
(2) The Housing and Community Services Department may establish
and maintain a petty cash fund, in an amount not to exceed
{ - $200 - } { + $300 + }, for the purpose of paying minor
incidental expenses in the administration of the department.
SECTION 6. { + The amendments to ORS 456.625 by section 4 of
this 2001 Act, providing that executed instruments that contain
terms pertaining to the use and enjoyment of housing projects
shall constitute and create restrictive covenants affecting and
running with the property according to the terms of the
instruments, apply to instruments recorded before, on or after
the effective date of this 2001 Act. + }
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Enrolled House Bill 3778 (HB 3778-A) Page 7
Passed by House May 29, 2001
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 20, 2001
...........................................................
President of Senate
Enrolled House Bill 3778 (HB 3778-A) Page 8
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled House Bill 3778 (HB 3778-A) Page 9