LRB-4271/1
FFK:eev:rs
2013 - 2014 LEGISLATURE
February 17, 2014 - Introduced by Representatives Nygren, Czaja, Bernier,
Marklein, Mursau, Murtha, Kulp, Krug, Nerison, Petryk, Swearingen,
Tranel and Ballweg, cosponsored by Senators Tiffany, Petrowski, Darling
and Harsdorf. Referred to Joint Committee on Finance.
AB770,1,2 1An Act to create 234.88 of the statutes; relating to: emergency heating
2assistance loan guarantees.
Analysis by the Legislative Reference Bureau
This bill creates an emergency heating assistance loan guarantee program to
be administered by the Wisconsin Housing and Economic Development Authority
(WHEDA). The bill directs WHEDA to guarantee collection of not less than 50
percent or more than 80 percent of eligible loans made to eligible individuals for the
purpose of financing extraordinary costs related to heating during a state of
emergency (emergency heating assistance loans). The bill also requires WHEDA to
pay an amount equal to 3.5 percent of a guaranteed emergency heating assistance
loan to a participating lender to reduce the interest rate charged to the individual
receiving the emergency heating assistance loan.
Under the bill, eligibility requirements for an emergency heating assistance
loan guarantee include:
1) The total principal amount of all guaranteed loans to the individual under
the program does not exceed $2,500, unless a different amount is requested by
WHEDA and approved by the Joint Committee on Finance (JFC).
2) The interest rate on the loan does not exceed a rate determined by WHEDA.
3) If the loan is obtained to pay a supplier, the participating lender pays the
supplier directly.
4) The initial term of the loan is not more than two years. The term of the loan
may be extended but may not exceed a total of three years.
5) The individual's household income is no more than 200 percent of the median
household income in the county in which the individual resides.

6) In the judgment of the participating lender, the loan is necessary for the
individual to pay heating costs related to the declared state of emergency; it is
reasonably likely that the individual will be able to repay the loan in full with
interest; the individual is not eligible for conventional financing on reasonably
equivalent terms and conditions; and that under normal market conditions the
individual's income and assets would be sufficient for the individual to pay his or her
heating costs.
In general, WHEDA may only guarantee emergency heating assistance loans
if the governor declares a state of emergency related to heating costs or the
availability of heating fuels and JFC approves WHEDA's plan for guaranteeing
emergency heating assistance loans in response to the declared state of emergency.
If the plan is approved, WHEDA may guarantee emergency heating assistance loans
for a period of 120 days following the date the plan is approved, except that WHEDA
may request one additional 120-day extension from JFC. The bill, however, provides
that WHEDA may guarantee emergency heating assistance loans related to the
state of emergency declared in Executive Order No. 130 relating to severe winter
weather and a propane shortage for 120 days following the effective date of this bill
without JFC approval.
Finally, the bill directs WHEDA to immediately transfer $2,000,000 from the
housing rehabilitation loan program administration fund to the Wisconsin
development reserve fund. The bill also requires WHEDA to allocate at least
$2,000,000 in the Wisconsin development reserve fund to the emergency heating
assistance loan guarantee program for 120 days following the effective date of the
bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB770,1 1Section 1. 234.88 of the statutes is created to read:
AB770,2,3 2234.88 Emergency heating assistance loan guarantees. (1) Definitions.
3In this section:
AB770,2,64 (a) "Emergency heating assistance loan" means a loan to an individual to
5finance extraordinary costs related to heating during a state of emergency declared
6by the governor under s. 323.10.
AB770,2,87 (b) "Guaranteed loan" means an emergency heating assistance loan on which
8the authority guarantees collection under sub. (5).
AB770,3,4
1(c) "Participating lender" means a bank, production credit association, credit
2union, savings bank, savings and loan association, or other person who makes
3emergency heating assistance loans and who has entered into an agreement with the
4authority under s. 234.93 (2) (a).
AB770,3,7 5(2) Eligible loans. An emergency heating assistance loan made by a
6participating lender is eligible for guarantee of collection under sub. (5) from the
7Wisconsin development reserve fund under s. 234.93 if all of the following apply:
AB770,3,108 (a) The total of the principal amounts of all guaranteed loans extended to the
9individual under this section will not exceed $2,500, unless a different maximum
10amount is approved under sub. (5).
AB770,3,1411 (b) The rate of interest on the emergency heating assistance loan, including any
12origination fees or other charges relating to the emergency heating assistance loan,
13does not exceed a rate determined by the authority after considering the conditions
14of the financial market.
AB770,3,1615 (c) If the individual obtains the emergency heating assistance loan to pay a
16supplier, the participating lender pays the supplier directly.
AB770,3,1817 (d) The participating lender follows procedures required by the authority to
18secure repayment of the emergency heating assistance loan.
AB770,3,2019 (e) The initial term of the emergency heating assistance loan is not longer than
202 years.
AB770,3,2321 (f) In the judgment of the participating lender, the emergency heating
22assistance loan is necessary for the individual to pay heating costs related to the
23declared state of emergency.
AB770,3,2524 (g) The proceeds of the emergency heating assistance loan may not be used to
25refinance a loan made under this section.
AB770,4,2
1(3) Eligible individuals. An individual is eligible for a guaranteed loan if all
2of the following apply:
AB770,4,43 (a) The individual's household annual income does not exceed 200 percent of
4the median household income for the county in which the individual resides.
AB770,4,55 (b) In the judgment of the participating lender, all of the following are true:
AB770,4,76 1. It is reasonably likely that the individual will be able to repay the emergency
7heating assistance loan in full with interest.
AB770,4,98 2. The individual is not eligible for conventional financing on reasonably
9equivalent terms and conditions.
AB770,4,1210 3. Under normal market conditions affecting the cost of heating, the
11individual's income and assets would be sufficient for the individual to pay his or her
12heating costs.
AB770,4,1713 (c) The individual's name does not appear on the statewide support lien docket
14under s. 49.854 (2) (b). The condition under this paragraph is met for an individual
15whose name does appear if the individual provides to the authority a payment
16agreement that has been approved by the county child support agency under s. 59.53
17(5) and that is consistent with rules promulgated under s. 49.858 (2) (a).
AB770,4,19 18(4) Extension. A participating lender may extend the term of an emergency
19heating assistance loan until no later than 3 years after the lender made the loan.
AB770,5,2 20(5) Guarantee of collection. (a) Subject to par. (c), if the governor issues an
21executive order under s. 323.10 declaring a state of emergency related to heating
22costs or the availability of heating fuels and the joint committee on finance approves
23the authority's plan under par. (b), the authority shall guarantee collection of not less
24than 50 percent or more than 80 percent of the principal of any emergency heating

1assistance loan eligible for guarantee under sub. (2) made to an individual eligible
2for a guaranteed loan under sub. (3).
AB770,5,93 (b) If the governor declares a state of emergency related to heating costs or the
4availability of heating fuels, no later than 14 days after the governor's declaration
5the authority shall submit the authority's plan for guaranteeing collection of
6emergency heating loans under this section related to the declared state of
7emergency to the joint committee on finance for approval. The authority may include
8in its plan a request to modify the maximum total principal amount under sub. (2)
9(a).
AB770,5,1410 (c) The authority may guarantee emergency heating assistance loans under
11par. (a) only for 120 days following the joint committee on finance's approval of the
12plan submitted under par. (b) unless the authority requests the joint committee on
13finance to permit the authority to guarantee emergency heating assistance loans for
14an additional 120 days.
AB770,5,20 15(6) Interest reduction. The authority shall pay, from the moneys in the
16Wisconsin development reserve fund under s. 234.93, to each participating lender an
17amount equal to 3.5 percent of the principal amount of any guaranteed loan to reduce
18interest payments on the guaranteed loan paid by an individual, except that the
19authority shall make interest reduction payments for no more than 2 years of the
20repayment term of any guaranteed loan.
AB770,2 21Section 2. Nonstatutory provisions.
AB770,5,2222 (1) Transfer to Wisconsin development reserve fund.
AB770,6,223 (a) The Wisconsin Housing and Economic Development Authority shall
24immediately transfer $2,000,000 from the housing rehabilitation loan program

1administration fund established under section 234.51 of the statutes to the
2Wisconsin development reserve fund under section 234.93 of the statutes.
AB770,6,63 (b) For 120 days following the effective date of this paragraph, the Wisconsin
4Housing and Economic Development Authority shall allocate at least $2,000,000 of
5the Wisconsin development reserve fund to the emergency heating assistance
6program under section 234.88 of the statutes, as created by this act.
AB770,6,167 (2) Declaration of propane shortage. Notwithstanding section 234.88 (5) (a)
8of the statutes, as created by this act, the Wisconsin Housing and Economic
9Development Authority shall guarantee collection of not less than 50 percent or more
10than 80 percent of the principal of any emergency heating assistance loan eligible for
11guarantee under section 234.88 (2) of the statutes, as created by this act, made to an
12individual eligible for a guaranteed loan under section 234.88 (3) of the statutes, as
13created by this act, related to the state of emergency declared by the governor on
14January 25, 2014, in Executive Order No. 130, for a period of 120 days beginning on
15the effective date of this subsection without the joint committee on finance approving
16a plan under section 234.88 (5) (b) of the statutes, as created by this act.
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