An Act To Carry Out the Will of the People of the State of Maine by Ensuring the Issuance of Bonds To Support the Independence of Maine's Seniors

Emergency preamble. Whereas,  acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and

Whereas,  in June 2015, the Legislature overwhelmingly approved a $15,000,000 bond issue for senior affordable housing with $14,500,000 for new energy-efficient affordable homes and the adaptive reuse of structures or homes and $500,000 for home repair and weatherization programs; and

Whereas,  on November 3, 2015, the people of Maine overwhelmingly approved the bond issue, with more than 69% of voters in favor; and

Whereas,  the funds from the bond issue will be used to leverage an estimated $22,600,000 in private and other funds for low-income households headed by a person 55 years of age or older; and

Whereas,  state officials and bond counsel have confirmed that the sale of the senior affordable housing bonds will not affect the State's credit rating; and

Whereas,  the bond proceeds will be administered by the Maine State Housing Authority, which already has provisions in place to ensure that bond proceeds are used efficiently, that rent levels remain affordable over the long term, that developer fees will be capped at a reasonable level and that telemedicine rooms will be made available within newly constructed properties; and

Whereas,  over a year has passed and no action has been taken to implement the voter-approved senior affordable housing bond issue; and

Whereas,  there is an urgent need for this new housing, with a current shortage of more than 9,000 affordable homes available for Maine seniors and an expected shortage of 15,000 homes by 2022 if action is not taken; and

Whereas,  in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Sec. 1. PL 2015, c. 337, §1  is amended to read:

Sec. 1. Authorization of bonds. The Treasurer of State is authorized , under the direction of the Governor, to issue bonds in the name and on behalf of the State in an amount not exceeding $15,000,000 for the purposes described in section 5 of this Act. Notwithstanding the Maine Revised Statutes, Title 5, section 145 and section 145-B, subsection 2, the bonds issued pursuant to this Act do not require the signature of the Governor or the attestation of the Commissioner of Administrative and Financial Services. The bonds are a pledge of the full faith and credit of the State. The bonds may not run for a period longer than 10 years from the date of the original issue of the bonds.

Sec. 2. PL 2015, c. 337, §1-A  is enacted to read:

Sec. 1-A. Treasurer of State shall facilitate and expedite issuance of bonds ratified by voters. The Treasurer of State shall facilitate and expedite the issuance of bonds pursuant to this Act, as ratified by the voters of the State, unless:

1. Debt service greater. The Treasurer of State determines that the debt service on the bonds would be greater than the amount budgeted;

2. Adverse impact on credit rating. The Treasurer of State determines that the issuance of the bonds will adversely affect the credit rating of the State;

3. Advantageous interest rate. The Treasurer of State determines that a delay in the issuance of the bonds will likely result in a more financially advantageous interest rate;

4. Project not proceeding. The Treasurer of State receives written notification that a project for which the bonds were authorized is not going forward and the funding to be provided by the bonds is not required; or

5. Alternative funding available. The Treasurer of State receives written notification that alternative funding sources are available to implement, within a comparable time frame, a project and the purposes for which those bonds were authorized and ratified.

Upon the occurrence of any of the circumstances set out in subsections 1 to 5, the Treasurer of State shall immediately notify the President of the Senate, the Speaker of the House of Representatives and the majority and minority leaders of the Senate and the House of Representatives of those circumstances.

Sec. 3. PL 2015, c. 337, §3  is amended to read:

Sec. 3. Sale; how negotiated; proceeds appropriated. The Treasurer of State may negotiate the sale of the bonds by direction of the Governor, but no bond may be loaned, pledged or hypothecated on behalf of the State. The proceeds of the sale of the bonds, which must be held by the Treasurer of State and paid by the Treasurer of State upon warrants drawn by the State Controller to the Maine State Housing Authority, are appropriated solely for the purposes set forth in this Act. Any unencumbered balances remaining at the completion of the project in this Act lapse to the Office of the Treasurer of State to be used for the retirement of general obligation bonds.

Sec. 4. Annual report. Beginning March 1, 2018, and annually thereafter, the director of the Maine State Housing Authority shall report to the joint standing committee of the Legislature having jurisdiction over affordable housing matters on the status of the bond funds authorized by Public Law 2015, chapter 337. The report must include, but is not limited to, both for the immediately preceding year and in the aggregate, the amount of bond proceeds made available for the purposes specified in Public Law 2015, chapter 337, the type, location and cost of projects receiving bond proceeds, the number of housing units created by each project, the number of direct construction jobs created or maintained by each project, the amount of direct construction wages paid in creating or maintaining those jobs and the total amount of building materials purchased in the development of each project. This section is repealed on March 2nd of the year following the year in which all bond proceeds have been expended.

Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.

SUMMARY

In November 2015, the voters approved Public Law 2015, chapter 337, a bond authorization to provide for the issuance of bonds to provide funding for the construction of new energy-efficient affordable homes and the adaptive reuse of structures or homes for low-income households headed by a person 55 years of age or older.

This bill makes the following changes to that law in order to ensure the issuance of the approved bonds:

1. It removes the requirement that the Treasurer of State operate at the direction of the Governor in issuing and selling the bonds;

2. It exempts the bonds from the requirements in the Maine Revised Statutes, Title 5, sections 145 and 145-B regarding the need for the signature of the Governor and the attestation of the Commissioner of Administrative and Financial Services on bonds issued and sold by the Treasurer of State;

3. It places a number of safeguards on the sale of the bonds, including allowing the Treasurer of State to not sell the bonds if debt service would exceed the amount budgeted or the issuance of the bonds would have an adverse impact on the State's credit rating; and

4. It requires the Treasurer of State to transfer the proceeds of the sale of the bonds directly to the Maine State Housing Authority, without the requirement of a warrant drawn by the State Controller.

The bill also requires the director of the Maine State Housing Authority to report annually to the Legislature regarding certain aspects of the bond proceeds and the projects using bond proceeds.