AN ACT PROVIDING FOR ADDITIONAL UNITS FOR THE SUPPORTIVE HOUSING INITIATIVE AND FOR FINANCING OF THE INITIATIVE BY THE CONNECTICUT HOUSING FINANCE AUTHORITY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 17a-485c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) The Commissioner of Mental Health and Addiction Services, in collaboration with the Commissioners of Social Services, Children and Families and Economic and Community Development and the Connecticut Housing Finance Authority, shall establish a Supportive Housing [Pilots] Initiative to provide additional units of affordable housing and support services to eligible persons. The Supportive Housing Initiative shall be implemented in two phases with the first phase to be known as the Supportive Housing Pilots Initiative and the second phase to be known as the Next Steps Initiative.

(b) The Supportive Housing Pilots Initiative shall provide up to six hundred fifty additional units of affordable housing and support services to eligible households, as defined in section 17a-484a, and to persons with serious mental health needs who are community-supervised offenders supervised by the executive or judicial branch. Such housing shall be permanent supportive housing or transitional living programs, and the permanent supportive housing may include both individuals and families with special needs and individuals and families without such needs.

[(b)] (c) [The Supportive Housing Pilots Initiative shall provide up to six hundred fifty dwelling units.] Not later than January 1, 2002, the Secretary of the Office of Policy and Management and the Commissioner of Mental Health and Addiction Services shall enter into a memorandum of understanding with the Departments of Social Services and Economic and Community Development and the Connecticut Housing Finance Authority. The memorandum of understanding shall provide that: (1) A collaborative plan shall be submitted with specific timetables to create up to six hundred fifty dwelling units of supportive housing, which may include the construction of up to three hundred new units of supportive housing; (2) the Department of Social Services may provide project-based rental subsidy certificates; (3) the Connecticut Housing Finance Authority and the Department of Economic and Community Development shall provide grants, mortgage loans and tax credits that offer a viable financing package, including capitalized operating reserves, for the construction of up to three hundred new units of supportive housing; (4) the Department of Mental Health and Addiction Services shall provide annual grants to the projects for supportive services during the term of any mortgage loan; (5) there shall be a plan for private and federal predevelopment financing and financing from nonstate sources for grants and loans from private investment through federal and state tax credit programs and federal project-based rental subsidies; and (6) not later than July 1, 2002, the Connecticut Housing Finance Authority shall issue a request for proposals by persons or entities interested in participating in such initiative with priority given to applicants that include organizations deemed qualified to provide services by the Department of Mental Health and Addiction Services pursuant to a request for qualifications. The Connecticut Housing Finance Authority shall review and underwrite projects developed under the Supportive Housing Pilots Initiative.

(d) The Next Steps Initiative shall provide up to five hundred additional units of affordable housing and support services to: (1) Eligible households, as defined in section 17a-484a; (2) families who are eligible for assistance under the federal temporary assistance for needy families program and whose participation in the Next Steps Initiative would not constitute assistance under federal temporary assistance for needy families program regulations; (3) adults who are eighteen to twenty-three years of age, inclusive, and who are homeless, or at risk for becoming homeless because they are transitioning from foster care or other residential programs; and (4) persons with serious mental health needs who are community-supervised offenders supervised by the executive or judicial branch. Such housing shall be permanent supportive housing or transitional living programs, and the permanent supportive housing may include both individuals and families with special needs and individuals and families without such needs.

(e) Not later than January 1, 2006, the Secretary of the Office of Policy and Management and the Commissioner of Mental Health and Addiction Services shall enter into a memorandum of understanding with the Departments of Social Services, Children and Families and Economic and Community Development and the Connecticut Housing Finance Authority. The memorandum of understanding shall provide that: (1) A collaborative plan shall be submitted with specific timetables to create up to five hundred dwelling units of supportive housing under the Next Steps Initiative; (2) the Department of Social Services may provide subsidies, including, but not limited to, project-based rental subsidy certificates during the term of any mortgage loan; (3) the Connecticut Housing Finance Authority and the Department of Economic and Community Development shall provide grants, mortgage loans and tax credits that offer a viable financing package, including capitalized operating reserves; (4) after January 1, 2006, the State Treasurer and the Secretary of the Office of Policy and Management may enter into a debt service agreement to provide funding for debt service costs for Section 501 (c)(3) of the Internal Revenue Code bonds issued by the Connecticut Housing Finance Authority; (5) the Department of Mental Health and Addiction Services shall provide annual grants to the projects for supportive services during the term of any mortgage loan; and (6) there shall be a plan for private and federal predevelopment financing and financing from nonstate sources for grants and loans from private investment through federal and state tax credit programs and federal project-based rental subsidies. Not later than January 1, 2006, the Connecticut Housing Finance Authority shall issue a request for proposals by persons or entities interested in participating in such initiative with priority given to applicants that include organizations deemed qualified to provide services by the Departments of Mental Health and Addiction Services, Social Services and Children and Families pursuant to a request for qualifications. The Connecticut Housing Finance Authority shall review and underwrite projects developed under the Supportive Housing Initiative.

[(c)] (f) Not later than January 1, [2004] 2006, the Commissioners of Mental Health and Addiction Services, Children and Families and Economic and Community Development and the Connecticut Housing Finance Authority shall submit an interim status report relative to the Supportive Housing [Pilots] Initiative established under this section to the joint standing committees of the General Assembly having cognizance of matters relating to public health, human services, finance, revenue and bonding and appropriations and the budgets of state agencies. Not later than January 1, [2006] 2007, the Commissioners of Mental Health and Addiction Services and Economic and Community Development and the Connecticut Housing Finance Authority shall submit a final report to said committees with respect to the Supportive Housing [Pilots] Initiative and the report shall include, but not be limited to, information indicating (1) the number and location of the units of supportive housing created, (2) the number of individuals served, (3) the number and type of services offered, and (4) the estimated amount of cost avoidance achieved as a direct result of such initiative.

Sec. 2. (NEW) (Effective July 1, 2005) (a) For purposes of this section "state assistance" means a payment by the state of actual debt service, comprised on principal, interest and reasonable operating reserves.

(b) The state, acting by and through the Secretary of the Office of Policy and Management and State Treasurer, may enter into a contract or contracts with the Connecticut Housing Finance Authority that provide the state shall pay actual debt service, comprised on principal, interest and reasonable operating repair and replacement reserves to the authority on mortgage loans made by the authority pursuant to the provisions of section 17a-485c of the general statutes, as amended by this act. Any such contract entered into pursuant to this section shall include provisions that the Secretary of the Office of Policy and Management and the State Treasurer find: (1) Necessary to assure the effectuation of the Supportive Housing Initiative, (2) appropriate for repayment of the state assistance to the state as a result of payment of mortgage loans made by the authority from federal or other sources of revenues, if any, and (3) in the best interests of the state to allow that such state assistance be paid by the state directly to the trustee or paying agent for any bonds or refunding bonds, as applicable, with respect to which the state assistance is provided. Any provision of such a contract entered into providing for payments equal to annual debt service shall be deemed a contract of the state with the holders of any bonds or refunding bonds, as applicable, and appropriation of all amounts necessary to meet punctually the terms of such provision is hereby made and the State Treasurer shall pay such amount as the same become due. The Connecticut Housing Finance Authority may pledge such state assistance as security for the payment of such bonds or refunding bonds issued by said authority. Any bonds so issued for the Supportive Housing Initiative by the Connecticut Housing Finance Authority and at any time outstanding may at any time or from time to time be refunded, in whole or in part, by the Connecticut Housing Finance Authority by the issuance of its refunding bonds in such amounts as the authority may deem necessary or appropriate but not exceeding an amount sufficient to refund the principal amount of the bonds to be so refunded, any unpaid interest thereon, and any premiums, commissions and costs of issuance necessary to be paid in connection therewith. Any such refunding may be effected whether the bonds to be refunded shall have matured or shall thereafter mature.

Sec. 3. Section 17b-812 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) The Commissioner of Social Services shall implement and administer a program of rental assistance for low-income families living in privately-owned rental housing. For the purposes of this section, a low-income family is one whose income does not exceed fifty per cent of the median family income for the area of the state in which such family lives, as determined by the commissioner.

(b) Housing eligible for participation in the program shall comply with applicable state and local health, housing, building and safety codes.

(c) In addition to an element in which rental assistance certificates are made available to qualified tenants, to be used in eligible housing which such tenants are able to locate, the program may include a housing support element in which rental assistance for tenants is linked to participation by the property owner in other municipal, state or federal housing repair, rehabilitation or financing programs. The commissioner shall use rental assistance under this section so as to encourage the preservation of existing housing and the revitalization of neighborhoods or the creation of additional rental housing.

(d) The commissioner may designate a portion of the rental assistance certificates available under the program for tenant-based and project-based supportive housing units. To the extent practicable rental assistance certificates issued for supportive housing shall adhere to the requirements of the federal Housing Choice Voucher program, 42 USC 1437f(o), relative to calculating the tenant's share of the rent to be paid.

[(d)] (e) The commissioner shall administer the program under this section to promote housing choice for certificate holders and encourage racial and economic integration. The commissioner shall establish maximum rent levels for each municipality in a manner that promotes the use of the program in all municipalities. Any certificate issued pursuant to this section may be used for housing in any municipality in the state. The commissioner shall inform certificate holders that a certificate may be used in any municipality and, to the extent practicable, the commissioner shall assist certificate holders in finding housing in the municipality of their choice.

[(e)] (f) Nothing in this section shall give any person a right to continued receipt of rental assistance at any time that the program is not funded.

[(f)] (g) The commissioner shall adopt regulations in accordance with the provisions of chapter 54 to carry out the purposes of this section. The regulations shall establish maximum income eligibility guidelines for such rental assistance and criteria for determining the amount of rental assistance which shall be provided to eligible families.

Statement of Purpose:

To implement the Governor's budget recommendations.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]