81R4241 ACP-D
By: Lucio S.B. No. 2288
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. SMALL MUNICIPALITY AND RURAL AREA HOUSING
DEVELOPMENT FUND. (a) In this section, "colonia" means a
geographic area that:
(1) is located in a county or municipality that is
eligible, as identified by office rule, to receive financial
assistance from the community development block grant colonia fund
under this subchapter;
(2) 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
(3) 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 department.
(b) The small municipality and rural area housing
development fund is an account in the general revenue fund.
(c) In each state fiscal year, the office shall set aside
for the purposes of this section an amount of money, not to exceed
$7.5 million each year, that is equal to any amount provided to the
community development block grant colonia fund under this
subchapter that exceeds the amount provided to that colonia fund
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:
(1) housing initiatives in eligible counties and
municipalities under office rules; or
(2) the improvement of the housing conditions in a
colonia.
(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 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 community development block
grant colonia fund under this subchapter.
SECTION 2. Section 2306.0521(b), Government Code, is
amended to read as follows:
(b) This section does not apply to:
(1) the manufactured housing division; or
(2) the division for rural community and small
municipality housing initiatives established by Section 2306.302.
SECTION 3. Subchapter E, Chapter 2306, Government Code, is
amended by adding Section 2306.098 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 identify available sources of funding for
housing initiatives in eligible counties and municipalities, as
described by Section 487.356.
SECTION 4. Section 2306.253, Government Code, is amended by
adding Subsections (a-1) and (a-2) to read as follows:
(a-1) In addition to the education program implemented
under Subsection (a), the department shall develop and implement a
homebuyer education program designed to provide information and
counseling to individuals and families of low income in rural
communities and small municipalities. The education program must
address topics relating to:
(1) the home buying process;
(2) financial literacy;
(3) foreclosure remediation; and
(4) other programs determined by the department as
necessary to increase home ownership by individuals and families of
low income.
(a-2) The department may require any person who receives
mortgage-based financial assistance from the department to
complete the homebuyer education program established by Subsection
(a-1).
SECTION 5. Chapter 2306, Government Code, is amended by
adding Subchapter N to read as follows:
SUBCHAPTER N. RURAL COMMUNITY AND SMALL MUNICIPALITY HOUSING
INITIATIVES
Sec. 2306.301. DEFINITION. In this subchapter, "division"
means the division established by Section 2306.302 to support rural
community and small municipality housing initiatives.
Sec. 2306.302. ESTABLISHMENT OF DIVISION. (a) The
department shall establish a division to support rural community
and small municipality housing initiatives.
(b) The department by rule shall define:
(1) a small municipality; and
(2) a rural community.
Sec. 2306.303. REGIONAL HOUSING DEVELOPMENT ORGANIZATIONS.
(a) The division 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
legislative appropriations and gifts, grants, and donations.
(c) The division may use the services of the Texas State
Affordable Housing Corporation when necessary to accomplish the
purposes of this section.
Sec. 2306.304. TRAINING. The division 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
division shall provide the course at an appropriate location
selected by the division and shall make the course available online
in real time.
Sec. 2306.305. RURAL GRANTS ADMINISTRATOR. (a) The
director shall designate a rural grants administrator within the
division established by Section 2306.302.
(b) The rural grants administrator shall:
(1) oversee and coordinate department initiatives
that are directed toward specific rural communities or small
municipalities; and
(2) provide information to the director and the board
regarding the impact of proposed department programs, rules, and
initiatives on housing opportunities in rural communities and small
municipalities.
Sec. 2306.306. HOUSING DEVELOPMENT PLANNING ASSISTANCE. On
the request of the governing body of a municipality or county, the
division shall assign a department 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. 2306.307. 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;
(2) individuals and families of very low income; or
(3) agricultural workers.
Sec. 2306.308. AGRICULTURAL WORKER HOUSING INITIATIVE. (a)
The division shall fund housing initiatives that serve agricultural
workers, including:
(1) new housing initiatives;
(2) housing rehabilitation initiatives; or
(3) tenant-based rental assistance.
(b) The division may designate a housing initiative for
agricultural workers as a pilot project authorized under Section
2306.307.
(c) The division shall coordinate with other 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 legislative appropriations and gifts,
grants, and donations.
Sec. 2306.309. RURAL LAND BANK DEMONSTRATION PROGRAM. (a)
The department may adopt a rural land bank demonstration program,
or may enter into a memorandum of understanding requiring the Texas
State Affordable Housing Corporation to adopt a rural land bank
demonstration program, in which the officer charged with selling
real property ordered sold pursuant to foreclosure of a tax lien may
sell certain eligible real property by private sale for purposes of
affordable housing development as provided by department rule.
(b) The department may adopt any rules necessary for the
purposes of the program, including a rule to establish or approve a
land bank for the purpose of acquiring, holding, and transferring
unimproved real property under this section.
SECTION 6. Section 2306.67022, Government Code, is amended
to read as follows:
Sec. 2306.67022. QUALIFIED ALLOCATION PLAN; MANUAL. (a)
The board annually shall adopt a qualified allocation plan and a
corresponding manual to provide information regarding the
administration of and eligibility for the low income housing tax
credit program.
(b) The board shall adopt any provisions in the qualified
allocation plan that the board considers necessary to facilitate
the efficient delivery of multifamily housing to rural areas in
this state.
SECTION 7. Section 2306.6723(b), Government Code, is
amended to read as follows:
(b) The rural development agency shall assist in developing
all threshold, scoring, and underwriting criteria applied to
applications eligible for the rural area set-aside. The criteria
must be approved by that agency. To the extent permitted by federal
law and notwithstanding any funding priorities otherwise provided
by state law, the threshold, scoring, and underwriting criteria
developed and approved under this section must ensure that
applications for allocations of housing tax credits to small-scale
developments located in rural areas are not placed, based solely on
the size of the proposed developments, at a competitive
disadvantage with applications for allocations of housing tax
credits to other developments located in those areas. For purposes
of this subsection, "small-scale development" means a development
with fewer than 33 units.
SECTION 8. Chapter 2306, Government Code, is amended by
adding Subchapter NN to read as follows:
SUBCHAPTER NN. TEXAS SECURE LOAN PILOT PROGRAM
Sec. 2306.1081. DEFINITION. In this subchapter, "program"
means the Texas secure loan pilot program.
Sec. 2306.1082. TEXAS SECURE LOAN PILOT PROGRAM. (a) The
department shall establish the Texas secure loan pilot program to
provide first lien and second lien single-family mortgage loans to
individuals and families of low income.
(b) The program may include the provision of down payment
and closing cost assistance.
Sec. 2306.1083. 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; and
(6) criteria for authorizing the modification of loan
terms 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. 2306.1084. 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.
Sec. 2306.1085. ALLOCATION OF LOANS. The department shall
issue at least 50 percent of all loans under this subchapter to
homebuyers whose incomes do not exceed 60 percent of area median
family income, adjusted for family size.
Sec. 2306.1086. LOAN TERMS; RECOVERY OF PRINCIPAL. (a) The
department shall establish reasonable interest rates for first lien
and second lien mortgage loans under this subchapter to allow full
repayment of those loans by low-income homebuyers.
(b) The department shall recover the full amount of the
principal of a loan issued under this subchapter.
Sec. 2306.1087. MODIFICATION OF LOAN TERMS. If a homebuyer
meets the criteria adopted by the department under Section
2306.1083(b)(6), the department or other servicer of the loan may
modify the terms of the loan by:
(1) suspending payments for a specific period;
(2) extending the term of the loan to reduce the amount
of the payments; or
(3) lowering the interest rate to reduce the amount of
the payments.
Sec. 2306.1088. INITIATION OF MODIFIED LOAN TERMS. (a)
Regardless of whether a loan payment is missed, the modification of
loan terms under Section 2306.1087 may be requested by the
homebuyer or initiated by the department or other servicer of the
loan.
(b) If a homebuyer misses a scheduled payment for a loan
under this subchapter, the department or other servicer of the loan
shall contact the homebuyer and determine the reason for the missed
payment. If the payment was missed for a reason meeting the
criteria adopted by the board under Section 2306.1083(b)(6), the
department or servicer may modify the terms of the loan under
Section 2306.1087.
Sec. 2306.1089. EDUCATION SERVICES FOR HOMEBUYERS. The
department shall provide homebuyer and homeowner education and
counseling services to persons receiving loans under this
subchapter.
Sec. 2306.1090. FUNDING. (a) The department shall ensure
that a loan issued under this subchapter is structured in a way that
complies with any requirements associated with the source of the
funds used for the loan.
(b) In addition to funds set aside for the program under
Section 1372.023 and any other available funds, including
legislative appropriations, the department may solicit and accept
gifts and grants for the purposes of this subchapter.
(c) The department may package, securitize, and sell the
loans issued under this subchapter and use the proceeds of the sale
to issue additional loans.
SECTION 9. Subtitle C, Title 12, Local Government Code, is
amended by adding Chapter 394A to read as follows:
CHAPTER 394A. RURAL HOUSING LAND ASSEMBLAGE PROGRAM
Sec. 394A.001. SHORT TITLE. This chapter may be cited as
the Rural Housing Land Assemblage Program Act.
Sec. 394A.002. DEFINITIONS. In this chapter:
(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) "Department" means the Texas Department of Housing
and Community Affairs.
(3) "Low-income household" means:
(A) for rental housing, a household with a gross
income not to exceed 60 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.
(4) "Rural county" means 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
implementing and operating a rural housing land assemblage program.
(6) "Rural housing land assemblage program" means a
program 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. 394A.003. RURAL HOUSING LAND ASSEMBLAGE PROGRAM. The
governing bodies of one or more rural municipalities or rural
counties may participate in a rural housing land assemblage
program. As part of the program, a participating municipality or
county shall:
(1) enter into interlocal agreements with any other
participating municipalities or counties governing the scope and
operation of the program, subject to the provisions of this
chapter; and
(2) establish or designate an entity to serve as the
rural housing land assemblage entity in charge of implementing and
operating the program.
Sec. 394A.004. RURAL HOUSING LAND ASSEMBLAGE ENTITY. A
rural housing land assemblage entity may acquire, hold, and
transfer, for the purpose of providing affordable housing for
low-income households, real property that is not improved with a
habitable building or buildings and is otherwise unoccupied.
Sec. 394A.005. 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 394A.004;
(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 participates in
the rural housing land assemblage program has executed with the
other taxing units that are parties to the tax suit an interlocal
agreement that enables those units to agree to participate in the
program while retaining 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. 394A.006. 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. 394A.007. DEPARTMENT RULEMAKING AUTHORITY. The
department shall develop and adopt additional guidelines and rules
governing the operation of a rural housing land assemblage program,
including 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.
Sec. 394A.008. OPEN RECORDS AND MEETINGS. A rural housing
land assemblage entity is subject to Chapters 551 and 552,
Government Code.
Sec. 394A.009. 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
each participating municipality or county not later than the 90th
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 10. (a) Not later than December 1, 2009, the Texas
Department of Housing and Community Affairs shall implement the
homebuyer education program required by Section 2306.253(a-1),
Government Code, as added by this Act.
(b) 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 11. The changes in law made by this Act in amending
Subchapter DD, Chapter 2306, Government Code, apply only to an
application cycle that begins on or after the effective date of this
Act. An application cycle that begins before the effective date of
this Act is governed by the law in effect when the application cycle
began, and the former law is continued in effect for that purpose.
SECTION 12. The Texas Department of Housing and Community
Affairs shall adopt the rules required by Subchapter NN, Chapter
2306, Government Code, as added by this Act, not later than October
1, 2009, and shall begin issuing loans under the Texas secure loan
pilot program not later than January 1, 2010.
SECTION 13. This Act takes effect September 1, 2009.