Substitute House Bill No. 5236
          Substitute House Bill No. 5236

              PUBLIC ACT NO. 98-176


AN  ACT  CONCERNING  LIMITS  FOR  MODERATE  RENTAL
HOUSING  AND  AUTHORIZING  THE  TRANSFER  OF  RICE
HEIGHTS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section   1.  Section  8-72a  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    (a)  THE  MAXIMUM  INCOME LIMITS UNDER SECTION
8-72 SHALL BE EIGHTY PER CENT OF THE  AREA  MEDIAN
INCOME ADJUSTED FOR FAMILY SIZE.
    (b)   NOTWITHSTANDING   THE    PROVISION    OF
SUBSECTION (a) OF  THIS SECTION, EACH DEVELOPER OR
HOUSING AUTHORITY MAY  PROPOSE  DIFFERENT  MAXIMUM
INCOME LIMITS. In  fixing  EXCEPTIONS  TO  maximum
income limits under section 8-72, the Commissioner
of Economic and  Community  Development shall take
into consideration (1)  the latest average wage as
computed by the Labor Commissioner for the city or
town served by  the  authority,  (2) the number of
vacancies in the  projects  under  the authority's
control,  (3)  the   number  of  applications  for
admission to tenancy  or  for  continued occupancy
which    are    refused    because    of    income
disqualification and (4)  the  latest  area median
income,  as  determined   by   the  United  States
Department of Housing and Urban Development.
    Sec.  2.  (NEW)   Notwithstanding   any  other
statute  to  the   contrary,   the  Department  of
Administrative Services may  administer  a  master
property and casualty  insurance program for state
funded   and  federally   funded   housing   units
operating under the  jurisdiction of local housing
authorities. The department may charge the housing
authorities a reasonable  fee  to  provide for the
administrative costs of the program.
    Sec. 3. (a)  The Housing Authority of the City
of Hartford may  transfer  to  the Commissioner of
Economic  and  Community   Development,   and  the
Commissioner of Economic and Community Development
may accept from  the Housing Authority of the City
of Hartford, the premises and buildings comprising
the housing development known as Rice Heights. The
commissioner may operate  and manage Rice Heights.
As  consideration for  such  transfer,  the  state
shall cancel the  outstanding  note  and mortgage,
including principal, interest  and  late  charges,
owed by the  Housing  Authority  of  the  City  of
Hartford  to  the   state  with  respect  to  Rice
Heights.  The  state   shall   hold   the  Housing
Authority of the City of Hartford harmless for any
claims, causes of action or liability arising from
the operation of  Rice  Heights by the state after
such transfer. The  Housing  Authority of the City
of Hartford shall  hold the state harmless for any
claims, causes of action or liability arising from
the  operation of  Rice  Heights  by  the  Housing
Authority of the City of Hartford.
    (b) The commissioner  may  plan  for and carry
out the demolition  or  renovation of the existing
buildings on the  premises  of Rice Heights or the
construction of new buildings on said premises.
    (c) The commissioner  shall plan for and carry
out the development  of housing on the premises of
Rice Heights.
    (d) The commissioner may select a developer or
developers to carry  out  all  or  a  part  of the
provisions  of  this  section,  on  a  competitive
basis,  from  proposals  solicited  and  submitted
before  or  after   the  effective  date  of  this
section.
    (e)  The commissioner  may  sell  any  housing
units developed at Rice Heights under this section
only  to  eligible   families   who  meet  minimum
qualifying standards, subject to deed restrictions
approved by the  commissioner  and  in  compliance
with  the provisions  of  this  section.  Families
living in Rice Heights prior to demolition or sale
shall have priority  for purchase or rental of all
units, and no  unit shall be sold or rented to any
other family unless  the  commissioner  determines
that there are  no  families  who  lived  in  Rice
Heights prior to demolition or sale who desire and
qualify  to  purchase  or  rent  such  units.  The
commissioner   shall   assist    such    families,
regardless  of  income,  to  meet  all  qualifying
conditions for purchase  or  rental of such units,
including,  but  not   limited   to,  (1)  linking
families to public  or  private  mortgage and down
payment   assistance   programs,   (2)   adjusting
interest rates and minimum payment requirements so
as  to  make  instalment  payments  affordable  to
eligible families who  wish  to  purchase or rent,
(3)  providing  direct  mortgage  assistance,  (4)
providing state or  federal rental assistance, and
(5) engaging in  other  actions  so  as to make it
possible for any  family  living  in  Rice Heights
prior to demolition  or sale to purchase or rent a
unit.  If  the  number  of  families  desiring  to
purchase or rent a unit is greater than the number
of units available, the commissioner may devise an
equitable system, by  lottery  or  otherwise,  for
determining which families  shall  be permitted to
purchase or rent,  provided  such system shall not
be based on  the  family's  employment  status  or
amount of income,  subject  to  the  provisions of
subsection (f) of  this  section.  If  there is an
insufficient number of  eligible families who wish
to purchase or  rent  units  on  the  land that is
subject  to this  section,  the  commissioner  may
permit the purchase  or  rental  of  such units by
persons who meet  the  initial occupancy standards
for admission to  moderate rental housing, but who
did not previously reside in Rice Heights. As used
in this subsection,  (A) "eligible families" means
low or moderate  income families who lived in Rice
Heights  within  the   four  years  prior  to  the
acquisition of title  by  the  commissioner  under
this   section,  and   (B)   "minimum   qualifying
standards"  means  (i)   family  income  from  all
sources which, when  combined  with the assistance
that  the  commissioner  is  required  to  provide
pursuant to this section, is sufficient to pay the
monthly  mortgage  and   other  costs  of  housing
developed  at Rice  Heights  under  this  section,
taking into consideration  any  reduction  in such
costs which arise  from  assistance required to be
provided pursuant to  this  subsection,  and  (ii)
commitment  to  participating   in   an  ownership
program. If, after  fully providing the assistance
required  under this  subsection  to  an  eligible
family, such family  is unable to obtain financing
to purchase a  housing  unit  developed under this
subsection due to  lack  of credit worthiness, the
commissioner may sell such housing unit to another
eligible   family   selected   pursuant   to   the
provisions of this subsection.
    (f) For the  purposes  of  this  section, deed
restrictions approved by  the  commissioner  shall
require for thirty  years  that (1) at the time of
purchase by or  rental to each new owner or tenant
family, the owner  or  family shall be a family of
low and moderate  income,  as  defined  in section
8-39 of the  general  statutes,  and  eligible for
admission to moderate  rental  housing pursuant to
part II of  chapter  128  of the general statutes,
(2) the resale  price  of  the  premises  shall be
limited to their original purchase price, adjusted
for inflation and improvements to the premises, as
determined by the commissioner, and (3) the rental
price for each  rental  unit  shall not exceed the
current fair market rents for the area established
by the United  States  Department  of  Housing and
Urban Development.
    (g)  The commissioner  may  lease,  convey  or
grant a license  for  the premises for the purpose
of carrying out the provisions of this section.
    (h) Notwithstanding the provisions of chapters
59 and 60  of  the general statutes and subject to
all other provisions  of the general statutes, the
commissioner may, within available appropriations,
bond authorizations and  bond fund consolidations,
do  all  things   necessary   to   carry  out  the
provisions of this  section,  including,  but  not
limited  to,  (1)   entering  into  contracts  and
agreements  for the  provision  of  services,  (2)
securing federal funds  or  program participation,
(3)  providing  for   relocation   and   rehousing
assistance   in  accordance   with   the   uniform
relocation  assistance act  and  other  applicable
laws regarding the  displacement  of  tenants, (4)
establishing  a  moratorium   on   rents,  as  the
commissioner deems necessary  or  appropriate, and
(5) providing for  the payment or reimbursement to
the   Department   of   Economic   and   Community
Development  for the  administrative  expenses  of
such department in  carrying  out  the purposes of
this section.
    Sec. 4. This  act  shall  take effect from its
passage, except that  sections  1 and 2 shall take
effect July 1, 1998.

Approved May 28, 1998