0316-sb 0422

CHAPTER 316

SB 422-FN - FINAL VERSION

AN ACT relative to the housing security guarantee loan program.

SPONSORS: Sen. D'Allesandro, Dist 20; Rep. Konys, Hills 33

This bill clarifies the process of securing funding for the department of health and human services' housing security guarantee loan program, and repeals certain references to the nonlapsing security deposit fund.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to the housing security guarantee loan program.

Be it Enacted by the Senate and House of Representatives in General Court convened:

316:1 Purpose. The general court recognizes that the housing security guarantee loan program has been an effective means of assisting low income families to overcome the barrier the cost of first month's rent and security deposit present to establishing a new home. As the costs of residential housing have escalated across the state of New Hampshire, the increasing amount of security deposit loans limits the number of low income families the housing security guarantee program can assist in accessing safe and affordable housing. The general court therefore acknowledges that in order to continue to provide comprehensive assistance to families in need, there must be an increase in the amount of funds that can be made available for such purposes.

316:2 Definitions; Guarantee Certificates. Amend RSA 126-A:52, II to read as follows:

II. "Guarantee certificate" means a document issued under this subdivision [~~that pledges the full faith and credit of the state of New Hampshire~~] for the payment of the security deposit it guarantees.

316:3 Allocation of the Housing Security Guarantee Program. Amend RSA 126-A:53, I to read as follows:

I. Upon application from a local housing security provider in such form as the department may require, the department may allocate and commit itself to issue, and the local housing security provider may be authorized to process applications and provide the ancillary services connected with the issuance of, guarantee certificates for the purposes of this subdivision. In no event shall the aggregate guarantee amounts allocated by the department to all local housing security providers exceed [~~$1,000,000~~] $2,000,000. The department shall allocate the aggregate guarantee certificate capacity authorized by this section in a manner which takes into account both housing needs and geographic diversity.

316:4 New Paragraph; Funding; Housing Security Guarantee Program. Amend RSA 126-A:53 by inserting after paragraph I the following new paragraph:

I-a. The department shall make payments either directly to the landlord or through the local housing security provider to the extent of the state's obligation under the terms of the guarantee certificates. The department shall be subrogated to the landlord's right title and interest in any amounts received pursuant to the lease or rental agreement. At the end of each fiscal year, the state treasurer shall reimburse the department for these amounts from funds not otherwise appropriated. The governor is hereby authorized to draw a warrant from funds not otherwise appropriated for the purposes of this subdivision.

316:5 New Paragraph; Reporting Requirements. Amend RSA 126-A:53 by inserting after paragraph II the following new paragraph:

III. The department shall make a report on or before December 1 of each year to the speaker of the house of representatives, the president of the senate, and the governor and council on the usage of the program and the success of its participants.

126-A:56 Periodic Payment Requirement. Beginning with the first month of tenancy and each month thereafter, a qualified tenant participating in this program shall make a monthly payment to the department of a fractional amount of the qualifying security deposit amount, which amount is determined by and adjustable with the approval of the local housing security provider. Notice of all adjustments to required payment amounts shall be forwarded to the department by the local housing security provider. The payments shall be made until the full amount of the security deposit guarantee has been received by the department. [~~Amounts received by the department shall be held in a fund, known as the security deposit fund, established in RSA 126-A:62 for this purpose.~~] In no event shall a qualified tenant's failure to make the periodic payments required by this section create a default under any lease or rental agreement for a subject housing unit. All amounts received by the department pursuant to RSA 126-A:56 shall not be a "security deposit" as defined by RSA 540-A:5, II.

126-A:58 Tenant's Right to Refund. In the event a tenancy is terminated before all periodic payments have been made to the department and no claim for redemption is brought by the landlord within the period specified, a qualified tenant may claim a refund of all payments made by the tenant and a cancellation of the tenant's written agreement to make any additional payments. The claims shall be brought by tenants within one year from the date of the termination of the tenancy. [~~All payment amounts unclaimed at the end of the one-year period shall be held in a fund established in RSA 126-A:62 for the purpose of making payments upon redemption of guarantee certificates.~~]

III. RSA 126-A:62, relative to the establishment of the nonlapsing security deposit fund.

AN ACT relative to the housing security guarantee loan program.

The Treasury Department indicated this bill will increase state expenditures by $111,950 in FY 2001, $109,400 in FY 2002, $106,850 in FY 2003, and $104,225 in FY 2004. There will be no fiscal impact on county and local expenditures or state, county and local revenue.

The Department determined the increase in state expenditures based on borrowing $1,000,000 using the 20-year bond model and existing interest rates. The Department states that $50,000 of the expenditures in each fiscal year would be a repayment of principal and the remainder would be interest expense.