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Session Law

2002

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Chapter 244 AN ACT AUTHORIZING THE FINANCING OF THE PRODUCTION AND PRESERVATION OF AFFORDABLE HOUSING.

Whereas , The deferred operation of this act would tend to defeat its purpose, which is forthwith to authorize the financing of the production and preservation of affordable housing and to make related changes in certain laws, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. To provide for a capital outlay program to rehabilitate, produce and modernize state-owned public housing developments, to preserve the affordability and the income mix of state-assisted multifamily developments, to support home ownership and rental housing opportunities for low and moderate income citizens of the commonwealth, to stem urban blight through the implementation of housing stabilization programs, to support housing for the elderly, disabled and homeless and to promote economic reinvestment through the funding of infrastructure improvements, the sums set forth in section 2, for the several purposes and subject to the conditions specified in this act, are hereby made available from the General Capital Projects Fund, subject to the laws regulating the disbursement of public funds.

SECTION 2.

Department of Housing and Community Development.

7004-7011
For the purposes of state financial assistance in the form of grants for projects undertaken pursuant to clause (j) of section 26 of chapter 121B of the General Laws; provided, that contracts entered into by the department for such projects may include, but shall not be limited to, projects providing for renovation, remodeling, reconstruction, redevelopment, and hazardous material abatement, including asbestos and lead paint, and for compliance with state codes and laws, the provision of day care facilities, learning centers and teen service centers and the adaptation of units for families and persons with disabilities; provided further, that priority shall be given to projects undertaken for the purpose of compliance with state codes and laws or for other purposes related to the health and safety of residents; provided further, that funds may be expended from this item to make such modifications to congregate housing units as may be necessary to increase the occupancy rate of such units; provided further, that the department, in consultation with local housing authorities, shall draft guidelines for a formula-based modernization program to be implemented on a demonstration basis beginning on July 1, 2002; provided further, the purpose of said program shall be to provide predictable funds to be used flexibly by housing authorities to provide for capital improvements to extend the useful life of state-assisted public housing; and provided further, that not less than 25 per cent of the amount appropriated in this item shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; provided further, that not less than $35,000,000 shall be expended for energy efficiency improvements that reduce utility consumption or costs for projects funded in this item including, but not limited to, the installation of high efficiency heating, ventilation, and air conditioning systems, furnaces, and boilers, the replacement of interior and exterior lighting with high efficiency fixtures and lamps, and the installation of plumbing fixtures, windows, siding, insulation and air sealing measures; and provided further, that not less than $3,540,600 shall be available, subject to the commitment of matching funds from local housing authorities as set forth in section 15, for the provision of a supportive services program for youths living in public housing pursuant to section 60 of said chapter 121B .............................................. $350,000,000

7004-7012
For the purpose of state financial assistance in the form of community development action grants to be awarded pursuant to section 57A of chapter 121B of the General Laws; provided, that not less than $2,000,000 of the amount authorized for expenditure in this item shall be used for projects in seriously distressed areas having a significant amount of vacant land or buildings, as defined by the department................................................................................................. $25,000,000

7004-7013
For the purpose of state financial assistance in the form of grants or loans for the Housing Innovations Fund Program established pursuant to section 5; provided, that not less than 25 per cent of the amount appropriated in this item shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; and provided further, that funds from this program shall be used to support joint projects proposed by municipalities or housing development agencies and Massachusetts colleges and universities................................................................................ $35,000,000

7004-7014
For the purpose of state financial assistance in the form of grants or loans for the housing stabilization and investment program established pursuant to section 6 of this act; provided, that not less than 25 per cent of the amount appropriated in this item shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; and provided further, that if the department has not been able to meet the spending allowable under the bond cap for this program, at the end of each year following the effective date of this act, the department shall be allowed to award the remaining funds to projects that serve households earning more than 30 per cent of the area median income, as defined by said United States Department of Housing and Urban Development...................................................... $50,000,000

7004-7015
For the purpose of state financial assistance in the form of grants or loans for the Capital Improvement and Preservation Fund for expiring use properties established pursuant to section 7 of this act .............................................................. $35,000,000

7004-7016
For the purpose of providing financial support for developing residential housing units within neighborhood commercial areas including, but not limited to, those areas designated as Main Street areas; provided however, that the developments may include projects which have residential units above commercial space and shall be located in areas characterized by a predominance of commercial land uses, a high daytime or business population or a high concentration of daytime traffic and parking; provided further, that the department shall give priority to developments for which municipalities have adopted a housing tax increment financing plan in an urban housing center tax increment financing zone pursuant to section 59 of chapter 40 of the General Laws; provided further, that $5,000,000 of the amount authorized for expenditure in this item shall be used to fund transit-oriented housing developments in proximity to public transit modes; provided further, that eligible activities for transit-oriented development shall include planning grants, financing subsidies and environmental assessment; and provided further, that not less than 50 per cent of the beneficiaries of such housing in projects assisted by this item shall be persons whose income is not more than 80 per cent of the area median income as defined by the United States Department of Housing and Urban Development............................... $10,000,000

7004-9981
For the recapitalization of the Massachusetts Housing Partnership Fund................................................. $3,500,000

SECTION 3. To meet the expenditures necessary in carrying out section 2, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time but not exceeding, in the aggregate, $508,500,000. All bonds issued by the commonwealth, as aforesaid, shall be designated on their face, Housing Preservation and Neighborhood Development Loan, Act of 2002, and shall be issued for a maximum term of years, not exceeding 20 years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Amendments to the Constitution; provided, however, that all such bonds shall be payable not later than June 30, 2028. All interest and payments on account of principal on such obligations shall be payable from the General Fund. Bonds and interest thereon issued under the authority of this section shall, notwithstanding any other provisions of this act, be general obligations of the commonwealth.

SECTION 4. The state treasurer may borrow from time to time on the credit of the commonwealth such sums as may be necessary for the purpose of meeting payments authorized by section 2 and may issue and renew from time to time notes of the commonwealth therefor bearing interest payable at such time and at such rates as shall be fixed by the state treasurer. The notes shall be issued and may be renewed 1 or more times for such terms, not exceeding 1 year, as the governor may recommend to the general court in accordance with Section 3 of Article LXII of the Amendments to the Constitution, but the final maturities of such notes, whether original or renewal, shall be not later than June 30, 2008. Notes and interest thereon issued under the authority of this section shall be general obligations of the commonwealth.

SECTION 5. The department of housing and community development, may enter into contracts for state financial assistance in the form of grants or loans by the commonwealth acting by and through the department; provided, however, that grants made pursuant to this section shall be made only to public or quasi-public agencies; provided further, that the department shall administer the Housing Innovations Fund Program for the purpose of facilitating the creation and retention of alternative forms of rental and ownership housing. Such forms of housing shall include, but not be limited to: single room occupancy units; limited equity cooperative housing; transitional housing for the homeless; battered women's shelters; mutual housing; housing acquired by nonprofit entities pursuant to Title II of the National Emergency Low Income Housing Preservation Act of 1987 and Title VI of the National Affordable Housing Act of 1990; employer assisted housing; lease to purchase housing; housing produced pursuant to a court approved receivership; innovative forms of housing which seek to mitigate the adverse impact on housing affordability in communities with high concentrations of college or university students; provided further, that the projects may include joint projects between municipalities or housing development agencies and institutions of higher education designed to create or preserve affordable units within those areas; and other innovative forms of housing; provided, however, that not less than 50 per cent of the beneficiaries of such housing shall be persons whose income is not more than 80 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development and not less than 25 per cent of the beneficiaries of such housing shall be persons whose income is not more than 30 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development. The department shall give preference to those projects that provide transitional and permanent housing for homeless individuals and families and disabled persons. Any such loan program shall be administered by the department through contracts with authorities which shall include housing authorities and redevelopment authorities duly organized and existing in accordance with chapter 121B of the General Laws, and may also include community development corporations duly organized and existing in accordance with chapter 40F of the General Laws, the Massachusetts Housing Finance Agency, a body politic and corporate entity established by chapter 708 of the acts of 1966, nonprofit agencies certified by the United States Department of Housing and Urban Development as community housing development organizations, the Community Economic Development Assistance Corporation, a body politic and corporate entity established by chapter 40H of the General Laws and the Massachusetts Development Finance Agency, a body politic and corporate entity established by chapter 23G of the General Laws. Said organizations may, pursuant to the terms and conditions of contracts with the department, directly issue loans for the purposes of the program or may enter into subcontracts with nonprofit organizations established pursuant to chapter 180 of the General Laws for such purposes. Loans issued directly or indirectly by such organizations shall be subject to the review and approval of the department.

Loans issued pursuant to this section shall be subject to the following provisions:

(1) such loans shall be limited to not more than 50 per cent of the financing of the total development costs; provided, however, that this limitation shall not apply to loans provided for the creation of battered women's shelters which loans may be provided in amounts up to 80 per cent of the financing of total development costs; and provided further, that such loans shall not exceed $2,500,000 per project;

(2) such loans shall only be issued when a contract or agreement for the use of the property for the purposes of such housing provides for the recording of a restriction in the registry of deeds or the registry district of the land court in the county in which the affected real property is located, for the benefit of said department, running with the land, that the land be used for the purpose of providing alternative forms of rental and ownership housing. Such property shall not be released from such restriction until the balance of the principal and interest for any such loan shall be repaid in full or until a mortgage foreclosure deed shall be recorded;

(3) such loans shall be issued for a term of up to 30 years during which time repayment may be deferred by the loan issuing authority unless, at the end of a fiscal year, cash collections from all sources in connection with such housing, except for contributions, donations or grant moneys, exceed 105 per cent of cash expenditures on behalf of such housing, including debt service, operating expenses, operating reserves and capital reserves. Such excess cash shall be paid to the commonwealth within 45 days of the end of the fiscal year, payable first to interest due under this section and then to principal advanced pursuant to such loan. If, on the date such loans become due and payable to the commonwealth, an outstanding balance exists, such loans may be extended for such periods, each period not to extend beyond 10 years, as the department determines, provided that the project continues to remain affordable housing as set forth in the contract or agreement entered into for the duration of the project by the department. In the event that the terms of repayment detailed in this section would cause a project authorized by this section to become ineligible to receive federal funds which would otherwise assist in the development of that project, the commissioner may waive the terms of repayment which would cause the project to become ineligible;

(4) interest rates for such loans shall be fixed at rates to be determined by the director of housing and community development, in consultation with the state treasurer;

(5) expenditures from this section shall not be made for the purpose of refinancing outstanding mortgage loans for housing in existence prior to the effective date of this act unless such housing had previously received funding pursuant to item 3722-8879 of section 3 of chapter 226 of the acts of 1987 or item 3722-8899 of section 2 of chapter 494 of the acts of 1993;

(6) said department shall take due consideration of a balanced geographic plan for such alternative forms of housing when issuing such loans; and

(7) housing projects developed pursuant to this act shall not be refinanced during the term of a loan issued pursuant to this section unless the balance of the principal and interest for such loan is repaid in full at the time of such refinancing. Such housing projects may be refinanced if such refinancing would result in a reduction of costs paid by the commonwealth. Any such refinanced loan shall be due and payable on a date not later than the date on which the original loan was due and payable, except in accordance with clause (3), or when necessary to effect extraordinary repairs or maintenance to be approved by the director of housing and community development.

Notwithstanding any other general or special law to the contrary, and within 120 days after the expiration of affordability restrictions on housing assisted under this section, the department or its assignee, who is a qualified developer selected pursuant to the terms of this section under the guidelines of the department, shall have an option to purchase any such property at its current appraised value reduced by any remaining obligation of the owner. Two impartial appraisers shall determine, within 60 days after the expiration of said affordability restrictions, the current appraised value in accordance with recognized professional standards. Two professionals in the field of multi-unit residential housing shall select each such appraiser. The owner and the department, respectively, shall designate such professionals within 30 days after the expiration of said affordability restrictions. If there exists a difference in the valuations provided by the appraisals, the 2 valuations shall be added together and divided by 2 to determine the current appraised value of the property.

Prior to any sale or transfer or other disposition of any such housing assisted under this section where the department has not previously exercised an option to purchase, an owner shall offer the department or its assignee, who shall be a qualified developer selected pursuant to the terms of this section under the guidelines of the department, a first refusal option to meet a bona fide offer to purchase said property. The owner shall provide to the department or its assignee written notice by regular and certified mail, return receipt requested, of the owner's intention to sell, transfer or otherwise dispose of the property. The department or its assignee shall hold such first refusal option for the first 120 days after receipt of the owner's notice of intent to transfer the property. Failure to respond to the written notice of the owner's intent to sell, transfer or otherwise dispose of the property within 120 days after the receipt thereof shall constitute a waiver of such right of first refusal by the department.

No sale, transfer or other disposition of such land shall be consummated until either said first refusal option period shall have expired or the owner shall have been notified in writing by the department or assignee in question that said option will not be exercised. Such option may be exercised only by written notice signed by a designated representative of the department or its assignee, mailed to the owner by certified mail at such address as may be specified in his notice of intention and recorded with the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located, within the option period. If the first refusal option has been assigned to a qualified developer selected pursuant to the terms of this section under guidelines issued by the department, such written notice shall state the name and address of such developer and the terms and conditions of such assignment. An affidavit before a notary public that the department or its designated representative has mailed such notice of intent on behalf of an owner shall conclusively establish the manner and time of the giving of such notice; and such an affidavit, and such notice that the option will not be exercised shall be recorded with the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located. Each notice of intention, notice of exercise of the option and notice that the option will not be exercised shall contain the name of the record owner of the land and description of the premises to be sold or converted adequate for identification thereof; and each such affidavit before a notary public shall have attached to it a copy of the notice of intention to which it relates. Such notices of intention shall be deemed to have been duly mailed to the parties above specified if addressed to them in care of the keeper of records for the party in question.

Upon notifying the owner in writing of its intention to pursue its first refusal option during such 120-day period, the department or its assignee shall have an additional 120 days, beginning on the date of the termination of the first refusal option period, to purchase the property. Such time periods may be extended by mutual agreement between the department or its assignee and the owner of the property; provided, however, that any such extension agreed upon shall be recorded in the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located. Within a reasonable time after request, the owner shall make available to the department or its assignee any information which is reasonably necessary for the department to exercise its rights. The department or its assignee may purchase or acquire the property only for the purposes of preserving or providing affordable housing provided that such housing shall remain affordable for not less than 40 years.

The department shall promulgate regulations for the implementation of the housing loan program authorized by this section.

SECTION 6. The department of housing and community development may enter into contracts for state financial assistance in the form of grants or loans by the commonwealth acting by and through the department of housing and community development for projects undertaken for the housing stabilization and investment program. The department shall administer the housing stabilization and investment program for the purpose of undertaking projects to develop and support affordable housing developments and homeownership affordability through the acquisition, preservation and rehabilitation of affordable housing; provided, however, that such program may include assistance for projects to stabilize and promote reinvestment in cities and towns including, but not limited to, acquisition, rehabilitation and preservation of foreclosed and distressed properties and any other techniques necessary to achieve such reinvestment; provided further, that not less than $5,000,000 shall be expended for the production or preservation of housing for people age 60 and over. Assistance provided through such program may be made in a manner which qualifies the assistance as a matching contribution under Section 220 of the HOME Investment Partnership Act Title II of the Cranston-Gonzalez National Affordable Housing Act including, in the case of assistance provided in the form of a loan, a commitment to repay such loan to the commonwealth's HOME Investment Trust Fund established pursuant to Section 92.5000(o) of the regulations of the United States Department of Housing and Urban Development. Loans may be provided to any agency, department, board, commission, authority or instrumentality of the commonwealth or any political subdivision thereof, to housing authorities, nonprofit agencies certified by the United States Department of Housing and Urban Development as community housing development organizations, community development corporations and limited equity cooperative housing corporations established pursuant to chapter 157B of the General Laws. Such recipients may enter into subcontracts to carry out the purposes of such contract with other for-profit or not-for-profit organizations. Prior to providing assistance, the department shall find that: (1) the housing would not, by private enterprise alone and without government assistance, be available to lower income families and individuals; (2) the amount of assistance appears to be the minimum amount necessary to make the housing development feasible; (3) with respect to rental housing, the operations of the owner and its articles of organization and by-laws and any changes to either shall be subject to regulation by the department; and (4) the housing shall remain affordable for its useful life as determined by the department. Such housing shall be considered affordable if, during the first 40 years after assistance is first provided, substantially all of the assisted units shall be rented to or owned by families and individuals whose income at initial occupancy is equal to or less than 80 per cent of the median income as determined by the secretary of Housing and Urban Development for the federal housing programs and that thereafter such units shall be rented or sold, subject to such restrictions on appreciation as determined by the department to be reasonable and necessary to maintain long term affordability, to families or individuals at incomes at or below 100 per cent of the median income.

Notwithstanding any other general or special law to the contrary and within 120 days after the expiration of such restrictions, the department of housing and community development or its assignee, who shall be a qualified developer selected pursuant to the terms of this section under the guidelines of the department, shall have an option to purchase any such property at its current appraised value reduced by any remaining obligation of the owner. Two impartial appraisers shall determine, within 60 days after the expiration of said affordability restrictions, the current appraised value in accordance with recognized professional standards. Two professionals in the field of multi-unit residential housing shall select each such appraiser. The owner and the department of housing and community development, respectively, shall designate such professionals within 30 days after the expiration of said affordability restrictions. If there exists a difference in the valuations provided by the appraisals, the 2 valuations shall be added together and divided by 2 to determine the current appraised value of the property.

Prior to any sale or transfer or other disposition of any such housing assisted under this section where the department has not previously exercised an option to purchase, an owner shall offer the department or its assignee, who shall be a qualified developer selected pursuant to the terms of this section under the guidelines of the department, a first refusal option to meet a bona fide offer to purchase said property. The owner shall provide to the department written notice by regular and certified mail, return receipt requested, of the owner's intention to sell, transfer or otherwise dispose of the property. The department or its assignee shall hold such first refusal option for the first 120 days after receipt of the owner's notice of intent to transfer the property. Failure to respond to the written notice of the owner's intent to sell, transfer or otherwise dispose of the property within 120 days after the receipt thereof shall constitute a waiver of such right of first refusal by the department.

No sale, transfer or other disposition of such land shall be consummated until either said first refusal option period shall have expired or the owner shall have been notified in writing by the department or assignee in question that said option will not be exercised. Such option may be exercised only by written notice signed by a designated representative of the department or its assignee, mailed to the owner by certified mail at such address as may be specified in his notice of intention and recorded with the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located, within the option period. If the first refusal option has been assigned to a qualified developer selected pursuant to the terms of this section under guidelines issued by the department, such written notice shall state the name and address of such developer and the terms and conditions of such assignment. An affidavit before a notary public that the department or its designated representative has mailed such notice of intent on behalf of an owner shall conclusively establish the manner and time of the giving of such notice; and such affidavit, and such notice that the option will not be exercised shall be recorded with the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located. Each notice of intention, notice of exercise of the option and notice that the option will not be exercised shall contain the name of the record owner of the land and description of the premises to be sold or converted adequate for identification thereof; and each such affidavit before a notary public shall have attached to it a copy of the notice of intention to which it relates. Such notices of intention shall be deemed to have been duly mailed to the parties above specified if addressed to them in care of the keeper of records for the party in question.

Upon notifying the owner in writing of its intention to pursue its first refusal option during such 120-day period, the department or its assignee shall have an additional 120 days, beginning on the date of the termination of the first refusal option period, to purchase the property. Such time periods may be extended by mutual agreement between the department or its assignee and the owner of the property; provided, however, that any such extension agreed upon shall be recorded in the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located. Within a reasonable time after request, the owner shall make available to the department of housing and community development or its assignee any information which is reasonably necessary for the authority to exercise its rights. The department of housing and community development or its assignee may purchase or acquire the property only for the purposes of preserving or providing affordable housing.

Funds provided herein may be used for grants to cities and towns to assist with the costs of demolishing certain privately-owned vacant and abandoned buildings that have been found to be uninhabitable and not economically feasible to rehabilitate and which the city or town may demolish pursuant to sections 127A and 127B of chapter 111 of the General Laws or sections 6 to 9, inclusive, of chapter 143 of the General Laws and the regulations promulgated pursuant to each of said chapters or which have been taken by the city or town for taxes. Any such demolition shall be undertaken in accordance with a neighborhood revitalization plan adopted by the city or town after a public hearing and after approval by the department which provides for the rehabilitation and development of housing in the areas in which such demolition is being undertaken. The department of housing and community development shall promulgate regulations for the purpose of implementing this section including, but not limited to, grants to cities and towns for demolition of certain vacant and abandoned buildings and procedures for neighborhood revitalization plans; provided, however, that not more than $25,000,000 shall be expended for new construction of affordable housing.

Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program shall be used for a revolving rehabilitation loan program to support the revitalization of certain abandoned or severely distressed privately-owned residential housing for which a court appointed, nonprofit receiver has been selected pursuant to chapter 111 of the General Laws. Such program may include activities necessary to make essential repairs and to pay operating expenses necessary to maintain habitability of such housing units in order to prevent abandonment and deterioration of such housing in primarily low and moderate income neighborhoods. Such loans may be administered by the department of housing and community development through contracts with the Community Economic Development Assistance Corporation, a body politic and corporate entity established in chapter 40H of the General Laws, and through contracts with the Massachusetts Housing Partnership Fund, an instrumentality of the commonwealth established in section 35 of chapter 405 of the acts of 1985. The recipients may enter into subcontracts to administer the purposes of such contracts with other for-profit or nonprofit organizations. The department of housing and community development shall promulgate regulations for the purpose of implementing this section.

An amount not to exceed $1,000,000 shall be expended in the form of loans to nonprofit developers for the acquisition of property to provide or preserve affordable housing. Such program of loans may be administered by the department of housing and community development through contracts with said Community Economic Development Assistance Corporation. Such program may include acquisition, financing and other holding costs, interim management and operating costs and may also be used by said Community Economic Development Assistance Corporation to secure, collateralize or reserve against other financing obtained by said Community Economic Development Assistance Corporation to support such costs. Not less than 50 per cent of the beneficiaries of such housing shall be persons of income not more than 80 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development and not less than 25 per cent of the beneficiaries of such housing shall be persons whose income is not more than 30 per cent of the area median income as determined from time to time by the United States Department of Housing and Urban Development.

Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program may be used to support the rehabilitation of owner-occupied 1 to 4-family properties and the acquisition and rehabilitation of such properties by persons of low or moderate income. The program may include, but shall not be limited to, direct loans, loan guarantees and loan loss reserves; provided, however, that the objective of such program shall include the following: (1) projects shall rely, to the greatest extent possible, on bank financing and other taxable financing to support the costs of such acquisition and rehabilitation; (2) coordinating the delivery of such financing and related rehabilitation services with cities and towns that provide such assistance utilizing federal community development block grants, federal HOME funds, and other resources; (3) expediting and simplifying the process by which home buyers may obtain financial and technical assistance for such acquisitions and rehabilitation; and (4) ensuring that adequate provisions are in place to assure that rehabilitation is completed in a timely and professional manner and to protect homeowners from excessive acquisition and rehabilitation costs.

Notwithstanding the restrictions described in this section, funds provided for the Housing Stabilization and Investment Program may be used for deferred payment second mortgage loans to support the acquisition and moderate rehabilitation of small multifamily rental properties pursuant to the Permanent PLUS Program to be administered by the department of housing and community development through contracts with the Massachusetts Housing Partnership Fund, an instrumentality of the commonwealth established by section 35 of chapter 405 of the acts of 1985. The Massachusetts Housing Partnership Fund shall enter into binding agreements to ensure that at least 20 per cent of the units are affordable to persons whose income is less than 50 per cent of the area median income, at least 40 per cent of the units are affordable to persons whose income is less than 60 per cent of the area median income, or at least 50 per cent of such units are affordable to persons whose income is less than 80 per cent of the area median income, as such incomes are determined from time to time by the United States Department of Housing and Urban Development.

Any money received from loan repayments pursuant to this section shall be deposited in the HOME Investment Trust Fund referred to in section 13 of chapter 257 of the acts of 1998 and may be expended by the department solely for the purposes set forth in this section.

SECTION 7. The department of housing and community development may enter into contracts for state financial assistance in the form of grants or loans by the commonwealth acting by and through the department of housing and community development for a Capital Improvement and Preservation Fund for the purposes of preserving and improving existing privately-owned, state or federally assisted housing. Property eligible for assistance shall include housing where the prepayment of a state or federally-assisted mortgage would lead or has led to the termination of a use agreement for low income housing or in which a project-based rental assistance contract is expiring or has expired. In allocating funds pursuant to this section, preference shall be given to nonprofit organizations and housing authorities seeking to purchase an eligible property. The department, in consultation with nonprofit organizations, the Massachusetts Housing Finance Agency, the Community Economic Development Assistance Corporation and the Massachusetts Housing Partnership Fund shall identify those projects at greatest risk of prepayment or nonrenewal of rental assistance and shall grant preference in allocating funds pursuant to this section to such developments. The department shall enter into binding agreements to ensure that not less than 50 per cent of the units in such housing shall be occupied and affordable to persons of income of 80 per cent or less of the area median income as determined by the United States Department of Housing and Urban Development and that not less than 10 per cent of such affordable units in such housing is available and affordable to households with income of 50 per cent or less of the area median income as determined by said United States Department of Housing and Urban Development or such greater percentage of units as required by the Massachusetts Housing Finance Agency or the United States Department of Housing and Urban Development regulations. The department may enter into subcontracts with community development corporations, for-profit organizations or nonprofit organizations to carry out the purposes of such grants and loans and shall enter into contracts with the Massachusetts Housing Finance Agency, the Community Economic Development Assistance Corporation and the Massachusetts Housing Partnership Fund. A portion of the funds may be allocated in the form of predevelopment grants or loans from the Community Economic Development Assistance Corporation and the Massachusetts Housing Partnership Fund to nonprofit purchasers of such housing. Such housing shall remain affordable for not less than 40 years or for such longer period, based upon the useful life of the housing as determined by the department, as may be specified in the applicable recorded restriction at the registry of deeds or the registry district of the land court of the county or district in which the affected real property is located.

The department shall promulgate regulations for the purpose of implementing this section.

SECTION 8. The costs of professional personnel, including personnel categorized under collective bargaining unit 9, directly involved in the planning, design and construction of projects funded by section 2, including costs incurred pursuant to section 5D of chapter 29 of the General Laws but excluding clerical and support personnel, may be charged to the authorizations in said section 2; provided, however, that such costs shall not be classified as administrative costs. The director of housing and community development shall file an annual spending plan with the fiscal affairs division, the house and senate committees on ways and means and the long term debt committee which details, by subsidiary, all personnel costs and administrative costs charged to expenditures made pursuant to this act.

SECTION 9. Chapter 40H of the General Laws is hereby amended by striking out section 1, as appearing in the 2000 Official Edition, and inserting in place thereof the following section:-

Section 1. The general court finds and declares that: (a) the commonwealth has already designated certain chronically depressed areas, and may hereafter designate other such areas, as target areas; (b) the development of these target areas will promote employment and the fuller utilization of local resources and will enhance the fiscal health of the commonwealth and its cities and towns; (c) the commonwealth has already implemented policies designed to provide capital and other financial assistance to community development corporations and other organizations seeking to alleviate the debilitating conditions characterizing these target areas, but the lack of technical assistance to these organizations inhibits the commonwealth's ability to redevelop such areas; (d) due to the critical shortage of housing in the commonwealth that is affordable to persons of low and moderate income, the preservation of existing and the creation of new housing that is affordable to persons of low and moderate income will enhance the fiscal health of the economy of the commonwealth; (e) therefore, it is in the public interest of the commonwealth to promote the prosperity and general welfare of its citizens, a public purpose for which public money may be expended, to provide technical and financial assistance and related services to community development corporations, nonprofit corporations and other organizations, to promote the revitalization of target areas and to preserve and develop housing affordable to low and moderate income persons; and (f) the creation of the Community Economic Development Assistance Corporation will assist in serving these public purposes.

SECTION 10. Section 2 of said chapter 40H, as so appearing, is hereby amended by inserting before the definition of "Board" the following definition:-

"Affordable housing", a dwelling unit: (i) rented to a household whose annual income, adjusted for family size, is equal to or less than 80 per cent of the median income of the Metropolitan Statistical Area, Primary Metropolitan Statistical Area or nonmetropolitan county in which the dwelling unit is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development or any successor agency; or (ii) sold to and occupied by a household whose annual income, adjusted for family size, is equal to or less than 100 per cent of the aforesaid median income.

SECTION 11. Said section 2 of said chapter 40H, as so appearing, is hereby further amended by striking out the definition of "Eligible organization" and inserting in place thereof the following definition:-

"Eligible organization", a CDC, a nonprofit corporation or such other entity or organization, including a public agency and a limited equity cooperative housing corporation organized under or subject to chapter 157B which the board determines to be engaged primarily in activities intended: (i) to contribute to the development and economic well-being of a target area or areas, and to increase or retain primary employment and capital in a target area or areas; or (ii) to contribute to the preservation of existing or the creation of new affordable housing. In addition the Massachusetts Community Development Finance Corporation, established in chapter 40F, shall be an eligible organization.

SECTION 12. Said section 2 of said chapter 40H, as so appearing, is hereby further amended by striking out the definition of "Technical assistance" and inserting in place thereof the following definition:-

"Technical and financial assistance", professional, financial and other assistance to assist eligible organizations to plan, organize and implement economic activities which may reasonably be expected: (i) to contribute to the development and economic well-being of a target area or areas, and to increase or retain primary employment and capital in a target area or areas; or (ii) to contribute to the preservation of existing or the creation of new affordable housing.

SECTION 13. Subsection (e) of section 3 of said chapter 40H, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- The board shall hire an executive director and shall establish his salary.

SECTION 14. Said chapter 40H is hereby further amended by striking out sections 4 and 5, as so appearing, and inserting in place thereof the following 2 sections:-

Section 4. CEDAC shall have the following powers:

(a) to make, amend and repeal bylaws, rules and regulations for the management of its affairs;

(b) to adopt an official seal;

(c) to sue and be sued, in its own name;

(d) to make contracts and execute all instruments necessary or convenient for the exercise of its power and functions;

(e) to acquire, own, hold and dispose of personal property of any nature or any interest therein;

(f) to enter into agreements or other transactions with any federal, state or municipal agency;

(g) to provide technical and financial assistance, either to particular eligible organizations or in the form of assistance, such as the publishing of materials or holding of conferences or the like, intended to contribute to the public purposes of this chapter generally;

(h) to appear in its own behalf before boards, commissions, departments or other agencies of municipal, state or federal government;

(i) to procure insurance against any losses in connection with its property in such amounts and from such insurers, as may be necessary or desirable;

(j) to apply for and accept grants, loans, advances and contributions from any source of money, property, labor or other things of value, to be held, used and applied for the purposes of this chapter;

(k) to provide and pay for such advisory services and technical and financial assistance as may be necessary or desirable to carry out the purposes of this chapter;

(l) to exercise any other powers of a corporation organized under chapter 156B; and

(m) to do all things necessary or convenient to carry out its purposes and exercise the powers expressly granted in this chapter.

Section 5. CEDAC may, subject to appropriation by the general court or funds made available from any other public or private source and pursuant to rules and regulations adopted by it, provide technical and financial assistance to particular eligible organizations or projects intended to contribute to the public purposes of this chapter generally; provided, however, that preference shall be given to projects in which community controlled organizations or community action programs have, or will have, an ownership interest; and provided further, that before providing technical and financial assistance to a particular eligible organization, CEDAC shall find and incorporate in its minutes that: (1) the eligible organization is devoting a substantial part of its efforts to activities intended to contribute to the redevelopment and economic well-being of target areas and to increase or retain primary employment and capital in target areas or to activities intended to preserve existing or create new units of affordable housing; and (2) technical and financial assistance shall be used solely for a particular project which meets the following standards:

(i) the project is within a target area and may reasonably be expected to contribute to the redevelopment and economic well-being of the target area within which it is located and to increase or maintain threatened primary employment and capital within such target area, or if the project may reasonably be expected to preserve existing or create new units of affordable housing;

(ii) the project has provided reasonable assurance that it will conform to all applicable environmental, zoning and building laws;

(iii) the benefits of the project, including the addition or retention of primary employment and of capital in the project's target area, shall primarily accrue to the residents of such target area, or a portion of the dwelling units in the project shall constitute or otherwise qualify as affordable housing;

(iv) there is a reasonable expectation that the project will be successful and that the eligible organization and project participants are responsible parties;

(v) the private sector has not provided sufficient primary employment opportunities in the project's target area;

(vi) alternative sources, including other agencies and subdivisions of the commonwealth and of the federal government, for technical and financial assistance have been sought and are either insufficient or unavailable to meet the needs of the project;

(vii) the technical and financial assistance to be provided is essential to the success of the project; and

(viii) provision has been made for the active participation of residents of the target area in the project; and

(3) adequate provisions have been made for reporting by the eligible organization and the project concerning the manner in which the technical and financial assistance is used and the extent to which it achieves its intended results.

Such findings by CEDAC shall be conclusive.

In providing technical and financial assistance to eligible organizations, CEDAC shall give preference to projects that provide potential benefits in addition to those listed herein.

SECTION 15. Item 4000-8200 of section 2 of chapter 52 of the acts of 1993, as amended by section 4 of chapter 494 of the acts of 1993, is hereby further amended by striking out, in line 32, the word "thirty" and inserting in place thereof the following figure:- 50.

SECTION 16. Said item 4000-8200 of said section 2 of said chapter 52, as amended by said section 4 of said chapter 494, is hereby further amended by inserting after the word "restriction", in line 40, the following words:- in the registry of deeds or the registry district of the land court of the county in which the affected real property is located.

SECTION 17. Said item 4000-8200 of said section 2 of said chapter 52, as amended by said section 4 of said chapter 494, is hereby further amended by striking out, in lines 43 to 46, inclusive, the words "the mentally ill, or mentally retarded and related uses; unless and until the balance of the principal and interest for said loan is repaid in full and is released from such restriction as provided pursuant to section three of this act" and inserting in place thereof the following words:- eligible individuals as determined by the departments of mental health and mental retardation; provided, that the property shall not be released from such restrictions until the balance of the principal and interest for the loan is repaid in full or until a mortgage foreclosure deed is recorded.

SECTION 18. Said item 4000-8200 of said section 2 of said chapter 52, as amended by said section 4 of said chapter 494, is hereby further amended by striking out, in lines 60 to 62, inclusive, the words ", said loans may be extended for a period not to exceed ten years for the purpose of repaying the outstanding principal and interest on said loans" and inserting in place thereof the following words:- and if, on such date, the department of housing and community development, in consultation with the executive office of health and human services, determines that there still exists a need for such housing and that there is continued funding available for the provision of services to such development, said department may, by agreement with the owner of the development, extend the loans for such periods, each period not to extend beyond 10 years, as the department determines; provided, however, that the project shall continue to remain affordable housing for the duration of the loan term, as extended, as set forth in the contract or agreement entered into by the department; and provided, further, that, in the event that the terms of repayment detailed in this item would cause a project authorized by this item to become ineligible to receive federal funds which would otherwise assist in the development of that project, that commissioner may waive the terms of repayment which would cause the project to become ineligible.

SECTION 19. Said chapter 52 is hereby further amended by striking out section 4 and inserting in place thereof the following section:-

Section 4. If any provision of this act would preclude the use of federal funds that will assist in meeting the goals of the program, the director of housing and community development may modify, waive or negotiate such modifications to the rules as may be required to allow the use of such federal funds; provided, however, that the interests of the commonwealth shall remain protected.

SECTION 20. The department of housing and community development, in accordance with this section, may make grants to local housing authorities for use in the provision of supportive services programs to complement improvements to the physical environment of public housing developments. Grants under this section may be used in public housing developments for:

(1) programs, including salaries and expenses for staff of those programs, designed to reduce use of drugs in and around public housing developments, including drug prevention, intervention, referral and treatment programs;

(2) programs, including salaries and expenses for staff of those programs, designed for outreach and recruitment of public housing development youths into employment, tutorial or job training programs; and

(3) programs, including salaries and expenses for staff of those programs, designed for outreach and recruitment of public housing development youth into sports and recreation programs; provided, that those sports and recreation programs shall be designed to appeal to youths as alternatives to drug use.

To receive a grant under this section, a local housing authority shall submit an application to the department at such time, in such manner and accompanied by such additional information as the department may reasonably require. The application shall include a plan for addressing the identified supportive services needs of youths residing in local housing developments.

The department shall approve all applications from local housing authorities in accordance with a grant formula which makes available a sum not to exceed $225 per unit for every unit of state-aided chapter 200 and chapter 705 low income family housing owned and operated by an applicant local housing authority. The department shall approve applications on the basis of threshold criteria that shall include, but not be limited to:

(a) the quality of the plan to address the supportive services needs of youths residing in housing developments, including the extent to which the plan includes initiatives that can be sustained over a period of several years;

(b) the capability of the applicant to carry out the plan; and

(c) the extent to which tenants, the local government and the local community support the activities proposed to be funded under the application.

The receipt of a grant under this section shall be contingent upon commitment of matching funds, in an amount equal to the proposed state grant, to be contributed by the local housing authority submitting an application pursuant to this section; provided, however, that not more than 50 per cent of federal funding shall be included in the calculation of the equal share of matching funds to be committed by the local housing authority, unless, upon certification of the director, the federal funding is determined to be directed toward supportive services program costs.

A local housing authority may apply for a 1-year grant under this section that, subject to the availability of appropriated amounts, shall be renewed annually for a period of not more than 4 additional years, except that such renewal shall be contingent upon the department finding, upon an annual or more frequent review, that the grantee local housing authority is performing under the terms of the grant and applicable laws in a satisfactory manner and meets such other requirements as the department may prescribe. The department may adjust the amount of any grant received or renewed under this paragraph to take into account increases or decreases in amounts appropriated for these purposes or such other factors as the director determines to be appropriate.

Each local housing authority shall be equally eligible for funding and may make application to the department for funding under this section.

The department shall require grantees to provide periodic reports that include the obligation and expenditure of grant funds, the progress made by the grantee in implementing the plan described in this section and any other pertinent information as reasonably required.

The department shall audit and monitor the programs funded under this section to ensure that assistance provided is administered in accordance with this section. Said department shall submit a report not later than January 1, 2003, and annually thereafter, to the joint committee on housing and urban development, the joint committee on long term debt, and the house and senate committees on ways and means regarding the funding of the programs pursuant to this section.

The department may issue such rules and regulations as are reasonably necessary to carry out this section.

SECTION 21. Notwithstanding any general or special law to the contrary, the following bond funded appropriation is hereby reduced by the amount of the uncommitted balances in this item and any allocations hereof as of the day following the effective date of this act: 3722-8872.

SECTION 22. Notwithstanding any general or special law to the contrary, the following bond funded appropriations are hereby reduced by the amount specified below for each item. If an allocation account is specified below for an item, the reduction shall be reflected in the state accounting system in the allocation account.

ItemAmount

3722-8871 .............................................................................................................................. $662,725

3722-8891............................................................................................................................ $2,822,017.

3722-8892 ......................................................................................................................... $15,692,269.

Approved August 10, 2002.

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