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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: RAGE DPA 7-0-0-0 | 3rd Read 17-11-2-0
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SB 1357: department of housing; continuation.
Sponsor: Senator Dunn, LD 25
Caucus & COW
Overview
Continues the Arizona Department of Housing (ADOH) for four years through July 1, 2029. Outlines requirements for ADOH related to the Housing Trust Fund (HTF), performance measurement, complaint tracking, wire transfers and conflicts of interest. Increases reporting requirements for ADOH.
History
Established in 2002, the ADOH is responsible for: 1) establishing policies, procedures and programs to address the affordable housing issues confronting Arizona, including issues of low income families, moderate income families, housing affordability, special needs populations and decaying housing stock; 2) providing, to qualified housing participants and political subdivisions of Arizona, financial, advisory, consultative, planning, training and educational assistance for the development of safe, decent and affordable housing, including housing for low and moderate income households; and 3) maintaining and enforcing standards of quality and safety for manufactured homes, mobile homes and factory-built buildings. Programs administered by the ADOH include rental development, rental assistance, home ownership assistance, housing rehabilitation, foreclosure prevention and homeless prevention (A.R.S. § 41-3953).
The ADOH is primarily funded through federal resources and fees. According to the Joint Legislative Budget Committee, the ADOH administered approximately $190 million in federal and non-appropriated state housing and community development funds per year (JLBC).
The House Commerce Committee of Reference (COR) held a public meeting on Tuesday, January 14, 2025, to review the Auditor General's Performance Audit and Sunset Review Report and consider ADOH's responses to the statutorily outlined sunset factors. The COR recommended that ADOH be continued with revisions. ADOH is set to terminate on July 1, 2025, unless legislation is enacted for its continuation (A.R.S. § 41-3025.06).
Provisions
1. Continues, retroactive to July 1, 2025, the ADOH until July 1, 2029. (Sec. 2, 9)
2. Repeals the ADOH on January 1, 2030. (Sec. 2)
3. Expands the reporting requirements for ADOH's annual report to the Governor and Legislature. (Sec. 3)
4. Requires ADOH to establish standards prohibiting the sale, manufacture or possession of dangerous or narcotic drugs in facilities funded by ADOH as a condition of the funding. (Sec. 3)
5. Declares that a grantee's refusal to comply with the standards disqualifies the grantee from receiving any future funding from ADOH. (Sec. 3)
6. Subjects all programs established by ADOH and funded by the Housing Trust Fund to review by the Joint Legislative Budget Committee (JLBC). (Sec. 4)
7. Requires HTF monies to be spent in the following order of priority:
a) for constructing or renovating emergency shelter facilities;
b) for constructing or renovating transitional housing units; and
c) for constructing or renovating other types of shelter or housing as determined by ADOH to best serve the needs of individuals who have been determined seriously mentally ill and chronically resistant to treatment. (Sec. 4)
8. Outlines requirements for emergency shelter facilities and transition housing units that receive HTF monies. (Sec. 4)
9. Requires ADOH to establish and implement a comprehensive performance measurement system within 12 months after the effective date. (Sec. 5)
10. Outlines requirements for the comprehensive performance measurement system. (Sec. 5)
11. Requires ADOH to conduct a biennial:
a) evaluation of all housing programs in this state to assess program alignment with state housing goals and ensure compliance with state law; and
b) review of regulatory fees associated with manufactured housing in this state. (Sec. 5)
12. Directs ADOH to establish secure wire transfer protocols to mitigate fraud risks. (Sec. 5)
13. Outlines requirements for the secure wire transfer protocols. (Sec. 5)
14. Requires any proposed regulatory fee changes to be submitted to the Board of Manufactured Housing for approval and subjects the fee changes to a 30-day public comment period. (Sec. 5)
15. Establishes requirements for ADOH related to complaints and complaint tracking. (Sec. 5)
16. Requires ADOH staff to annually complete a conflict-of-interest disclosure form. (Sec. 5)
17. Instructs ADOH to maintain a special file of all substantial interest disclosures. (Sec. 5)
18. Requires ADOH to report any instance of fraud involving state monies to the Governor, JLBC and the Auditor General within 10 business days. (Sec. 5)
19. Directs ADOH to institute restitution efforts within 30 days after identifying fraudulent activity. (Sec. 5)
20. Directs ADOH to provide quarterly reports to the Speaker of the House and the President of the Senate regarding the use of monies from the Housing Trust Fund until December 31, 2026. (Sec. 6)
21. Outlines requirements for the quarterly report. (Sec. 6)
22. Instructs ADOH to conduct a review of approved and paid payment requests since July 1, 2021, to identify any improper payments made to grantees and how to recover those monies. (Sec. 6)
23. Requires the Auditor General to appear before the Appropriations Committee of Reference and the Joint Legislative Audit Committee to present the 18-month follow-up of the sunset report for ADOH. (sec. 7)
24. Contains a legislative intent clause. (Sec. 8)
25. Defines terms. (Sec. 3, 5)
26. Makes technical and conforming changes. (Sec. 3, 4)
Amendments
Committee on Appropriations
1. Removes the outlined order of priority for how HTF monies must be used.
2. Allows HTF monies to be used on housing assistance, including support services for people who have been determined to be seriously mentally ill and chronically resistant to treatment.
3. Prohibits HTF monies from being spent on down payment assistance programs, except as authorized by law.
4. Requires the Auditor General to conduct a special audit of the money spent on programs and services for individuals experiencing homelessness in this state for the past five years.
5. Outlines requirements for the special audit.
6. Establishes a reporting requirement for the special audit and requires the report to be submitted by December 31, 2026.
7. Appropriates $1,650,000 from the Housing Trust Fund in FY 2026 to the Auditor General for the special audit.
8. Exempts the appropriation from lapsing.
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12. SB 1357
13. Initials JB Page 0 Caucus & COW
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