SENATE AMENDED
PRIOR PRINTER'S NOS. 2285, 3310 PRINTER'S NO. 4157
No. 1776 Session of 1985
INTRODUCED BY F. E. TAYLOR, L. E. SMITH, KUKOVICH AND IRVIS,
OCTOBER 15, 1985
SENATOR SALVATORE, URBAN AFFAIRS AND HOUSING, IN SENATE,
AS AMENDED, NOVEMBER 18, 1986
AN ACT
1 Amending the act of December 3, 1959 (P.L.1688, No.621),
2 entitled, as amended, "An act to promote the health, safety
3 and welfare of the people of the Commonwealth by broadening
4 the market for housing for persons and families of low and
5 moderate income and alleviating shortages thereof, and by
6 assisting in the provision of housing for elderly persons
7 through the creation of the Pennsylvania Housing Finance
8 Agency as a public corporation and government
9 instrumentality; providing for the organization, membership
10 and administration of the agency, prescribing its general
11 powers and duties and the manner in which its funds are kept
12 and audited, empowering the agency to make housing loans to
13 qualified mortgagors upon the security of insured and
14 uninsured mortgages, defining qualified mortgagors and
15 providing for priorities among tenants in certain instances,
16 prescribing interest rates and other terms of housing loans,
17 permitting the agency to acquire real or personal property,
18 permitting the agency to make agreements with financial
19 institutions and Federal agencies, providing for the purchase
20 by persons of low and moderate income of housing units, and
21 approving the sale of housing units, permitting the agency to
22 sell housing loans, providing for the promulgation of
23 regulations and forms by the agency, prescribing penalties
24 for furnishing false information, empowering the agency to
25 borrow money upon its own credit by the issuance and sale of
26 bonds and notes and by giving security therefor, permitting
27 the refunding, redemption and purchase of such obligations by
28 the agency, prescribing remedies of holders of such bonds and
29 notes, exempting bonds and notes of the agency, the income
30 therefrom, and the income and revenues of the agency from
31 taxation, except transfer, death and gift taxes; making such
1 bonds and notes legal investments for certain purposes; and
2 indicating how the act shall become effective,"
3 reestablishing and continuing the Pennsylvania Housing
4 Finance Agency; further providing for agency membership and
5 terms; providing for removal from the agency for
6 nonattendance at meetings; further providing for mortgagors'
7 profits; continuing the Homeowner's Emergency Assistance
8 program; and making a conforming amendment.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 202 of the act of December 3, 1959
12 (P.L.1688, No.621), known as the Housing Finance Agency Law,
13 amended April 7, 1976 (P.L.73, No.33), is amended to read:
14 Section 202. Agency Membership.--The members of the agency
15 shall be the Secretary of Community Affairs, the State
16 Treasurer, the Secretary of Commerce and the Secretary of
17 Banking, and the respective successors in office of each of them
18 and six additional members whom the Governor shall appoint. One
19 of the members of the agency appointed by the Governor with the
20 advice and consent of the Senate shall be a representative of a
21 community-based nonprofit group which assists low-income and
22 moderate-income individuals in housing matters. [The Secretary <--
23 of Community Affairs shall] ANNUALLY AT THE FIRST MEETING HELD <--
24 DURING THE CALENDAR YEAR, THE MEMBERS SHALL ELECT ONE OF THE
25 MEMBERS TO serve as chairperson. The members initially appointed
26 shall serve for terms of one, two, three, four, five and six
27 years, respectively, the particular term of each to be
28 designated by the Governor at the time of appointment. The terms
29 of all their successors shall be six years each, except that any
30 person appointed to fill a vacancy shall serve only for the
31 unexpired term. Every member's term shall extend until his
32 successor is appointed and qualified but not longer than six <--
33 months beyond the six-year period. Any appointment of a member
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1 of the agency made hereafter shall be subject to the advice and
2 consent of [two-thirds] a majority of all the members of the
3 Senate. Any appointed member of the agency shall be eligible for
4 reappointment. The members of the agency shall not receive
5 compensation for their services as members, but shall receive
6 reimbursement for all necessary expenses incurred in connection
7 with the performance of their duties as members. A member who
8 fails to attend MEETINGS FOR three consecutive meetings MONTHS <--
9 shall forfeit his seat unless the chairperson of the agency,
10 upon written request from the member, finds that the member
11 should be excused from a meeting because of illness or the death
12 of an immediately family member.
13 Section 2. The act is amended by adding a section to read:
14 Section 208. Housing Studies.--The agency shall conduct a
15 periodic study of housing needs in the Commonwealth, with
16 particular emphasis on the needs of low-income and moderate-
17 income individuals. Such a study shall be conducted at least
18 every four years.
19 Section 3. Section 402-A(c) of the act, added December 5,
20 1972 (P.L.1259, No.282), is amended to read:
21 Section 402-A. Mortgage Loans.--* * *
22 [(c) Limited Profit. A mortgagor may not make distributions
23 in any one year, with respect to a project financed by the
24 agency, in excess of eight per cent of the mortgagor's equity in
25 such project, except that the right to such distribution shall
26 be cumulative. The mortgagor's equity in a project shall consist
27 of the difference between the mortgage loan and the total
28 project cost. A loan may be in an amount not to exceed one
29 hundred per cent of the project cost as approved by the agency
30 in the case of a non-profit mortgagor and in an amount not to
19850H1776B4157 - 3 -
1 exceed ninety per cent of the project cost as approved by the
2 agency in all other cases. With respect to every project, the
3 agency shall, pursuant to regulations adopted by it, establish
4 the mortgagor's equity at the time of the making of the final
5 mortgage advance and for purposes of this paragraph, that figure
6 shall remain constant during the life of the agency's mortgage
7 on such project. In the case of a nonprofit mortgagor receiving
8 a mortgage loan in the amount of one hundred per cent of the
9 total project cost, no distributions shall be permitted.]
10 (c) Limited Profit. The loan shall be subject to an
11 agreement between the agency and the mortgagor limiting the
12 mortgagor and its principals or stockholders to such rate of
13 return on its investment in the housing project to be assisted
14 with a loan from the agency as shall be fixed from time to time
15 by the agency in its regulations, which shall take into account
16 the prevailing rates of return available for similar investments
17 and the risks associated with the development of the project,
18 together with factors designed to promote the objectives of
19 providing affordable housing throughout the Commonwealth,
20 maintaining and improving the existing housing stock and other
21 objectives of this act. A loan may be in an amount not to exceed
22 one hundred per cent of the project cost as approved by the
23 agency in the case on a nonprofit mortgagor and in an amount not
24 to exceed ninety per cent of the project costs as approved by
25 the agency in all other cases.
26 * * *
27 Section 4. The act is amended by adding a section to read:
28 Section 411-C. Expiration.--This article, other than the
29 provisions contained in sections 405-C(g) and 406-C shall expire
30 December 23, 1989, except that mortgage assistance shall
19850H1776B4157 - 4 -
1 continue to be made available to mortgagors who were deemed
2 eligible for mortgage assistance prior to the expiration of this
3 article in accordance with the terms of this article.
4 Section 5. This act, with respect to the Pennsylvania
5 Housing Finance Agency, shall constitute the legislation
6 required to reestablish an agency under the act of December 22,
7 1981 (P.L.508, No.142), known as the Sunset Act.
8 Section 6. (a) Section 4 of the act of December 23, 1983
9 (P.L.385, No.91), entitled "An act amending the act of December
10 3, 1959 (P.L.1688, No.621), entitled, as amended, 'An act to
11 promote the health, safety and welfare of the people of the
12 Commonwealth by broadening the market for housing for persons
13 and families of low and moderate income and alleviating
14 shortages thereof, and by assisting in the provision of housing
15 for elderly persons through the creation of the Pennsylvania
16 Housing Finance Agency as a public corporation and government
17 instrumentality; providing for the organization, membership and
18 administration of the agency, prescribing its general powers and
19 duties and the manner in which its funds are kept and audited,
20 empowering the agency to make housing loans to qualified
21 mortgagors upon the security of insured and uninsured mortgages,
22 defining qualified mortgagors and providing for priorities among
23 tenants in certain instances, prescribing interest rates and
24 other terms of housing loans, permitting the agency to acquire
25 real or personal property, permitting the agency to make
26 agreements with financial institutions and Federal agencies,
27 providing for the purchase by persons of low and moderate income
28 of housing units, and approving the sale of housing units,
29 permitting the agency to sell housing loans, providing for the
30 promulgation of regulations and forms by the agency, prescribing
19850H1776B4157 - 5 -
1 penalties for furnishing false information, empowering the
2 agency to borrow money upon its own credit by the issuance and
3 sale of bonds and notes and by giving security therefor,
4 permitting the refunding, redemption and purchase of such
5 obligations by the agency, prescribing remedies of holders of
6 such bonds and notes, exempting bonds and notes of the agency,
7 the income therefrom, and the income and revenues of the agency
8 from taxation, except transfer, death and gift taxes; making
9 such bonds and notes legal investments for certain purposes; and
10 indicating how the act shall become effective,' providing for
11 homeowner's emergency assistance," is repealed.
12 (b) All other acts and parts of acts are repealed insofar as
13 they are inconsistent with this act.
14 Section 7. The presently confirmed members of the existing
15 Pennsylvania Housing Finance Agency AS OF DECEMBER 31, 1986, <--
16 shall continue to serve as agency members UNTIL SUCCESSORS ARE <--
17 APPOINTED AND QUALIFIED.
18 Section 8. Each rule and regulation of the agency in effect
19 on the effective date of this act DECEMBER 31, 1986, shall <--
20 remain in effect after such date until repealed or amended by
21 the agency.
22 Section 9. This act shall take effect immediately. <--
23 SECTION 9. (A) SECTIONS 4 AND 6 OF THIS ACT SHALL TAKE <--
24 EFFECT IMMEDIATELY.
25 (B) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT JANUARY 1,
26 1987.
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