81R4731 JAM-D
By: Davis of Dallas H.B. No. 2296
A BILL TO BE ENTITLED
AN ACT
relating to the administration of certain housing funds by the
Texas Department of Housing and Community Affairs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2306.201, Government Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) The fund consists of:
(1) appropriations or transfers made to the fund;
(2) unencumbered fund balances;
(3) public or private gifts, [or] grants, or
donations;
(4) investment income, including all interest,
dividends, capital gains, or other income from the investment of
any portion of the fund;
(5) repayments received on loans made from the fund;
and
(6) funds from any other source.
(c) The department may accept gifts, grants, or donations
for the housing trust fund. All funds received for the housing
trust fund under Subsection (b) shall be deposited or transferred
into the Texas Treasury Safekeeping Trust Company.
SECTION 2. Section 2306.202(a), Government Code, is amended
to read as follows:
(a) The department, through the housing finance division,
shall use the housing trust fund to provide loans, grants, or other
comparable forms of assistance to local units of government, public
housing authorities, nonprofit organizations, and income-eligible
individuals, families, and households to finance, acquire,
rehabilitate, and develop decent, safe, and sanitary housing. In
each biennium the first $2.6 million available through the housing
trust fund for loans, grants, or other comparable forms of
assistance shall be set aside and made available exclusively for
local units of government, public housing authorities, and
nonprofit organizations. Any additional funds may also be made
available to for-profit organizations provided that [so long as] at
least 45 percent of available funds, as determined on September 1 of
each state fiscal year, in excess of the first $2.6 million shall be
made available to nonprofit organizations for the purpose of
acquiring, rehabilitating, and developing decent, safe, and
sanitary housing. The remaining portion shall be distributed to
[competed for by] nonprofit organizations, for-profit
organizations, and other eligible entities. Notwithstanding any
other section of this chapter, but subject to the limitations in
Section 2306.251(c), the department may also use the fund to
acquire property to endow the fund.
SECTION 3. Section 2306.203, Government Code, is amended to
read as follows:
Sec. 2306.203. RULES REGARDING ADMINISTRATION OF HOUSING
TRUST FUND. The board shall adopt rules to administer the housing
trust fund, including rules providing:
(1) that the division give priority to programs that
maximize federal resources;
(2) for a process to set priorities for use of the
fund, including the distribution of fund resources in accordance
with a plan that is [under a request for a proposal process]
developed and approved by the board and included in the
department's annual report regarding the housing trust fund as
described in the General Appropriations Act;
(3) that the criteria used to evaluate a proposed
activity [rank proposals] will include the:
(A) leveraging of [federal] resources;
(B) cost-effectiveness of the [a] proposed
activity [development]; and
(C) extent to which individuals and families of
very low income are served by the proposed activity [development];
(4) that funds may not be made available for a proposed
activity [to a development] that permanently and involuntarily
displaces individuals and families of low income;
(5) that the board attempt to allocate funds to
achieve a broad geographical distribution with:
(A) special emphasis on equitably serving rural
and nonmetropolitan areas; and
(B) consideration of the number and percentage of
income-qualified families in different geographical areas; and
(6) that multifamily housing developed or
rehabilitated through the fund remain affordable to
income-qualified households for at least 20 years.
SECTION 4. Sections 2306.753(b) and (d), Government Code,
are amended to read as follows:
(b) To be eligible for a loan under this subchapter, an
owner-builder:
(1) may not have an annual income that exceeds 60
percent, as determined by the department, of the greater of the
state or local median family income, when combined with the income
of any person who resides with the owner-builder;
(2) must have resided in this state for the preceding
six months;
(3) must have successfully completed an owner-builder
education class under Section 2306.756; and
(4) must agree to:
(A) provide through personal labor at least 65
[60] percent of the labor necessary to build the proposed housing by
working through a state-certified owner-builder housing program;
[or]
(B) provide an amount of personal labor
equivalent to the amount required under Paragraph (A) in connection
with building housing for others through a state-certified
nonprofit owner-builder housing program; or
(C) if approved by the department, provide
through noncontract labor of friends, family, or volunteers at
least 65 percent of the labor necessary to build the proposed
housing by working through a state-certified owner-builder housing
program.
(d) At least two-thirds of the dollar amount of loans made
under this subchapter in each fiscal year must be made to borrowers
whose property is located in a county that is in a census tract that
has a median household income that is not greater than 75 percent of
the median state household income for the most recent year for which
statistics are available [eligible to receive financial assistance
under Subchapter K, Chapter 17, Water Code].
SECTION 5. Sections 2306.754(a), (b), and (c), Government
Code, are amended to read as follows:
(a) The department may establish the minimum amount of a
loan under this subchapter, but a loan made by the department may
not exceed $45,000 [$30,000].
(b) If it is not possible for an owner-builder to purchase
necessary real property and build adequate housing for $45,000
[$30,000], the owner-builder must obtain the amount necessary that
exceeds $45,000 [$30,000] from one or more local governmental
entities, nonprofit organizations, or private lenders or from
grants awarded by the department for the purposes of this
subchapter. The total amount of amortized, repayable loans made by
the department and other entities to an owner-builder under this
subchapter may not exceed $90,000 [$60,000].
(c) A loan made by the department under this subchapter:
(1) may not exceed a term of 30 years;
(2) may bear interest at a fixed rate of not more than
three percent or bear interest in the following manner:
(A) no interest for the first two years of the
loan;
(B) beginning with the second anniversary of the
date the loan was made, interest at the rate of one percent a year;
(C) beginning on the third anniversary of the
date the loan was made and ending on the sixth anniversary of the
date the loan was made, interest at a rate that is one percent
greater than the rate borne in the preceding year; and
(D) beginning on the sixth anniversary of the
date the loan was made and continuing through the remainder of the
loan term, interest at the rate of five percent; and
(3) shall [may] be secured by a lien by the department
on the real property, including a lien that is subordinate to a lien
that secures a loan made under Subsection (b), regardless of
whether the other lien [and that] is greater than, equal to, or less
than the department's lien.
SECTION 6. Section 2306.758(c), Government Code, is amended
to read as follows:
(c) In a state fiscal year, the department may use not more
than 10 percent of the revenue available for purposes of this
subchapter to enhance the ability of tax-exempt organizations
described by Section 2306.755(a) to implement the purposes of this
chapter and to enhance the number of such organizations that are
able to implement those purposes. The department shall use that
available revenue to provide financial assistance, technical
training, and management support for the purposes of this
subsection.
SECTION 7. Section 2306.7581(a-1), Government Code, is
amended to read as follows:
(a-1) Each state fiscal year the department shall transfer
an amount equal to the greater of $6 million or an amount of funds
that is based on the annual volume of demand for the owner-builder
loan program, as determined using the total amount of loan
originations made under the program in the preceding state fiscal
year, [at least $3 million] to the owner-builder revolving fund
from money received under the federal HOME Investment Partnerships
program established under Title II of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. Section 12701 et seq.),
from money in the housing trust fund, or from money appropriated by
the legislature to the department. This subsection expires August
31, 2020 [2010].
SECTION 8. (a) The change in law made by this Act in
amending Sections 2306.202, 2306.203, 2306.758, and 2306.7581,
Government Code, applies beginning with the state fiscal year that
begins September 1, 2009.
(b) The change in law made by this Act in amending Sections
2306.753 and 2306.754, Government Code, applies only to
owner-builder loans granted by the department on or after the
effective date of this Act. An owner-builder loan granted before
the effective date of this Act is governed by the law in effect at
the time the loan was granted, and the former law is continued in
effect for that purpose.
SECTION 9. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.