By: Lucio S.B. No. 2288
(In the Senate - Filed March 13, 2009; March 31, 2009, read
first time and referred to Committee on International Relations and
Trade; April 14, 2009, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 0;
April 14, 2009, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 2288 By: Lucio
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 Texas Department
of Housing and Community Affairs.
(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 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 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
community development block grant colonia fund under this
subchapter;
(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
community development block grant colonia fund under Subchapter I,
Chapter 487;
(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. 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, including:
(1) new housing initiatives;
(2) housing rehabilitation initiatives; or
(3) tenant-based rental assistance.
(b) The office may designate a housing initiative for
agricultural workers as a pilot project.
(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.).
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 agricultural worker
housing facilities in appropriate areas in the state.
(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.).
SECTION 4. 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 5. 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 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. 2306.1083. 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;
(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. 2306.1084. 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.
SECTION 6. 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 7. 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 8. 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 9. The board of directors of 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 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 10. This Act takes effect September 1, 2009.
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