hb69_LC_28_1973_a

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05 LC 28 1973

House Bill 69

By: Representatives Holmes of the 61st, Orrock of the 58th, Brooks of the 63rd, Thomas of the 55th, Bruce of the 64th, and others

A BILL TO BE ENTITLED
AN ACT

To amend Part 2 of Article 2 of Chapter 3 of Title 20 of the Official Code of Georgia Annotated, relating to the University System of Georgia, so as to establish the Multidisciplinary Center for Affordable Housing; to provide for its purposes; to provide for certain reports; to amend Chapter 6 of Title 48 of the Official Code of Georgia Annotated, relating to taxation of intangibles, so as to increase the real estate transfer tax and the intangible recording tax; to provide for the disposition of such increase; to amend Chapter 26 of Title 50 of the Official Code of Georgia Annotated, relating to the Georgia Housing and Finance Authority, so as to create the Georgia Housing Trust Fund, Housing Predevelopment Program, the Low-Income Citizens Emergency Home Repair Program, the State Apartment Incentive Loan Program, the Georgia Home Ownership Assistance Program, the Georgia Affordable Housing Guarantee Program, and the State Housing Initiatives Partnership Program; to provide for funding mechanisms, administration, eligibility, accountability, and operation of such programs; to provide additional duties, functions, and responsibilities of the Georgia Housing and Finance Authority; to provide for a contingency; to provide an effective date; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Part 2 of Article 2 of Chapter 3 of Title 20 of the Official Code of Georgia Annotated, relating to the University System of Georgia, is amended by adding a new Code Section 20-3-87 to read as follows:

"20-3-87.

(a) The board of regents shall establish the Multidisciplinary Center for Affordable Housing within the College of Architecture at the Georgia Institute of Technology. The center shall work in conjunction with other colleges in the University System of Georgia.

(b) The Multidisciplinary Center for Affordable Housing shall:

(1) Conduct research relating to the problems and solutions associated with the availability of affordable housing in the state for families who are below the median income level and widely disseminate the results of such research to appropriate public and private audiences within the state. Such research shall emphasize methods to improve the planning, design, and production of affordable housing, including, but not limited to, the financial, maintenance, management, and regulatory aspects of residential development;

(2) Provide public services to local, regional, and state agencies, units of government, and authorities by helping them create regulatory climates that are amenable to the introduction of affordable housing within their jurisdictions;

(3) Conduct special research relating to fire safety;

(4) Provide a focus for the teaching of new technology and skills relating to affordable housing in the state;

(5) Develop a base of informational and financial support from the private sector for the activities of the center;

(6) Develop prototypes for both multifamily and single-family housing units;

(7) Establish a research agenda and general work plan in cooperation with the Department of Community Affairs for research and planning for affordable housing and for training and technical assistance for providers of affordable housing; and

(8) Submit a report to the Governor, the President of the Senate, and the Speaker of the House of Representatives by January 1 of each year which shall include information relating to the activities of the center, including collaborative efforts with public and private entities, affordable housing models, and any other findings and recommendations related to the production of safe, decent, and affordable housing.

(c) The director of the Multidisciplinary Center for Affordable Housing shall be appointed by the dean of the College of Architecture at the Georgia Institute of Technology."

SECTION 2.

Chapter 6 of Title 48 of the Official Code of Georgia Annotated, relating to taxation of intangibles, is amended by striking Code Section 48-6-1, relating to real estate transfer tax rates, and inserting in lieu thereof a new Code Section 48-6-1 to read as follows:

"48-6-1.

(a) There is imposed a tax at the rate of $1.00 for the first $1,000.00 or fractional part of $1,000.00 and at the rate of 10¢ for each additional $100.00 or fractional part of $100.00 on each deed, instrument, or other writing by which any lands, tenements, or other realty sold is granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or purchasers, or any other person or persons by his or her or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance existing prior to the sale and not removed by the sale) exceeds $100.00.

(b) In addition to the amount specified in subsection (a) of this Code section, there is imposed an additional tax at the rate of 20¢ for the first $1,000.00 or fractional part of $1,000.00 and at the rate of 2¢ for each additional $100.00 or fractional part of $100.00 on each deed, instrument, or other writing by which any lands, tenements, or other realty sold is granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or purchasers, or any other person or persons by his or her or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance existing prior to the sale and not removed by the sale) exceeds $100.00."

SECTION 3.

Said chapter is further amended by striking Code Section 48-6-8, relating to the distribution of tax revenues among state and other tax jurisdictions and districts, and inserting in lieu thereof a new Code Section 48-6-8 to read as follows:

"48-6-8.

(a) At least once every 30 days, all revenues derived from the tax imposed by this article subsection (a) of Code Section 48-6-1 shall be distributed among the state and municipalities in which the real property is situated and the county in which the real property is situated in the same proportion that revenues derived from the taxes imposed by Article 3 of this chapter are divided. If the real property is situated in more than one county, the appropriate portion of the tax shall be equitably divided among the counties by the clerk of the superior court.

(b) At least once every 30 days, all revenues derived from the tax imposed by subsection (b) of Code Section 48-6-1 shall be transmitted to commissioner who shall deposit such revenues into the Georgia Housing Trust Fund created by Code Section 50-26-42."

SECTION 4.

Said chapter is further amended by striking Code Section 48-6-61, relating to the intangible recording tax, and inserting in lieu thereof a new Code Section 48-6-61 to read as follows:

"48-6-61.

(a) Every holder of a long-term note secured by real estate shall, within 90 days from the date of the instrument executed to secure the note, record the security instrument in the county in which is located the real estate conveyed or encumbered or upon which a lien is created to secure the note and shall present, prior to presenting the instrument to the clerk of superior court for recording, the security instrument to the collecting officer of the county in which the real estate is located. The collecting officer shall determine from the face of the security instrument the date of execution of the instrument, the maturity date of the note, and the principal amount of the note. There is imposed on each instrument an intangible recording tax at the rate of $1.50 for each $500.00 or fraction thereof of the face amount of the note secured by the recording of the security instrument. The collecting officer shall collect the tax due on the security instrument from the holder of the instrument; provided, however, that the holder may pass on the amount of such tax to the borrower or mortgagor but the amount of such tax passed to the borrower or mortgagor shall not be considered or treated as part of any finance charge imposed by the holder in connection with the loan transaction. If the security instrument reflects an amount greater than the principal amount of the note and, at the time the security instrument is presented for recording, the holder of the note also presents for recording with the security instrument said holdeŕs sworn statement itemizing the principal amount of the note and the other charges included within the amount shown on the face of the security instrument, the collecting officer shall determine the principal amount of the note from the sworn statement. The maximum amount of any intangible recording tax payable as provided in this Code section subsection with respect to any single note shall be $25,000.00.

(b) In addition to the amount imposed in subsection (a) of this Code section, there is imposed on each instrument an additional intangible recording tax at the rate of 20¢ for each $1,000.00 or fraction thereof of the face amount of the note secured by the recording of the security instrument. The collecting officer shall collect the tax due on the security instrument from the holder of the instrument; provided, however, that the holder may pass on the amount of such tax to the borrower or mortgagor but the amount of such tax passed to the borrower or mortgagor shall not be considered or treated as part of any finance charge imposed by the holder in connection with the loan transaction. If the security instrument reflects an amount greater than the principal amount of the note and, at the time the security instrument is presented for recording, the holder of the note also presents for recording with the security instrument said holdeŕs sworn statement itemizing the principal amount of the note and the other charges included within the amount shown on the face of the security instrument, the collecting officer shall determine the principal amount of the note from the sworn statement."

SECTION 5.

Said chapter is further amended by striking Code Section 48-6-72, relating to collection and distribution of revenues, and inserting in lieu thereof a new Code Section 48-6-72 to read as follows:

"48-6-72.

(a) The intangible recording tax imposed by Code Section 48-6-61 upon instruments securing long-term notes secured by real property shall be collected by the collecting officer of each county and said officer shall make the distributions in the manner provided for in this Code section.

(b) The governing authority of each county shall take into consideration any increase or decrease in the duties and responsibilities of the offices of the tax commissioner and the clerk of the superior court required by this article in establishing the annual budget for each such office and, where applicable, the affected officers shall cooperate fully in any transferring of responsibilities required under this Code section.

(c) The collecting officer, on the basis of the tax commissioneŕs or tax collectoŕs records and of certificates which shall be supplied by each school district, municipality, and other tax district in the county, shall distribute at least monthly the revenue collected under this article subsection (a) of Code Section 48-6-61. Each year the millage rates used in the distributions of revenue under this Code section shall be based upon the immediately preceding yeaŕs millage rate of each participating tax authority as provided in this article.

(d) Revenue derived from taxes under this article subsection (a) of Code Section 48-6-61 shall be divided among the state and all other tax jurisdictions and districts including, but not limited to, county and municipal districts, which levy or cause to be levied for their benefit a property tax on real and tangible personal property having the same taxable situs as the real property which is the subject of the intangible tax. The distribution shall be made according to the proportion that the millage rate levied for the state and each other tax jurisdiction or district respectively bears to the total millage rate levied for all purposes applicable to real and tangible personal property having the same taxable situs as the subject of the intangible tax. The revenue distributed to municipalities having independent school systems supported by taxes levied by the municipality shall be divided between the municipality and the independent school system according to the proportion that the millage rate levied by the municipality for nonschool purposes and the millage rate levied for school purposes bear to the total millage rate levied by the municipality for all purposes. The tax levied by this article subsection (a) of Code Section 48-6-61 shall be deemed to be levied by the participating tax authorities in the proportion that the millage rate of each participating tax authority bears to the aggregate millage rate of all the participating tax authorities.

(e) In the event any distribution or part of a distribution as provided in this article is adjudged to be invalid for any reason, such distribution or part of a distribution shall be paid into the general fund of the state in the same manner and for the same purposes as provided in this article for the statés share of the revenues derived from the tax imposed by this article subsection (a) of Code Section 48-6-61.

(f) The revenues derived from the tax imposed by subsection (b) of Code Section 48-6-61 shall be transferred to the commissioner for deposit in the Georgia Housing Trust Fund created by Code Section 50-26-42."

SECTION 6.

Said chapter is further amended by striking Code Section 48-6-74, relating to distribution of revenues from intangible recording tax, and inserting in lieu thereof a new Code Section 48-6-74 to read as follows:

"48-6-74.

All revenues derived from the intangible recording tax imposed by this article subsection (a) of Code Section 48-6-61 including, but not limited to, revenues from any imposition of the tax upon intangible trust property shall be distributed among the state, county, and municipality in which the real property is located in the same proportion that revenues derived from the intangible taxes imposed by Article 3 of this chapter are distributed. If the real property is located in more than one county, the appropriate portion of the intangible recording tax shall be distributed equitably by the commissioner among the affected counties."

SECTION 7.

Chapter 26 of Title 50 of the Official Code of Georgia Annotated, relating to the Georgia Housing and Finance Authority, is amended by designating the existing material within the chapter as Article 1 and inserting a new Article 2 to read as follows:

"ARTICLE 2

50-26-40.

This article is enacted pursuant to Article III, Section IX, Paragraph VI(n) of the Constitution, which provision authorizes increases in the state real estate transfer tax and the state intangible recording tax and provides that the proceeds derived therefrom may be used for the purpose of assisting low-income citizens and moderate-income citizens of this state in obtaining and maintaining affordable housing.

50-26-41.

As used in this article, the term:

(1) 'Authority' means the Georgia Housing and Finance Authority created in Code Section 50-26-5.

(2) 'Trust fund' means the Georgia Housing Trust Fund created by Code Section 50-26-42.

50-26-42.

(a) There is created the Georgia Housing Trust Fund as a separate fund in the state treasury. The director of the Office of Treasury and Fiscal Services shall credit to the trust fund all amounts transferred to such fund and shall invest the trust fund moneys in the same manner as authorized for investing other moneys in the state treasury. In addition, all loan repayments, penalties, and other fees and charges accruing to the trust fund shall also be credited to the trust fund. It is the intent of the General Assembly that all loan repayments, penalties, and other fees and charges collected be credited in full to the program account from which the loan originated.

(b) The authority may authorize the disbursement of available money from the trust fund for the purposes of assisting low-income citizens and moderate-income citizens of this state in obtaining and maintaining affordable housing. The authority may also authorize the disbursement of trust fund moneys for the actual and necessary operating expenses that the authority incurs in performing its duties in connection with the trust fund; provided, however, that such disbursements shall be kept at a minimum in furtherance of the primary purpose of the trust fund, which is to assist low-income citizens and moderate-income citizens of this state in obtaining and maintaining affordable housing.

(c) The authority shall prepare an annual report to the Governor and members of the General Assembly not later than December 31 of each year outlining the financial status of the trust fund and making any recommendations on how the trust fund can better achieve its mission of providing affordable housing in the state.

(d) The authority shall allocate 30 percent of the funds in the trust fund to the Housing Predevelopment Program, the Low-Income Citizens Emergency Home Repair Program, the State Apartment Incentive Loan Program, the Georgia Home Ownership Assistance Program, and the Georgia Affordable Housing Guarantee Program. The authority shall allocate the remaining funds to the State Housing Initiatives Partnership Program. Notwithstanding anything in this Code section to the contrary, the authority may establish reserve and similar accounts to ensure efficient and continued operation of the authority and its programs.

50-26-43.

(a) There is created the Housing Predevelopment Program which shall be administered by the authority using funds from the trust fund.

(b) As used in this Code section, the term:

(1) 'Community based organization' or 'not for profit organization' means any group that provides housing and other services on a not for profit basis, and which is acceptable to federal and state agencies and financial institutions as a sponsor of affordable housing.

(2) 'Eligible housing project' means a housing project proposed by an eligible sponsor which will ensure that a minimum of 20 percent of the completed housing units are rented or sold to very low-income persons or that a minimum of 50 percent of the completed housing units are rented or sold to low-income persons.

(3) 'Low-income persons' means one or more natural persons or a family, not including students, whose total annual household income does not exceed 80 percent of the median annual adjusted gross income for households within the state, or 80 percent of the median annual adjusted gross income for households within the metropolitan statistical area in which the person or family resides or, if not within a metropolitan statistical area, within the county in which the person or family resides, whichever is greater.

(4) 'Program' mean the Housing Predevelopment Program created by this Code section.

(5) 'Sponsor' means a unit of local government, a housing authority, a community based or not for profit organization, or a limited partnership if its general partner is a community based or not for profit organization that applies for and is awarded predevelopment expenses from the program.

(6) 'Student' means any person not living with that persońs parent or guardian who is eligible to be claimed by that persońs parent or guardian as a dependent under the federal income tax code and who is enrolled on at least a half-time basis in a secondary school, career center, community college, college, or university. The term does not include a person participating in an educational or training program approved by the authority.

(7) 'Target population' means very low-income persons and families and low-income persons and families.

(8) 'Very low-income persons' means one or more natural persons or a family, not including students, whose total annual household income does not exceed 50 percent of the median annual adjusted gross income for households within the state, or 50 percent of the median annual adjusted gross income for households within the metropolitan statistical area in which the person or family resides or, if not residing within a metropolitan statistical area, within the county in which the person or family resides, whichever is greater. The term also means, in projects for which the sponsor intends to use the federal low-income housing tax credit, persons or households having incomes that meet the eligibility requirements of Section 42 of the federal Internal Revenue Code of 1986.

(c)(1) The authority is authorized to make loans and grants from the program to eligible sponsors when it determines that:

(A) A need for housing for the target population exists in the area described in the application; and

(B) Federal, state, or local public funds or private funds are available or likely to be available to aid in the site acquisition, site development, construction, rehabilitation, maintenance, or support of the housing proposed in the application.

(2) If a loan is made, the authority is authorized to forgive such loan and thereby make a grant to a sponsor for any moneys which are unable to be repaid due to the sponsoŕs inability to obtain construction or permanent financing for the development. The authority shall not forgive the portion of the loan, if any, which is secured by a mortgage to the extent such loan could be repaid from the sale of the mortgaged property.

(3) The authority shall promulgate rules and regulations for the equitable distribution of the funds in a manner that meets the need and demand for housing for the target population. Funds shall be made available under the program on a first-come, first-served basis, unless otherwise established by rule or regulation of the authority.

(4) The activities of sponsors which are eligible for housing predevelopment loans and grants shall include, but not be limited to:

(A) Site acquisition;

(B) Site development;

(D) Marketing expenses relating to advertisement;

(E) Administrative expenses;

(F) Market and feasibility studies; and

(G) Consulting fees.

(5) Terms and conditions of housing predevelopment program loan agreements shall be established by rule and regulation and shall include:

(A) Provision for interest, which shall be set at between 0 and 3 percent per year, as established by the authority;

(B) Provision of a schedule for the repayment of principal and interest for a term not to exceed 3 years or initiation of permanent financing, whichever event occurs first. However, the authority may extend the term of a loan for an additional period if extraordinary circumstances exist and if such extension would not jeopardize the authoritýs security interest;

(C) Provision of reasonable security for the housing predevelopment loan to ensure the repayment of the principal and any interest accrued within the term specified;

(D) Provisions to ensure that the land acquired will be used for the development of housing and related services for the target population;

(E) Provisions to ensure, to the extent possible, that any accrued savings in cost due to the availability of these funds will be passed on to the target population in the form of lower land prices. The authority shall ensure that such savings in land prices shall be passed on in the form of lower prices or rents for dwellings constructed on such land; and

(F) Provisions to ensure that any land acquired for housing for the target population shall not be disposed of or alienated in a manner that violates Title VII of the federal 1968 Civil Rights Act, which specifically prohibits discrimination based on race, sex, color, religion, or national origin or that violates other applicable federal or state laws.

(6) No predevelopment loan made under this Code section shall exceed the lesser of:

(A) The development and acquisition costs for the project, as determined by rule and regulation of the authority; or

(B) Five hundred thousand dollars.

(7) Any real property or any portion thereof purchased or developed under this Code section may be disposed of by the eligible sponsor upon the terms and conditions established by rules and regulations of the authority at a price not to exceed the actual prorated land costs, development costs, accrued taxes, and interest.

(d) Applications shall be submitted to the authority in a form that it shall establish by rule or regulation. The authority shall establish the criteria for determining threshold compliance with authority objectives. Final decisions regarding funding shall be approved by the authority. The authority shall determine the tentative loan or grant amount available to each program participant. The actual loan or grant amount shall be determined pursuant to rule specifying credit underwriting procedures. The criteria to be used to determine threshold compliance shall include, but are not limited to, the following:

(1) Income target objectives of the authority;

(2) Sponsoŕs agreement to reserve more than the minimum number of units for low-income persons and very low-income persons;

(3) Projects requiring the least amount of predevelopment funds compared to total predevelopment costs;

(4) Sponsoŕs prior experience;

(5) Commitments of other financing;

(6) Sponsoŕs ability to proceed; and

(7) Project́s consistency with the local government comprehensive plan.

(e)(1) The authority may adopt rules and regulations necessary to implement this Code section and to further specify the purposes for which loan and grant funds may be expended, the required content of applications, the procedure for evaluating and competitively ranking all applications, and reporting requirements for sponsors awarded funds.

(2) The authority shall submit, within the annual report required by Code Section 50-26-42, a summary of loans and grants made, loan and grant recipients, loan commitments received by sponsors, persons or families housed, projects initiated and completed, and the balance on all loans outstanding at the end of each fiscal year.

(f) If a default on a loan occurs, the authority may foreclose on any mortgage or security interest or commence any legal action to protect the interest of the authority or the trust fund and recover the amount of the unpaid principal, accrued interest, and fees on behalf of the fund. The authority may also acquire real and personal property or any interest in the property if such acquisition is necessary or appropriate to protect any loan; sell, transfer, and convey any such property to a buyer; and, if such sale, transfer, or conveyance cannot be effected within a reasonable time, lease such property for occupancy by eligible persons. All sums recovered from the sale, transfer, conveyance, or lease of such property shall be deposited into the trust fund.

50-26-44.

(a) There is established the Low-Income Citizens Emergency Home Repair Program to assist low-income persons, especially the elderly and physically disabled, in making emergency repairs which directly affect their health and safety. This program shall be administered by the authority.

(b) As used in this Code section, the term:

(1) 'Grantee' means a local public or private nonprofit agency that receives funds from the authority to conduct a weatherization assistance program in one or more counties or a public or nonprofit agency chosen as outlined in this Code section.

(2) 'Program' means the Low-Income Citizens Emergency Home Repair Program created by this Code section.

(3) 'Subgrantee' means a local public or private nonprofit agency experienced in weatherization, emergency repairs, or rehabilitation of housing.

(c) A person is eligible to receive assistance under this Code section if that person has an income in relation to that persońs family size which is at or below 125 percent of the poverty level as specified annually in the federal Office of Management and Budget Poverty Guidelines. Eligible persons over 60 years of age and eligible persons who are physically disabled shall be given priority in the program.

(d)(1) Allowable repairs, including materials and labor, which may be charged under the program include:

(A) Correcting deficiencies in support beams, load-bearing walls, and floor joists;

(B) Repair or replacement of unsafe or nonfunctional space-heating or water-heating systems;

(C) Egress or physically disabled accessibility repairs, improvements, or assistive devices, including wheelchair ramps, steps, porches, handrails, or other health and safety measures;

(D) Plumbing, pump, well, and line repairs to ensure safe drinking water and sanitary sewage;

(E) Electrical repairs;

(F) Repairs to deteriorating walls, floors, and roofs; and

(G) Other interior and exterior repairs as necessary for the health and safety of the resident.

(2) Administrative expenses may not exceed 10 percent of the total grant funds.

(e) Each grantee shall be required to provide an in-kind or cash match of at least 20 percent of the funds granted. Grantees and subgrantees shall be encouraged to use community resources to provide such match, including family, church, and neighborhood volunteers and materials provided by local groups and businesses.

(f) Funds shall be distributed to grantees and subgrantees as follows:

(1) For each county, a base amount of at least $3,000.00 shall be set aside from the total funds available;

(2) The balance of the funds shall be divided by the total poverty population of the state, and this quotient shall be multiplied by each countýs share of the poverty population. That amount plus the base of at least $3,000.00 shall constitute each countýs share. A grantee which serves more than one county shall receive the base amount plus the poverty population share for each county to be served. Contracts with grantees may be renewed annually.

(g) The funds allocated to each county shall be offered first to an existing weatherization assistance program grantee in good standing, as determined by the authority, that can provide services to low-income persons, low-income elderly persons, and low-income physically disabled persons throughout the county.

(h) If a weatherization assistance program grantee is not available to serve the entire county, the funds shall be distributed through the following process:

(1) An announcement of funding availability shall be provided to the county. The county may elect to administer the program; and

(2) If the county elects not to administer the program, the authority shall establish rules to address the selection of one or more public or private not for profit agencies that are experienced in weatherization, rehabilitation, or emergency repair to administer the program.

(i) If no eligible agency agrees to serve a county, the funds for that county shall be distributed to grantees having the best performance record as determined by rule or regulation of the authority. At the end of the contract year, any uncontracted or unexpended funds shall be returned to the trust fund for reallocation in the next year.

(j) The authority may perform all actions appropriate and necessary to carry out the purposes of this Code section, including, but not limited to:

(1) Entering into contracts and agreements with the federal government, agencies of the state, local governments, or any person, association, corporation, or entity;

(2) Seeking and accepting funding from any public or private source; and

(3) Adopting and enforcing rules and regulations consistent with this Code section.

(k) The authority shall have all powers necessary or convenient to carry out and effectuate the purposes of this Code section, including the power to provide for the collection and payment of fees and charges, regardless of method of payment, including, but not limited to, reimbursement of costs of financing by the authority, credit underwriting fees, servicing charges, and insurance premiums determined by the authority to be reasonable and as approved by the authority. The fees and charges may be paid directly by the borrower to the insurer, lender, or servicing agent or may be deducted from the payments collected by such insurer, lender, or servicing agent.

50-26-45.

(a) There is created the State Apartment Incentive Loan Program for the purpose of providing first, second, or other subordinated mortgage loans or loan guarantees to sponsors, including for profit, nonprofit, and public entities, to provide housing affordable to very low-income persons.

(b) As used in this Code section, the term:

(2) 'Eligible housing project' means a housing project proposed by an eligible sponsor which will ensure that a minimum of 20 percent of the completed housing units are rented to very low-income persons.

(3) 'Program' means the State Apartment Incentive Loan Program created by this Code section.

(4) 'Sponsor' means a unit of local government, a housing authority, a community based or not for profit organization, or a limited partnership if its general partner is a community based or not for profit organization.

(5) 'Student' means any person not living with that persońs parent or guardian who is eligible to be claimed by that persońs parent or guardian as a dependent under the federal income tax code and who is enrolled on at least a half-time basis in a secondary school, career center, community college, college, or university. The term does not include a person participating in an educational or training program approved by the authority.

(6) 'Target population' means very low-income persons and families.

(7) 'Very low-income persons' means one or more natural persons or a family, not including students, whose total annual household income does not exceed 50 percent of the median annual adjusted gross income for households within the state, or 50 percent of the median annual adjusted gross income for households within the metropolitan statistical area in which the person or family resides or, if not residing within a metropolitan statistical area, within the county in which the person or family resides, whichever is greater. The term also means, in projects for which the sponsor intends to use the federal low-income housing tax credit, persons or households having incomes that meet the eligibility requirements of Section 42 of the federal Internal Revenue Code of 1986.

(c) Program funds shall be distributed over successive three-year periods in a manner that meets the need and demand for housing for the target population throughout the state. That need and demand must be determined by using the most recent state-wide low-income rental housing market studies available at the beginning of each three-year period. However, at least 10 percent of the program funds distributed during a three-year period must be allocated to each of the following categories of counties, as determined by using the population statistics published by the United States Bureau of the Census:

(1) Counties that have a population of more than 500,000 people;

(2) Counties that have a population between 100,000 and 500,000 people; and

(3) Counties that have a population of 100,000 people or fewer.

Any increase in funding required to reach the 10 percent minimum shall be taken from the county category that has the largest allocation. The authority shall adopt rules and regulations that establish an equitable process for distributing any portion of the 10 percent of program funds allocated to the county categories specified in this Code section which remain unallocated at the end of a three-year period. Counties that have a population of 100,000 people or fewer shall be given preference under these rules and regulations.

(d) The authority shall have the power to underwrite and make state apartment incentive loans or loan guarantees to sponsors, provided that:

(1) The sponsor uses tax-exempt financing for the first mortgage and at least 20 percent of the units in the project are set aside for persons or families who have incomes which meet the income eligibility requirements of Section 8 of the United States Housing Act of 1937, as amended;

(2) The sponsor uses taxable financing for the first mortgage and at least 20 percent of the units in the project are set aside for persons or families who have incomes below 50 percent of the state or local median income, whichever is higher, which shall be adjusted by the authority for family size;

(3) The sponsor uses the federal low-income housing tax credit, and the project meets the tenant income eligibility requirements of Section 42 of the federal Internal Revenue Code of 1986, as amended; or

(4) The project is located in a county that includes, or has included within the previous five years, an area of critical state concern designated or ratified by the authority for which the authority has declared its intent to provide affordable housing, and 100 percent of the units in the project are set aside for persons or families who have incomes below 120 percent of the state or local median income, whichever is higher, which shall be adjusted by the authority for family size.

This subsection shall not prohibit a tenant from qualifying under the income eligibility criteria of paragraphs (1) through (4) of this subsection due to the tenant́s participation in a job training program approved by the authority. Compliance with the provisions of this subsection must be contractually provided for the term of the loan or 12 years, whichever is longer; however, this subsection does not apply to loans made to housing communities for the elderly to provide for life safety, building preservation, health, sanitation, or security related repairs or improvements. Such loans shall be subject to tenant income criteria established by rule or regulation of the authority.

(e) During the first six months of loan or loan guarantee availability, program funds shall be reserved for use by sponsors who provide the housing set-aside required in subsection (d) of this Code section for the tenant groups designated in this subsection. The reservation of funds to each of these groups shall be determined using the most recent state-wide very low-income rental housing market study available at the time of publication of each notice of fund availability required by paragraph (2) of subsection (h) of this Code section. The reservation of funds within each notice of fund availability to the tenant groups in paragraphs (1), (2), and (4) of this subsection may not be less than 10 percent of the funds available at that time. Any increase in funding required to reach the 10 percent minimum shall be taken from the tenant group that has the largest reservation. The reservation of funds within each notice of fund availability to the tenant group in paragraph (3) of this subsection may not be less than 5 percent of the funds available at that time. The tenant groups are:

(1) Commercial fishing workers and farm workers;

(2) Families;

(3) Persons who are homeless; and

(4) Elderly persons.

Ten percent of the amount reserved for the elderly shall be reserved to provide loans to sponsors of housing for the elderly for the purpose of making building preservation, health, or sanitation repairs or improvements which are required by federal, state, or local regulation or code, or life safety or security related repairs or improvements to such housing. Such a loan may not exceed $200,000.00 per housing community for the elderly. In order to receive the loan, the sponsor of the housing community must make a commitment to match at least 15 percent of the loan amount to pay the cost of such repair or improvement. The authority shall establish the rate of interest on the loan, which may not exceed 3 percent, and the term of the loan, which may not exceed 15 years. The term of the loan shall be established on the basis of a credit analysis of the applicant. The authority shall establish, by rule and regulation, the procedure and criteria for receiving, evaluating, and competitively ranking all applications for loans under this Code section. A loan application must include evidence of the first mortgageés having reviewed and approved the sponsoŕs intent to apply for a loan. A nonprofit organization or sponsor may not use the proceeds of the loan to pay for administrative costs, routine maintenance, or new construction.

(f) Loans shall be in an amount not to exceed the lesser of 25 percent of the total project cost or the minimum amount required to make the project economically feasible.

(g) The amount of the mortgage provided under this program combined with any other mortgage in a superior position shall be less than the value of the project without the housing set-aside required by subsection (d) of this Code section. However, the authority may waive this requirement for projects in rural areas or urban infill areas which have market rate rents that are less than the allowable rents pursuant to applicable state and federal guidelines. In no event shall the mortgage provided under this program combined with any other mortgage in a superior position exceed total project cost.

(h) On all state apartment incentive loans, except loans made to housing communities for the elderly to provide for life safety, building preservation, health, sanitation, or security related repairs or improvements, the following provisions shall apply:

(1) The authority shall establish reasonable interest rates;

(2) The authority shall publish a notice of fund availability in a publication of general circulation throughout the state. Such notice shall be published at least 60 days prior to the application deadline and shall provide notice of the temporary reservations of funds established in subsection (e) of this Code section;

(3) The authority shall provide by rule or regulation for the establishment of a review committee composed of the authority staff and shall establish by rule or regulation a scoring system for evaluation and competitive ranking of applications submitted in this program, including, but not limited to, the following criteria:

(A) Tenant income and demographic targeting objectives of the authority;

(B) Targeting objectives of the authority which will ensure an equitable distribution of loans between rural and urban areas;

(C) Sponsoŕs agreement to reserve the units for persons or families who have incomes below 50 percent of the state or local median income, whichever is higher, for a time period to exceed the minimum required by federal law or the provisions of this Code section;

(D) Sponsoŕs agreement to reserve more than 20 percent of the units in the project for persons or families who have incomes that do not exceed 50 percent of the state or local median income, whichever is higher, or 40 percent of the units in the project for persons or families who have incomes that do not exceed 60 percent of the state or local median income, whichever is higher, without requiring a greater amount of the loans as provided in this Code section;

(E) Provision for tenant counseling;

(F) Sponsoŕs agreement to accept rental assistance certificates or vouchers as payment for rent; however, when certificates or vouchers are accepted as payment for rent on units set aside pursuant to subsection (d) of this Code section, the benefit must be divided between the authority and the sponsor, as provided by rule or regulation of the authority;

(G) Projects requiring the least amount of a state apartment incentive loan compared to overall project cost;

(H) Local government contributions and local government comprehensive planning and activities that promote affordable housing;

(I) Project feasibility;

(J) Economic viability of the project;

(K) Commitment of first mortgage financing;

(L) Sponsoŕs prior experience;

(M) Sponsoŕs ability to proceed with construction; and

(N) Projects that directly implement or assist welfare-to-work transition;

(4) The authority may reject any and all applications;

(5) The authority may approve and reject applications for the purpose of achieving geographic targeting;

(6) The review committee established by rule or regulation of the authority pursuant to this subsection shall make recommendations to the authority regarding program participation under the State Apartment Incentive Loan Program. The authority shall make the final ranking and the decisions regarding which applicants shall become program participants based on the scores received in the competitive ranking, further review of applications, and the recommendations of the review committee. The authority shall approve or reject applications for loans and shall determine the tentative loan amount available to each applicant selected for participation in the program. The actual loan amount shall be determined by the authority in consideration of the funds available and the applications under consideration;

(7) The loan term shall be for a period of not more than 15 years; however, if both a program loan and federal low-income housing tax credits are to be used to assist a project, the authority may set the loan term for a period commensurate with the investment requirements associated with the tax credit syndication. The term of the loan may also exceed 15 years if necessary to conform to requirements of the Federal National Mortgage Association. The authority may renegotiate and extend the loan in order to extend the availability of housing for the targeted population. The term of a loan may not extend beyond the period for which the sponsor agrees to provide the housing set-aside required by subsection (d) of this Code section;

(8) The loan shall be subject to sale, transfer, or refinancing. However, all requirements and conditions of the loan shall remain following sale, transfer, or refinancing;

(9) The authority shall not discriminate based on race, sex, color, religion, or national origin in considering and approving loans under this Code section;

(10) The authority may require units dedicated for the elderly;

(11) Rent controls shall not be allowed on any project except as required in conjunction with the issuance of tax-exempt bonds or federal low-income housing tax credits;

(12) The proceeds of all loans shall be used for new construction or substantial rehabilitation which creates affordable, safe, and sanitary housing units;

(13) Sponsors shall annually certify the adjusted gross income of all persons or families qualified under subsection (d) of this Code section at the time of initial occupancy who are residing in a project funded by this program. All persons or families qualified under subsection (d) of this Code section may continue to qualify under subsection (d) of this Code section in a project funded by this program if the adjusted gross income of those persons or families at the time of annual recertification meets the requirements established in Section 142(d)(3)(B) of the Internal Revenue Code of 1986, as amended. If the annual recertification of persons or families qualifying under subsection (d) of this Code section results in noncompliance with income occupancy requirements, the next available unit must be rented to a person or family qualifying under subsection (d) of this Code section in order to ensure continuing compliance of the project;

(14) Upon submission and approval of a marketing plan which demonstrates a good faith effort of a sponsor to rent a unit or units to persons or families reserved under subsection (e) of this Code section and qualified under subsection (d) of this Code section, the sponsor may rent such unit or units to any person or family qualified under subsection (d) of this Code section notwithstanding the reservation; and

(15) Sponsors may participate in federal mortgage insurance programs and must abide by the requirements of those programs. If a conflict occurs between the requirements of federal mortgage insurance programs and the requirements of this Code section, the requirements of federal mortgage insurance programs shall take precedence.

(i) All loan repayments, proceeds from the sale of any property, and any other proceeds that would otherwise accrue pursuant to the activities conducted under the provisions of the program shall be deposited in the trust fund.

(j) If a default on a loan occurs, the authority may foreclose on any mortgage or security interest or commence any legal action to protect the interest of the authority or the trust fund and recover the amount of the unpaid principal, accrued interest, and fees on behalf of the fund. The authority may acquire real and personal property or any interest therein when that acquisition is necessary or appropriate to protect any loan; sell, transfer, and convey any such property to a buyer; and, if that sale, transfer, or conveyance cannot be effected within a reasonable time, lease such property for occupancy by eligible persons. All sums recovered from the sale, transfer, conveyance, or lease of such property shall be deposited into the trust fund.

50-26-46.

(a) There is created the Georgia Home Ownership Assistance Program for the purpose of assisting low-income persons in purchasing a home by reducing the cost of the home with below-market construction financing, by reducing the amount of down payment and closing costs paid by the borrower to a maximum of 5 percent of the purchase price, or by reducing the monthly payment to an affordable amount for the purchaser. Loans shall be made available at an interest rate that does not exceed 3 percent. The balance of any loan is due at closing if the property is sold or transferred.

(b) As used in this Code section, the term:

(1) 'Low-income persons' means one or more natural persons or a family, not including students, whose total annual household income does not exceed 80 percent of the median annual adjusted gross income for households within the state, or 80 percent of the median annual adjusted gross income for households within the metropolitan statistical area in which the person or family resides or, if not within a metropolitan statistical area, within the county in which the person or family resides, whichever is greater.

(2) 'Program' means the Georgia Home Ownership Assistance Program created by this Code section.

(1) Subordinated loans to eligible borrowers for down payments or closing costs related to the purchase of the borroweŕs primary residence;

(2) Permanent loans to eligible borrowers related to the purchase of the borroweŕs primary residence; or

(3) Subordinated loans to nonprofit sponsors or developers of housing for construction financing of housing to be offered for sale to eligible borrowers as a primary residence at an affordable price.

(c) For loans made under paragraph (1) or (2) of subsection (c) of this Code section, the authority may underwrite and make mortgage loans through the program to persons or families who have incomes that do not exceed 80 percent of the state or local median income, whichever is greater, adjusted for family size. Loans shall be made available for the term of the first mortgage. Loans are limited to the lesser of 25 percent of the purchase price of the home or the amount necessary to enable the purchaser to meet credit underwriting criteria.

(d) For loans made under paragraph (3) of subsection (c) of this Code section, availability shall be limited to nonprofit sponsors or developers who are selected for program participation pursuant to this Code section. Preference shall be given to community based organizations as defined in paragraph (1) of subsection (c) of Code Section 50-26-43. Priority must be given to projects that have received state assistance in funding project predevelopment costs. The benefits of making such loans shall be contractually provided to the persons or families purchasing homes financed under this Code section. At least 30 percent of the units in a project financed pursuant to this Code section must be sold to persons or families who have incomes that do not exceed 80 percent of the state or local median income, whichever amount is greater, adjusted for family size; and at least another 30 percent of the units in a project financed pursuant to this Code section must be sold to persons or families who have incomes that do not exceed 50 percent of the state or local median income, whichever amount is greater, adjusted for family size. The maximum loan amount may not exceed 33 percent of the total project cost. A person who purchases a home in a project financed under this subsection is eligible for a loan authorized by paragraph (1) or (2) of subsection (c) of this Code section in an aggregate amount not exceeding the construction loan made pursuant to this subsection. The home purchaser must meet all the requirements for loan recipients established pursuant to the applicable loan program. The authority shall provide, by rule or regulation, for the establishment of a review committee composed of staff of the authority and shall establish, by rule or regulation, a scoring system for evaluating and ranking applications submitted for construction loans under this subsection, including, but not limited to, the following criteria:

(1) The affordability of the housing proposed to be built;

(2) The direct benefits of the assistance to the persons who will reside in the proposed housing;

(3) The demonstrated capacity of the applicant to carry out the proposal, including the experience of the development team;

(4) The economic feasibility of the proposal;

(5) The extent to which the applicant demonstrates potential cost savings by combining the benefits of different governmental programs and private initiatives, including the local government contributions and local government comprehensive planning and activities that promote affordable housing;

(6) The use of the least amount of program loan funds compared to overall project cost;

(7) The provision of home ownership counseling;

(8) The applicant́s agreement to exceed the requirements of this subsection with regard to the number of units set aside for low-income persons or families;

(9) The commitment of first mortgage financing for the balance of the construction loan and for the permanent loans to the purchasers of the housing;

(10) The applicant́s ability to proceed with construction;

(11) The targeting objectives of the authority which will ensure an equitable distribution of loans between rural and urban areas; and

(12) The extent to which the proposal will further the purposes of this program.

The authority may reject any and all applications. The review committee established by rule or regulation pursuant to this subsection shall make recommendations to the authority regarding program participation under this subsection. The authority shall make the final ranking for participation based on the scores received in the ranking, further review of the applications, and the recommendations of the review committee. The authority shall approve or reject applicants for loans and shall determine the tentative loan amount available to each program participant. The final loan amount shall be determined pursuant to rule or regulation.

(e) The authority shall publish a notice of fund availability in a publication of general circulation throughout the state at least 60 days prior to the anticipated availability of funds.

(f) During the first nine months of fund availability:

(1) Sixty percent of the program funds shall be reserved for use by borrowers pursuant to paragraph (1) of subsection (c) of this Code section;

(2) Twenty percent of the program funds shall be reserved for use by borrowers pursuant to paragraph (2) of subsection (c) of this Code section; and

(3) Twenty percent of the program funds shall be reserved for use by borrowers pursuant to paragraph (3) of subsection (c) of this Code section.

If the application of these percentages would cause the reservation of program funds under paragraph (1) of this subsection to be less than $1 million, the reservation for paragraph (1) of this subsection shall be increased to $1 million or all available funds, whichever amount of this subsection is less, with the increase to be accomplished by reducing the reservation for paragraph (2) of this subsection and, if necessary, paragraph (3) of this subsection.

(g) All loan repayments, proceeds from the sale of any property, and any other proceeds that would otherwise accrue pursuant to the activities of the programs described in this Code section shall be deposited in the trust fund.

50-26-47.

(a) There is created the Georgia Affordable Housing Guarantee Program for the purposes of:

(1) Stimulating creative private sector lending activities to increase the supply and lower the cost of financing or refinancing eligible housing;

(2) Creating security mechanisms to allow lenders to sell affordable housing loans in the secondary market; and

(3) Encouraging affordable housing lending activities that would not have taken place or that serve persons who would not have been served but for the creation of this program.

(b) As used in this Code section, the term:

(1) 'Affordable housing guarantee' means an obligation of the guarantee program to guarantee the payment of an obligation made to finance or refinance the purchase, construction, or rehabilitation of eligible housing.

(2) 'Annual debt service reserve' means the reserve maintained in the guarantee program in an amount equal to the maximum reserve amount for each series of revenue bonds issued to establish the guarantee fund.

(3) 'Eligible housing' means any real and personal property designed and intended for the primary purpose of providing decent, safe, and sanitary residential units for home ownership or rental for eligible persons, including specifically housing for the homeless, as determined by the authority pursuant to rule or regulation.

(4) 'Guarantee program' means the Georgia Affordable Housing Guarantee Program which shall be funded through the trust fund and with proceeds of revenue bonds issued by the authority.

(5) 'Maximum reserve amount' means, for each series of outstanding revenue bonds issued to fund the guarantee program, the largest aggregate amount of annual principal installments and interest payments becoming due in any state fiscal year in which the revenue bonds are outstanding.

(c) The authority, by rule or regulation, may establish rates and fees for the issuance of an affordable housing guarantee, including contractual provisions to foster reimbursement, in the event of default, to the guarantee program of payments made pursuant to an affordable housing guarantee issued for eligible housing.

(d) The authority may issue, in accordance with Article 3 of Chapter 82 of Title 36, the 'Revenue Bond Law,' revenue bonds of the authority to establish and fund the guarantee program. Such revenue bonds shall be primarily payable from and secured by annual debt service reserves; from interest earned on funds on deposit in the guarantee program; from fees, charges, and reimbursements established by the authority for the issuance of affordable housing guarantees; and from any other revenue sources received by the authority for such guarantee program for the issuance of affordable housing guarantees. To the extent such primary revenue sources are considered insufficient by the authority, pursuant to the certification provided in subsection (e) of this Code section, to fund fully the annual debt service reserve, the certified deficiency in such reserve shall be additionally payable from the trust fund.

(e) If the primary revenue sources to be used for repayment of revenue bonds used to establish and fund the guarantee program are insufficient for such repayment, the annual principal and interest due on each series of revenue bonds shall be payable from funds in the annual debt service reserve. The authority shall, before June 1 of each year, perform a financial audit to determine whether at the end of the fiscal year there will be on deposit in the guarantee program an annual debt service reserve from interest earned pursuant to the investment of guarantee funds and from fees, charges, and reimbursements received from issued affordable housing guarantees and other revenue sources available to the authority. Based upon the findings in such guarantee program financial audit, the authority shall certify the amount of any projected deficiency in the annual debt service reserve for any series of outstanding bonds as of the end of the fiscal year and the amount necessary to maintain such annual debt service reserve. Upon such certification, the authority shall transfer to the annual debt service reserve, from the trust fund, the amount certified as necessary to maintain the annual debt service reserve.

(f) Funds on deposit in the guarantee program shall be used as the primary resource to support the performance by the authority of its obligation under an affordable housing guarantee issued by the authority as determined by rule or regulation of the authority. Such funds shall not be subject to lapse at the end of the fiscal year.

(g) Before establishing the fees, charges, and other obligations and conditions for the issuance of an affordable housing guarantee and defining housing eligible to obtain a guarantee, the authority shall perform an affordable housing guarantee feasibility study. Such study must determine the eligible housing for which a guarantee is required for the investment of private capital, the anticipated risk of default for classifications of eligible housing, and the level of fees, charges, and reimbursement conditions necessary to establish a financially sound affordable housing guarantee program that exposes funds deposited into the guarantee program to a reasonable or acceptable level of risk. Revenue bonds may not be issued to create and establish a guarantee program until the completion of an initial financial feasibility study.

(h) This Code section does not preclude the use of the remaining funds in the trust fund.

(i) The maximum total amount of revenue bonds that may be issued by the authority pursuant to this Code section is $400 million.

50-26-48.

(a) There is created the State Housing Initiatives Partnership Program for the purpose of providing funds to counties and eligible municipalities as an incentive for the creation of local housing partnerships, to expand production of and preserve affordable housing, to further the housing element of the local government comprehensive plan specific to affordable housing, and to increase housing related employment. The General Assembly finds that affordable housing is most effectively provided by combining available public and private resources to conserve and improve existing housing and provide new housing for very low-income households, low-income households, and moderate-income households. The General Assembly intends to encourage partnerships in order to secure the benefits of cooperation by the public and private sectors and to reduce the cost of housing for the target population by effectively combining all available resources and cost-saving measures. The General Assembly further intends that local governments achieve this combination of resources by encouraging active partnerships between government, lenders, builders and developers, real estate professionals, advocates for low-income persons, and community groups to produce affordable housing and provide related services. Extending the partnership concept to encompass cooperative efforts among small counties and among counties and municipalities is specifically encouraged. Local governments are also intended to establish an affordable housing advisory committee to recommend monetary and nonmonetary incentives for affordable housing. The General Assembly further intends that the program provide the maximum flexibility to local governments to determine the use of funds for housing programs while ensuring accountability for the efficient use of public resources and guaranteeing that benefits are provided to those in need.

(b) As used in this Code section, the term:

(1) 'Adjusted for family size' means adjusted in a manner that results in an income eligibility level that is lower for households having fewer than four people, or higher for households having more than four people, than the base income eligibility determined as provided in paragraphs (19), (20), and (29) of this subsection, based upon a formula established by the United States Department of Housing and Urban Development.

(2) 'Affordable' means that monthly rents or monthly mortgage payments including taxes and insurance do not exceed 30 percent of that amount which represents the percentage of the median annual gross income for the households as indicated in paragraphs (19), (20), and (29) of this subsection. However, it is not the intent to limit an individual household́s ability to devote more than 30 percent of its income for housing, and housing for which a household devotes more than 30 percent of its income shall be deemed affordable if the first institutional mortgage lender is satisfied that the household can afford mortgage payments in excess of the 30 percent benchmark.

(3) 'Affordable housing advisory committee' means the committee appointed by the governing body of a county or eligible municipality for the purpose of recommending specific initiatives and incentives to encourage or facilitate affordable housing as provided in this Code section.

(4) 'Annual gross income' means annual income as defined under the Section 8 housing assistance payments programs in 24 C.F.R. Part 5; annual income as reported under the census long form for the most recent available decennial census; or adjusted gross income as defined for purposes of reporting under the federal Internal Revenue Service Form 1040 for individual federal annual income tax purposes. Counties and eligible municipalities shall calculate income by annualizing verified sources of income for the household as the amount of income to be received in a household during the 12 months following the effective date of the determination.

(5) 'Award' means a loan, grant, or subsidy funded wholly or partially by the local housing assistance trust fund.

(6) 'Community based organization' means a nonprofit organization that has among its purposes the provision of affordable housing to persons who have special needs or have very low income, low income, or moderate income within a designated area, which may include a municipality, a county, or more than one municipality or county, and maintains, through a minimum of one-third representation on the organizatiońs governing board, accountability to housing program beneficiaries and residents of the designated area. A community housing development organization established pursuant to 24 C.F.R. Part 92.2 is an example of a community based organization.

(7) 'Eligible housing' means any real and personal property located within the county or the eligible municipality which is designed and intended for the primary purpose of providing decent, safe, and sanitary residential units that are designed to meet the standards for home ownership or rental for eligible persons as designated by each county or eligible municipality participating in the State Housing Initiatives Partnership Program.

(8) 'Eligible municipality' means a municipality that is eligible for federal community development block grant entitlement moneys as an entitlement community identified in 24 C.F.R. Section 570, subpart D, Entitlement Grants. An eligible municipality that defers its participation in community development block grants does not affect its eligibility for participation in the State Housing Initiatives Partnership Program.

(9) 'Eligible person' or 'eligible household' means one or more natural persons or a family determined by the county or eligible municipality to be of very low income, low income, or moderate income according to the income limits adjusted to family size published annually by the United States Department of Housing and Urban Development based upon the annual gross income of the household.

(10) 'Eligible sponsor' means a person or a private or public for profit or not for profit entity that applies for an award under the local housing assistance plan for the purpose of providing eligible housing for eligible persons.

(11) 'Grant' means an award from the local housing assistance trust fund to an eligible sponsor or eligible person to partially assist in the construction, rehabilitation, or financing of eligible housing or to provide the cost of tenant or ownership qualifications without requirement for repayment so long as the condition of award is maintained.

(12) 'Loan' means an award from the local housing assistance trust fund to an eligible sponsor or eligible person to partially finance the acquisition, construction, or rehabilitation of eligible housing with requirement for repayment or provision for forgiveness of repayment if the condition of the award is maintained.

(13) 'Local housing assistance plan' means a concise description of the local housing assistance strategies and local housing incentive strategies adopted by local government resolution with an explanation of the way in which the program meets the requirements of this Code section and the rules and regulations of the authority.

(14) 'Local housing assistance strategies' means the housing construction, rehabilitation, repair, or finance program implemented by a participating county or eligible municipality with the local housing distribution or other funds deposited into the local housing assistance trust fund.

(15) 'Local housing distributions' means funds distributed by the authority from the trust fund to counties and eligible municipalities participating in the State Housing Initiatives Partnership Program.

(16) 'Local housing incentive strategies' means local regulatory reform or incentive programs to encourage or facilitate affordable housing production, which include, at a minimum, assurance that permits for the construction of affordable housing projects are expedited to a greater degree than other projects; an ongoing process for review of local policies, ordinances, regulations, and plan provisions that increase the cost of housing prior to their adoption; and a schedule for implementing the incentive strategies. Local housing incentive strategies may also include other regulatory reforms adopted by the local governing body.

(17) 'Local housing partnership' means the implementation of the local housing assistance plan in a manner that involves the applicable county or eligible municipality, lending institutions, housing builders and developers, real estate professionals, advocates for low-income persons, community based housing and service organizations, and providers of professional services relating to affordable housing. The term includes initiatives to provide support services for housing program beneficiaries such as training to prepare persons for the responsibility of home ownership, the counseling of tenants, and the establishing of support services such as day care, health care, and transportation.

(18) 'Local housing trust fund' means the account established by a recipient county or municipality pursuant to subsection (p) of this Code section.

(19) 'Low-income person' or 'low-income household' means one or more natural persons or a family that has a total annual gross household income that does not exceed 80 percent of the median annual income adjusted for family size for households within the metropolitan statistical area, the county, or the nonmetropolitan median for the state, whichever amount is greatest. With respect to rental units, the low-income household́s annual income at the time of initial occupancy may not exceed 80 percent of the areás median income adjusted for family size. While occupying the rental unit, a low-income household́s annual income may increase to an amount not to exceed 140 percent of 80 percent of the areás median income adjusted for family size.

(20) 'Moderate-income person' or 'moderate-income household' means one or more natural persons or a family that has a total annual gross household income that does not exceed 120 percent of the median annual income adjusted for family size for households within the metropolitan statistical area, the county, or the nonmetropolitan median for the state, whichever is greatest. With respect to rental units, the moderate-income household́s annual income at the time of initial occupancy may not exceed 120 percent of the areás median income adjusted for family size. While occupying the rental unit, a moderate-income household́s annual income may increase to an amount not to exceed 140 percent of 120 percent of the areás median income adjusted for family size.

(21) 'Personal property' means major appliances, including a freestanding refrigerator or stove, to be identified on the encumbering documents.

(22) 'Plan amendment' means the addition or deletion of a local housing assistance strategy or local housing incentive strategy. Plan amendments must at all times maintain consistency with program requirements and must be submitted to the authority for review pursuant to this Code section. Technical or clarifying revisions may not be considered plan amendments but must be transmitted to the authority for purposes of notification.

(23) 'Population' means the latest official state estimate of population by the United States Bureau of the Census prior to the beginning of the state fiscal year.

(24) 'Program' means the State Housing Initiatives Partnership Program created by this Code section.

(25) 'Program income' means the proceeds derived from interest earned on or investment of the local housing distribution and other funds deposited into the local housing assistance trust fund, proceeds from loan repayments, recycled funds, and all other income derived from use of funds deposited in the local housing assistance trust fund. The term does not include recaptured funds as defined in paragraph (26) of this subsection.

(26) 'Recaptured funds' means funds that are recouped by a county or eligible municipality in accordance with the recapture provisions of its local housing assistance plan pursuant to this Code section from eligible persons or eligible sponsors who default on the terms of a grant award or loan award.

(27) 'Rent subsidies' means ongoing monthly rental assistance. The term does not include initial assistance to tenants, such as grants or loans for security and utility deposits.

(28) 'Sales price' or 'value' means, in the case of acquisition of an existing or newly constructed unit, the amount on the executed sales contract. For eligible persons who are building a unit on land that they own, the sales price is determined by an appraisal performed by a certified appraiser. The appraisal must include the value of the land and the improvements using the after-construction value of the property and must be dated within 12 months of the date construction is to commence. The sales price of any unit must include the value of the land in order to qualify as eligible housing as defined in paragraph (7) of this subsection. In the case of rehabilitation or emergency repair of an existing unit that does not create additional living space, sales price or value means the value of the real property, as determined by an appraisal performed by a certified appraiser and dated within 12 months of the date construction is to commence or the assessed value of the real property as determined by the county property appraiser. In the case of rehabilitation of an existing unit that includes the addition of new living space, sales price or value means the value of the real property, as determined by an appraisal performed by a certified appraiser and dated within 12 months of the date construction is to commence or the assessed value of the real property as determined by the county property appraiser, plus the cost of the improvements in either case.

(29) 'Very low-income person' or 'very low-income household' means one or more natural persons or a family that has a total annual gross household income that does not exceed 50 percent of the median annual income adjusted for family size for households within the metropolitan statistical area, the county, or the nonmetropolitan median for the state, whichever is greatest. With respect to rental units, the very low-income household́s annual income at the time of initial occupancy may not exceed 50 percent of the areás median income adjusted for family size. While occupying the rental unit, a very low-income household́s annual income may increase to an amount not to exceed 140 percent of 50 percent of the areás median income adjusted for family size.

(c)(1) To be eligible to receive funds under the program, a county or eligible municipality must:

(A) Submit to the authority its local housing assistance plan describing the local housing assistance strategies established pursuant to this Code section;

(B) Within 12 months after adopting the local housing assistance plan, amend the plan to incorporate its local housing incentive strategies; and

(C) Within 24 months after adopting the amended local housing assistance plan to incorporate the local housing incentive strategies, amend its land development regulations or establish local policies and procedures, as necessary, to implement the local housing incentive strategies adopted by the local governing body.

(2) A county or an eligible municipality seeking approval to receive its share of the local housing distribution must adopt an ordinance containing the following provisions:

(A) Creation of a local housing assistance trust fund as described in this Code section;

(B) Adoption by resolution of a local housing assistance plan to be implemented through a local housing partnership;

(C) Designation of the responsibility for the administration of the local housing assistance plan. Such ordinance may also provide for the contracting of all or part of the administrative or other functions of the program to a third person or entity; and

(D) Creation of an affordable housing advisory committee.

The ordinance must not take effect until at least 30 days after the date of formal adoption.

(d)(1) The governing authority of the county or of an eligible municipality must submit to the authority one copy of its local housing assistance plan. The transmittal of the plan must include a copy of the ordinance, the adopting resolution, the local housing assistance plan, and such other information as the authority may require by rule or regulation; however, information to be included in the plan is intended to demonstrate consistency with the requirements of this Code section and the rules and regulations of the authority without posing an undue burden on the local government. Plans shall be reviewed by a committee composed of staff of the authority as established by rule or regulation of the authority.

(2) Within 30 days after receiving a plan, the review committee shall review the plan and either approve it or identify inconsistencies with the requirements of the program. The authority shall assist a local government in revising its plan if it initially proves to be inconsistent with program requirements. A plan that is revised by the local government to achieve consistency with program requirements shall be reviewed within 30 days after submission. The deadlines for submitting original and revised plans shall be established by rule or regulation of the authority.

(3) The General Assembly intends that approval of plans be expedited to ensure that the production of needed housing and the related creation of jobs occur as quickly as possible. After being approved for funding, a local government may amend by resolution its local housing assistance plan if the plan as amended complies with program requirements; however, a local government must submit its amended plan for review according to the process established in this subsection in order to ensure continued consistency with the requirements of the program.

(e) Funds shall be distributed by the authority to each approved county and eligible municipality within the county as provided in this Code section. Distributions shall be allocated to the participating county and to each eligible municipality within the county according to an intergovernmental agreement between the county governing authority and the governing body of the eligible municipality or, if there is no intergovernmental agreement, according to population. The portion for each eligible municipality shall be computed by multiplying the total moneys earmarked for a county by a fraction, the numerator of which is the population of the eligible municipality and the denominator of which is the total population of the county. The remaining revenues shall be distributed to the governing authority of the county.

(f)(1) Local governments are encouraged to make the most efficient use of their resources by cooperating to provide affordable housing assistance. Local governments may enter into an intergovernmental agreement for the purpose of establishing a joint local housing assistance plan subject to the requirements of this Code section. The local housing distributions for such counties and eligible municipalities shall be directly disbursed on a monthly basis to each county or eligible municipality to be administered in conformity with the intergovernmental agreement providing for a joint local housing assistance plan.

(2) If a county or eligible municipality enters into an intergovernmental agreement with a municipality that becomes eligible as a result of entering into that intergovernmental agreement, the county or eligible municipality that has agreed to transfer the control of funds to a municipality that was not originally eligible must ensure through its local housing assistance plan and through the intergovernmental agreement that all program funds are used in a manner consistent with this Code section. This must be accomplished by:

(A) Providing that the use of the portion of funds transferred to the municipality meets all requirements of this Code section; or

(B) Providing that the use of the portion of funds transferred to the municipality, when taken in combination with the use of the local housing distribution from which funds were transferred, meets all requirements of this Code section.

(g) The funds that otherwise would be distributed to a local government that does not meet the prograḿs requirements for receipts of such distributions shall be administered by the authority.

(h) A county or an eligible municipality must expend its portion of the local housing distribution only to implement a local housing assistance plan. A county or an eligible municipality may not expend its portion of the local housing distribution to provide rent subsidies; however, this does not prohibit the use of funds for security and utility deposit assistance.

(i) Funds distributed under the program may not be pledged to pay the debt service on any bonds.

(j) The authority shall adopt rules and regulations as necessary to implement this Code section.

(k) Each county or eligible municipality participating in the program shall develop and implement a local housing assistance plan created to make affordable residential units available to persons of very low income, low income, or moderate income and to persons who have special housing needs, including, but not limited to, homeless people and the elderly. The plans are intended to increase the availability of affordable residential units by combining local resources and cost-saving measures into a local housing partnership and using private and public funds to reduce the cost of housing.

(l) Local housing assistance plans may allocate funds to:

(1) Implement local housing assistance strategies for the provision of affordable housing;

(2) Supplement funds available to the authority to provide enhanced funding of state housing programs within the county or the eligible municipality;

(3) Provide the local matching share of federal affordable housing grants or programs;

(4) Fund emergency repairs; and

(5) Further the housing element of the local government comprehensive plan specific to affordable housing.

(m)(1) Each county and each eligible municipality participating in the program shall encourage the involvement of appropriate public sector and private sector entities as partners in order to combine resources to reduce housing costs for the targeted population. This partnership process should involve:

(A) Lending institutions;

(B) Housing builders and developers;