Florida Senate - 2013                       CS for CS for SB 928
       By the Committees on Appropriations; and Community Affairs; and
       Senator Simpson
       576-04675-13                                           2013928c2
    1                        A bill to be entitled                      
    2         An act relating to community development; amending s.
    3         159.603, F.S.; modifying the definition of “qualifying
    4         housing development”; amending s. 159.608, F.S.;
    5         revising the power of a housing finance authority to
    6         make loans directly to eligible persons; amending s.
    7         196.1978, F.S.; deleting an ad valorem tax exemption
    8         for property owned by certain Florida-based limited
    9         partnerships and used for affordable housing for
   10         certain income-qualified persons; amending s. 420.507,
   11         F.S.; revising the powers of the Florida Housing
   12         Finance Corporation; specifying how the corporation
   13         will allocate certain funds; directing the corporation
   14         to adopt rules prioritizing affordable housing
   15         projects in the Florida Keys; amending s. 420.5087,
   16         F.S.; revising provisions relating to state apartment
   17         incentive loans to provide for a competitive
   18         evaluation and selection process with respect to loan
   19         applications; amending s. 420.511, F.S.; providing
   20         that the corporation’s strategic business plan must be
   21         consistent with a long-range program plan relating to
   22         affordable housing; deleting a requirement that the
   23         corporation compile certain data; revising provisions
   24         relating to the corporation’s development of its long
   25         range plan; revising the required contents and
   26         information to be included in the corporation’s annual
   27         report; requiring the corporation to submit separate
   28         audited financial statements that include specified
   29         information and incorporate certain reports; requiring
   30         the Auditor General to conduct an operational audit of
   31         the corporation and provide a written report to the
   32         Legislature; amending ss. 420.0003, 420.0006, 420.504,
   33         and 420.506, F.S.; conforming provisions to changes
   34         made by this act; repealing s. 420.5091, F.S.,
   35         relating to the HOPE program; providing for
   36         retroactive application; providing an effective date.
   38  Be It Enacted by the Legislature of the State of Florida:
   40         Section 1. Subsection (6) of section 159.603, Florida
   41  Statutes, is amended to read:
   42         159.603 Definitions.—As used in this part, the following
   43  words and terms have the following meanings unless the context
   44  indicates another or different meaning or intent.
   45         (6) “Qualifying housing development” means any work or
   46  improvement located or to be located in this the state,
   47  including real property, buildings, and any other real and
   48  personal property, designed or intended for the primary purpose
   49  of providing decent, safe, and sanitary residential housing for
   50  four or more families, at least 60 percent of whom are eligible
   51  persons, whether new construction, the acquisition of existing
   52  residential housing, or the remodeling, improvement,
   53  rehabilitation, or reconstruction of existing housing, together
   54  with such related nonhousing facilities as the authority
   55  determines to be necessary, convenient, or desirable.
   56         (a) The term includes a housing development that meets the
   57  definition of a “qualified low-income housing project” under s.
   58  42(g) of the Internal Revenue Code, regardless of whether such
   59  development meets the 60-percent-eligible-persons requirement
   60  under this subsection.
   61         (b) The exception provided under paragraph (a) applies to
   62  all housing developments that meet the federal definition of
   63  “qualified low-income housing project” and all developments that
   64  previously qualified under the state definition of “qualifying
   65  housing development.” Housing finance authorities may enter into
   66  regulatory agreement amendments as necessary to accommodate
   67  housing developments that qualify under paragraph (a).
   68         Section 2. Subsection (8) of section 159.608, Florida
   69  Statutes, is amended to read:
   70         159.608 Powers of housing finance authorities.—A housing
   71  finance authority shall constitute a public body corporate and
   72  politic, exercising the public and essential governmental
   73  functions set forth in this act, and shall exercise its power to
   74  borrow only for the purpose as provided herein:
   75         (8) To make loans directly to eligible persons or families
   76  who otherwise cannot borrow from conventional lending sources
   77  and whose annual income does not exceed 80 percent of the median
   78  income based on a family of up to four persons for the county in
   79  which they seek to purchase a residence. The housing finance
   80  authority may adjust the annual income requirements for families
   81  of greater than four persons. Such loans must be secured by
   82  either first mortgages or subordinated mortgages and must be
   83  used to purchase, construct, rehabilitate, or refinance single
   84  family residences that have purchase prices that do not exceed
   85  the purchase price limits of; however, the purchase price of any
   86  residence financed through such a loan may not exceed 90 percent
   87  of the median sales price for single-family homes in the county
   88  where the borrower’s residence is to be located, as mandated by
   89  federal law for tax-exempt, single-family bond programs.
   90         Section 3. Section 196.1978, Florida Statutes, is amended
   91  to read:
   92         196.1978 Affordable housing property exemption.—Property
   93  used to provide affordable housing to serving eligible persons
   94  as defined under by s. 159.603(7) and natural persons or
   95  families meeting the extremely-low-income, very-low-income, low
   96  income, or moderate-income limits specified in s. 420.0004,
   97  which property is owned entirely by a nonprofit entity that is a
   98  corporation not for profit, qualified as charitable under s.
   99  501(c)(3) of the Internal Revenue Code and in compliance with
  100  Rev. Proc. 96-32, 1996-1 C.B. 717, is or a Florida-based limited
  101  partnership, the sole general partner of which is a corporation
  102  not for profit which is qualified as charitable under s.
  103  501(c)(3) of the Internal Revenue Code and which complies with
  104  Rev. Proc. 96-32, 1996-1 C.B. 717, shall be considered property
  105  owned by an exempt entity and used for a charitable purpose, and
  106  those portions of the affordable housing property which provide
  107  housing to natural persons or families classified as extremely
  108  low income, very low income, low income, or moderate income
  109  under s. 420.0004 are shall be exempt from ad valorem taxation
  110  to the extent authorized under in s. 196.196. All property
  111  identified in this section must shall comply with the criteria
  112  provided under s. 196.195 for determining determination of
  113  exempt status and to be applied by property appraisers on an
  114  annual basis as defined in s. 196.195. The Legislature intends
  115  that any property owned by a limited liability company or
  116  limited partnership which is disregarded as an entity for
  117  federal income tax purposes pursuant to Treasury Regulation
  118  301.7701-3(b)(1)(ii) shall be treated as owned by its sole
  119  member or sole general partner.
  120         Section 4. Paragraph (h) of subsection (22) and subsection
  121  (48) of section 420.507, Florida Statutes are amended, and
  122  subsection (49) is added to that section, to read:
  123         420.507 Powers of the corporation.—The corporation shall
  124  have all the powers necessary or convenient to carry out and
  125  effectuate the purposes and provisions of this part, including
  126  the following powers, which are in addition to all other powers
  127  granted by other provisions of this part:
  128         (22) To develop and administer the State Apartment
  129  Incentive Loan Program. In developing and administering that
  130  program, the corporation may:
  131         (h) Establish, by rule, the procedure for evaluating,
  132  scoring, and competitively evaluating and selecting ranking all
  133  applications for funding based on the criteria set forth in s.
  134  420.5087(6)(c),; determining actual loan amounts,; making and
  135  servicing loans,; and exercising the powers authorized in this
  136  subsection.
  137         (48) To award use up to 10 percent of its annual allocation
  138  of low-income housing tax credits, nontaxable revenue bonds, and
  139  State Apartment Incentive Loan Program funds appropriated by the
  140  Legislature and available to allocate by request for proposals
  141  or other competitive solicitation. The corporation shall reserve
  142  up to 5 percent of each allocation funding for high-priority
  143  affordable housing projects, such as housing to support economic
  144  development and job-creation initiatives, housing for veterans
  145  and their families, and other special needs populations in
  146  communities throughout the state as determined by the
  147  corporation on an annual basis. The corporation shall reserve an
  148  additional 5 percent of each allocation for affordable housing
  149  projects that target persons who have a disabling condition as
  150  defined in s. 420.0004 and their families. These allocations
  151  must prioritize projects or initiatives piloting or
  152  demonstrating cost effective, best practices that meet the
  153  housing needs and preferences of such persons. Any tax credits
  154  or funds not allocated because of a lack of eligible projects
  155  targeting persons who have a disabling condition shall be
  156  distributed by the corporation for high-priority housing
  157  projects.
  158         (49)To adopt rules prescribing a priority for funding
  159  affordable housing projects in the Florida Keys Area of Critical
  160  State Concern and the City of Key West Area of Critical State
  161  Concern where, due to challenging environmental, land use,
  162  transportation, workforce, and economic factors, it is extremely
  163  difficult to successfully finance, develop, and construct
  164  affordable housing.
  165         Section 5. Paragraphs (c) and (f) of subsection (6) of
  166  section 420.5087, Florida Statutes, are amended to read:
  167         420.5087 State Apartment Incentive Loan Program.—There is
  168  hereby created the State Apartment Incentive Loan Program for
  169  the purpose of providing first, second, or other subordinated
  170  mortgage loans or loan guarantees to sponsors, including for
  171  profit, nonprofit, and public entities, to provide housing
  172  affordable to very-low-income persons.
  173         (6) On all state apartment incentive loans, except loans
  174  made to housing communities for the elderly to provide for
  175  lifesafety, building preservation, health, sanitation, or
  176  security-related repairs or improvements, the following
  177  provisions shall apply:
  178         (c) The corporation shall provide by rule for the
  179  establishment of a review committee composed of the department
  180  and corporation staff and shall establish by rule a scoring
  181  system for the competitive evaluation and selection competitive
  182  ranking of applications submitted in this program, including,
  183  but not limited to, the following criteria:
  184         1. Tenant income and demographic targeting objectives of
  185  the corporation.
  186         2. Targeting objectives of the corporation which will
  187  ensure an equitable distribution of loans between rural and
  188  urban areas.
  189         3. Sponsor’s agreement to reserve the units for persons or
  190  families who have incomes below 50 percent of the state or local
  191  median income, whichever is higher, for a time period that
  192  exceeds to exceed the minimum required by federal law or the
  193  provisions of this part.
  194         4. Sponsor’s agreement to reserve more than:
  195         a. Twenty percent of the units in the project for persons
  196  or families who have incomes that do not exceed 50 percent of
  197  the state or local median income, whichever is higher; or
  198         b. Forty percent of the units in the project for persons or
  199  families who have incomes that do not exceed 60 percent of the
  200  state or local median income, whichever is higher, without
  201  requiring a greater amount of the loans as provided in this
  202  section.
  203         5. Provision for tenant counseling.
  204         6. Sponsor’s agreement to accept rental assistance
  205  certificates or vouchers as payment for rent.
  206         7. Projects requiring the least amount of a state apartment
  207  incentive loan compared to overall project cost, except that the
  208  share of the loan attributable to units serving extremely-low
  209  income persons must shall be excluded from this requirement.
  210         8. Local government contributions and local government
  211  comprehensive planning and activities that promote affordable
  212  housing.
  213         9. Project feasibility.
  214         10. Economic viability of the project.
  215         11. Commitment of first mortgage financing.
  216         12. Sponsor’s prior experience.
  217         13. Sponsor’s ability to proceed with construction.
  218         14. Projects that directly implement or assist welfare-to
  219  work transitioning.
  220         15. Projects that reserve units for extremely-low-income
  221  persons.
  222         16. Projects that include green building principles, storm
  223  resistant construction, or other elements that reduce long-term
  224  costs relating to maintenance, utilities, or insurance.
  225         17. Job-creation rate of the developer and general
  226  contractor, as provided in s. 420.507(47).
  227         (f) The review committee established by corporation rule
  228  pursuant to this subsection shall make recommendations to the
  229  board of directors of the corporation regarding program
  230  participation under the State Apartment Incentive Loan Program.
  231  The corporation board shall make the final ranking and the
  232  decisions regarding which applicants shall become program
  233  participants based on the scores received in the competitive
  234  process ranking, further review of applications, and the
  235  recommendations of the review committee. The corporation board
  236  shall approve or reject applications for loans and shall
  237  determine the tentative loan amount available to each applicant
  238  selected for participation in the program. The actual loan
  239  amount shall be determined pursuant to rule adopted pursuant to
  240  s. 420.507(22)(h).
  241         Section 6. Section 420.511, Florida Statutes, is amended to
  242  read:
  243         420.511 Strategic business plan; long-range program
  244  strategic plan; annual report; audited financial statements.—
  245         (1) The corporation shall develop a strategic business plan
  246  for the provision of affordable housing for the state. The plan
  247  must be consistent shall not be inconsistent with the long-range
  248  program strategic plan prepared pursuant to subsection (2) and
  249  shall contain performance measures and specific performance
  250  targets for the following:
  251         (a) The ability of low-income and moderate-income
  252  Floridians to access housing that is decent and affordable.
  253         (b) The continued availability and affordability of housing
  254  financed by the corporation to target populations.
  255         (c) The availability of affordable financing programs,
  256  including equity and debt products, and programs that reduce
  257  gaps in conventional financing in order, to increase individual
  258  access to housing and stimulate private production of affordable
  259  housing.
  260         (d) The establishment and maintenance of efficiencies in
  261  the delivery of affordable housing.
  262         (e) Such other measures as directed by the corporation’s
  263  board of directors.
  265  The corporation shall also compile data on the stimulus of
  266  economic activity created by the affordable housing finance
  267  programs administered by the corporation.
  268         (2) The corporation, in coordination equal partnership with
  269  the department, shall develop annually develop a long-range
  270  program strategic plan for the provision of affordable housing
  271  in this state as Florida as part of the department’s agency
  272  strategic plan required pursuant to chapter 186. In part, the
  273  plan must shall include provisions that maximize the abilities
  274  of the corporation and the department to implement the state
  275  housing strategy established under s. 420.0003, to respond to
  276  federal housing initiatives, and to develop programs in a manner
  277  that is more responsive to the needs of public and private
  278  partners. The plan shall be developed on a schedule consistent
  279  with that established by s. 186.021. For purposes of this
  280  section act, the executive director or his or her designee shall
  281  serve as the corporation’s representative to achieve a
  282  coordinated and integrated planning relationship with the
  283  department.
  284         (3)(a) The corporation shall submit to the Governor and the
  285  presiding officers of each house of the Legislature, within 6 2
  286  months after the end of its fiscal year, a complete and detailed
  287  report setting forth the corporation’s state and federal program
  288  accomplishments using the most recent available data. The report
  289  must include, but is not limited to:
  290         (a) The following tenant characteristics in existing rental
  291  units financed through corporation-administered programs:
  292         1. The number of households served, delineated by income,
  293  race, ethnicity, and age of the head of household.
  294         2. The number of households served in large, medium, and
  295  small counties as defined in s. 420.5087 and the extent to which
  296  geographic distribution has been achieved in accordance with s.
  297  420.5087.
  298         3. The number of farmworker and commercial-fishing worker
  299  households served.
  300         4. The number of homeless households served.
  301         5. The number of special needs households served.
  302         6. By county, the average rent charged based on unit size.
  303         (b) The number of rental units to which resources have been
  304  allocated in the last fiscal year, including income and
  305  demographic restrictions.
  306         (c) The estimated average cost of producing units under
  307  each rental or homeownership unit financed under each program in
  308  the last fiscal year.
  309         (d) By county, the average sales price of homeownership
  310  units financed in the last fiscal year.
  311         (e) The number of households served by homeownership
  312  programs in the last fiscal year, including the income, race,
  313  ethnicity, and age of the homeowner of each household.
  314         (f) The percentage of homeownership loans that are in
  315  foreclosure.
  316         (g) The percentage of properties in the corporation’s
  317  rental portfolio which have an occupancy rate below 90 percent.
  318         (h) The amount of economic stimulus created by the
  319  affordable housing finance programs administered by the
  320  corporation for the most recent year available.
  321         (i) For the State Apartment Incentive Loan (SAIL) Program,
  322  a comprehensive list of all closed loans outstanding at the end
  323  of the most recent fiscal year, including, but not limited to,
  324  development name, city, county, developer, set-aside type, set
  325  aside percentage, affordability term, total number of units,
  326  number of set-aside units, lien position, original loan amount,
  327  loan maturity date, loan balance at close of year, status of
  328  loan, rate of interest, and interest paid.
  329         (j) For the Florida Affordable Housing Guarantee Program, a
  330  list of all guaranteed loans through the close of the most
  331  recent fiscal year, including, but not limited to, development
  332  name, city, county, developer, total number of units, issuer of
  333  the bonds, loan maturity date, participation in the United
  334  States Department of Housing and Urban Development Risk-Sharing
  335  Program, original guarantee amount, guarantee amount at the
  336  close of the fiscal year, status of guaranteed loans, and total
  337  outstanding Florida Housing Finance Corporation Affordable
  338  Housing Guarantee Program revenue bonds at the close of the most
  339  recent fiscal year.
  340         (k) Any other information the corporation deems
  341  appropriate.
  342         1. Its operations and accomplishments;
  343         2. Its receipts and expenditures during its fiscal year in
  344  accordance with the categories or classifications established by
  345  the corporation for its operating and capital outlay purposes;
  346         3. Its assets and liabilities at the end of its fiscal year
  347  and the status of reserve, special, or other funds;
  348         4. A schedule of its bonds outstanding at the end of its
  349  fiscal year, together with a statement of the principal amounts
  350  of bonds issued and redeemed during the fiscal year; and
  351         5. Information relating to the corporation’s activities in
  352  implementing the provisions of ss. 420.5087, 420.5088, and
  353  420.5095.
  354         (b) The report shall include, but not be limited to:
  355         1. The number of people served, delineated by income, age,
  356  family size, and racial characteristics.
  357         2. The number of units produced under each program.
  358         3. The average cost of producing units under each program.
  359         4. The average sales price of single-family units financed
  360  under s. 420.5088.
  361         5. The average amount of rent charged based on unit size on
  362  units financed under s. 420.5087.
  363         6. The number of persons in rural communities served under
  364  each program.
  365         7. The number of farmworkers served under each program.
  366         8. The number of homeless persons served under each
  367  program.
  368         9. The number of elderly persons served under each program.
  369         10. The extent to which geographic distribution has been
  370  achieved in accordance with the provisions of s. 420.5087.
  371         11. The success of the Community Workforce Housing
  372  Innovation Pilot Program in meeting the housing needs of
  373  eligible areas.
  374         12. Any other information the corporation deems
  375  appropriate.
  376         (4) Within 6 months after the end of its fiscal year, the
  377  corporation shall submit audited financial statements prepared
  378  in accordance with generally accepted accounting principles
  379  which include all assets, liabilities, revenues, and expenses of
  380  the corporation, and a list of all bonds outstanding at the end
  381  of its fiscal year. with the annual report required by this
  382  section, a copy of an annual financial audit of its accounts and
  383  records and an annual compliance The audit must be of its
  384  programs conducted by an independent certified public accountant
  385  and performed in accordance with generally accepted auditing
  386  standards and government auditing standards, and must
  387  incorporate all reports, including compliance reports, as
  388  required by such auditing standards.
  389         (5) The Auditor General shall conduct an operational audit
  390  of the accounts and records of the corporation and provide a
  391  written report on the audit to the President of the Senate and
  392  the Speaker of the House of Representatives by December 1, 2016.
  393  Both the corporation’s business plan and annual report must
  394  shall recognize the different fiscal periods under which the
  395  corporation, the state, the Federal Government, and local
  396  governments operate.
  397         Section 7. Paragraph (b) of subsection (4) of section
  398  420.0003, Florida Statutes, is amended to read:
  399         420.0003 State housing strategy.—
  400         (4) IMPLEMENTATION.—The Department of Economic Opportunity
  401  and the Florida Housing Finance Corporation in carrying out the
  402  strategy articulated herein shall have the following duties:
  403         (b) The long-range program agency strategic plan of the
  404  Department of Economic Opportunity must shall include specific
  405  goals, objectives, and strategies that implement the housing
  406  policies in this section and shall include the strategic plan
  407  for housing production prepared by the corporation pursuant to
  408  s. 420.511.
  409         Section 8. Section 420.0006, Florida Statutes, is amended
  410  to read:
  411         420.0006 Authority to contract with corporation; contract
  412  requirements; nonperformance.—The executive director of the
  413  department shall contract, notwithstanding part I of chapter
  414  287, with the Florida Housing Finance Corporation on a multiyear
  415  basis to stimulate, provide, and foster affordable housing in
  416  the state. The contract must incorporate the performance
  417  measures required by s. 420.511 and must be consistent with the
  418  provisions of the corporation’s strategic business plan prepared
  419  in accordance with s. 420.511. The contract must provide that
  420  if, in the event the corporation fails to comply with any of the
  421  a performance measure measures required under by s. 420.511, the
  422  executive director shall notify the Governor and shall refer the
  423  nonperformance to the department’s inspector general for review
  424  and determination as to whether such failure is due to forces
  425  beyond the corporation’s control or whether such failure is due
  426  to inadequate management of the corporation’s resources.
  427  Advances shall continue to be made pursuant to s. 420.0005
  428  during the pendency of the review by the department’s inspector
  429  general. If such failure is due to outside forces, it may shall
  430  not be deemed a violation of the contract. If such failure is
  431  due to inadequate management, the department’s inspector general
  432  shall provide recommendations regarding solutions. The Governor
  433  may is authorized to resolve any differences of opinion with
  434  respect to performance under the contract and may request that
  435  advances continue in the event of a failure under the contract
  436  due to inadequate management. The Chief Financial Officer shall
  437  approve the request absent a finding by the Chief Financial
  438  Officer that continuing such advances would adversely impact the
  439  state; however, in any event the Chief Financial Officer shall
  440  provide advances sufficient to meet the debt service
  441  requirements of the corporation and sufficient to fund contracts
  442  committing funds from the State Housing Trust Fund if so long as
  443  such contracts are in accordance with the laws of this state.
  444         Section 9. Subsection (1) of section 420.504, Florida
  445  Statutes, is amended to read:
  446         420.504 Public corporation; creation, membership, terms,
  447  expenses.—
  448         (1) There is created within the Department of Economic
  449  Opportunity A public corporation and a public body corporate and
  450  politic, to be known as the “Florida Housing Finance
  451  Corporation,” is created within the Department of Economic
  452  Opportunity.“Florida Housing Finance Corporation.” It is
  453  declared to be the intent of and constitutional construction by
  454  the Legislature that the Florida Housing Finance Corporation
  455  constitutes an entrepreneurial public corporation organized to
  456  provide and promote the public welfare by administering the
  457  governmental function of financing or refinancing housing and
  458  related facilities in this state Florida and that the
  459  corporation is not a department of the executive branch of state
  460  government within the scope and meaning of s. 6, Art. IV of the
  461  State Constitution, but is functionally related to the
  462  Department of Economic Opportunity in which it is placed. The
  463  executive function of state government to be performed by the
  464  executive director of the Department of Economic Opportunity in
  465  the conduct of the business of the Florida Housing Finance
  466  Corporation must be performed pursuant to a contract to monitor
  467  and set performance standards for the implementation of the
  468  business plan for the provision of housing approved for the
  469  corporation as provided in s. 420.0006. This contract must shall
  470  include the performance standards for the provision of
  471  affordable housing in this state Florida established in the
  472  strategic business plan described in s. 420.511.
  473         Section 10. Subsection (1) of section 420.506, Florida
  474  Statutes, is amended to read:
  475         420.506 Executive director; agents and employees; inspector
  476  general.—
  477         (1) The appointment and removal of an executive director
  478  shall be by the executive director of the Department of Economic
  479  Opportunity, with the advice and consent of the corporation’s
  480  board of directors. The executive director shall employ legal
  481  and technical experts and such other agents and employees,
  482  permanent and temporary, as the corporation may require, and
  483  shall communicate with and provide information to the
  484  Legislature with respect to the corporation’s activities. The
  485  board is authorized, Notwithstanding the provisions of s.
  486  216.262, the board may to develop and implement rules regarding
  487  the employment of employees of the corporation and service
  488  providers, including legal counsel. The board of directors of
  489  the corporation is entitled to establish travel procedures and
  490  guidelines for employees of the corporation, subject to s.
  491  112.061(6) and (7). The executive director’s office and the
  492  corporation’s files and records must be located in Leon County.
  493         Section 11. Section 420.5091, Florida Statutes, is
  494  repealed.
  495         Section 12. This act shall take effect upon becoming a law
  496  and shall first apply to the 2013 ad valorem tax rolls.