Bill Summary – FastDemocracy

APPROVED                 CHAPTER
                                                             FEBRUARY 29, 2024                513
                                                               BY GOVERNOR              PUBLIC LAW
                                 STATE OF MAINE
                                          _____
                          IN THE YEAR OF OUR LORD
                       TWO THOUSAND TWENTY-FOUR
                                          _____
                                 H.P. 960 - L.D. 1505
An Act to Amend the Maine Cooperative Affordable Housing Ownership Act
Be it enacted by the People of the State of Maine as follows:
    Sec. 1. 13 MRSA §1742, sub-§4-A is enacted to read:
    4-A. Group equity cooperative. "Group equity cooperative" means a cooperative
affordable housing corporation organized in accordance with section 1763.
    Sec. 2. 13 MRSA §1742, sub-§4-B is enacted to read:
    4-B. Housing assistance program. "Housing assistance program" means any
program that offers financial assistance to individuals or organizations for housing costs,
residential utilities or the development, acquisition, repair, weatherization, remediation,
renovation or operation of residential housing.
    Sec. 3. 13 MRSA §1742, sub-§4-C is enacted to read:
    4-C. Housing cooperative. "Housing cooperative" includes any type of cooperative
affordable housing corporation.
    Sec. 4. 13 MRSA §1754, sub-§2, as enacted by PL 1993, c. 300, §1, is amended to
read:
    2. Maintenance of affordability. A limited equity formula, once established by a
cooperative affordable housing corporation in its articles of incorporation, may be amended
only if that amendment does not make the cooperative membership unaffordable for classes
of low-income or moderate-income households for which the cooperative affordable
housing corporation was originally incorporated. A cooperative affordable housing
corporation once organized under this section may not reorganize as other than a limited
equity cooperative or group equity cooperative without first dissolving.
    Sec. 5. 13 MRSA §1760, sub-§1, ¶B, as enacted by PL 1993, c. 300, §1, is
amended to read:
    B. As a dividend not to exceed 6% per annum on invested capital, except that a group
    equity cooperative may not apportion a dividend.
    Sec. 6. 13 MRSA §1763 is enacted to read:
                                   Page 1 - 131LR0185(03)
§1763. Group equity cooperative
   A cooperative affordable housing corporation may organize as a group equity
cooperative for the purpose of providing and preserving housing for classes of low-income
or moderate-income households at the time that the person or household purchases a
membership. A group equity cooperative must meet the following requirements.
    1. Interest does not accrue equity. The articles of incorporation must require that
cooperative interests may not be sold for more than the original par value. The original par
value may not exceed $100.
    2. Maintenance of affordability. A cooperative affordable housing corporation, once
organized under this section, may not reorganize as other than a group equity cooperative
without first dissolving.
     3. Uphold public purpose. A group equity cooperative may not sell all or substantially
all of its assets if the sale is intended to circumvent the purpose of this section.
    4. Right to repurchase. The articles of incorporation must require that the cooperative
affordable housing corporation has the first right to repurchase a member's cooperative
interest.
     5. No capital distribution. The articles of incorporation must require that there is no
distribution of capital to a member in the form of dividends or any additional interest in the
cooperative affordable housing corporation.
     6. Distribution upon dissolution. The articles of incorporation must require that upon
dissolution of the cooperative affordable housing corporation any assets remaining after
retirement of corporate debts and distribution to members must be distributed to a
charitable organization described in the United States Internal Revenue Code of 1986,
Section 501(c)(3), as amended, a public agency or another limited equity cooperative
whose formula for determining transfer value is no less restrictive than that of the
cooperative affordable housing corporation being dissolved.
    7. Sublease limitations. The articles of incorporation must require that a sublease of a
unit may not require monthly payments by the sublessee in excess of 100% of the monthly
payments for the unit required in the proprietary lease.
    8. Minimum occupancy requirement. At least 80% of the occupied units of a group
equity cooperative must be occupied by members.
    9. Residents only. Voting authority may not be assigned to nonresidents.
    Sec. 7. 13 MRSA §1764 is enacted to read:
§1764. Housing assistance programs
    1. Program inclusion. Housing cooperatives and residents of housing cooperatives
as classified or categorized in subsection 2 as owners, landlords, tenants or renters must be
considered for eligibility as owners, landlords, tenants or renters for all state and municipal
housing assistance programs, including publicly funded programs administered by private
agencies, notwithstanding state law or agency rules to the contrary, including but not
limited to:
    A. Energy efficiency and weatherization assistance programs administered by the
    Efficiency Maine Trust Board set out in Title 35-A, section 10103, subsection 2;
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    B. Programs administered by the Maine State Housing Authority established by Title
    30-A, section 4722, including but not limited to home fuel and electricity assistance
    programs, manufactured home replacement programs and programs to assist tenants
    with locating housing and with the rental application process and to provide supportive
    services to promote successful landlord-tenant relationships; and
    C. Municipal general assistance provided pursuant to Title 22, chapter 1161.
    2. Classification of housing cooperatives. Housing assistance programs may develop
specific policies that govern the treatment of program applicants who belong to or reside
in housing cooperatives. For those programs that do not have specific policies regarding
housing cooperatives, program applicants belonging to the housing cooperative must be
treated as owners with a housing classification type of homeownership, except for the
following:
    A. A program applicant belonging to a group equity housing cooperative must have the
    program applicant's housing type classified as rental property, and all residents must
    be categorized as a renter or tenant and the group equity housing cooperative must be
    categorized as the owner or landlord and carrying charges as rent; and
    B. A program applicant who is a resident of a housing cooperative and leases the
    program applicant's unit from the housing cooperative but is not a member of the
    housing cooperative, does not own a share of stock and does not hold any other
    ownership interest in the housing cooperative or residential property must be
    categorized as a renter or tenant and the respective cooperative affordable housing
    corporation must be categorized as owner or landlord.
   3. Cooperative affordable housing corporation participation in housing assistance
programs. If a cooperative affordable housing corporation is classified as the owner, the
cooperative affordable housing corporation has the right to apply for multifamily owner
benefit programs in accordance with the guidelines of the housing assistance programs.
                                   Page 3 - 131LR0185(03)
Statutes affected: 
Bill Text LD 1505, HP 960: 13.1754, 13.1760
Bill Text ACTPUB , Chapter 513: 13.1754, 13.1760