Chapter 698 Oregon Laws 1999

Session Law

AN ACT

HB 2089

Relating to housing; amending ORS 456.593 and 456.661.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 456.593 is amended to read:

456.593. (1) Notwithstanding any of the provisions of ORS 456.550 to 456.725 to the contrary:

(a) Of the [$1,030,000,000] $2 billion bond authorization under ORS 456.661, the aggregate principal amount of not to exceed $30 million is to be made available exclusively for making or participating in making residential loans for detached single-family homes in any city.

(b) The bonds under paragraph (a) of this subsection may be sold as a part of the Housing and Community Services Department's overall nongeneral obligation bond issues under ORS 456.550 to 456.725, or separate issues totaling no more than $30 million in an aggregate principal amount may be sold by the department as required and requested by a city. The bonds need not be identified by individual loans or transactions but may include any number of individual loans or transactions or purposes within any single issue.

(c) With moneys received under paragraph (b) of this subsection, the department may purchase, service, sell and make commitments to purchase, service and sell residential loans, originated by private lending institutions or any individual or organization authorized by law to make [such] those loans, for residential housing for owner-occupied detached single-family housing located within an area of a city where the median income is below median Portland family income to persons whose annual income for the current and the immediately preceding year does not exceed 105 percent of the prevailing median income for families within that city. Areas eligible under this paragraph shall be identified by ordinance of the governing body of that city. That city shall have sole discretion to designate one or more of those areas, and the proportionate or approximate actual amount of single-family residential loans to be made in those areas.

(d) Fees or service charges pursuant to ORS 456.625 (3) shall be charged or collected in connection with, or for, any loan, advance, insurance, loan commitments or servicing, by the department under this section only after consultation with the city.

(2) As used in this section, unless the context requires otherwise, "city" means any city with a population of 300,000 or more.

SECTION 2. ORS 456.661 is amended to read:

456.661. (1) The aggregate principal amount of bonds issued under ORS 456.645 [which] that may be outstanding is [$1,030,000,000] $2 billion, excluding bonds issued under[,] and within the limits provided in ORS 456.515 to 456.725 and any bonds [which] that have been refunded under ORS 456.650 or advance refunded under ORS 288.605 to 288.690. The amount of $30 million of the total [$1,030,000,000] $2 billion of bonds authorized under this section or proceeds from the sale of the bonds shall be made exclusively available for making or participating in making residential loans for single-family homes in cities with a population of 300,000 or more in the manner specified in ORS 456.593. No more than $10 million of the bonds authorized under this section or proceeds from the sale of the bonds shall be made available for residential loans for home improvements.

(2) For the purpose of determining the aggregate principal amount of bonds issued or outstanding, the value of bonds shall be calculated as follows:

(a) If, upon sale, the initial reoffering price is equal to or more than 98 percent of the maturity value of the bonds, the value of the bonds shall be the maturity value on the date of the calculation.

(b) If, upon sale, the initial reoffering price is an amount less than 98 percent of the maturity value of the bonds, the value of the bonds shall be the price on any date of the calculation that would result in a yield-to-maturity equal to the yield-to-maturity at the time the bonds were sold by the state.

(3) For the purposes of the limitation contained in subsection (1) of this section, the aggregate principal amount of bonds outstanding shall be determined for any date of calculation by subtracting the aggregate value of bonds [which] that would have matured or would have been redeemed through mandatory sinking fund payments from the aggregate value of bonds issued.

(4) The Legislative Assembly finds that section 103A of the Internal Revenue Code, as enacted by the 96th Congress of the United States:

(a) Defines qualified mortgage bonds, which are treated as exempt from federal income taxes under the code;

(b) Establishes limitations on the purposes and aggregate amount or the state ceiling of qualified mortgage bonds [which] that may be issued within a state during any calendar year; and

(c) Authorizes the state to allocate the amount of qualified mortgage bonds within the state ceiling among the units of government having authority to issue those bonds.

(5) The Legislative Assembly further finds that:

(a) Pursuant to ORS 456.515 to 456.725, the Housing and Community Services Department has served as the sole department or instrumentality of the state authorized to coordinate and establish statewide priorities for housing programs and to provide planning and technical assistance to sponsors of housing for persons and families of lower income throughout the state.

(b) The department's activities have been instrumental in alleviating the serious shortage of decent, safe and sanitary housing for lower income persons.

(c) Continuation of the department's programs for financing owner-occupied residential housing to the fullest extent practicable under section 103A of the Internal Revenue Code is a matter of paramount concern to the state.

(d) Cities have issued qualified mortgage bonds to finance the rehabilitation of housing as part of urban renewal or community development plans under home rule powers or authority granted under ORS 457.010 to 457.460. Further, some cities now have authority to issue bonds under ORS 280.417 to 280.485. [Such] Those bonds may be considered qualified mortgage bonds under section 103A of the Internal Revenue Code when issued to finance owned units in multiunit structures.

(6) For purposes of section 103A of the Internal Revenue Code, the department shall allocate the state ceiling of qualified mortgage bonds. The department shall determine the allocations to cities as may be necessary for bonds issued as provided in subsection (7) of this section and any balance of that state ceiling shall be allocated to the department. This determination shall be made for each calendar year and shall be set forth in a Certificate of Determination signed by the director of the department and filed with the State Treasurer. The Certificate of Determination shall cover the allocation during [such] the year or any portion thereof.

(7) The department shall allocate to cities the portions of the state ceiling as shall be necessary for bond programs specified in subsection (5)(d) of this section. Before [July 1, 1981, and] each January 1 [thereafter], any city may notify the department of its intention to issue qualified mortgage bonds and of the amount of the bonds intended to be issued during the ensuing calendar year. Promptly upon determining the applicable state ceiling for that calendar year and the applicable limit for that city provided in paragraph (3) of subsection (g) of section 103A of the Internal Revenue Code, the department shall allocate to [any such] the city the lesser of the amount of that limit or the amount intended to be issued by the city. Upon request of [any such] the city, the department may increase or decrease the allocation at any time in the discretion of the director and amend the Certificate of Determination accordingly.

(8) The department shall be responsible for the designation of areas of chronic economic distress within the state for approval as provided in section 103A of the Internal Revenue Code.

Approved by the Governor July 14, 1999

Filed in the office of Secretary of State July 15, 1999

Effective date October 23, 1999

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