Texas 2009 - 81st Regular

Texas Senate Bill SB2288 Compare Versions

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1	1	81R30961 ACP-F
2	2	By: Lucio, et al. S.B. No. 2288
3	3	Substitute the following for S.B. No. 2288:
4	4	By: Guillen C.S.S.B. No. 2288
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the provision of affordable housing in this state.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter I, Chapter 487, Government Code, is
12	12	amended by adding Sections 487.355 and 487.356 to read as follows:
13	13	Sec. 487.355. NONBORDER COLONIA FUND. (a) In this
14	14	section, "nonborder colonia" means a geographic area that:
15	15	(1) is located in a county all parts of which are
16	16	located at least 150 miles from the international border of this
17	17	state;
18	18	(2) is located in a county or municipality that is
19	19	eligible, as identified by office rule, to receive community
20	20	development block grant money under this subchapter;
21	21	(3) consists of 11 or more dwellings that are located
22	22	in close proximity to each other in an area that may be described as
23	23	a community or neighborhood; and
24	24	(4) either:
25	25	(A) has a majority population composed of
26	26	individuals and families of low income, based on the federal Office
27	27	of Management and Budget poverty index, and meets the
28	28	qualifications of an economically distressed area under Section
29	29	17.921, Water Code; or
30	30	(B) has the physical and economic
31	31	characteristics of a colonia, as determined by the office.
32	32	(b) The nonborder colonia fund is an account in the general
33	33	revenue fund.
34	34	(c) In each state fiscal year, from amounts allocated to the
35	35	state under the federal community development block grant
36	36	nonentitlement program authorized by Title I of the Housing and
37	37	Community Development Act of 1974 (42 U.S.C. Section 5301 et seq.),
38	38	the office shall set aside and transfer to the account for the
39	39	purposes of this section the portion of that money, not to exceed
40	40	$7.5 million each year, that exceeds the amount provided to the
41	41	state under that program for the state fiscal year ending August 31,
42	42	2008.
43	43	(d) Except as provided by Subsection (e), amounts deposited
44	44	to the account may be appropriated to the office only for the
45	45	benefit of counties and municipalities identified by office rule as
46	46	eligible to receive community development block grant money under
47	47	this subchapter for:
48	48	(1) housing initiatives for nonborder colonias
49	49	located in those counties and municipalities, including
50	50	infrastructure associated with new construction, rehabilitation,
51	51	or improvements; and
52	52	(2) the improvement of the housing conditions in those
53	53	colonias.
54	54	(e) Amounts deposited to the account may not be appropriated
55	55	to the office for financial assistance to political subdivisions
56	56	for the construction, acquisition, or improvement of water supply
57	57	and sewer services, as described by Section 17.922, Water Code.
58	58	(f) Sections 403.095 and 404.071 do not apply to the
59	59	account.
60	60	Sec. 487.356. COORDINATION WITH TEXAS DEPARTMENT OF HOUSING
61	61	AND COMMUNITY AFFAIRS. The office shall work with the Texas
62	62	Department of Housing and Community Affairs to:
63	63	(1) identify available sources of funding for housing
64	64	initiatives in a county or municipality that is eligible, as
65	65	identified by office rule, to receive financial assistance from the
66	66	nonborder colonia fund established by Section 487.355;
67	67	(2) coordinate housing initiatives that receive funds
68	68	under Section 487.355(d); and
69	69	(3) make available on or before August 1 of each year a
70	70	plan that addresses the housing and infrastructure needs for the
71	71	following state fiscal year for at least one colonia, as defined by
72	72	Section 2306.083.
73	73	SECTION 2. Subchapter E, Chapter 2306, Government Code, is
74	74	amended by adding Sections 2306.098 and 2306.099 to read as
75	75	follows:
76	76	Sec. 2306.098. COORDINATION WITH OFFICE OF RURAL COMMUNITY
77	77	AFFAIRS. The department shall work with the Office of Rural
78	78	Community Affairs to:
79	79	(1) identify available sources of funding for housing
80	80	initiatives in a county or municipality that is eligible, as
81	81	identified by office rule, to receive financial assistance from the
82	82	nonborder colonia fund established by Section 487.355;
83	83	(2) coordinate housing initiatives that receive funds
84	84	under Section 487.355(d); and
85	85	(3) make available on or before August 1 of each year a
86	86	plan that addresses the housing and infrastructure needs for the
87	87	following state fiscal year for at least one colonia, as defined by
88	88	Section 2306.083.
89	89	Sec. 2306.099. RURAL HOUSING FIELD OFFICES. (a) The board
90	90	by rule shall:
91	91	(1) establish field offices in rural areas of each
92	92	uniform state service region to assist political subdivisions and
93	93	nonprofit entities in developing or administering affordable
94	94	housing programs in those areas; and
95	95	(2) specify the duties for each field office.
96	96	(b) The rules under Subsection (a) must include the
97	97	following duties for each field office:
98	98	(1) identifying affordable housing needs for rural
99	99	areas of the uniform state service region in which the field office
100	100	is located;
101	101	(2) identifying state and federal programs that may
102	102	address the needs identified under Subdivision (1);
103	103	(3) facilitating the development of relationships
104	104	that will assist in building local capacity to address the needs
105	105	identified under Subdivision (1); and
106	106	(4) providing information regarding state programs to
107	107	assist in the development of affordable housing for rural areas of
108	108	the uniform state service region in which the field office is
109	109	located.
110	110	SECTION 3. Section 2306.201, Government Code, is amended by
111	111	amending Subsection (b) and adding Subsection (c) to read as
112	112	follows:
113	113	(b) The fund consists of:
114	114	(1) appropriations or transfers made to the fund;
115	115	(2) unencumbered fund balances;
116	116	(3) public or private gifts, [or] grants, or
117	117	donations;
118	118	(4) investment income, including all interest,
119	119	dividends, capital gains, or other income from the investment of
120	120	any portion of the fund;
121	121	(5) repayments received on loans made from the fund;
122	122	and
123	123	(6) funds from any other source.
124	124	(c) The department may accept gifts, grants, or donations
125	125	for the housing trust fund. All funds received for the housing
126	126	trust fund under Subsection (b) shall be deposited or transferred
127	127	into the Texas Treasury Safekeeping Trust Company.
128	128	SECTION 4. Section 2306.202(a), Government Code, is amended
129	129	to read as follows:
130	130	(a) The department, through the housing finance division,
131	131	shall use the housing trust fund to provide loans, grants, or other
132	132	comparable forms of assistance to local units of government, public
133	133	housing authorities, nonprofit organizations, and income-eligible
134	134	individuals, families, and households to finance, acquire,
135	135	rehabilitate, and develop decent, safe, and sanitary housing. In
136	136	each biennium the first $2.6 million available through the housing
137	137	trust fund for loans, grants, or other comparable forms of
138	138	assistance shall be set aside and made available exclusively for
139	139	local units of government, public housing authorities, and
140	140	nonprofit organizations. Any additional funds may also be made
141	141	available to for-profit organizations provided that [so long as] at
142	142	least 45 percent of available funds, as determined on September 1 of
143	143	each state fiscal year, in excess of the first $2.6 million shall be
144	144	made available to nonprofit organizations for the purpose of
145	145	acquiring, rehabilitating, and developing decent, safe, and
146	146	sanitary housing. The remaining portion shall be distributed to
147	147	[competed for by] nonprofit organizations, for-profit
148	148	organizations, and other eligible entities. Notwithstanding any
149	149	other section of this chapter, but subject to the limitations in
150	150	Section 2306.251(c), the department may also use the fund to
151	151	acquire property to endow the fund.
152	152	SECTION 5. Section 2306.203, Government Code, is amended to
153	153	read as follows:
154	154	Sec. 2306.203. RULES REGARDING ADMINISTRATION OF HOUSING
155	155	TRUST FUND. The board shall adopt rules to administer the housing
156	156	trust fund, including rules providing:
157	157	(1) that the division give priority to programs that
158	158	maximize federal resources;
159	159	(2) for a process to set priorities for use of the
160	160	fund, including the distribution of fund resources in accordance
161	161	with a plan that is [under a request for a proposal process]
162	162	developed and approved by the board and included in the
163	163	department's annual report regarding the housing trust fund as
164	164	described in the General Appropriations Act;
165	165	(3) that the criteria used to evaluate a proposed
166	166	activity [rank proposals] will include the:
167	167	(A) leveraging of [federal] resources;
168	168	(B) cost-effectiveness of the [a] proposed
169	169	activity [development]; and
170	170	(C) extent to which individuals and families of
171	171	very low income are served by the proposed activity [development];
172	172	(4) that funds may not be made available for a proposed
173	173	activity [to a development] that permanently and involuntarily
174	174	displaces individuals and families of low income;
175	175	(5) that the board attempt to allocate funds to
176	176	achieve a broad geographical distribution with:
177	177	(A) special emphasis on equitably serving rural
178	178	and nonmetropolitan areas; and
179	179	(B) consideration of the number and percentage of
180	180	income-qualified families in different geographical areas; and
181	181	(6) that multifamily housing developed or
182	182	rehabilitated through the fund remain affordable to
183	183	income-qualified households for at least 20 years.
184	184	SECTION 6. Chapter 2306, Government Code, is amended by
185	185	adding Subchapter N to read as follows:
186	186	SUBCHAPTER N. OFFICE OF RURAL COMMUNITY AND SMALL MUNICIPALITY
187	187	HOUSING INITIATIVES
188	188	Sec. 2306.301. DEFINITION. In this subchapter, "office"
189	189	means the office established by Section 2306.302 to support rural
190	190	community and small municipality housing initiatives.
191	191	Sec. 2306.302. ESTABLISHMENT OF OFFICE. (a) The
192	192	department shall establish an office to support rural community and
193	193	small municipality housing initiatives.
194	194	(b) The department by rule shall define for purposes of this
195	195	subchapter:
196	196	(1) a rural community; and
197	197	(2) a small municipality.
198	198	(c) Subject to available funding, the department by rule may
199	199	establish not more than seven field offices as part of the office.
200	200	(d) The office shall work with each regional council of
201	201	government to:
202	202	(1) match housing sponsors to the housing needs of
203	203	rural communities and small municipalities; and
204	204	(2) identify available sources of funds for those
205	205	housing needs.
206	206	(e) The office shall use funds available from the housing
207	207	trust fund established under Section 2306.201 to administer
208	208	capacity building programs for rural communities and small
209	209	municipalities.
210	210	(f) The office shall coordinate a meeting at least two times
211	211	each year between department program directors and representatives
212	212	of rural communities and small municipalities to discuss best
213	213	practices for rural community and small municipality housing
214	214	initiatives.
215	215	(g) The office shall establish an online clearinghouse of
216	216	information relating to best practices for rural community and
217	217	small municipality housing initiatives.
218	218	(h) The director may assign additional duties to the office.
219	219	Sec. 2306.303. REGIONAL HOUSING DEVELOPMENT ORGANIZATIONS.
220	220	(a) The office shall establish regional nonprofit housing
221	221	development organizations that serve rural communities and small
222	222	municipalities in accordance with the purposes of this subchapter.
223	223	(b) To implement this section, the department may use any
224	224	money available to the department for the purpose, including gifts,
225	225	grants, and donations and funds allocated to the state under the
226	226	federal HOME Investment Partnerships program established under
227	227	Title II of the Cranston-Gonzalez National Affordable Housing Act
228	228	(42 U.S.C. Section 12701 et seq.).
229	229	Sec. 2306.304. TRAINING. (a) The office annually shall
230	230	provide to elected officials, community organizations, nonprofit
231	231	organizations, and private developers a training course that
232	232	addresses housing programs and techniques that increase housing
233	233	opportunities in rural communities and small municipalities. The
234	234	office shall provide the course at an appropriate location selected
235	235	by the office and shall make the course available online in real
236	236	time.
237	237	(b) The department periodically shall also provide to
238	238	elected officials a training course regarding housing programs and
239	239	sources of funding for these programs.
240	240	Sec. 2306.305. HOUSING DEVELOPMENT PLANNING ASSISTANCE. On
241	241	the request of the governing body of a municipality or county, the
242	242	office shall assign an employee or independent contractor to assist
243	243	the municipality or county in:
244	244	(1) developing comprehensive housing plans for rural
245	245	communities and small municipalities in that county;
246	246	(2) supporting housing development initiatives in
247	247	those communities and municipalities; and
248	248	(3) identifying financial resources available for
249	249	those plans and initiatives.
250	250	Sec. 2306.306. RURAL COMMUNITY AND SMALL MUNICIPALITY
251	251	HOUSING DEVELOPMENT PILOT PROJECTS. Notwithstanding other program
252	252	rules and procedures of the department, the department may
253	253	establish pilot projects to test and develop new approaches to
254	254	providing housing in rural communities and small municipalities
255	255	for:
256	256	(1) individuals and families of low income; and
257	257	(2) individuals and families of very low income.
258	258	Sec. 2306.307. AGRICULTURAL WORKER HOUSING INITIATIVE.
259	259	(a) The office shall fund housing initiatives that serve
260	260	agricultural workers and their families, including:
261	261	(1) new housing initiatives;
262	262	(2) housing rehabilitation initiatives; or
263	263	(3) tenant-based rental assistance.
264	264	(b) The office may designate as a pilot project a housing
265	265	initiative implemented under this section for agricultural workers
266	266	and their families.
267	267	(c) The office shall coordinate with appropriate divisions
268	268	of the department to:
269	269	(1) document agricultural worker housing needs;
270	270	(2) determine whether a housing need documented by the
271	271	department is critical; and
272	272	(3) develop initiatives to address those housing
273	273	needs.
274	274	(d) The department may use any available funds to implement
275	275	this section, including gifts, grants, and donations and funds
276	276	allocated to the department under the federal HOME Investment
277	277	Partnerships program established under Title II of the
278	278	Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
279	279	Section 12701 et seq.).
280	280	(e) In this section, "agricultural worker":
281	281	(1) means a person who receives a substantial portion
282	282	of income from employment that involves:
283	283	(A) the primary production of agricultural or
284	284	aquacultural commodities; or
285	285	(B) the handling of agricultural or aquacultural
286	286	commodities in an unprocessed state, including handling those
287	287	commodities in a feedlot or a meat processing plant; and
288	288	(2) includes a person who is retired or disabled but
289	289	was employed as described by Subdivision (1) at the time of that
290	290	person's retirement or disablement.
291	291	Sec. 2306.308. COMMUNITY DEVELOPMENT CORPORATION FOR
292	292	AGRICULTURAL WORKER HOUSING FACILITIES. (a) In this section,
293	293	"community development corporation" means a private, nonprofit
294	294	corporation organized to foster economic growth and
295	295	revitalization, create small businesses, or develop affordable
296	296	housing in a defined neighborhood or for a targeted population.
297	297	(b) Using existing resources, the department shall create a
298	298	statewide community development corporation charged with
299	299	developing, acquiring, and rehabilitating housing facilities in
300	300	appropriate areas in the state for agricultural workers and their
301	301	families.
302	302	(c) The department shall work with the community
303	303	development corporation to implement the findings and
304	304	recommendations of the department in the report submitted under
305	305	Section 2(f), Chapter 60 (H.B. 1099), Acts of the 79th Legislature,
306	306	Regular Session, 2005.
307	307	(d) The department may use any available funds to implement
308	308	this section, including gifts, grants, and donations and funds
309	309	allocated to the department under the federal HOME Investment
310	310	Partnerships program established under Title II of the
311	311	Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
312	312	Section 12701 et seq.).
313	313	(e) In this section, "agricultural worker":
314	314	(1) means a person who receives a substantial portion
315	315	of income from employment that involves:
316	316	(A) the primary production of agricultural or
317	317	aquacultural commodities; or
318	318	(B) the handling of agricultural or aquacultural
319	319	commodities in an unprocessed state, including handling those
320	320	commodities in a feedlot or a meat processing plant; and
321	321	(2) includes a person who is retired or disabled but
322	322	was employed as described by Subdivision (1) at the time of that
323	323	person's retirement or disablement.
324	324	SECTION 7. Chapter 2306, Government Code, is amended by
325	325	adding Subchapter EE to read as follows:
326	326	SUBCHAPTER EE. RURAL HOUSING LAND ASSEMBLAGE PROGRAM
327	327	Sec. 2306.701. SHORT TITLE. This subchapter may be cited as
328	328	the Rural Housing Land Assemblage Program Act.
329	329	Sec. 2306.702. DEFINITIONS. In this subchapter:
330	330	(1) "Affordable" means that the monthly mortgage
331	331	payment or contract rent does not exceed 30 percent of the
332	332	applicable median income for that unit size, in accordance with the
333	333	income and rent limit rules adopted by the department.
334	334	(2) "Low-income household" means:
335	335	(A) for rental housing, a household with a gross
336	336	income not to exceed 80 percent of the greater of the area median
337	337	income or national nonmetropolitan median income, adjusted for
338	338	household size, as determined annually by the United States
339	339	Department of Housing and Urban Development; or
340	340	(B) for purchased housing, a household with a
341	341	gross income not to exceed 80 percent of the greater of the area
342	342	median income or the state median income, adjusted for household
343	343	size, as determined annually by the United States Department of
344	344	Housing and Urban Development or by the department based on data
345	345	from the United States Department of Housing and Urban Development,
346	346	as appropriate.
347	347	(3) "Office" means the Office of Rural Community
348	348	Affairs.
349	349	(4) "Rural county" means, notwithstanding Section
350	350	2306.004, a county classified as a rural county by the United States
351	351	Department of Agriculture for purposes of the rural housing loan
352	352	programs authorized by the Housing Act of 1949 (42 U.S.C. Section
353	353	1471 et seq.).
354	354	(5) "Rural housing land assemblage entity" means an
355	355	entity established or designated by the governing bodies of one or
356	356	more rural municipalities or rural counties for the purpose of
357	357	participating in the rural housing land assemblage program.
358	358	(6) "Rural housing land assemblage program" means a
359	359	program established by the department to acquire, hold, and
360	360	transfer real property under this subchapter for the purpose of
361	361	providing affordable housing for low-income households.
362	362	(7) "Rural municipality" means a municipality
363	363	classified as a rural municipality by the United States Department
364	364	of Agriculture for purposes of the rural housing loan programs
365	365	authorized by the Housing Act of 1949 (42 U.S.C. Section 1471 et
366	366	seq.).
367	367	Sec. 2306.703. RURAL HOUSING LAND ASSEMBLAGE PROGRAM.
368	368	(a) The department, in consultation with the office, shall
369	369	establish the rural housing land assemblage program.
370	370	(b) The governing bodies of one or more rural municipalities
371	371	or rural counties may agree to establish a rural housing land
372	372	assemblage entity and for that purpose may apply to participate in
373	373	the rural housing land assemblage program.
374	374	(c) The department and the office shall:
375	375	(1) jointly select not more than five applications for
376	376	participation in the program; and
377	377	(2) enter into a memorandum of understanding to
378	378	establish a selection procedure and address performance of other
379	379	duties imposed on the department and the office under this
380	380	subchapter.
381	381	(d) If selected to participate in the program, a
382	382	municipality or county shall:
383	383	(1) enter into interlocal agreements with any other
384	384	municipalities or counties selected to participate in the program
385	385	with that municipality or county, subject to the provisions of this
386	386	subchapter; and
387	387	(2) establish or designate a rural housing land
388	388	assemblage entity to exercise powers as described by this
389	389	subchapter.
390	390	Sec. 2306.704. RURAL HOUSING LAND ASSEMBLAGE ENTITY. For
391	391	the purpose of providing affordable housing for low-income
392	392	households, a rural housing land assemblage entity may acquire,
393	393	hold, and transfer real property that is not improved with a
394	394	habitable building or buildings and is otherwise unoccupied.
395	395	Sec. 2306.705. PRIVATE SALE TO LAND ASSEMBLAGE ENTITY.
396	396	(a) Notwithstanding any other law and except as provided by
397	397	Subsection (f), real property that is ordered sold pursuant to
398	398	foreclosure of a tax lien may be sold in a private sale to a rural
399	399	housing land assemblage entity by the officer charged with the sale
400	400	of the property, without first offering the property for sale as
401	401	otherwise provided by Section 34.01, Tax Code, if:
402	402	(1) the property is used for the purpose of providing
403	403	affordable housing as described by Section 2306.704;
404	404	(2) the market value of the property as appraised by
405	405	the local appraisal district and as specified in the judgment of
406	406	foreclosure is less than the total amount due under the judgment,
407	407	including all taxes, penalties, and interest, plus the value of
408	408	nontax liens held by a taxing unit and awarded by the judgment,
409	409	court costs, and the cost of the sale;
410	410	(3) the property is not improved with a habitable
411	411	building or buildings and is otherwise unoccupied;
412	412	(4) there are delinquent taxes on the property for a
413	413	total of at least five years; and
414	414	(5) each municipality or county that established or
415	415	designated the rural housing land assemblage entity has executed
416	416	with the other taxing units that are parties to the tax suit an
417	417	interlocal agreement that enables those units to retain the right
418	418	to withhold consent to the sale of specific properties to the rural
419	419	housing land assemblage entity.
420	420	(b) A sale of property for use in connection with the rural
421	421	housing land assemblage program is a sale for a public purpose.
422	422	(c) If the person being sued in a suit for foreclosure of a
423	423	tax lien does not contest the market value of the property in the
424	424	suit, the person waives the right to challenge the amount of the
425	425	market value determined by the court for purposes of the sale of the
426	426	property under Section 33.50, Tax Code.
427	427	(d) For any sale of property under this section, each person
428	428	who was a defendant to the judgment, or that person's attorney,
429	429	shall be given, not later than the 60th day before the date of sale,
430	430	written notice of the proposed method of sale of the property by the
431	431	officer charged with the sale of the property. Notice shall be
432	432	given in the manner prescribed by Rule 21a, Texas Rules of Civil
433	433	Procedure.
434	434	(e) After receipt of the notice required by Subsection (d)
435	435	and before the date of the proposed sale, the owner of the property
436	436	subject to sale may file with the officer charged with the sale a
437	437	written request that the property not be sold in the manner provided
438	438	by this section.
439	439	(f) If the officer charged with the sale receives a written
440	440	request as provided by Subsection (e), the officer shall sell the
441	441	property as otherwise provided in Section 34.01, Tax Code.
442	442	(g) The owner of the property subject to sale may not
443	443	receive any proceeds of a sale under this section. However, the
444	444	owner does not have any personal liability for a deficiency of the
445	445	judgment as a result of a sale under this section.
446	446	(h) Notwithstanding any other law, if consent is given by
447	447	the taxing units that are a party to the judgment, property may be
448	448	sold to the rural housing land assemblage entity for less than the
449	449	market value of the property as specified in the judgment or less
450	450	than the total of all taxes, penalties, and interest, plus the value
451	451	of nontax liens held by a taxing unit and awarded by the judgment,
452	452	court costs, and the cost of the sale.
453	453	(i) The deed of conveyance of the property sold to a rural
454	454	housing land assemblage entity under this section conveys to the
455	455	entity the right, title, and interest acquired or held by each
456	456	taxing unit that was a party to the judgment, subject to the right
457	457	of redemption.
458	458	Sec. 2306.706. EXEMPTION FROM AD VALOREM TAXATION.
459	459	Property sold to and held by a rural housing land assemblage entity
460	460	for subsequent resale is entitled to an exemption from ad valorem
461	461	taxation for a period not to exceed three years from the date of
462	462	acquisition. The exemption period may be renewed for a property for
463	463	an additional period, not to exceed three years, on approval of the
464	464	governing body of each participating municipality or county and any
465	465	other taxing unit in which the property is located. Property is
466	466	entitled to an exemption under this section only during the period
467	467	the property is held by the rural housing land assemblage entity.
468	468	Sec. 2306.707. REGIONAL WORKSHOPS. (a) The department and
469	469	the office shall conduct regional workshops for rural housing land
470	470	assemblage entities. A workshop must include information regarding
471	471	the operation of the rural housing land assemblage program, such as
472	472	reporting and audit requirements for rural housing land assemblage
473	473	entities, affordability terms, additional income targeting, and
474	474	the imposition of deed and resale restrictions on real property
475	475	sold under the program to achieve the purpose of providing
476	476	affordable housing for low-income households.
477	477	(b) The department and the office shall contract for
478	478	technical assistance in conducting the workshops, if necessary.
479	479	Sec. 2306.708. FUNDING; REPORT. (a) The department shall
480	480	allocate $1 million to the rural housing land assemblage program
481	481	from funds allocated to the department under the federal HOME
482	482	Investment Partnerships program established under Title II of the
483	483	Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
484	484	Section 12701 et seq.).
485	485	(b) The office shall allocate $1 million to the rural
486	486	housing land assemblage program from funds allocated to the office
487	487	under the federal community development block grant nonentitlement
488	488	program authorized by Title I of the Housing and Community
489	489	Development Act of 1974 (42 U.S.C. Section 5301 et seq.).
490	490	(c) Not later than December 1, 2012, the department and the
491	491	office jointly shall submit a report to the legislature on the
492	492	establishment and implementation of the rural housing land
493	493	assemblage program.
494	494	(d) This section expires September 1, 2013.
495	495	Sec. 2306.709. OPEN RECORDS AND MEETINGS. A rural housing
496	496	land assemblage entity is subject to Chapters 551 and 552.
497	497	Sec. 2306.710. RECORDS; AUDIT. (a) A rural housing land
498	498	assemblage entity shall keep accurate minutes of its meetings and
499	499	shall keep accurate records and books of account that conform with
500	500	generally accepted principles of accounting and that clearly
501	501	reflect the income and expenses of the rural housing land
502	502	assemblage entity and all transactions in relation to its property.
503	503	(b) A rural housing land assemblage entity shall file with
504	504	the department and each participating municipality or county, not
505	505	later than the 120th day after the close of the entity's fiscal
506	506	year, annual audited financial statements prepared by a certified
507	507	public accountant. The financial transactions of the rural housing
508	508	land assemblage entity are subject to audit by a participating
509	509	municipality or county and by the department.
510	510	SECTION 8. Section 2306.753(b), Government Code, is amended
511	511	to read as follows:
512	512	(b) To be eligible for a loan under this subchapter, an
513	513	owner-builder:
514	514	(1) may not have an annual income that exceeds 60
515	515	percent, as determined by the department, of the greater of the
516	516	state or local median family income, when combined with the income
517	517	of any person who resides with the owner-builder;
518	518	(2) must have resided in this state for the preceding
519	519	six months;
520	520	(3) must have successfully completed an owner-builder
521	521	education class under Section 2306.756; and
522	522	(4) must agree to:
523	523	(A) provide through personal labor at least 65
524	524	[60] percent of the labor necessary to build or rehabilitate the
525	525	proposed housing by working through a state-certified
526	526	owner-builder housing program; [or]
527	527	(B) provide an amount of personal labor
528	528	equivalent to the amount required under Paragraph (A) in connection
529	529	with building or rehabilitating housing for others through a
530	530	state-certified [nonprofit] owner-builder housing program;
531	531	(C) provide through the noncontract labor of
532	532	friends, family, or volunteers and through personal labor at least
533	533	65 percent of the labor necessary to build or rehabilitate the
534	534	proposed housing by working through a state-certified
535	535	owner-builder housing program; or
536	536	(D) if due to documented disability or other
537	537	limiting circumstances as defined by department rule the
538	538	owner-builder cannot provide the amount of personal labor otherwise
539	539	required by this subdivision, provide through the noncontract labor
540	540	of friends, family, or volunteers at least 65 percent of the labor
541	541	necessary to build or rehabilitate the proposed housing by working
542	542	through a state-certified owner-builder housing program.
543	543	SECTION 9. Sections 2306.754(a), (b), and (c), Government
544	544	Code, are amended to read as follows:
545	545	(a) The department may establish the minimum amount of a
546	546	loan under this subchapter, but a loan made by the department may
547	547	not exceed $45,000 [$30,000].
548	548	(b) If it is not possible for an owner-builder to purchase
549	549	necessary real property and build or rehabilitate adequate housing
550	550	for $45,000 [$30,000], the owner-builder must obtain the amount
551	551	necessary that exceeds $45,000 [$30,000] from other sources of
552	552	funds [one or more local governmental entities, nonprofit
553	553	organizations, or private lenders]. The total amount of amortized,
554	554	repayable loans made by the department and other entities to an
555	555	owner-builder under this subchapter may not exceed $90,000
556	556	[$60,000].
557	557	(c) A loan made by the department under this subchapter:
558	558	(1) may not exceed a term of 30 years;
559	559	(2) may bear interest at a fixed rate of not more than
560	560	three percent or bear interest in the following manner:
561	561	(A) no interest for the first two years of the
562	562	loan;
563	563	(B) beginning with the second anniversary of the
564	564	date the loan was made, interest at the rate of one percent a year;
565	565	(C) beginning on the third anniversary of the
566	566	date the loan was made and ending on the sixth anniversary of the
567	567	date the loan was made, interest at a rate that is one percent
568	568	greater than the rate borne in the preceding year; and
569	569	(D) beginning on the sixth anniversary of the
570	570	date the loan was made and continuing through the remainder of the
571	571	loan term, interest at the rate of five percent; and
572	572	(3) shall [may] be secured by:
573	573	(A) a first lien by the department on the real
574	574	property if the loan is the largest amortized, repayable loan
575	575	secured by the real property; or
576	576	(B) a co-first lien or subordinate lien as
577	577	determined by department rule, if the loan is not the largest loan
578	578	as described by Paragraph (A)[, including a lien that is
579	579	subordinate to a lien that secures a loan made under Subsection (b)
580	580	and that is greater than the department's lien].
581	581	SECTION 10. Section 2306.755(a), Government Code, is
582	582	amended to read as follows:
583	583	(a) The department may certify nonprofit owner-builder
584	584	housing programs operated by a tax-exempt organization listed under
585	585	Section 501(c)(3), Internal Revenue Code of 1986, to:
586	586	(1) qualify potential owner-builders for loans under
587	587	this subchapter;
588	588	(2) provide owner-builder education classes under
589	589	Section 2306.756;
590	590	(3) assist owner-builders in building or
591	591	rehabilitating housing; and
592	592	(4) originate or service loans made under this
593	593	subchapter.
594	594	SECTION 11. Section 2306.756(a), Government Code, is
595	595	amended to read as follows:
596	596	(a) A state-certified nonprofit owner-builder housing
597	597	program shall offer owner-builder education classes to potential
598	598	owner-builders. A class under this section must provide
599	599	information on:
600	600	(1) the financial responsibilities of an
601	601	owner-builder under this subchapter, including the consequences of
602	602	an owner-builder's failure to meet those responsibilities;
603	603	(2) the building or rehabilitation of housing by
604	604	owner-builders;
605	605	(3) resources for low-cost building materials
606	606	available to owner-builders; and
607	607	(4) resources for building or rehabilitation
608	608	assistance available to owner-builders.
609	609	SECTION 12. Section 2306.757, Government Code, is amended
610	610	to read as follows:
611	611	Sec. 2306.757. LOAN PRIORITY FOR WAIVER OF LOCAL GOVERNMENT
612	612	FEES. In making loans under this subchapter, the department shall
613	613	give priority to loans to owner-builders who will reside in
614	614	counties or municipalities that agree in writing to waive capital
615	615	recovery fees, building permit fees, inspection fees, or other fees
616	616	related to the building or rehabilitation of the housing to be built
617	617	or improved with the loan proceeds.
618	618	SECTION 13. Section 2306.758(c), Government Code, is
619	619	amended to read as follows:
620	620	(c) In a state fiscal year, the department may use not more
621	621	than 10 percent of the revenue available for purposes of this
622	622	subchapter to enhance the ability of tax-exempt organizations
623	623	described by Section 2306.755(a) to implement the purposes of this
624	624	chapter and to enhance the number of such organizations that are
625	625	able to implement those purposes. The department shall use that
626	626	available revenue to provide financial assistance, technical
627	627	training, and management support for the purposes of this
628	628	subsection.
629	629	SECTION 14. Section 2306.7581(a-1), Government Code, is
630	630	amended to read as follows:
631	631	(a-1) Each state fiscal year the department shall transfer
632	632	at least $3 million to the owner-builder revolving fund from money
633	633	received under the federal HOME Investment Partnerships program
634	634	established under Title II of the Cranston-Gonzalez National
635	635	Affordable Housing Act (42 U.S.C. Section 12701 et seq.), from
636	636	money in the housing trust fund, or from money appropriated by the
637	637	legislature to the department. This subsection expires August 31,
638	638	2020 [2010].
639	639	SECTION 15. Chapter 2306, Government Code, is amended by
640	640	adding Subchapter JJ to read as follows:
641	641	SUBCHAPTER JJ. TEXAS SECURE LOAN PILOT PROGRAM
642	642	Sec. 2306.871. DEFINITION. In this subchapter, "program"
643	643	means the Texas secure loan pilot program.
644	644	Sec. 2306.872. TEXAS SECURE LOAN PILOT PROGRAM. (a) The
645	645	department shall establish the Texas secure loan pilot program to
646	646	provide to individuals and families of low income mortgage loans
647	647	that allow modifications to the terms of the loans, such as
648	648	adjustments to the period of the loans and to interest rates, to
649	649	assist program participants in avoiding foreclosure of those loans.
650	650	(b) The program may include the provision of down payment
651	651	and closing cost assistance.
652	652	(c) The department may work with mortgage brokers, lenders,
653	653	and nonprofit organizations to design mortgage loan products
654	654	available under the program.
655	655	Sec. 2306.873. ADMINISTRATION OF PROGRAM; RULES. (a) The
656	656	department shall administer the program.
657	657	(b) The board shall adopt rules governing:
658	658	(1) the administration of the program, including the
659	659	origination of loans under the program;
660	660	(2) the criteria for approving another entity to
661	661	service loans originated under the program;
662	662	(3) the use of insurance on the loans and the homes
663	663	financed under the program, as considered appropriate by the board
664	664	to provide additional security for the loans;
665	665	(4) the verification of occupancy of the home by the
666	666	homebuyer as the homebuyer's principal residence;
667	667	(5) the terms of any memorandum of understanding or
668	668	contract with another entity for processing, servicing, or
669	669	administering the loans;
670	670	(6) the types of loan modifications that would assist
671	671	a homebuyer in avoiding foreclosure of a loan under this
672	672	subchapter; and
673	673	(7) criteria for authorizing loan modifications for
674	674	homebuyers whose income is adversely affected by circumstances such
675	675	as unemployment, a reduction of wages or hours of employment,
676	676	illness, or the death of a spouse or other person contributing to
677	677	the income of a homebuyer.
678	678	Sec. 2306.874. ELIGIBILITY. (a) To be eligible for a
679	679	mortgage loan issued by the department under this subchapter, a
680	680	homebuyer must:
681	681	(1) earn an income, adjusted for family size, of not
682	682	more than:
683	683	(A) 80 percent of the area median income if the
684	684	homebuyer lives in a rural area; or
685	685	(B) 60 percent of the area median income if the
686	686	homebuyer lives in an urban area;
687	687	(2) intend to occupy, as the homebuyer's principal
688	688	residence, the home for which the mortgage loan is issued; and
689	689	(3) meet any additional eligibility requirements or
690	690	limitations prescribed by the department.
691	691	(b) The department may enter into memoranda of
692	692	understanding with other agencies of the state or may contract with
693	693	private entities to process, service, or administer all or a
694	694	portion of the loans issued under this subchapter.
695	695	SECTION 16. The change in law made by this Act in amending
696	696	Sections 2306.202, 2306.203, and 2306.758, Government Code,
697	697	applies beginning with the state fiscal year that begins September
698	698	1, 2009.
699	699	SECTION 17. The Texas Department of Housing and Community
700	700	Affairs shall create the community development corporations
701	701	required by Section 2306.308, Government Code, as added by this
702	702	Act, as soon as practicable after the effective date of this Act,
703	703	but not later than October 1, 2009.
704	704	SECTION 18. Not later than October 1, 2009, the Texas
705	705	Department of Housing and Community Affairs shall adopt the rules
706	706	required by Subchapter N, Chapter 2306, Government Code, as added
707	707	by this Act.
708	708	SECTION 19. Not later than January 1, 2010, the Texas
709	709	Department of Housing and Community Affairs and the Office of Rural
710	710	Community Affairs shall allocate the funds required by Section
711	711	2306.708, Government Code, as added by this Act, to the rural
712	712	housing land assemblage program established under Subchapter EE,
713	713	Chapter 2306, Government Code, as added by this Act.
714	714	SECTION 20. The change in law made by this Act in amending
715	715	Sections 2306.753 and 2306.754, Government Code, applies only to
716	716	owner-builder loans granted by the department on or after the
717	717	effective date of this Act. An owner-builder loan granted before
718	718	the effective date of this Act is governed by the law in effect at
719	719	the time the loan was granted, and the former law is continued in
720	720	effect for that purpose.
721	721	SECTION 21. The board of directors of the Texas Department
722	722	of Housing and Community Affairs shall adopt the rules required by
723	723	Subchapter JJ, Chapter 2306, Government Code, as added by this Act,
724	724	not later than October 1, 2009, and the Texas Department of Housing
725	725	and Community Affairs shall begin issuing loans under the Texas
726	726	secure loan pilot program not later than January 1, 2010.
727	727	SECTION 22. This Act does not make an appropriation. A
728	728	provision in this Act that creates a new governmental program,
729	729	creates a new entitlement, or imposes a new duty on a governmental
730	730	entity is not mandatory during a fiscal period for which the
731	731	legislature has not made a specific appropriation to implement the
732	732	provision.
733	733	SECTION 23. This Act takes effect September 1, 2009.