2004 Senate Bill text for SB0503

SENATE BILL 503

46th legislature - STATE OF NEW MEXICO - second session, 2004

INTRODUCED BY

Nancy Rodriguez

AN ACT

RELATING TO HOUSING; ENACTING THE NEW MEXICO HOUSING TRUST FUND ACT; CREATING A FUND; DESIGNATING FUNDING SOURCES; CREATING AN ADVISORY COMMITTEE; PROVIDING CERTAIN POWERS TO THE NEW MEXICO MORTGAGE FINANCE AUTHORITY; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 9 of this act may be cited as the "New Mexico Housing Trust Fund Act".

Section 2. [NEW MATERIAL] PURPOSE.--The purpose of the New Mexico Housing Trust Fund Act is to provide flexible funding for housing initiatives in order to produce significant additional housing investment in New Mexico.

Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the New Mexico Housing Trust Fund Act:

A. "authority" means the New Mexico mortgage finance authority;

B. "committee" means the New Mexico housing trust fund advisory committee;

C. "extremely low-income person" means a household consisting of a single individual or a family or unrelated

individuals living together when the household's total annual income does not exceed thirty percent of the median income for

the area, as determined by the United States department of housing and urban development and as adjusted for family size;

D. "fund" means the New Mexico housing trust fund; and

E. "low-income person" means a household consisting of a single individual or a family or unrelated individuals living together when the household's total annual income does not exceed eighty percent of the median income for the area, as determined by the United States department of housing and urban development and as adjusted for family size, or eighty percent of the state median income, whichever is greater.

Section 4. [NEW MATERIAL] FUND CREATED.--

A. The "New Mexico housing trust fund" is created in the authority. The fund shall consist of all distributions and appropriations made to the fund. Earnings of the fund shall be credited to the fund, and unexpended and unencumbered balances in the fund shall not revert to any other fund. The authority shall be the trustee for the fund.

B. The fund shall consist of revenue from the following recurring sources:

(1) proceeds from unclaimed property pursuant to Section 7-8A-13 NMSA 1978;

(2) net proceeds from the user fee imposed for private activity bonds used to provide financing for housing in the Private Activity Bond Act;

(3) appropriations and transfers from the general fund; and

(4) any other money appropriated or distributed to the fund.

C. Money in the fund is appropriated to the authority for the purposes of carrying out the provisions of the New Mexico Housing Trust Fund Act.

Section 5. [NEW MATERIAL] ADVISORY COMMITTEE CREATED.-- A. The "New Mexico housing trust fund advisory committee" is created. The committee shall consist of thirteen persons appointed by the authority's governing body:

(1) the chair of the authority or the chair's designee, who shall serve as chair of the committee;

(2) one representative of nonprofit housing developers;

(3) one representative of for-profit housing developers;

(4) one representative of the real estate industry;

(5) one representative of the mortgage lending industry;

(6) one representative of the title insurance industry;

(7) one representative from a nonprofit housing agency;

(8) one representative from a local governmental housing agency;

(9) one representative of rural constituents;

(10) one representative of urban constituents;

(11) one representative of tribal constituents;

(12) one representative of border constituents; and

(13) one representative of special needs constituents.

B. Of the first committee members appointed, four shall be appointed for terms of five years, four shall be appointed for terms of four years and four shall be appointed for terms of three years. Thereafter, appointed members shall be appointed for terms of five years. Members shall serve at the pleasure of the authority's governing body, and vacancies shall be filled by the authority's governing body. Members of the committee shall be eligible for reappointment.

C. The committee shall be advisory to the authority and shall be subject to oversight by the Mortgage Finance Authority Act oversight committee.

D. The committee shall review all project applications and make recommendations to the authority for funding them. The committee shall not be involved in or advisory to the authority in matters relating to the investment of the fund.

E. The committee shall adopt rules regarding:

(1) the time, place and procedures of committee meetings; and

(2) the procedures for the review of and standards for recommending applications for loans or grant projects.

Section 6. [NEW MATERIAL] AWARD OF FUNDS--ACCOUNTABILITY.--

A. Trust funds shall be awarded on a competitive basis. The authority's staff shall work with the committee to develop an application and applicant scoring mechanism that encourages applicants to develop solutions that are responsive to local needs and are consistent with sound housing policy.

B. The authority's governing body shall be responsible for ensuring that on an annual basis the total funds awarded for housing activities attract at least three times as much funding from other sources.

Section 7. [NEW MATERIAL] USE OF FUNDS--ELIGIBLE ACTIVITIES.--Money from the fund and matching funds from other sources may be used to finance in whole or in part any loans or grant projects that will provide housing for low-income persons and extremely low-income persons. Money deposited into the fund may be used annually as follows:

A. no more than five percent of the fund shall be used for expenses of administering the fund;

B. no less than fifteen percent of the fund shall be invested in a permanent capital fund, or fully amortizing interest-bearing mortgages secured by real property in New Mexico, the earnings on which may be used for purposes specified in this section;

C. no less than fifty-six percent of the fund shall be allocated to eligible organizations to make housing more accessible to low-income persons; and

D. no less than twenty-four percent of the fund shall be allocated to eligible organizations to make housing more accessible to extremely low-income persons.

Section 8. [NEW MATERIAL] CONFLICT WITH FEDERAL REQUIREMENTS.--If any part of the New Mexico Housing Trust Fund Act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of that act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of that act in its application to the agencies concerned. The rules adopted pursuant to the provisions of the New Mexico Housing Trust Fund Act shall meet those federal requirements that are a necessary condition to the receipt of federal funds by the state.

Section 9. [NEW MATERIAL] MATCHING FUNDS.--Money from the fund may be used to match federal, local or private money to be used for projects authorized under the New Mexico Housing Trust Fund Act.

Section 10. A new section of the Private Activity Bond Act is enacted to read:

"[NEW MATERIAL] USER FEE ON PRIVATE ACTIVITY BONDS--FINANCING FOR HOUSING.--The user shall pay a fee equal to fifteen-hundredths percent of each request for private activity bonds used to provide financing for housing. The fee shall be paid to the state board of finance for deposit in the New Mexico housing trust fund."

Section 11. Section 7-8A-13 NMSA 1978 (being Laws 1997, Chapter 25, Section 13) is amended to read:

"7-8A-13. DEPOSIT OF FUNDS.--

(a) Except as otherwise provided by this section, the administrator shall promptly deposit in the tax administration suspense fund for distribution to the [general fund] New Mexico housing trust fund of this state all funds received under the Uniform Unclaimed Property Act (1995), including the proceeds from the sale of abandoned property under Section [12 of that act] 7-8A-12 NMSA 1978. The administrator shall retain in the unclaimed property fund at least one hundred thousand dollars ($100,000), from which the administrator shall pay claims duly allowed. The administrator shall record the name and last known address of each person appearing from the holders' reports to be entitled to the property and the name and last known address of each insured person or annuitant and beneficiary and with respect to each policy or annuity listed in the report of an insurance company, its number, the name of the company and the amount due.

(b) Before making a deposit to the tax administration suspense fund, the administrator may deduct:

(1) expenses of sale of abandoned property;

(2) costs of mailing and publication in connection with abandoned property;

(3) reasonable service charges; and

(4) expenses incurred in examining records of holders of property and in collecting the property from those holders."

Section 12. Section 58-18-5 NMSA 1978 (being Laws 1975, Chapter 303, Section 5, as amended) is amended to read:

"58-18-5. POWERS OF THE AUTHORITY.--The authority shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of the Mortgage Finance Authority Act, including but without limiting the generality of the foregoing, the power:

A. to sue and be sued;

B. to have a seal and alter it at pleasure;

C. to make and alter bylaws for its organization and internal management;

D. to appoint other officers, agents and employees, prescribe their duties and qualifications and fix their compensation;

E. to acquire, hold, improve, mortgage, lease and dispose of real and personal property for its public purposes;

F. subject to the provisions of Section 58-18-6 NMSA 1978, to make loans, and contract to make loans, to mortgage lenders;

G. subject to the provisions of Section 58-18-7 NMSA 1978, to purchase, and contract to purchase, mortgage loans from mortgage lenders;

H. to procure or require the procurement of a policy of group or individual life insurance or disability insurance or both to insure repayment of mortgage loans in event of the death or disability of the borrower and to pay any premiums for the policy;

I. to procure insurance against any loss in connection with its operations, including without limitation the repayment of any mortgage loan, in amounts and from insurers, including the federal government, that the authority deems necessary or desirable; to procure liability insurance covering its members, officers and employees for acts performed within the scope of their authority as members, officers or employees; and to pay any premiums for insurance procured;

J. subject to any agreement with bondholders or noteholders:

(1) to renegotiate any mortgage loan or any loan to a mortgage lender in default;

(2) to waive any default or consent to the modification of the terms of any mortgage loan or any loan to a mortgage lender and otherwise exercise all powers with respect to its mortgage loans and loans to mortgage lenders that any private creditor may exercise under applicable law; and

(3) to commence, prosecute and enforce a judgment in any action or proceeding, including without limitation a foreclosure proceeding, to protect or enforce any right conferred upon it by law, mortgage loan agreement, contract or other agreement; and in connection with any such proceeding, to bid for and purchase the property or acquire or take possession of it and, in such event, complete, administer, pay the principal of and interest on any obligations incurred in connection with the property and operate or dispose of and otherwise deal with the property in such manner as the authority may deem advisable to protect its interests therein;

K. to make and execute contracts for the administration, servicing or collection of any mortgage loan and pay the reasonable value of services rendered to the authority pursuant to such contracts;

L. to fix, revise from time to time, charge and collect fees and other charges in connection with the making of mortgage loans, the purchasing of mortgage loans and any other services rendered by the authority;

M. subject to any agreement with bondholders or noteholders, to sell any mortgage loans at public or private sale at such prices and on such terms as the authority shall determine;

N. to borrow money and to issue bonds and notes that may be negotiable and to provide for the rights of the holders thereof;

O. to arrange for guarantees or other security, liquidity or credit enhancements in connection with its bonds, notes or other obligations by the federal government or by any private insurer or other provider and to pay any premiums therefor;

P. subject to any agreement with bondholders or noteholders, to invest money of the authority not required for immediate use, including proceeds from the sale of any bonds or notes:

(1) in obligations of any municipality or the state or the United States of America;

(2) in obligations the principal and interest of which are guaranteed by the state or the United States of America;

(3) in obligations of any corporation wholly owned by the United States of America;

(4) in obligations of any corporation sponsored by the United States of America that are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;

(5) in certificates of deposit or time deposits in banks qualified to do business in New Mexico, secured in the manner, if any, as the authority shall determine;

(6) in contracts for the purchase and sale of obligations of the types specified in this subsection; or

(7) as otherwise provided in any trust indenture or a resolution authorizing the issuance of the bonds or notes;

Q. subject to any agreement with bondholders or noteholders, to purchase bonds or notes of the authority at the price as may be determined by the authority or to authorize third persons to purchase bonds or notes of the authority; bonds or notes so purchased shall be canceled or resold, as determined by the authority;

R. to make surveys and to monitor on a continuing basis the adequacy of the supply of:

(1) funds available in the private banking system in the state for affordable residential mortgages; and

(2) adequate, safe and sanitary housing available to persons of low or moderate income in the state and various sections of the state;

S. to make and execute agreements, contracts and other instruments necessary or convenient in the exercise of the powers and functions of the authority under the Mortgage Finance Authority Act;

T. to employ architects, engineers, attorneys (other than and in addition to the attorney general of the state), accountants, housing, construction and financial experts and such other advisors, consultants and agents as may be necessary in its judgment and to fix and pay their compensation;

U. to contract for and to accept any gifts or grants or loans of funds or property or financial or other aid in any form from the federal government or from any other source and to comply, subject to the provisions of the Mortgage Finance Authority Act, with the terms and conditions thereof;

V. to maintain an office at such place in the state as it may determine;

W. subject to any agreement with bondholders and noteholders, to make, alter or repeal, subject to prior approval by the Mortgage Finance Authority Act oversight committee, hereby created, to be composed of four members appointed by the president pro tempore of the senate and four members appointed by the speaker of the house of representatives, such rules and regulations with respect to its operations, properties and facilities as are necessary to carry out its functions and duties in the administration of the Mortgage Finance Authority Act;

X. to make, purchase, guarantee, service and administer mortgage loans for residential housing for the purposes set forth in the Mortgage Finance Authority Act where private banking channels and private enterprise, unaided, have not, cannot or are unwilling to make, purchase, guarantee, service or administer the loans;

Y. to act as trustee and administer the land title trust fund created pursuant to Section 58-28-3 NMSA 1978;

Z. to act as trustee and administrator pursuant to the Low-Income Housing Trust Act; [and]

AA. to act as trustee and statewide administrator of the New Mexico housing trust fund pursuant to the New Mexico Housing Trust Fund Act; and

[AA.] BB. to do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in the Mortgage Finance Authority Act."

Section 13. APPROPRIATION.--

A. Five million dollars ($5,000,000) is appropriated from the general fund to the New Mexico housing trust fund for expenditure in fiscal year 2005 and subsequent years to carry out the purposes of the New Mexico Housing Trust Fund Act. Any unexpended or unencumbered balance at the end of a fiscal year shall not revert to the general fund.

B. The appropriation in Subsection A of this section is contingent upon the enactment into law of Senate Bill 441 of the second session of the forty-sixth legislature decoupling the New Mexico estate tax from the federal estate tax.

Section 14. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2004.

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