AB 770

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