72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 561
 
                         House Bill 2169
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor Theodore R.
  Kulongoski for Housing and Community Services Department)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Authorizes Housing and Community Services Department to use
Guarantee Fund in Housing Development and Guarantee Account to
guarantee loans on commercial component of structure containing
both commercial property and low income housing.
  Allows preference for certain properties in granting of loan
guarantees.
 
                        A BILL FOR AN ACT
Relating to loan guarantees; amending ORS 458.630.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 458.630 is amended to read:
  458.630. (1)(a) The  { + Housing and Community Services
Department shall hold and use the + } principal that is credited
to the Housing Development and Guarantee Account under ORS
458.620 (3)   { - shall be held and used by the Housing and
Community Services Department - }  as the Guarantee Fund. The
 { + department shall use the + } fund   { - shall be used - }
 { +  only + } to guarantee repayment of loans made to finance
the construction, development, acquisition or rehabilitation of
low income housing  { - . - }  { + , of the commercial component
of a structure that contains both commercial property and low
income housing, or of both. The department, by rule, shall
specify the grounds on which it may deny loan guarantees for a
structure that contains both commercial and low income housing
components. The grounds for denial specified by the department
must include, but need not be limited to, a commercial component
that is excessive in scope or that is designed for commercial
activity of a type incompatible with residential housing. The
State Housing Council shall review + } loans that are guaranteed
by the fund   { - shall be reviewed by the State Housing
Council - }  to   { - assure - }  { +  ensure + } that
 { - they - }  { +  the loans + } meet prudent underwriting
standards.
  (b) A guarantee   { - shall - }   { + may + } not be prepared
or construed in such a manner as to violate the provisions of
section 7, Article XI of the Oregon Constitution.
  (2) The department   { - shall - }  { +  may + } not issue any
loan guarantee under this section that guarantees the repayment
 
of more than 25 percent of the original principal balance of any
loan.
  (3)   { - At no time shall - }  The { +  department may not
issue a loan guarantee if the guarantee would cause the + }
aggregate dollar total of all loan guarantees issued by the
department under this section  { +  to + } exceed two times the
total amount then in the Guarantee Fund established under
subsection (1) of this section. Whenever the fund principal
 { - reaches a - }  { +  decreases by + } five percent
 { - loss - }  { +  or more + }, the interest on the fund shall
be deposited only to the principal account until the full amount
of the fund principal is
  { - realized - }  { +  restored + }.
  (4) In developing policy for loan guarantees under this
section, the council shall give preference to loans for the
construction, development, acquisition or rehabilitation of low
income housing { + , or of structures containing both commercial
and low income housing components,  + }that would:
  (a) Provide the greatest number of low income housing units
constructed, acquired, developed or rehabilitated for the amount
of guarantee allowed;
  (b)   { - Insure - }  { +  Ensure + } the longest possible use
for the units as low income housing units. Pursuant to this end,
the State Housing Council may adopt a formula   { - which - }
 { +  that + } optimizes the interests of the lender and the
developer and the working life of the low income units; or
  (c) Include a program of services for the occupants of the
proposed housing including, but not limited to, programs that
address home health care, mental health services, alcohol and
drug treatment and post-treatment care, child care and case
management.
    { - (5) The Guarantee Fund established under subsection (1)
of this section shall be used to guarantee loans made to finance
the construction, development, acquisition or rehabilitation of
housing for low income households. - }
   { +  (5) The council may adopt a policy that gives loan
guarantee preference to loans for low income housing, or
structures containing both commercial and low income housing
components, for which the department has provided a grant, loan,
tax credit or other investment. + }
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