HB1227ham002 100TH GENERAL ASSEMBLY

Rep. Christian L. Mitchell

Filed: 7/1/2017

10000HB1227ham002 LRB100 02935 AWJ 27889 a

AMENDMENT TO HOUSE BILL 1227

AMENDMENT NO. ______. Amend House Bill 1227 by replacing everything after the enacting clause with the following:

"Section 5. The State Finance Act is amended by adding Sections 5.878 and 6z-102 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Illinois Community Stabilization Program Revolving Fund.

(30 ILCS 105/6z-102 new)

Sec. 6z-102. The Illinois Community Stabilization Program Revolving Fund; creation. The Illinois Community Stabilization Program Revolving Fund is created as a special fund in the State treasury. Moneys in the Fund shall be used by the Illinois Housing Development Authority, subject to appropriation, for the purpose of making zero-interest loans to municipalities that operate home equity programs within their boundaries. Loan funds shall be used for the purpose of operating those programs. The Fund shall consist of any moneys transferred or appropriated into the Fund, as well as all repayments of loans made under the program. All interest earned on moneys in the Fund shall be deposited into the Fund.

Section 10. The State Revenue Sharing Act is amended by changing Section 3 as follows:

(30 ILCS 115/3) (from Ch. 85, par. 613)

Sec. 3. Use of Fund.

(a) The amounts allocated and paid to the municipalities and counties of this State pursuant to the provisions of this Act shall be used solely for the general welfare of the people of the State of Illinois, including financial assistance to school districts, any part of which lie within the municipality or county, through unrestricted block grants for school purposes carried out within the municipality or county making the grant, and also including, but not limited to, mental health programs, wastewater projects, road and bridge construction and repair and social service programs.

(b) A municipality may use up to 2% of the net revenue of their Local Government Distributive Fund portion to fund home equity programs within the municipality's boundaries.

(Source: P.A. 86-18.)

Section 15. The Home Equity Assurance Act is amended by changing Sections 2, 3, 4, 4.2, 11, and 20 as follows:

(65 ILCS 95/2) (from Ch. 24, par. 1602)

Sec. 2. Purpose. The purpose of a Home Equity Program and commission created under the provisions of this Act by the voters of a territory within a municipality with a population of more than 1,000,000 or an eligible municipality shall be to guarantee that the value of the property of each member of the program shall not fall below its fair market value established at the time the member registers in a program, provided that the member remains in the program for at least 5 years, keeps the property well maintained, continuously occupies the property as his or her principal residence, or a family member continuously occupies the property as a principal residence, and adheres to the guidelines of a program. By providing such a guarantee, a program is intended to provide relief only from specifically local adverse housing market conditions within the territory of the program as they may differ from municipal-wide, regional, or national housing conditions. A program is not intended to provide relief from physical perils such as natural disasters or acts of God or from depreciation due to failure to maintain a residence. Furthermore, a program is not intended to provide, serve as, or replace homeowner's insurance or other conventional forms of insurance.

(Source: P.A. 85-1044.)

(65 ILCS 95/3) (from Ch. 24, par. 1603)

Sec. 3. Definitions. For the purposes of this Act:

(a) "Bona fide offer" means an offer made in good faith and for a valuable consideration to purchase a qualified residence at a price that in the opinion of the governing commission is reasonable given current market conditions.

(b) "Certificate of participation" means the duly notarized document of membership in a program, signed by the qualified applicant and by an authorized representative of the governing commission, which specifies the location and description of the guaranteed residence, its guaranteed value, the registration date, and which has attached a program appraisal for the guaranteed residence.

(c) "Community organization" means a not-for-profit organization which has been registered with this State for at least 5 years as a not-for-profit organization, which qualifies for tax exempt status under Section 501 (c) (3) or 501 (c) (4) of the United States Internal Revenue Code of 1986, as now or hereafter amended, which continuously maintains an office or business location within the territory of a program together with a current listed telephone number, and whose members reside within the territory of a program.

(d) "Eligible applicant" means a natural person who is the owner of a qualified residence within the territory of a program who continuously occupies or has a family member who occupies such qualified residence as the principal place of residence.

(d-5) "Eligible municipality" means a municipality with 1,000,000 or fewer inhabitants that has (i) an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security, (ii) a poverty rate of at least 20% according to the latest federal decennial census, or (iii) a census tract crime rate higher than the State average.

(e) "Family member" means a spouse, child, stepchild, parent, grandparent, brother, sister, or any such relations of the spouse of the member.

(f) "Governing commission" means the 9 member (or 18 member in the case of a merged program) governing body which is authorized by voter approval of the creation of a home equity program (or merger of programs) as provided in this Act and which is appointed by the mayor of the municipality in which the program has been approved with the approval of the city council, 7 (or 14 in the case of a merged program) of whom shall be appointed from a list or lists of nominees submitted by a community organization or community organizations as defined in this Act.

(g) "Gross selling value" means the total consideration to be paid for the purchase of a guaranteed residence, and shall include any amount that the buyer or prospective buyer agrees to assume on behalf of a member, including broker commissions, points, legal fees, personal financing, or other items of value involved in the sale.

(h) "Guarantee fund" means the funds collected under the provisions of this Act for the purpose of guaranteeing the property values of members within the territory of a program.

(i) "Guaranteed residence" means a qualified residence for which a certificate of participation has been issued, which is occupied continuously as the place of legal residence by the member or a family member, which is described in the certificate of participation, and which is entitled to coverage under this Act.

(j) "Guaranteed value" means the appraised valuation based upon a standard of current fair market value as of the registration date on the qualified residence as determined by a program appraiser pursuant to accepted professional appraisal standards and which is authorized by the commission for the registration date. The guaranteed value shall be used solely by the commission for the purpose of administering the program and shall remain confidential.

(k) "Member" means the owner of a guaranteed residence.

(l) "Owner" means a natural person who is the legal titleholder or who is the beneficiary of a trust which is the legal titleholder.

(m) "Physical perils" means physical occurrences such as, but not limited to, fire, windstorm, hail, nuclear explosion or seepage, war, insurrection, wear and tear, cracking, settling, vermin, rodents, insects, vandalism, pollution or contamination, and all such related occurrences or acts of God.

(n) "Program" means the guaranteed home equity program governed by a specific home equity commission.

(o) "Program appraisal" means a real estate appraisal conducted by a program appraiser for the purpose of establishing the guaranteed value of a qualified residence under a program and providing a general description of the qualified residence. The program appraisal shall be used solely by the governing commission for the purpose of administering the program and shall remain confidential.

(p) "Program appraiser" means a real estate appraiser who meets the professional standards established by the American Institute of Real Estate Appraisers (AIREA), the National Association of Independent Fee Appraisers (NAIFA), the National Society of Real Estate Appraisers (NSREA) or the American Society of Appraisers (ASA) and whose name is submitted to the governing commission by the appraiser to conduct program appraisals under the provisions of a program.

(q) "Program guidelines" means those policies, rules, regulations, and bylaws established from time to time by the governing commission to explain, clarify, or modify the program in order to fulfill its goals and objectives.

(r) "Qualified residence" means a building: (1) located in the territory of a program having at least one, but not more than 6, dwelling units; (2) classified by county ordinance as residential and assessed for property tax purposes; and (3) with at least one dwelling unit continuously occupied as the principal legal residence of a member or family member.

(s) "Registration date" means the date of receipt by the governing commission of the registration fee and a completed application of a qualified applicant for participation in a program.

(t) "Registration fee" means the fee which is established by the governing commission to defray the cost of a program appraisal on a qualified residence.

(Source: P.A. 95-1047, eff. 4-6-09.)

(65 ILCS 95/4) (from Ch. 24, par. 1604)

Sec. 4. Creation of Commission.

(a) Whenever in a municipality with more than 1,000,000 inhabitants or an eligible municipality, the question of creating a home equity program within a contiguous territory included entirely within the municipality is initiated by resolution or ordinance of the corporate authorities of the municipality or by a petition signed by not less than 10% of the total number of registered voters of each precinct in the territory, the registered voters of which are eligible to sign the petition, it shall be the duty of the election authority having jurisdiction over such municipality to submit the question of creating a home equity program to the electors of each precinct within the territory at the regular election specified in the resolution, ordinance or petition initiating the question. If the question is initiated by petition and if the requisite number of signatures is not obtained in any precinct included within the territory described in the petition, then the petition shall be valid as to the territory encompassed by those precincts for which the requisite number of signatures is obtained and any such precinct for which the requisite number of signatures is not obtained shall be excluded from the territory. A petition initiating a question described in this Section shall be filed with the election authority having jurisdiction over the municipality. The petition shall be filed and objections thereto shall be made in the manner provided in the general election law. A resolution, ordinance, or petition initiating a question described in this Section shall specify the election at which the question is to be submitted. The referendum on such question shall be held in accordance with general election law. Such question, and the resolution, ordinance, or petition initiating the question, shall include a description of the territory, the name of the proposed home equity program, and the maximum rate at which the home equity program shall be able to levy a property tax. All of that area within the geographic boundaries of the territory described in such question shall be included in the program, and no area outside the geographic boundaries of the territory described in such question shall be included in the program. If the election authority determines that the description cannot be included within the space limitations of the ballot, the election authority shall prepare large printed copies of a notice of the question, which shall be prominently displayed in the polling place of each precinct in which the question is to be submitted.

Notwithstanding any other provision of law, on and after the effective date of this amendatory Act of the 100th General Assembly, a home equity program may also be created in an eligible municipality.

(b) Whenever a majority of the voters on such public question approve the creation of a home equity program as certified by the proper election authorities, the mayor of the municipality shall appoint, with the consent of the corporate authorities, 9 individuals, to be known as commissioners, to serve as the governing body of the home equity program. The mayor shall choose 7 of the 9 individuals to be appointed to the governing commission from nominees submitted by a community organization or community organizations as defined in this Act. A community organization may recommend up to 20 individuals to serve on a governing commission.

No fewer than 5 commissioners serving at any one time shall reside within the territory of the program.

Upon creation of a governing commission, the terms of the initial commissioners shall be as follows: 3 shall serve for one year, 3 shall serve for 2 years, and 3 shall serve for 3 years and until a successor is appointed and qualified. All succeeding terms shall be for 3 years, or until a successor is appointed or qualified. Commissioners shall serve without compensation except for reimbursement for reasonable expenses incurred in the performance of duties as a commissioner. A vacancy in the office of a member of a commission shall be filled in like manner as an original appointment.

All proceedings and meetings of the governing commission shall be conducted in accordance with the provisions of the Open Meetings Act, as now or hereafter amended.

(Source: P.A. 93-709, eff. 7-9-04.)

(65 ILCS 95/4.2) (from Ch. 24, par. 1604.2)

Sec. 4.2. Merger of Programs.

(a) Whenever in a municipality with more than 1,000,000 inhabitants or an eligible municipality, the question of merging 2 existing and contiguous home equity programs within the municipality is initiated by resolution or ordinance of the governing commissions of both programs proposed to be merged or by a petition signed by not less than 10% of the total number of registered voters of each program proposed to be merged, the registered voters of which are eligible to sign the petition, it shall be the duty of the election authority having jurisdiction over such municipality to submit the question of merging the programs to the electors of each program at the regular election specified in the resolution, ordinance or petition initiating the question. A petition initiating a question described in this Section shall be filed with the election authority having jurisdiction over the municipality. The petition shall be filed and objections thereto shall be made in the manner provided in the general election law. A resolution, ordinance, or petition initiating a question described in this Section shall specify the election at which the question is to be submitted. The referendum on such question shall be held in accordance with general election law. Such question, and the resolution, ordinance, or petition initiating the question, shall include a description of the territory of the 2 programs, the name of the proposed merged home equity program, and the maximum rate at which the merged home equity program shall be able to levy a property tax. All of that area within the geographic boundaries of the territory of the 2 programs described in such question shall be included in the merged program, and no area outside the geographic boundaries of the territory of the 2 programs described in such question shall be included in the merged program. If the election authority determines that the description cannot be included within the space limitations of the ballot, the election authority shall prepare large printed copies of a notice of the question, which shall be prominently displayed in the polling place of each precinct in which the question is to be submitted.

(b) Whenever a majority of the voters on such public question in each existing program approve the merger of home equity programs as certified by the proper election authorities, the 9 commissioners of each of the merged programs shall serve as the 18 member governing body of the merged home equity program.

No fewer than 10 commissioners serving at any one time shall reside within the territory of the merged program.

Upon creation of a merged program, a commissioner shall serve for the term for which he or she was appointed and until a successor is appointed and qualified. All succeeding terms shall be for 3 years, or until a successor is appointed and qualified, and no commissioner may serve more than 2 consecutive terms. Commissioners shall serve without compensation except for reimbursement for reasonable expenses incurred in the performance of duties as a commissioner. A vacancy in the office of a member of the commission shall be filled in like manner as an original appointment.

All proceedings and meetings of the governing commission shall be conducted in accordance with the provisions of the Open Meetings Act, as now or hereafter amended.

Upon creation of a merged program, the members of each of the 2 programs merged into the merged program shall be members of the merged program, the guarantee funds of each shall be merged, and they shall be operated as a single program.

(Source: P.A. 86-684.)

(65 ILCS 95/11) (from Ch. 24, par. 1611)

Sec. 11. Guarantee Fund.

(a) Each governing commission and program created by referendum under the provisions of this Act shall maintain a guarantee fund for the purposes of paying the costs of administering the program and extending protection to members pursuant to the limitations and procedures set forth in this Act.

(b) The guarantee fund shall be raised by means of an annual tax levied on all residential property within the territory of the program having at least one, but not more than 6 dwelling units and classified by county ordinance as residential. The rate of this tax may be changed from year to year by majority vote of the governing commission but in no case shall it exceed a rate of 0.155% in an eligible municipality or 0.12% in a municipality with a population of more than 1,000,000 .12% of the equalized assessed valuation of all property in the territory of the program having at least one, but not more than 6 dwelling units and classified by county ordinance as residential, or the maximum tax rate approved by the voters of the territory at the referendum which created the program or, in the case of a merged program, the maximum tax rate approved by the voters at the referendum authorizing the merger, whichever rate is lower. The commissioners shall cause the amount to be raised by taxation in each year to be certified to the county clerk in the manner provided by law, and any tax so levied and certified shall be collected and enforced in the same manner and by the same officers as those taxes for the purposes of the county and city within which the territory of the commission is located. Any such tax, when collected, shall be paid over to the proper officer of the commission who is authorized to receive and receipt for such tax. The governing commission may issue tax anticipation warrants against the taxes to be assessed for the calendar year in which the program is created and for the first full calendar year after the creation of the program.

(c) The moneys deposited in the guarantee fund shall, as nearly as practicable, be fully and continuously invested or reinvested by the governing commission in investment obligations which shall be in such amounts, and shall mature at such times, that the maturity or date of redemption at the option of the holder of such investment obligations shall coincide, as nearly as practicable, with the times at which monies will be required for the purposes of the program. For the purposes of this Section investment obligation shall mean direct general municipal, state, or federal obligations which at the time are legal investments under the laws of this State and the payment of principal of and interest on which are unconditionally guaranteed by the governing body issuing them.

(d) Except as permitted by this subsection and subsection (d-5), the guarantee fund shall be used solely and exclusively for the purpose of providing guarantees to members of the particular Guaranteed Home Equity Program and for reasonable salaries, expenses, bills, and fees incurred in administering the program, and shall be used for no other purpose.

An eligible municipality with a home equity program shall have no less than $1,000,000 in its guarantee fund. A governing commission, with no less than $1,000,000 if located in an eligible municipality or $4,000,000 if located in a municipality with a population of more than 1,000,000 in its guarantee fund, may, if authorized (i) by referendum duly adopted by a majority of the voters or (ii) by resolution of the governing commission upon approval by two-thirds of the commissioners, establish a Low Interest Home Improvement Loan Program in accordance with and subject to procedures established by a financial institution, as defined in the Illinois Banking Act. Whenever the question of creating a Low Interest Home Improvement Loan Program is initiated by resolution or ordinance of the corporate authorities of the municipality or by a petition signed by not less than 10% of the total number of registered voters of each precinct in the territory, the registered voters of which are eligible to sign the petition, it shall be the duty of the election authority having jurisdiction over the municipality to submit the question of creating the program to the electors of each precinct within the territory at the regular election specified in the resolution, ordinance, or petition initiating the question. A petition initiating a question described in this subsection shall be filed with the election authority having jurisdiction over the municipality. The petition shall be filed and objections to the petition shall be made in the manner provided in the Election Code. A resolution, ordinance, or petition initiating a question described in this subsection shall specify the election at which the question is to be submitted. The referendum on the question shall be held in accordance with the Election Code. The question shall be in substantially the following form:

"Shall the (name of the home equity program) implement a Low Interest Home Improvement Loan Program with money from the guarantee fund of the established guaranteed home equity program?"

The votes must be recorded as "Yes" or "No".

Whenever a majority of the voters on the public question approve the creation of the program as certified by the proper election authorities or a resolution of the governing commission is approved by a two-thirds majority, the commission shall establish the program and administer the program with funds collected under the Guaranteed Home Equity Program, subject to the following conditions:

(1) At any given time, the cumulative total of all loans and loan guarantees (if applicable) issued under this program may not reduce the balance of the guarantee fund to less than $3,000,000.

(2) Only eligible applicants may apply for a loan.

(3) The loan must be used for the repair, maintenance, remodeling, alteration, or improvement of a guaranteed residence. This condition is intended to include the repair or maintenance of a guaranteed residence's water and sewer pipes and repair of a guaranteed residence, including but not limited to basement repairs, following flooding damage to the property. This condition is not intended to exclude the repair, maintenance, remodeling, alteration, or improvement of a guaranteed residence's landscape. This condition is intended to exclude the demolition of a current residence. This condition is also intended to exclude the construction of a new residence.

(4) An eligible applicant may not borrow more than the amount of equity value in his or her residence.

(5) A commission must ensure that loans issued are secured with collateral that is at least equal to the amount of the loan or loan guarantee.

(6) A commission shall charge an interest rate which it determines to be below the market rate of interest generally available to the applicant.

(7) A commission may, by resolution, establish other administrative rules and procedures as are necessary to implement this program including, but not limited to, loan dollar amounts and terms. A commission may also impose on loan applicants a one-time application fee for the purpose of defraying the costs of administering the program.

(d-5) A governing commission, with no less than $4,000,000 in its guarantee fund, may, if authorized by referendum duly adopted by a majority of the voters, establish a Foreclosure Prevention Loan Fund to provide low interest emergency loans to eligible applicants that may be forced into foreclosure proceedings.

Whenever the question of creating a Foreclosure Prevention Loan Fund is initiated by resolution or ordinance of the corporate authorities of the municipality or by a petition signed by not less than 10% of the total number of registered voters of each precinct in the territory, the registered voters of which are eligible to sign the petition, it shall be the duty of the election authority having jurisdiction over the municipality to submit the question of creating the program to the electors of each precinct within the territory at the regular election specified in the resolution, ordinance, or petition initiating the question. A petition initiating a question described in this subsection shall be filed with the election authority having jurisdiction over the municipality. The petition shall be filed and objections to the petition shall be made in the manner provided in the Election Code. A resolution, ordinance, or petition initiating a question described in this subsection shall specify the election at which the question is to be submitted. The referendum on the question shall be held in accordance with the Election Code. The question shall be in substantially the following form:

"Shall the (name of the home equity program) implement a Foreclosure Prevention Loan Fund with money from the guarantee fund of the established guaranteed home equity program?"

The votes must be recorded as "Yes" or "No".

Whenever a majority of the voters on the public question approve the creation of a Foreclosure Prevention Loan Fund as certified by the proper election authorities, the commission shall establish the program and administer the program with funds collected under the Guaranteed Home Equity Program, subject to the following conditions:

(1) At any given time, the cumulative total of all loans and loan guarantees (if applicable) issued under this program may not exceed $3,000,000.

(2) Only eligible applicants may apply for a loan. The Commission may establish, by resolution, additional criteria for eligibility.

(3) The loan must be used to assist with preventing foreclosure proceedings.

(4) An eligible applicant may not borrow more than the amount of equity value in his or her residence.

(5) A commission must ensure that loans issued are secured as a second lien on the property.

(6) A commission shall charge an interest rate which it determines to be below the market rate of interest generally available to the applicant.

(7) A commission may, by resolution, establish other administrative rules and procedures as are necessary to implement this program including, but not limited to, eligibility requirements for eligible applicants, loan dollar amounts, and loan terms.

(8) A commission may also impose on loan applicants a one-time application fee for the purpose of defraying the costs of administering the program.

(e) The guarantee fund shall be maintained, invested, and expended exclusively by the governing commission of the program for whose purposes it was created. Under no circumstance shall the guarantee fund be used by any person or persons, governmental body, or public or private agency or concern other than the governing commission of the program for whose purposes it was created. Under no circumstances shall the guarantee fund be commingled with other funds or investments.

(e-1) No commissioner or family member of a commissioner, or employee or family member of an employee, may receive any financial benefit, either directly or indirectly, from the guarantee fund. Nothing in this subsection (e-1) shall be construed to prohibit payment of expenses to a commissioner in accordance with Section 4 or payment of salaries or expenses to an employee in accordance with this Section.

As used in this subsection (e-1), "family member" means a spouse, child, stepchild, parent, brother, or sister of a commissioner or a child, stepchild, parent, brother, or sister of a commissioner's spouse.

(f) An independent audit of the guarantee fund and the management of the program shall be conducted annually and made available to the public through any office of the governing commission or a public facility such as a local public library located within the territory of the program.

(Source: P.A. 98-1160, eff. 6-1-15; 99-37, eff. 1-1-16.)

(65 ILCS 95/20) (from Ch. 24, par. 1620)

Sec. 20. Home Rule.

(a) In compliance with Section 7 of "An Act to revise the law in relation to the construction of the statutes", approved March 5, 1874, as amended, it is declared to be the law of this State, pursuant to paragraph (h) of Section 6 of Article VII of the Illinois Constitution, that the authority or duty to establish or prohibit the establishment of home equity programs in any municipality with more than 1,000,000 inhabitants, including home rule units, and the determination of the terms of such programs are declared to be exclusive powers and functions of the State which may not be exercised concurrently by any such municipality. No municipality with more than 1,000,000 inhabitants, including home rule units, shall establish or maintain a home equity program other than as provided in this Act, and any such municipality shall affirmatively establish and maintain a home equity program when required to do so pursuant to this Act.

(b) A home rule eligible municipality may not establish or maintain a home equity program in a manner inconsistent with this Act. This subsection is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

(Source: P.A. 85-1044.)".