HB 5240

House Bill No. 5240
  Public Act No. 26-29
AN ACT CONCERNING THE DEPARTMENT OF DEVELOPMENTAL
SERVICES'   RECOMMENDATIONS    REGARDING    VARIOUS
REVISIONS TO DEVELOPMENTAL SERVICES STATUTES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
   Section 1. Subsection (c) of section 17a-218 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective from
passage):
   (c) The commissioner may provide, within available appropriations,
subsidies [to] for persons with intellectual disability who are placed in
supervised apartments, condominiums or homes which do not receive
housing payments under section 17b-244, in order to assist such persons
to meet housing costs.
   Sec. 2. Section 17a-220 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
  As used in this section and sections 17a-221 to 17a-225, inclusive, as
amended by this act:
  (1) "Borrower" means an organization which has received a loan
pursuant to this section and sections 17a-221 to 17a-225, inclusive, as
amended by this act;
  House Bill No. 5240
   (2) "Capital loan agreement" means an agreement, in the form of a
written contract, between the department and the organization which
sets forth the terms and conditions applicable to the awarding of a
community residential facility loan;
   (3) "Certification" or "certified" means certification by the Department
of Public Health as an intermediate care facility for individuals with
intellectual disabilities pursuant to standards set forth in the rules and
regulations published in Title 42, Part 442, Subpart G of the Code of
Federal Regulations;
  (4) "Community-based" means those programs or facilities which are
not located on the grounds of, or operated by, the department;
   (5) "Community residential facility" means a community-based
residential facility which houses up to six persons with intellectual
disability or autism spectrum disorder and which provides food,
shelter, personal guidance and, to the extent necessary, continuing
health-related services and care for persons requiring assistance to live
in the community. [, provided any such facilities in operation on July 1,
1985, which house more than six persons with intellectual disability or
autism spectrum disorder shall be eligible for loans for rehabilitation
under this section and sections 17a-221 to 17a-225, inclusive.] Such
facility shall be licensed and may be certified;
   (6) "Community Residential Facility Revolving Loan Fund" means
the loan fund established pursuant to section 17a-221;
   (7) "Default" means the failure of the borrower to observe or perform
any covenant or condition under the capital loan agreement and
includes the failure to meet any of the conditions specified in section
17a-223, as amended by this act;
  (8) "Department" means the Department of Developmental Services;
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   (9) ["Loan" means a community residential facilities] "Community
residential facility loan" or "loan" means a loan to a community
residential facility which shall bear an interest rate to be determined in
accordance with subsection (t) of section 3-20, but in no event in excess
of six per cent per annum, and is made pursuant to the provisions of this
section and sections 17a-221 to 17a-225, inclusive, as amended by this
act;
  (10) "Licensed" or "licensure" means licensure by the department
pursuant to section 17a-227;
   (11) "Organization" means a private nonprofit corporation which is
(A) tax-exempt under Section 501(c)(3) of the Internal Revenue Code of
1986, or any subsequent corresponding internal revenue code of the
United States, as from time to time amended, (B) qualified to do business
in this state, and (C) applying for a loan under the community
residential facility revolving loan program;
   [(12) "Rehabilitate" or "rehabilitation" means rehabilitation of a
previously existing and operating community residential facility to
meet physical plant requirements for licensure, certification or Fire
Safety Code compliance or to make energy conservation
improvements;]
   [(13)] (12) "Renovate" or "renovation" means renovation of a newly
acquired residential facility to meet physical plant requirements for
licensure, certification or Fire Safety Code compliance or to make energy
conservation improvements;
  [(14)] (13) "Total property development cost" means the cost of
property acquisition, construction [,] or renovation [or rehabilitation]
and related development costs which may be capitalized under
generally accepted accounting principles, including furnishings and
equipment, provided in no case may the total property development
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cost of a residential facility financed pursuant to this section and
sections 17a-221 to 17a-225, inclusive, as amended by this act, exceed the
total residential development amount approved by the Department of
Social Services in accordance with sections 17a-228 and 17b-244, and the
regulations adopted thereunder; and
   [(15)] (14) "Capital repairs and improvements" means major repairs
and improvements to an existing community residential facility to
maintain the physical plant and property of such facility, which repairs
and improvements are reimbursable under the room and board rates
established by the Department of Social Services in accordance with
section 17b-244 and may be capitalized in accordance with generally
accepted accounting principles.
   Sec. 3. Section 17a-222 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
   (a) The department may make a community residential facility
[loans] loan to [organizations] an organization for [(1)] construction [or
purchase and renovation] of a community-based residential [facilities]
facility in a principal [amounts] amount up to one hundred per cent of
the total property development cost of the project. [or (2) the refinancing
of an indebtedness created in December, 1983, which indebtedness is
secured by a mortgage on such residential facility in principal amounts
up to one hundred per cent of the total indebtedness provided in no case
may the total amount of the loan exceed three hundred fifty thousand
dollars.]
   (b) The department may make a community residential facility loan
to an organization for the purchase and renovation of a community
residential facility in a principal amount up to one hundred per cent of
the total property development cost of the project, provided in no case
shall the total amount of renovation costs above the property acquisition
cost exceed one hundred thousand dollars.
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   [(b) The department may make community residential facility loans
to organizations for rehabilitation of community-based residential
facilities in principal amounts up to one hundred per cent of the total
property development cost of the project provided in no case may the
total amount of the loan exceed sixty thousand dollars.]
   (c) The portion, if any, of the total property development cost
described in subsections (a) and (b) of this section which is to be paid by
the organization may come from one or both of the following sources:
(1) Actual cash under the control of the organization; or (2) a loan
secured by a mortgage on the property, which mortgage may include
both the land and the building.
   (d) The department may make a community residential facility
[loans] loan to an [organizations] organization [which own or have] that
owns or has a capital [leases] lease for an existing [community-based]
community residential [facilities] facility for [rehabilitation and] capital
repairs and improvements in [amounts] an amount not less than three
thousand dollars and not greater than [forty] one hundred thousand
dollars. Notwithstanding the provisions of section 17a-225, as amended
by this act, the department may make [loans] a loan pursuant to this
subsection upon execution of a promissory note equal to the amount of
the loan which shall provide for repayment of the loan principal and
interest. The term of such [loans] loan shall be consistent with the
reimbursement through the rates established by the Department of
Social Services in accordance with section 17b-224.
   (e) Any organization that receives a community residential facility
loan shall be a licensed or certified provider that owns and operates the
community residential facility for the period of the loan.
   Sec. 4. Section 17a-223 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
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   (a) If the organization is seeking to [purchase and renovate a new
community residential facility or to rehabilitate an existing community
residential facility, it] obtain a community residential facility loan
pursuant to section 17a-222, as amended by this act, it shall provide
documentation to the department, including, but not limited to: (1) An
independent appraisal by a state certified real estate appraiser; and (2)
a structural survey of the home by a state licensed engineer. The
department shall not provide community residential facility loan funds
for the purchase of a residential facility in principal amounts which are
in excess of its appraised value and shall not provide such loan funds
for renovation [or rehabilitation] in principal amounts which are in
excess of actual and reasonable cost as defined in department standards.
   (b) The borrower shall sign a capital loan agreement in which it
agrees to meet all existing department guidelines for use of community
residential facility loan funds and to use such loan funds exclusively for
the purchase and renovation of property, construction [, renovation or
rehabilitation] or capital repairs and improvements of a community
residential facility as approved by the department.
   (c) The borrower shall agree to maintain the facility as a licensed or
certified community residential facility for a period equal to the
amortization period of the loan. The minimum such obligation shall be
five years and the maximum such obligation shall be thirty years.
   (d) If the borrower receives a loan equal to one hundred per cent of
the total property development cost of a new community residential
facility, it shall agree to reserve one hundred per cent of the maximum
number of beds in the funded community residential facility for
department referrals from state institutions and waiting lists until such
time as the department determines this no longer to be necessary. If the
borrower receives a loan which provides less than one hundred per cent
of the total property development cost of a new community residential
facility, it shall agree to reserve not less than two-thirds of the maximum
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number of beds in the funded community residential facility for
department referrals from state institutions and waiting lists until such
time as the department determines this no longer to be necessary. The
department may establish priorities for the development of new
community residential facilities serving persons with specialized needs
and may give preference in funding to applications addressing such
needs.
   (e) The borrower shall provide the department with a promissory
note equal to the amount of the loan which shall provide for repayment
of the loan principal and interest within a period not to exceed thirty
years and a mortgage deed as security for the loan. Such mortgage may
be subordinate to a first mortgage interest in the property given by the
organization for the purpose of developing such property, provided
that the total of both mortgage interests shall not exceed the limit of total
property development cost as set forth in section 17a-220, as amended
by this act. The department shall file a lien against the title of the
property for which community residential facility loan funds are
expended.
  (f) The capital loan agreement shall require the borrower to make
periodic payments of principal and interest to the department which
payments shall be deposited in the Community Residential Facility
Revolving Loan Fund.
   (g) In the event of a default or if the capital loan agreement is
terminated prior to the borrower's having satisfied its obligations under
said agreement, the department shall require the return to the
Community Residential Facility Revolving Loan Fund of the
outstanding amount of the loan and may foreclose on its mortgage in
accordance with the provisions of chapter 49.
   (h) In the event that the borrower's license to operate the community
residential facility is terminated by the department for cause, the
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department may bring an action to place the facility into receivership
pursuant to sections 17a-231 to 17a-237, inclusive, may contract with a
private nonprofit corporation to operate the facility or may operate the
facility with department staff until such license is restored. If such
license is not restored within one year, this shall constitute a default and
the department may pursue the remedies provided in this subsection.
   Sec. 5. Section 17a-225 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
   (a) The State Bond Commission shall have the power, from time to
time to authorize the issuance of bonds of the state in one or more series
and in principal amounts not exceeding in the aggregate six million
dollars.
   (b) The proceeds of the sale of said bonds, to the extent of the amount
stated in subsection (a) of this section, shall be used for the purposes of
sections 17a-220 to [17a-224] 17a-223, inclusive, as amended by this act.
   (c) All provisions of section 3-20, or the exercise of any right or power
granted thereby which are not inconsistent with the provisions of
sections 17a-220 to [17a-224] 17a-223, inclusive, as amended by this act,
are hereby adopted and shall apply to all bonds authorized by the State
Bond Commission pursuant to said sections, and temporary notes in
anticipation of the money to be derived from the sale of any such bonds
so authorized may be issued in accordance with said section 3-20 and
from time to time renewed. Such bonds shall mature at such time or
times not exceeding twenty years from their respective dates as may be
provided in or pursuant to the resolution or resolutions of the State
Bond Commission authorizing such bonds. None of said bonds shall be
authorized except upon a finding by the State Bond Commission that
there has been filed with it a request for such authorization, which is
signed by or on behalf of the Commissioner of Developmental Services
and states such terms and conditions as said commission, in its
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discretion, may require. Said bonds issued pursuant to sections 17a-220
to [17a-224] 17a-223, inclusive, as amended by this act, shall be general
obligations of the state and the full faith and credit of the state of
Connecticut are pledged for the payment of the principal of and interest
on said bonds as the same become due, and accordingly and as part of
the contract of the state with the holders of said bonds, appropriation of
all amounts necessary for punctual payment of such principal and
interest is hereby made, and the Treasurer shall pay such principal and
interest as the same become due.
   Sec. 6. Section 17a-224 of the general statutes is repealed. (Effective
from passage)
 Governor's Action:
 Approved May 27, 2026
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