House Bill No. 6564
House Bill No. 6564
PUBLIC ACT NO. 97-173
AN ACT CONCERNING THE DEFINITION OF "TROUBLED
LOAN" AND CONSUMER LOAN PROGRAMS OF THE DEPARTMENT
OF ECONOMIC AND COMMUNITY DEVELOPMENT.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Subsection (e) of section 8-37x of
the general statutes is repealed and the following
is substituted in lieu thereof:
(e) (1) [The Commissioner of Economic and
Community Development] AS USED IN THIS SUBSECTION,
"TROUBLED LOAN" MEANS A LOAN IN WHICH PAYMENTS OF
INTEREST OR PRINCIPAL, OR BOTH INTEREST AND
PRINCIPAL, (A) ARE DELINQUENT UNDER THE TERMS OF A
LOAN AGREEMENT, OR (B) MAY BECOME DELINQUENT UNDER
CONDITIONS WHICH EXIST WHICH WOULD REASONABLY LEAD
THE COMMISSIONER OF ECONOMIC AND COMMUNITY
DEVELOPMENT TO BELIEVE THAT A BORROWER WOULD BE
UNABLE TO REPAY THE LOAN. SAID COMMISSIONER may
authorize the deferred payments of interest or
principal, or both interest and principal, or a
portion thereof, in the case of a troubled loan
made by the commissioner under any provision of
the general statutes or special acts if he
determines the deferral to be in the best
interests of the state. Such determination shall
be in writing and shall include a statement of the
reasons why the deferral is in the best interests
of the state. Any deferral made under the
provisions of this section shall be subject to the
approval of the State Bond Commission. [As used in
this subsection, "troubled loan" means a loan in
which payments of interest or principal, or both
interest and principal, are delinquent under the
terms of a loan agreement.]
(2) The Commissioner of Economic and
Community Development shall, on or before January
1, 1994, and annually thereafter, submit a report
to the joint standing committees of the General
Assembly having cognizance of matters relating to
housing and finance, revenue and bonding
concerning any deferrals granted under the
provisions of this subsection. The report shall
list each troubled loan, the amount of the loan,
the decision of the commissioner on deferral and
the amount of principal and interest deferred.
Sec. 2. Section 8-219e of the general statutes
is repealed and the following is substituted in
lieu thereof:
(a) The state, acting by and in the discretion
of the Commissioner of Economic and Community
Development, may enter into a contract with an
eligible developer, as defined in section 8-39, a
community housing development corporation, as
defined in section 8-217, or any other person
approved by the commissioner for state financial
assistance in the form of a grant-in-aid, loan or
deferred loan for technical assistance and the
abatement of lead-based paint, asbestos and
asbestos-containing material from a residential
dwelling unit. In the case of a deferred loan, the
contract shall require that payments on interest
are due [immediately] AND PAYABLE but that
payments on principal may be [made at a later
time] DEFERRED TO A TIME CERTAIN. Such
grant-in-aid, loan or deferred loan or combination
thereof shall not exceed [two-thirds of] the cost
of such abatement, including expenses incurred in
obtaining technical assistance for such abatement,
and shall be awarded upon such terms and
conditions as the commissioner may prescribe by
regulations adopted pursuant to subsection (b).
(b) The Commissioner of Economic and
Community Development may adopt regulations, in
accordance with the provisions of chapter 54, to
carry out the purposes of this section. Such
regulations shall provide the terms and conditions
of grants-in-aid, loans or deferred loans made
pursuant to subsection (a) of this section and the
eligibility and application requirements for such
financial assistance. In determining such
eligibility requirements, the commissioner shall
consider establishing priorities for low and
moderate income families and households having a
child suffering from lead-paint poisoning.
Sec. 3. Section 32-317 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) The commissioner, acting on behalf of the
state, may in his discretion make [low-cost] loans
OR DEFERRED LOANS to residents of this state for
the purchase and installation in residential
structures of insulation, alternative energy
devices, energy conservation materials and
replacement furnaces and boilers, approved in
accordance with regulations to be adopted by the
Secretary of the Office of Policy and Management.
In the purchase and installation of insulation in
new residential structures, only that insulation
which exceeds the requirements of the State
Building Code shall be eligible for such loans OR
DEFERRED LOANS. The commissioner may also make
[low-cost] loans OR DEFERRED LOANS to persons in
the state residing in dwellings constructed not
later than December 31, 1979, and for which the
primary source of heating since such date has been
electric resistance, for (1) the purchase and
installation of a high-efficiency secondary
heating system using a source of heat other than
electric resistance, (2) the conversion of a
primary electric heating system to a
high-efficiency system using a source of heat
other than electric resistance, or (3) the
purchase and installation of a high-efficiency
combination heating and cooling system. As used in
this subsection, "high-efficiency" means having a
seasonal energy efficiency ratio of 11.0 or higher
or a heating season performance factor of 7.2 or
higher as designated by the American Refrigeration
Institute in the Directory of Certified Unitary
Air Conditioners, Air Source Heat Pumps and
Outdoor Unitary Equipment, as from time to time
amended, or an equivalent ratio for a fossil fuel
system.
(b) Except as provided under subsection (c) of
this section, any such loan OR DEFERRED LOAN shall
be available only for a residential structure
containing not more than four dwelling units,
shall be not less than four hundred dollars and
not more than [six] FIFTEEN thousand dollars per
structure and shall be made only to an applicant
who submits evidence, satisfactory to the
commissioner, that the adjusted gross income of
the household member or members who contribute to
the support of his household was not in excess of
one hundred fifty per cent of the median area
income by household size. Repayment of all loans
OR DEFERRED LOANS made under this subsection shall
be subject to a rate of interest to be determined
in accordance with subsection (t) of section 3-20
and such terms and conditions as the commissioner
may establish. The State Bond Commission shall
establish a range of rates of interest payable on
all loans OR DEFERRED LOANS under this subsection
and shall apply the range to applicants in
accordance with a formula which reflects their
income. Such range shall be not less than zero per
cent for any applicant in the lowest income class
and not more than one per cent above the rate of
interest borne by the general obligation bonds of
the state last issued prior to the most recent
date such range was established for any applicant
for whom the adjusted gross income of the
household member or members who contribute to the
support of his household was at least one hundred
fifteen per cent of the median area income by
household size.
(c) The commissioner shall establish a program
under which he shall make funds authorized under
section 32-318 available for [low-cost] loans OR
DEFERRED LOANS under subsection (a) of this
section for residential structures containing more
than four dwelling units, or for contracts
guaranteeing payment of loans provided by private
institutions for such structures for the purposes
specified under subsection (a) of this section.
Any such loan OR DEFERRED LOAN shall be an amount
equaling not more than [one] TWO thousand dollars
multiplied by the number of dwelling units in such
structure, provided no such loan shall exceed
[thirty] SIXTY thousand dollars. If the applicant
seeks a loan OR DEFERRED LOAN for a structure
containing more than thirty dwelling units, he
shall include in his application a commitment to
make comparable energy improvements of benefit to
all dwelling units in the structure in addition to
the thirty units which are eligible for the loan
OR DEFERRED LOAN. Applications for contracts of
guarantee shall be limited to structures
containing not more than thirty dwelling units and
the amount of the guarantee shall be not more than
[fifteen hundred] THREE THOUSAND dollars for each
dwelling unit benefiting from the loan. There
shall not be an income eligibility limitation for
applicants for such loans, DEFERRED LOANS or
guarantees, but the commissioner shall give
preference to applications for loans, DEFERRED
LOANS or guarantees for such structures which are
occupied by persons of low or moderate income.
Repayment of such loans OR DEFERRED LOANS shall be
subject to such rates of interest, terms and
conditions as the commissioner shall establish.
The state shall have a lien on each property for
which a loan, DEFERRED LOAN or guarantee has been
made under this section to ensure compliance with
such terms and conditions.
(d) With respect to all loans OR DEFERRED
LOANS under this section, any repayments of
principal shall be paid to the State Treasurer for
deposit in the energy conservation revolving loan
account. The interest applicable to any such loans
made shall be paid to the State Treasurer for
deposit in the General Fund. IN THE CASE OF A
DEFERRED LOAN, PAYMENTS ON INTEREST ARE DUE AND
PAYABLE BUT PAYMENTS ON PRINCIPAL MAY BE DEFERRED
TO A TIME CERTAIN.
(e) The commissioner shall adopt regulations
in accordance with chapter 54, (1) concerning
qualifications for such loans OR DEFERRED LOANS,
requirements and limitations as to adjustments of
terms and conditions of repayment and any
additional requirements deemed necessary to carry
out the provisions of this section and to assure
that those tax-exempt bonds and notes used to fund
such loans qualify for exemption from federal
income taxation, (2) providing for the maximum
feasible availability of such loans OR DEFERRED
LOANS for dwelling units owned or occupied by
persons of low and moderate income, (3)
establishing procedures to inform such persons of
the availability of such loans OR DEFERRED LOANS
and to encourage and assist them to apply for such
loans and (4) providing that (A) the interest
payments received from the recipients of loans OR
DEFERRED LOANS, less the expenses incurred by the
commissioner in the implementation of the program
of loans, DEFERRED LOANS and loan guarantees under
this section, and (B) the payments received from
electric and gas companies under subsection (f) of
this section shall be applied to reimburse the
General Fund for interest on the outstanding bonds
and notes used to fund such loans OR DEFERRED
LOANS.
(f) Not later than August first, annually, the
commissioner shall calculate the difference
between (1) the weighted average of the percentage
rates of interest payable on all subsidized loans
OR DEFERRED LOANS made from the energy
conservation loan program authorized under
sections 32-315 to 32-318, inclusive, and (2) the
average of the percentage rates of interest on any
bonds and notes issued pursuant to section 3-20,
which have been dedicated to the energy
conservation loan program under sections 32-315 to
32-318, inclusive, and used to fund such loans OR
DEFERRED LOANS, and multiply such difference by
the outstanding amount of all such loans OR
DEFERRED LOANS, or such lesser amount as may be
required under Section 103 (b)(2) of the Internal
Revenue Code of 1986, or any subsequent
corresponding internal revenue code of the United
States, as from time to time amended. The product
of such difference and such applicable amount
shall not exceed six per cent of the sum of the
outstanding principal amount at the end of each
fiscal year of all loans OR DEFERRED LOANS made
under the energy conservation loan program
authorized under sections 32-315 to 32-318,
inclusive, and the balance remaining in the energy
conservation revolving loan account. Not later
than September first, annually, the Department of
Public Utility Control shall allocate such product
among each electric and gas company having at
least seventy-five thousand customers, in
accordance with a formula taking into account,
without limitation, the average number of
residential customers of each company. Not later
than October first, annually, each such company
shall pay its assessed amount to the commissioner.
The commissioner shall pay to the State Treasurer
for deposit in the General Fund all such payments
from electric and gas companies, and shall adopt
procedures to assure that such payments are not
used for purposes other than those specifically
provided in this section. The department shall
include each company's payment as an operating
expense of the company for the purposes of
rate-making under section 16-19.
Approved June 24, 1997