By: Davis of Dallas, Flores, Hodge H.B. No. 2308
(Senate Sponsor - Lucio)
(In the Senate - Received from the House May 11, 2009;
May 11, 2009, read first time and referred to Committee on
International Relations and Trade; May 23, 2009, reported
adversely, with favorable Committee Substitute by the following
vote: Yeas 6, Nays 0; May 23, 2009, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2308 By: Davis
A BILL TO BE ENTITLED
AN ACT
relating to the provision of affordable housing in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 487, Government Code, is
amended by adding Sections 487.355 and 487.356 to read as follows:
Sec. 487.355. NONBORDER COLONIA FUND. (a) In this
section, "nonborder colonia" means a geographic area that:
(1) is located in a county all parts of which are
located at least 150 miles from the international border of this
state;
(2) is located in a county or municipality that is
eligible, as identified by office rule, to receive community
development block grant money under this subchapter;
(3) consists of 11 or more dwellings that are located
in close proximity to each other in an area that may be described as
a community or neighborhood; and
(4) either:
(A) has a majority population composed of
individuals and families of low income, based on the federal Office
of Management and Budget poverty index, and meets the
qualifications of an economically distressed area under Section
17.921, Water Code; or
(B) has the physical and economic
characteristics of a colonia, as determined by the office.
(b) The nonborder colonia fund is an account in the general
revenue fund.
(c) In each state fiscal year, from amounts allocated to the
state under the federal community development block grant
nonentitlement program authorized by Title I of the Housing and
Community Development Act of 1974 (42 U.S.C. Section 5301 et seq.),
the office shall set aside and transfer to the account for the
purposes of this section the portion of that money, not to exceed
$7.5 million each year, that exceeds the amount provided to the
state under that program for the state fiscal year ending August 31,
2008.
(d) Except as provided by Subsection (e), amounts deposited
to the account may be appropriated to the office only for the
benefit of counties and municipalities identified by office rule as
eligible to receive community development block grant money under
this subchapter for:
(1) housing initiatives for nonborder colonias
located in those counties and municipalities, including
infrastructure associated with new construction, rehabilitation,
or improvements; and
(2) the improvement of the housing conditions in those
colonias.
(e) Amounts deposited to the account may not be appropriated
to the office for financial assistance to political subdivisions
for the construction, acquisition, or improvement of water supply
and sewer services, as described by Section 17.922, Water Code.
(f) Sections 403.095 and 404.071 do not apply to the
account.
Sec. 487.356. COORDINATION WITH TEXAS DEPARTMENT OF HOUSING
AND COMMUNITY AFFAIRS. The office shall work with the Texas
Department of Housing and Community Affairs to:
(1) identify available sources of funding for housing
initiatives in a county or municipality that is eligible, as
identified by office rule, to receive financial assistance from the
nonborder colonia fund established by Section 487.355;
(2) coordinate housing initiatives that receive funds
under Section 487.355(d); and
(3) make available on or before August 1 of each year a
plan that addresses the housing and infrastructure needs for the
following state fiscal year for at least one colonia, as defined by
Section 2306.083.
SECTION 2. Subchapter E, Chapter 2306, Government Code, is
amended by adding Sections 2306.098 and 2306.099 to read as
follows:
Sec. 2306.098. COORDINATION WITH OFFICE OF RURAL COMMUNITY
AFFAIRS. The department shall work with the Office of Rural
Community Affairs to:
(1) identify available sources of funding for housing
initiatives in a county or municipality that is eligible, as
identified by office rule, to receive financial assistance from the
nonborder colonia fund established by Section 487.355;
(2) coordinate housing initiatives that receive funds
under Section 487.355(d); and
(3) make available on or before August 1 of each year a
plan that addresses the housing and infrastructure needs for the
following state fiscal year for at least one colonia, as defined by
Section 2306.083.
Sec. 2306.099. RURAL HOUSING FIELD OFFICES. (a) The board
by rule shall:
(1) establish field offices in rural areas of each
uniform state service region to assist political subdivisions and
nonprofit entities in developing or administering affordable
housing programs in those areas; and
(2) specify the duties for each field office.
(b) The rules under Subsection (a) must include the
following duties for each field office:
(1) identifying affordable housing needs for rural
areas of the uniform state service region in which the field office
is located;
(2) identifying state and federal programs that may
address the needs identified under Subdivision (1);
(3) facilitating the development of relationships
that will assist in building local capacity to address the needs
identified under Subdivision (1); and
(4) providing information regarding state programs to
assist in the development of affordable housing for rural areas of
the uniform state service region in which the field office is
located.
SECTION 3. 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 4. 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 5. 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 6. Chapter 2306, Government Code, is amended by
adding Subchapter N to read as follows:
SUBCHAPTER N. OFFICE OF RURAL COMMUNITY AND SMALL MUNICIPALITY
HOUSING INITIATIVES
Sec. 2306.301. DEFINITION. In this subchapter, "office"
means the office established by Section 2306.302 to support rural
community and small municipality housing initiatives.
Sec. 2306.302. ESTABLISHMENT OF OFFICE. (a) The
department shall establish an office to support rural community and
small municipality housing initiatives.
(b) The department by rule shall define for purposes of this
subchapter:
(1) a rural community; and
(2) a small municipality.
(c) Subject to available funding, the department by rule may
establish not more than seven field offices as part of the office.
(d) The office shall work with each regional council of
government to:
(1) match housing sponsors to the housing needs of
rural communities and small municipalities; and
(2) identify available sources of funds for those
housing needs.
(e) The office shall use funds available from the housing
trust fund established under Section 2306.201 to administer
capacity building programs for rural communities and small
municipalities.
(f) The office shall coordinate a meeting at least two times
each year between department program directors and representatives
of rural communities and small municipalities to discuss best
practices for rural community and small municipality housing
initiatives.
(g) The office shall establish an online clearinghouse of
information relating to best practices for rural community and
small municipality housing initiatives.
(h) The director may assign additional duties to the office.
Sec. 2306.303. REGIONAL HOUSING DEVELOPMENT ORGANIZATIONS.
(a) The office shall establish regional nonprofit housing
development organizations that serve rural communities and small
municipalities in accordance with the purposes of this subchapter.
(b) To implement this section, the department may use any
money available to the department for the purpose, including gifts,
grants, and donations and funds allocated to the state 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.).
Sec. 2306.304. TRAINING. (a) The office annually shall
provide to elected officials, community organizations, nonprofit
organizations, and private developers a training course that
addresses housing programs and techniques that increase housing
opportunities in rural communities and small municipalities. The
office shall provide the course at an appropriate location selected
by the office and shall make the course available online in real
time.
(b) The department periodically shall also provide to
elected officials a training course regarding housing programs and
sources of funding for these programs.
Sec. 2306.305. HOUSING DEVELOPMENT PLANNING ASSISTANCE. On
the request of the governing body of a municipality or county, the
office shall assign an employee or independent contractor to assist
the municipality or county in:
(1) developing comprehensive housing plans for rural
communities and small municipalities in that county;
(2) supporting housing development initiatives in
those communities and municipalities; and
(3) identifying financial resources available for
those plans and initiatives.
Sec. 2306.306. RURAL COMMUNITY AND SMALL MUNICIPALITY
HOUSING DEVELOPMENT PILOT PROJECTS. Notwithstanding other program
rules and procedures of the department, the department may
establish pilot projects to test and develop new approaches to
providing housing in rural communities and small municipalities
for:
(1) individuals and families of low income; and
(2) individuals and families of very low income.
Sec. 2306.307. AGRICULTURAL WORKER HOUSING INITIATIVE.
(a) The office shall fund housing initiatives that serve
agricultural workers and their families, including:
(1) new housing initiatives;
(2) housing rehabilitation initiatives; or
(3) tenant-based rental assistance.
(b) The office may designate as a pilot project a housing
initiative implemented under this section for agricultural workers
and their families.
(c) The office shall coordinate with appropriate divisions
of the department to:
(1) document agricultural worker housing needs;
(2) determine whether a housing need documented by the
department is critical; and
(3) develop initiatives to address those housing
needs.
(d) The department may use any available funds to implement
this section, including gifts, grants, and donations and funds
allocated to the department 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.).
(e) In this section, "agricultural worker":
(1) means a person who receives a substantial portion
of income from employment that involves:
(A) the primary production of agricultural or
aquacultural commodities; or
(B) the handling of agricultural or aquacultural
commodities in an unprocessed state, including handling those
commodities in a feedlot or a meat processing plant; and
(2) includes a person who is retired or disabled but
was employed as described by Subdivision (1) at the time of that
person's retirement or disablement.
Sec. 2306.308. COMMUNITY DEVELOPMENT CORPORATION FOR
AGRICULTURAL WORKER HOUSING FACILITIES. (a) In this section,
"community development corporation" means a private, nonprofit
corporation organized to foster economic growth and
revitalization, create small businesses, or develop affordable
housing in a defined neighborhood or for a targeted population.
(b) Using existing resources, the department shall create a
statewide community development corporation charged with
developing, acquiring, and rehabilitating housing facilities in
appropriate areas in the state for agricultural workers and their
families.
(c) The department shall work with the community
development corporation to implement the findings and
recommendations of the department in the report submitted under
Section 2(f), Chapter 60 (H.B. 1099), Acts of the 79th Legislature,
Regular Session, 2005.
(d) The department may use any available funds to implement
this section, including gifts, grants, and donations and funds
allocated to the department 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.).
(e) In this section, "agricultural worker":
(1) means a person who receives a substantial portion
of income from employment that involves:
(A) the primary production of agricultural or
aquacultural commodities; or
(B) the handling of agricultural or aquacultural
commodities in an unprocessed state, including handling those
commodities in a feedlot or a meat processing plant; and
(2) includes a person who is retired or disabled but
was employed as described by Subdivision (1) at the time of that
person's retirement or disablement.
SECTION 7. Chapter 2306, Government Code, is amended by
adding Subchapter EE to read as follows:
SUBCHAPTER EE. RURAL HOUSING LAND ASSEMBLAGE PROGRAM
Sec. 2306.701. SHORT TITLE. This subchapter may be cited as
the Rural Housing Land Assemblage Program Act.
Sec. 2306.702. DEFINITIONS. In this subchapter:
(1) "Affordable" means that the monthly mortgage
payment or contract rent does not exceed 30 percent of the
applicable median income for that unit size, in accordance with the
income and rent limit rules adopted by the department.
(2) "Low-income household" means:
(A) for rental housing, a household with a gross
income not to exceed 80 percent of the greater of the area median
income or national nonmetropolitan median income, adjusted for
household size, as determined annually by the United States
Department of Housing and Urban Development; or
(B) for purchased housing, a household with a
gross income not to exceed 80 percent of the greater of the area
median income or the state median income, adjusted for household
size, as determined annually by the United States Department of
Housing and Urban Development or by the department based on data
from the United States Department of Housing and Urban Development,
as appropriate.
(3) "Office" means the Office of Rural Community
Affairs.
(4) "Rural county" means, notwithstanding Section
2306.004, a county classified as a rural county by the United States
Department of Agriculture for purposes of the rural housing loan
programs authorized by the Housing Act of 1949 (42 U.S.C. Section
1471 et seq.).
(5) "Rural housing land assemblage entity" means an
entity established or designated by the governing bodies of one or
more rural municipalities or rural counties for the purpose of
participating in the rural housing land assemblage program.
(6) "Rural housing land assemblage program" means a
program established by the department to acquire, hold, and
transfer real property under this subchapter for the purpose of
providing affordable housing for low-income households.
(7) "Rural municipality" means a municipality
classified as a rural municipality by the United States Department
of Agriculture for purposes of the rural housing loan programs
authorized by the Housing Act of 1949 (42 U.S.C. Section 1471 et
seq.).
Sec. 2306.703. RURAL HOUSING LAND ASSEMBLAGE PROGRAM.
(a) The department, in consultation with the office, shall
establish the rural housing land assemblage program.
(b) The governing bodies of one or more rural municipalities
or rural counties may agree to establish a rural housing land
assemblage entity and for that purpose may apply to participate in
the rural housing land assemblage program.
(c) The department and the office shall:
(1) jointly select not more than five applications for
participation in the program; and
(2) enter into a memorandum of understanding to
establish a selection procedure and address performance of other
duties imposed on the department and the office under this
subchapter.
(d) If selected to participate in the program, a
municipality or county shall:
(1) enter into interlocal agreements with any other
municipalities or counties selected to participate in the program
with that municipality or county, subject to the provisions of this
subchapter; and
(2) establish or designate a rural housing land
assemblage entity to exercise powers as described by this
subchapter.
Sec. 2306.704. RURAL HOUSING LAND ASSEMBLAGE ENTITY. For
the purpose of providing affordable housing for low-income
households, a rural housing land assemblage entity may acquire,
hold, and transfer real property that is not improved with a
habitable building or buildings and is otherwise unoccupied.
Sec. 2306.705. PRIVATE SALE TO LAND ASSEMBLAGE ENTITY.
(a) Notwithstanding any other law and except as provided by
Subsection (f), real property that is ordered sold pursuant to
foreclosure of a tax lien may be sold in a private sale to a rural
housing land assemblage entity by the officer charged with the sale
of the property, without first offering the property for sale as
otherwise provided by Section 34.01, Tax Code, if:
(1) the property is used for the purpose of providing
affordable housing as described by Section 2306.704;
(2) the market value of the property as appraised by
the local appraisal district and as specified in the judgment of
foreclosure is less than the total amount due under the judgment,
including all taxes, penalties, and interest, plus the value of
nontax liens held by a taxing unit and awarded by the judgment,
court costs, and the cost of the sale;
(3) the property is not improved with a habitable
building or buildings and is otherwise unoccupied;
(4) there are delinquent taxes on the property for a
total of at least five years; and
(5) each municipality or county that established or
designated the rural housing land assemblage entity has executed
with the other taxing units that are parties to the tax suit an
interlocal agreement that enables those units to retain the right
to withhold consent to the sale of specific properties to the rural
housing land assemblage entity.
(b) A sale of property for use in connection with the rural
housing land assemblage program is a sale for a public purpose.
(c) If the person being sued in a suit for foreclosure of a
tax lien does not contest the market value of the property in the
suit, the person waives the right to challenge the amount of the
market value determined by the court for purposes of the sale of the
property under Section 33.50, Tax Code.
(d) For any sale of property under this section, each person
who was a defendant to the judgment, or that person's attorney,
shall be given, not later than the 60th day before the date of sale,
written notice of the proposed method of sale of the property by the
officer charged with the sale of the property. Notice shall be
given in the manner prescribed by Rule 21a, Texas Rules of Civil
Procedure.
(e) After receipt of the notice required by Subsection (d)
and before the date of the proposed sale, the owner of the property
subject to sale may file with the officer charged with the sale a
written request that the property not be sold in the manner provided
by this section.
(f) If the officer charged with the sale receives a written
request as provided by Subsection (e), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(g) The owner of the property subject to sale may not
receive any proceeds of a sale under this section. However, the
owner does not have any personal liability for a deficiency of the
judgment as a result of a sale under this section.
(h) Notwithstanding any other law, if consent is given by
the taxing units that are a party to the judgment, property may be
sold to the rural housing land assemblage entity for less than the
market value of the property as specified in the judgment or less
than the total of all taxes, penalties, and interest, plus the value
of nontax liens held by a taxing unit and awarded by the judgment,
court costs, and the cost of the sale.
(i) The deed of conveyance of the property sold to a rural
housing land assemblage entity under this section conveys to the
entity the right, title, and interest acquired or held by each
taxing unit that was a party to the judgment, subject to the right
of redemption.
Sec. 2306.706. EXEMPTION FROM AD VALOREM TAXATION.
Property sold to and held by a rural housing land assemblage entity
for subsequent resale is entitled to an exemption from ad valorem
taxation for a period not to exceed three years from the date of
acquisition. The exemption period may be renewed for a property for
an additional period, not to exceed three years, on approval of the
governing body of each participating municipality or county and any
other taxing unit in which the property is located. Property is
entitled to an exemption under this section only during the period
the property is held by the rural housing land assemblage entity.
Sec. 2306.707. REGIONAL WORKSHOPS. (a) The department and
the office shall conduct regional workshops for rural housing land
assemblage entities. A workshop must include information regarding
the operation of the rural housing land assemblage program, such as
reporting and audit requirements for rural housing land assemblage
entities, affordability terms, additional income targeting, and
the imposition of deed and resale restrictions on real property
sold under the program to achieve the purpose of providing
affordable housing for low-income households.
(b) The department and the office shall contract for
technical assistance in conducting the workshops, if necessary.
Sec. 2306.708. FUNDING; REPORT. (a) The department shall
allocate $1 million to the rural housing land assemblage program
from funds allocated to the department 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.).
(b) The office shall allocate $1 million to the rural
housing land assemblage program from funds allocated to the office
under the federal community development block grant nonentitlement
program authorized by Title I of the Housing and Community
Development Act of 1974 (42 U.S.C. Section 5301 et seq.).
(c) Not later than December 1, 2012, the department and the
office jointly shall submit a report to the legislature on the
establishment and implementation of the rural housing land
assemblage program.
(d) This section expires September 1, 2013.
Sec. 2306.709. OPEN RECORDS AND MEETINGS. A rural housing
land assemblage entity is subject to Chapters 551 and 552.
Sec. 2306.710. RECORDS; AUDIT. (a) A rural housing land
assemblage entity shall keep accurate minutes of its meetings and
shall keep accurate records and books of account that conform with
generally accepted principles of accounting and that clearly
reflect the income and expenses of the rural housing land
assemblage entity and all transactions in relation to its property.
(b) A rural housing land assemblage entity shall file with
the department and each participating municipality or county, not
later than the 120th day after the close of the entity's fiscal
year, annual audited financial statements prepared by a certified
public accountant. The financial transactions of the rural housing
land assemblage entity are subject to audit by a participating
municipality or county and by the department.
SECTION 8. Section 2306.753(b), Government Code, is 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 or rehabilitate 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 or rehabilitating housing for others through a
state-certified [nonprofit] owner-builder housing program;
(C) provide through the noncontract labor of
friends, family, or volunteers and through personal labor at least
65 percent of the labor necessary to build or rehabilitate the
proposed housing by working through a state-certified
owner-builder housing program; or
(D) if due to documented disability or other
limiting circumstances as defined by department rule the
owner-builder cannot provide the amount of personal labor otherwise
required by this subdivision, provide through the noncontract labor
of friends, family, or volunteers at least 65 percent of the labor
necessary to build or rehabilitate the proposed housing by working
through a state-certified owner-builder housing program.
SECTION 9. 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 or rehabilitate adequate housing
for $45,000 [$30,000], the owner-builder must obtain the amount
necessary that exceeds $45,000 [$30,000] from other sources of
funds [one or more local governmental entities, nonprofit
organizations, or private lenders]. 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) a first lien by the department on the real
property if the loan is the largest amortized, repayable loan
secured by the real property; or
(B) a co-first lien or subordinate lien as
determined by department rule, if the loan is not the largest loan
as described by Paragraph (A)[, including a lien that is
subordinate to a lien that secures a loan made under Subsection (b)
and that is greater than the department's lien].
SECTION 10. Section 2306.755(a), Government Code, is
amended to read as follows:
(a) The department may certify nonprofit owner-builder
housing programs operated by a tax-exempt organization listed under
Section 501(c)(3), Internal Revenue Code of 1986, to:
(1) qualify potential owner-builders for loans under
this subchapter;
(2) provide owner-builder education classes under
Section 2306.756;
(3) assist owner-builders in building or
rehabilitating housing; and
(4) originate or service loans made under this
subchapter.
SECTION 11. Section 2306.756(a), Government Code, is
amended to read as follows:
(a) A state-certified nonprofit owner-builder housing
program shall offer owner-builder education classes to potential
owner-builders. A class under this section must provide
information on:
(1) the financial responsibilities of an
owner-builder under this subchapter, including the consequences of
an owner-builder's failure to meet those responsibilities;
(2) the building or rehabilitation of housing by
owner-builders;
(3) resources for low-cost building materials
available to owner-builders; and
(4) resources for building or rehabilitation
assistance available to owner-builders.
SECTION 12. Section 2306.757, Government Code, is amended
to read as follows:
Sec. 2306.757. LOAN PRIORITY FOR WAIVER OF LOCAL GOVERNMENT
FEES. In making loans under this subchapter, the department shall
give priority to loans to owner-builders who will reside in
counties or municipalities that agree in writing to waive capital
recovery fees, building permit fees, inspection fees, or other fees
related to the building or rehabilitation of the housing to be built
or improved with the loan proceeds.
SECTION 13. 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 14. Section 2306.7581(a-1), Government Code, is
amended to read as follows:
(a-1) Each state fiscal year the department shall transfer
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 15. Chapter 2306, Government Code, is amended by
adding Subchapter JJ to read as follows:
SUBCHAPTER JJ. TEXAS SECURE LOAN PILOT PROGRAM
Sec. 2306.871. DEFINITION. In this subchapter, "program"
means the Texas secure loan pilot program.
Sec. 2306.872. TEXAS SECURE LOAN PILOT PROGRAM. (a) The
department shall establish the Texas secure loan pilot program to
provide to individuals and families of low income mortgage loans
that allow modifications to the terms of the loans, such as
adjustments to the period of the loans and to interest rates, to
assist program participants in avoiding foreclosure of those loans.
(b) The program may include the provision of down payment
and closing cost assistance.
(c) The department may work with mortgage brokers, lenders,
and nonprofit organizations to design mortgage loan products
available under the program.
Sec. 2306.873. ADMINISTRATION OF PROGRAM; RULES. (a) The
department shall administer the program.
(b) The board shall adopt rules governing:
(1) the administration of the program, including the
origination of loans under the program;
(2) the criteria for approving another entity to
service loans originated under the program;
(3) the use of insurance on the loans and the homes
financed under the program, as considered appropriate by the board
to provide additional security for the loans;
(4) the verification of occupancy of the home by the
homebuyer as the homebuyer's principal residence;
(5) the terms of any memorandum of understanding or
contract with another entity for processing, servicing, or
administering the loans;
(6) the types of loan modifications that would assist
a homebuyer in avoiding foreclosure of a loan under this
subchapter; and
(7) criteria for authorizing loan modifications for
homebuyers whose income is adversely affected by circumstances such
as unemployment, a reduction of wages or hours of employment,
illness, or the death of a spouse or other person contributing to
the income of a homebuyer.
Sec. 2306.874. ELIGIBILITY. (a) To be eligible for a
mortgage loan issued by the department under this subchapter, a
homebuyer must:
(1) earn an income, adjusted for family size, of not
more than:
(A) 80 percent of the area median income if the
homebuyer lives in a rural area; or
(B) 60 percent of the area median income if the
homebuyer lives in an urban area;
(2) intend to occupy, as the homebuyer's principal
residence, the home for which the mortgage loan is issued; and
(3) meet any additional eligibility requirements or
limitations prescribed by the department.
(b) The department may enter into memoranda of
understanding with other agencies of the state or may contract with
private entities to process, service, or administer all or a
portion of the loans issued under this subchapter.
SECTION 16. The change in law made by this Act in amending
Sections 2306.202, 2306.203, and 2306.758, Government Code,
applies beginning with the state fiscal year that begins September
1, 2009.
SECTION 17. The Texas Department of Housing and Community
Affairs shall create the community development corporations
required by Section 2306.308, Government Code, as added by this
Act, as soon as practicable after the effective date of this Act,
but not later than October 1, 2009.
SECTION 18. Not later than October 1, 2009, the Texas
Department of Housing and Community Affairs shall adopt the rules
required by Subchapter N, Chapter 2306, Government Code, as added
by this Act.
SECTION 19. Not later than January 1, 2010, the Texas
Department of Housing and Community Affairs and the Office of Rural
Community Affairs shall allocate the funds required by Section
2306.708, Government Code, as added by this Act, to the rural
housing land assemblage program established under Subchapter EE,
Chapter 2306, Government Code, as added by this Act.
SECTION 20. 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 21. The board of directors of the Texas Department
of Housing and Community Affairs shall adopt the rules required by
Subchapter JJ, Chapter 2306, Government Code, as added by this Act,
not later than October 1, 2009, and the Texas Department of Housing
and Community Affairs shall begin issuing loans under the Texas
secure loan pilot program not later than January 1, 2010.
SECTION 22. This Act does not make an appropriation. A
provision in this Act that creates a new governmental program,
creates a new entitlement, or imposes a new duty on a governmental
entity is not mandatory during a fiscal period for which the
legislature has not made a specific appropriation to implement the
provision.
SECTION 23. This Act takes effect September 1, 2009.
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