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91_HB0943enr HB0943 Enrolled LRB9101953PTpk 1 AN ACT to amend the Home Equity Assurance Act by changing 2 Section 11. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Home Equity Assurance Act is amended by 6 changing Section 11 as follows: 7 (65 ILCS 95/11) (from Ch. 24, par. 1611) 8 Sec. 11. Guarantee Fund. 9 (a) Each governing commission and program created by 10 referendum under the provisions of this Act shall maintain a 11 guarantee fund for the purposes of paying the costs of 12 administering the program and extending protection to members 13 pursuant to the limitations and procedures set forth in this 14 Act. 15 (b) The guarantee fund shall be raised by means of an 16 annual tax levied on all residential property within the 17 territory of the program having at least one, but not more 18 than 6 dwelling units and classified by county ordinance as 19 residential. The rate of this tax may be changed from year 20 to year by majority vote of the governing commission but in 21 no case shall it exceed a rate of .12% of the equalized 22 assessed valuation of all property in the territory of the 23 program having at least one, but not more than 6 dwelling 24 units and classified by county ordinance as residential, or 25 the maximum tax rate approved by the voters of the territory 26 at the referendum which created the program or, in the case 27 of a merged program, the maximum tax rate approved by the 28 voters at the referendum authorizing the merger, whichever 29 rate is lower. The commissioners shall cause the amount to 30 be raised by taxation in each year to be certified to the 31 county clerk in the manner provided by law, and any tax so HB0943 Enrolled -2- LRB9101953PTpk 1 levied and certified shall be collected and enforced in the 2 same manner and by the same officers as those taxes for the 3 purposes of the county and city within which the territory of 4 the commission is located. Any such tax, when collected, 5 shall be paid over to the proper officer of the commission 6 who is authorized to receive and receipt for such tax. The 7 governing commission may issue tax anticipation warrants 8 against the taxes to be assessed for the calendar year in 9 which the program is created and for the first full calendar 10 year after the creation of the program. 11 (c) The moneys deposited in the guarantee fund shall, as 12 nearly as practicable, be fully and continuously invested or 13 reinvested by the governing commission in investment 14 obligations which shall be in such amounts, and shall mature 15 at such times, that the maturity or date of redemption at the 16 option of the holder of such investment obligations shall 17 coincide, as nearly as practicable, with the times at which 18 monies will be required for the purposes of the program. For 19 the purposes of this Section investment obligation shall mean 20 direct general municipal, state, or federal obligations which 21 at the time are legal investments under the laws of this 22 State and the payment of principal of and interest on which 23 are unconditionally guaranteed by the governing body issuing 24 them. 25 (d) Except as permitted by this subsection, the 26 guarantee fund shall be used solely and exclusively for the 27 purpose of providing guarantees to members of the particular 28 Guaranteed Home Equity Program and for reasonable salaries, 29 expenses, bills, and fees incurred in administering the 30 program, and shall be used for no other purpose. 31 A governing commission, with no less than $4,000,000 in 32 its guarantee fund, may, if authorized by referendum duly 33 adopted by a majority of the voters, establish a Low Interest 34 Home Improvement Loan Program in accordance with and subject HB0943 Enrolled -3- LRB9101953PTpk 1 to procedures established by a financial institution, as 2 defined in the Illinois Banking Act. Whenever the question 3 of creating a Low Interest Home Improvement Loan Program is 4 initiated by resolution or ordinance of the corporate 5 authorities of the municipality or by a petition signed by 6 not less than 10% of the total number of registered voters of 7 each precinct in the territory, the registered voters of 8 which are eligible to sign the petition, it shall be the duty 9 of the election authority having jurisdiction over the 10 municipality to submit the question of creating the program 11 to the electors of each precinct within the territory at the 12 regular election specified in the resolution, ordinance, or 13 petition initiating the question. A petition initiating a 14 question described in this subsection shall be filed with the 15 election authority having jurisdiction over the municipality. 16 The petition shall be filed and objections to the petition 17 shall be made in the manner provided in the Election Code. A 18 resolution, ordinance, or petition initiating a question 19 described in this subsection shall specify the election at 20 which the question is to be submitted. The referendum on the 21 question shall be held in accordance with the Election Code. 22 The question shall be in substantially the following form: 23 "Shall the (name of the home equity program) 24 implement a Low Interest Home Improvement Loan Program 25 with money from the guarantee fund of the established 26 guaranteed home equity program?" 27 The votes must be recorded as "Yes" or "No". 28 Whenever a majority of the voters on the public question 29 approve the creation of the program as certified by the 30 proper election authorities, the commission shall establish 31 the program and administer the program with funds collected 32 under the Guaranteed Home Equity Program, subject to the 33 following conditions: 34 (1) At any given time, the cumulative total of all HB0943 Enrolled -4- LRB9101953PTpk 1 loans and loan guarantees (if applicable) issued under 2 this program may not reduce the balance of the guarantee 3 fund to less than $3,000,000. 4 (2) Only eligible applicants may apply for a loan. 5 (3) The loan must be used for the repair, 6 maintenance, remodeling, alteration, or improvement of a 7 guaranteed residence. This condition is not intended to 8 exclude the repair, maintenance, remodeling, alteration, 9 or improvement of a guaranteed residence's landscape. 10 This condition is intended to exclude the demolition of a 11 current residence. This condition is also intended to 12 exclude the construction of a new residence. 13 (4) An eligible applicant may not borrow more than 14 the amount of equity value in his or her residence. 15 (5) A commission must ensure that loans issued are 16 secured with collateral that is at least equal to the 17 amount of the loan or loan guarantee. 18 (6) A commission shall charge an interest rate 19 which it determines to be below the market rate of 20 interest generally available to the applicant. 21 (7) A commission may, by resolution, establish 22 other administrative rules and procedures as are 23 necessary to implement this program including, but not 24 limited to, loan dollar amounts and terms. A commission 25 may also impose on loan applicants a one-time application 26 fee for the purpose of defraying the costs of 27 administering the program. 28 (e) The guarantee fund shall be maintained, invested, 29 and expended exclusively by the governing commission of the 30 program for whose purposes it was created. Under no 31 circumstance shall the guarantee fund be used by any person 32 or persons, governmental body, or public or private agency or 33 concern other than the governing commission of the program 34 for whose purposes it was created. Under no circumstances HB0943 Enrolled -5- LRB9101953PTpk 1 shall the guarantee fund be commingled with other funds or 2 investments. 3 (e-1) No commissioner or family member of a 4 commissioner, or employee or family member of an employee, 5 may receive any financial benefit, either directly or 6 indirectly, from the guarantee fund. Nothing in this 7 subsection (e-1) shall be construed to prohibit payment of 8 expenses to a commissioner in accordance with Section 4 or 9 payment of salaries or expenses to an employee in accordance 10 with this Section. 11 As used in this subsection (e-1), "family member" means a 12 spouse, child, stepchild, parent, brother, or sister of a 13 commissioner or a child, stepchild, parent, brother, or 14 sister of a commissioner's spouse. 15 (f) An independent audit of the guarantee fund and the 16 management of the program shall be conducted annually and 17 made available to the public through any office of the 18 governing commission or a public facility such as a local 19 public library located within the territory of the program. 20 (Source: P.A. 88-439.)