A.__The community action agency must demonstrate its capacity to originate prudent loans and to service those loans through:

(1)__The ability to solicit and screen potential applicants, provide necessary technical assistance to help an applicant prepare an application and determine the viability of the application;

(2)__The ability to properly document each loan transaction, including the perfection of the interest of the agency in all collateral;

(3)__The ability to access appropriate legal guidance to ensure adherence to all applicable laws concerning lending, loan administration and collection;

(4)__The ability to accurately account for all loan repayments;

(5)__The ability to pursue collection actions;

(6)__The ability to invest and administer the fund; and

(7)__Such other criteria as the commissioner determines necessary to ensure the efficient administration of the program.

B.__The community action agency must agree to follow each of the following mechanisms for loan review and approval.

(1)__The community action agency must designate a coordinator who is responsible for the program in that region.

(2)__The board of directors of the community action agency must appoint a Drive ME Wheels-to-work review board, which may consist of a subcommittee of the board of directors, to review and make recommendations concerning loan applications.__The review board must consist of 3 members who represent low-income people and 2 members who are knowledgeable in financial matters. Members of a Drive ME Wheels-to-work review board serve for 2-year terms and may be reappointed to successive terms.

(3)__Loan applications must be reviewed by the Drive ME Wheels-to-work review board to determine if the applicant is creditworthy within the scope of this program and whether adequate collateral is required and, if necessary, offered to secure the loan.

(4)__A majority vote of the Drive ME Wheels-to-work review board is necessary to approve a loan in accordance with the policies adopted by the commissioner. The decision of the review board is final.

(5)__Loan applications must be on forms and accompanied by additional information required under rules adopted by the commissioner. Loan applicants may be required to submit personal or business-related financial information considered necessary to determine eligibility for the program.

(6)__The community action agency must provide the commissioner with an annual report detailing the fund activity in the form and containing the information required by the contract between the agency and the commissioner.

(7)__The community action agency must allow the commissioner or an agent of the commissioner to perform an audit of the fund and the administration of the program at the times and in the manner provided in the contract between the agency and the commissioner.

(8)__The community action agency must provide loan recipients training in credit management, budgeting, driving safety and car seat safety.

(9)__The community action agency must, to the maximum extent feasible, contract or arrange for the in-kind donation of technical and counseling services to assist program loan applicants.

§3833.__Loan criteria and procedures

1.__Criteria.__The commissioner may adopt rules to implement the program, which must include, but are not limited to, the following loan criteria.

A.__A person is not eligible for a loan from the fund unless that person receives assistance from the TANF program.

B.__No loan may be made in an amount in excess of $10,000 to any single applicant, nor at an interest rate that is equal to or greater than a comparable private market loan.__The commissioner may establish by rule interest rates on loans from the program.

C.__Loans may not be insured or guaranteed by the State, but a community action agency may require collateral in the form of security for the loan and may, in appropriate cases, take a mortgage on real estate.

D.__The commissioner must allocate funds under section 3835 to participating community action agencies on the basis of a formula that takes into consideration both the populations served by the agencies and the economic conditions of the regions, as evidenced by unemployment statistics and per capita income.

E.__A person may not use a loan from the fund to purchase a used vehicle unless that vehicle displays a valid inspection sticker pursuant to Title 29-A, chapter 15, subchapter I and the person purchases the vehicle from a dealer who offers a warranty on that vehicle.__The commissioner shall by rule establish the minimum standards for a warranty.

F.__A person may not use a loan from the fund to pay for repair or maintenance of a vehicle unless the repair or maintenance is conducted at a facility certified by the commissioner as a facility with adequately trained mechanics and appropriate repair and maintenance equipment.__The commissioner shall establish by rule the certification standards for facilities and the repair and maintenance procedures to which a loan may be applied.

§3834.__Administrative costs; community action agencies

A community action agency must be reimbursed for its administrative costs associated with implementing the program.__ The commissioner shall establish by rule a fee on each loan issued by a community action agency to cover the agency's administrative costs.

§3835.__Drive ME Wheels-to-work Revolving Loan Fund

1.__Fund established.__The Drive ME Wheels-to-work Revolving Loan Fund is established as a revolving loan fund in the department.

2.__Administration. The commissioner shall administer the fund.__The fund must be invested in the same manner as permitted for investment of funds belonging to the State or held in the State Treasury.__The fund is held separate from any other funds or money of the department and must be used and administered exclusively for the purposes under subsection 3.__The fund consists of the following:

A.__Such sums as may be appropriated by the Legislature or transferred to the fund from time to time by the Treasurer of State.__Any funds appropriated for this purpose may not lapse, but must remain available for the purposes set forth in this chapter;

B.__Principal and interest received from the repayment of loans made from the fund;

C.__Capitalization grants and awards made to the State or an instrumentality of the State by the United States for any of the purposes for which the fund has been established. These amounts must be paid directly into the fund without need for appropriation by the State;

D.__Interest earned from the investment of fund balances;

E.__Private gifts, bequests and donations made to the State for any of the purposes for which the fund has been established;

F.__The proceeds of notes or bonds issued by a bank for the purpose of deposit in the fund; and

G.__Other funds from any public or private source received for use for any of the purposes for which the fund has been established.

3.__Purposes.__The fund may be used for the following purposes:

A.__To provide a person who receives assistance from the TANF program a loan at below-market rates for the purchase of a used vehicle, in accordance with the loan criteria established under section 3833;

B.__To provide a person who receives assistance from the TANF program a loan at below-market rates for the repair and maintenance of a used vehicle, in accordance with the loan criteria established under section 3833;

C.__To invest available fund balances and to credit the net interest income on those balances to the fund; and

D. To pay the costs of the department staff associated with the administration of the fund and projects financed by the fund, except that no more than the lesser of 2% of the aggregate of the highest fund balances in any fiscal year or 4% of any capitalization grants provided by the United States for deposit in the fund may be used for these purposes.

4.__Community action agencies.__The fund may be divided into separate revolving loan funds to be administered by community action agencies upon approval by the commissioner. Each separate fund must contain all repayments of principal and interest for loans made from that fund and interest earned by the fund. Interest and principal payments required by loan defaults are charged to the fund to which repayments are applied. The commissioner has sole responsibility for the allocation and distribution of the original fund and for appropriations and repayments applied to the original fund. Each community action agency has responsibility for the allocation and distribution of the portion of the fund allocated to its separate revolving loan fund.

5.__Rules.__The commissioner shall develop by rule the terms and repayment of loans and may adopt rules for the administration of the fund.

§3836.__Reports

1. Regional.__Each community action agency participating in the program shall file reports required by the commissioner.

2. Commissioner.__The commissioner shall annually by December 1st report to the joint standing committee of the Legislature having jurisdiction over human services matters on the balance of each community action agency revolving loan fund, the status of all outstanding loans and a report on all other program activities.

§3837.__Drive ME Wheels-to-work Advisory Board

1.__Appointment.__The Drive ME Wheels-to-work Advisory Board, referred to in this section as the "board," established by Title 5, section 12004-I, subsection 49-C, consists of 13 members.__The commissioner shall appoint the members as follows:

A.__Two representatives from the vehicle sales industry;

B.__Two representatives from the vehicle service and repair industry;

C.__Three representatives of community action agencies;

D.__Two representatives who receive assistance from the TANF program.__The commissioner shall select the representatives from a list of potential appointees submitted by a statewide organization of interdependent neighborhoods;

E.__A representative of an organization that provides legal assistance to people with low incomes who has significant knowledge of public assistance programs;

F.__One person who is knowledgeable in consumer affairs;

G.__One person who is knowledgeable in consumer lending; and

H.__One person with experience in administering the TANF program.

2.__Term.__A board member serves for 2 years and continues serving until a successor is duly appointed and qualified.__When a vacancy occurs, the commissioner shall fill the vacancy by appointing a member from the same category of members listed in subsection 1 as the member who vacated the board.

3.__Purpose.__The board shall make recommendations to the commissioner concerning all aspects of the program, including, but not limited to, program improvements and other methods that may assist people with low incomes to obtain and maintain affordable and reliable transportation.

4.__Chair and officers.__The board shall annually choose one of its members to serve as chair for a one-year term.__The board may select other officers and designate their duties.

5.__Meetings.__The board shall meet at least once each year.__ The board may also meet at other times at the call of the chair or the chair's designee or the call of the commissioner or the commissioner's designee.

§3838.__Rules

Rules adopted pursuant to this chapter are major substantive rules as defined in Title 5, chapter 375, subchapter II-A.

Sec. 3. Appropriation. The following funds are appropriated from the General Fund to carry out the purposes of this Act.

2002-03

HUMAN SERVICES, DEPARTMENT OF

Drive ME Wheels-to-Work Revolving Loan Fund

All Other $750,000

Provides for the appropriation of funds to capitalize the Drive ME Wheels-to-Work Revolving Loan Fund to provide loans for the purchase of used vehicles and for the purchase of repair and maintenance services to people who receive assistance through the federal Temporary Assistance for Needy Families program.

SUMMARY

This bill establishes the Drive ME Wheels-to-work Program and requires the Commissioner of Human Services to adopt rules to implement the program, which will provide loans for the purchase of used vehicles and for the purchase of repair and maintenance services to people who receive assistance through the federal Temporary Assistance for Needy Families program. The loans will be provided through community action agencies at below-market rates. The bill also creates a revolving loan fund to finance the program and provides an appropriation.