Substitute House Bill No. 6835
          Substitute House Bill No. 6835

              PUBLIC ACT NO. 97-307


    Be it enacted  by  the  Senate  and  House  of
Representatives in General Assembly convened:
    Section 1. (NEW)  (a)  The Connecticut Housing
Finance Authority shall  develop,  in  conjunction
with  private lenders  and  the  Federal  National
Mortgage Association, a  two-year pilot program to
guarantee  loans  by   approved  lenders  for  the
rehabilitation or refinancing  of  buildings  with
five to twenty-five  dwelling units. The authority
may  fix  a   fee   for   the   payment   of   any
administrative cost incurred  under the provisions
of  this act.  Such  fee  may  be  computed  as  a
percentage  of  the   principal  of  the  mortgage
outstanding  at the  beginning  of  each  mortgage
year, but shall  not  be  more than one-quarter of
one per cent  per  year  of such principal amount.
The amount of such fee need not be uniform for all
insured  loans.  Such  fee  shall  be  payable  by
mortgagors  or  mortgagees   in   such  manner  as
prescribed by the authority. Such guarantees shall
insure  the lender  against  loss  not  to  exceed
twenty per cent  of  the principal due at the time
of default.
    (b)   The  authority   shall   adopt   written
procedures in accordance  with  the  provisions of
section 1-121 of  the  general  statutes  for  the
application and distribution  of  loans under this
    Sec. 2. (NEW)  As  used  in  this section, the
terms   "housing  authority",   "moderate   rental
housing  project",  "municipality"  and  "eligible
developer" shall have  the  same  meanings as such
terms are defined  in  section 8-39 of the general
statutes.  The  Commissioner   of   Economic   and
Community   Development  shall   develop,   within
available appropriations, a two-year pilot program
in not more than three municipalities in the state
to   promote  the   rehabilitation   and   private
management  of moderate  rental  housing  projects
owned  by  any   housing  authority  in  any  such
municipality. Notwithstanding any provision of the
general  statutes  or   any   regulation   to  the
contrary,   upon   the   determination   of   said
commissioner  that the  availability  of  moderate
rental housing projects  in  any such municipality
would be enhanced,  and  that  it  is  in the best
interests  of the  state,  he  may  grant  written
approval  to  the   housing   authority   in  such
municipality to enter  into  a  contract  with  an
eligible developer. Such  contract may provide for
a long-term lease  with such eligible developer or
for  the  sale  of  not  more  than  two  existing
moderate  rental  housing   projects   within  the
municipality in which  said  housing  authority is
located,  provided that  such  eligible  developer
agrees  to  (1)  substantially  rehabilitate  such
projects within a  time  period  specified  by the
commissioner and (2)  maintain  such  projects  as
moderate rental housing projects for fifteen years
or until any  financial assistance provided by the
state or said  housing  authority to such eligible
developer has been  repaid,  whichever  is longer.
Said housing authority, or said commissioner, upon
approval by the State Bond Commission, may provide
financial assistance to  such  eligible developer,
either directly or  indirectly,  in  the  form  of
grants,   loans,   deferred   loans,   guarantees,
interest  subsidies or  any  combination  of  such
financial      assistance     for      substantial
rehabilitation of such  housing projects, and said
commissioner   may   subordinate    any   mortgage
obligations of said  housing  authority  issued in
favor of the  state.  Said  commissioner may adopt
regulations in accordance  with  chapter 54 of the
general statutes to  implement  the  provisions of
this section.
    Sec. 3. Section  8-41  of the general statutes
is repealed and  the  following  is substituted in
lieu thereof:
    (a) When the  governing body of a municipality
other than a town adopts a resolution as described
in section 8-40,  it  shall  promptly  notify  the
chief executive officer  of  such  adoption.  Upon
receiving such notice, the chief executive officer
shall appoint five  persons  who  are residents of
said   municipality  as   commissioners   of   the
authority,  except  that   where   the   authority
operates more than  three thousand units the chief
executive  officer  may   appoint  two  additional
persons who are  residents of the municipality. If
the  governing  body  of  a  town  adopts  such  a
resolution, such body  shall  appoint five persons
who are residents of said town as commissioners of
the  authority  created   for   such   town.   The
commissioners who are  first so appointed shall be
designated to serve for a term of either one, two,
three, four or  five  years,  except  that  if the
authority has five  members, the terms of not more
than one member  shall  expire  in  the same year.
Terms shall commence on the first day of the month
next succeeding the date of their appointment, and
annually  thereafter  a   commissioner   shall  be
appointed to serve  for five years except that any
vacancy which may  occur  because  of  a change of
residence  by  a   commissioner,   removal   of  a
commissioner, resignation or death shall be filled
for  the unexpired  portion  of  the  term.  If  a
governing body increases  the  membership  of  the
authority on or after July 1, 1995, such governing
body shall, by  resolution,  provide for a term of
five years for  each  such  additional member. The
term of the  chairman  shall  be  three  years. At
least one of  such  commissioners  of an authority
having five members,  and  at  least  two  of such
commissioners of an  authority  having  more  than
five members, shall  be  a  tenant  or tenants who
live  in  housing   owned   or   managed  by  such
authority, if any  exists,  provided that any such
tenant shall have resided in such housing for more
than one year,  and  provided further that no such
tenant shall have  the  authority  to  vote on any
matter concerning the establishment or revision of
the rents to  be  charged  in any housing owned or
managed by such authority. If, on October 1, 1979,
a  municipality  has   adopted   a  resolution  as
described in section  8-40,  but  has  no  tenants
serving  as  commissioners,  the  chief  executive
officer of a municipality other than a town or the
governing body of  a  town  shall appoint a tenant
who  meets the  qualifications  set  out  in  this
section as a  commissioner  of such authority when
the next vacancy  occurs.  No  commissioner  of an
authority  may  hold  any  public  office  in  the
municipality for which the authority is created. A
commissioner shall hold office until his successor
is appointed and  has  qualified. A certificate of
the   appointment   or    reappointment   of   any
commissioner shall be  filed  with  the  clerk and
shall  be  conclusive   evidence   of   the  legal
appointment of such  commissioner,  after  he  has
taken an oath  in the form prescribed in the first
paragraph of section  1-25.  The  powers  of  each
authority shall be  vested  in  the  commissioners
thereof. Three commissioners  shall  constitute  a
quorum  if  the   authority   consists   of   five
commissioners. Four commissioners shall constitute
a quorum if  the  authority  consists of more than
five commissioners. Action  may  be  taken  by the
authority upon a  vote of not less than a majority
of the commissioners present, unless the bylaws of
the authority require  a  larger number. The chief
executive officer, or, in the case of an authority
for a town,  the governing body of the town, shall
designate which of  the commissioners shall be the
first chairman, but when the office of chairman of
the authority becomes  vacant, the authority shall
select a chairman from among its commissioners. An
authority   shall   select    from    among    its
commissioners a vice chairman, and it may employ a
secretary, who shall  be  executive  director, and
technical experts and  such other officers, agents
and  employees, permanent  and  temporary,  as  it
requires,     and    shall     determine     their
qualifications, duties and compensation, provided,
in municipalities having  a civil service law, all
appointments and promotions, except the employment
of the secretary,  shall  be based on examinations
given and lists  prepared  under  such  law,  and,
except so far  as  may  be  inconsistent  with the
terms of this  chapter, such civil service law and
regulations adopted thereunder shall apply to such
housing  authority and  its  personnel.  For  such
legal services as  it  requires,  an authority may
employ  its  own   counsel  and  legal  staff.  An
authority  may delegate  any  of  its  powers  and
duties to one  or more of its agents or employees.
A commissioner, or  any  employee of the authority
who  handles  its  funds,  shall  be  required  to
furnish an adequate  bond. The commissioners shall
serve without compensation,  but shall be entitled
to reimbursement for  their  actual  and necessary
expenses  incurred in  the  performance  of  their
official duties.
    (b)  Any  tenant   organization   composed  of
tenants residing within  units owned or managed by
the  appointing authority  may  indicate  to  such
authority its desire to be notified of any pending
appointment of any such commissioner. A reasonable
time before appointing  any such commissioner, the
appointing authority shall  notify any such tenant
organization and, in making such appointment, such
authority shall consider tenants suggested by such
tenant organizations.
    Sec. 4. This  act  shall  take effect from its
passage, except that  section  1 shall take effect
July 1, 1997.

Approved July 8, 1997