BILL ANALYSIS Senate Research Center S.B. 2605 By: Blanco Local Government 4/25/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Between 2013 and 2022, the city of El Paso's Housing Opportunity Management Enterprise (HOME) revitalized its older, aging public housing stock by constructing new apartments and fully renovating existing units. This transition encompassed approximately 6,400 units, primarily through the federal Rental Assistance Demonstration (RAD) program, which shifts public housing to a different ownership structure, allowing access to private investment and greater financial flexibility. As a result, HOME eliminated many federal restrictions, significantly increased its overall assets, and enhanced its long-term financial stability. The "municipal housing authority asset commission" this bill proposes will serve as a fiduciary advisor and overseer to approve certain actions by the municipal housing authority. From time to time, municipal housing authorities will seek to divest certain assets of a publicly created housing authority for various reasons. For example, a unit may become dilapidated to the point that it is no longer functional for housing, but the land may have significant value. Many of these transactions can be substantial divestures. Establishing a commission with fiduciary responsibilities to advise the municipal housing authority ensures transparency of transactions of publicly held properties. S.B. 2605 proposes amendments to Chapter 392 of the Local Government Code by adding Subchapter G, which outlines the formation, membership, powers, and responsibilities of the commission. Having a member board with fiduciary responsibilities and financial expertise to oversee large, consequential transactions fosters community trust, transparency, and informed financial decisions. As proposed, S.B. 2605 amends current law relating to the formation of a municipal housing authority asset commission by certain municipal housing authorities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 392, Local Government Code, by adding Subchapter G, as follows: SUBCHAPTER G. ASSET COMMISSION OF CERTAIN MUNICIPAL HOUSING AUTHORITIES Sec. 392.151. DEFINITION. Defines "asset commission." Sec. 392.152. APPLICABILITY. Provides that this subchapter applies only to a municipal housing authority operating in: (1) a county with a population of 800,000 or more that is located on the international border; and (2) a municipality with a population of 600,000 or more that is located in a county described by Subdivision (1). Sec. 392.153. FORMATION OF ASSET COMMISSION. Authorizes the commissioners of a municipal housing authority to adopt a resolution to create a municipal housing authority asset commission (asset commission). Sec. 392.154. ASSET COMMISSION MEMBERSHIP; TERMS. (a) Provides that an asset commission is composed of five members who serve staggered terms of five years and are appointed by a majority of the commissioners of the municipal housing authority that formed the asset commission. Requires an asset commission member to meet certain qualifications. (b) Requires at least one of the asset commission members, in addition to the qualifications required by Subsection (a), to have at least 10 years of experience in a field related to the management or operation of apartments funded by low income-housing tax credits. (c) Prohibits certain persons from serving as an asset commission member. (d) Requires the commissioners of a municipal housing authority, notwithstanding the provisions of Subsection (a) establishing the terms of an asset commission member, in appointing the initial members to an asset commission under this section, to designate two members to serve a three-year term, two members to serve a four-year term, and one member to serve a five-year term. Sec. 392.155. CONFLICTS OF INTEREST. (a) Prohibits an asset commission member from having dealings for pecuniary gain with the municipal housing authority that formed the asset commission or a public facility corporation sponsored by the authority or owning, acquiring, or controlling a direct or indirect interest in any item described by Sections 392.042(b)(1)-(5) (relating to prohibiting a commissioner of an authority from owning, acquiring, or controlling a direct or indirect interest in certain items). (b) Requires an asset commission member, if the member manages, owns, acquires, or controls a direct or indirect interest in an item prohibited by Subsection (a) or otherwise has any other dealings for pecuniary gain with the municipal housing authority, to immediately disclose the interest to the authority and asset commission in writing. Requires that the disclosure be entered in the minutes of the asset commission for the meeting at which the disclosure was made. (c) Provides that an asset commission member's failure to make a required disclosure under Subsection (b) constitutes misconduct of office. Sec. 392.156. REMOVAL OF ASSET COMMISSION MEMBER. Authorizes an asset commission member to be removed by a majority of the commissioners of the municipal housing authority that formed the asset commission based on the same criteria and following the same processes for the removal of a commissioner described by Section 392.041 (Removal of a Commissioner). Sec. 392.157. ASSET COMMISSION MEMBER COMPENSATION AND REIMBURSEMENT. (a) Provides that an asset commission member is entitled to reasonable compensation for the member's services on the asset commission and reimbursement for necessary expenses incurred by the member in carrying out duties related to the member's services on the asset commission, including travel expenses. (b) Requires the municipal housing authority that forms an asset commission to pay the compensation and reimbursement described by Subsection (a). Sec. 392.158. POWERS AND DUTIES. (a) Requires an asset commission to approve by majority vote certain actions before the municipal housing authority that formed the asset commission is authorized to perform or approve the action. (b) Authorizes an asset commission to directly or indirectly hold or own an interest in an asset described by Subsection (a) and any accompanying cash flow or benefit associated with that interest only if the asset commission holds the interest in trust for the sole and exclusive benefit of the municipal housing authority that formed the asset commission. (c) Authorizes an asset commission to delegate the powers and duties under this section to an agent or employee of the asset commission or the municipal housing authority that formed the asset commission, as determined appropriate by the asset commission. Sec. 392.159. OFFICERS AND EMPLOYEES OF ASSET COMMISSION. Requires the secretary and executive director employed under Section 392.038 (Other Officers and Employees of a Municipal or County Housing Authority) for a municipal housing authority that forms an asset commission to serve as the secretary and executive director of the asset commission. Sec. 392.160. MEETINGS OF ASSET COMMISSION. Provides that meetings of an asset commission are subject to Chapter 551 (Open Meetings), Government Code. SECTION 2. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2605
By: Blanco
Local Government
4/25/2025
As Filed
Senate Research Center
S.B. 2605
By: Blanco
Local Government
4/25/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Between 2013 and 2022, the city of El Paso's Housing Opportunity Management Enterprise (HOME) revitalized its older, aging public housing stock by constructing new apartments and fully renovating existing units. This transition encompassed approximately 6,400 units, primarily through the federal Rental Assistance Demonstration (RAD) program, which shifts public housing to a different ownership structure, allowing access to private investment and greater financial flexibility. As a result, HOME eliminated many federal restrictions, significantly increased its overall assets, and enhanced its long-term financial stability.
The "municipal housing authority asset commission" this bill proposes will serve as a fiduciary advisor and overseer to approve certain actions by the municipal housing authority. From time to time, municipal housing authorities will seek to divest certain assets of a publicly created housing authority for various reasons. For example, a unit may become dilapidated to the point that it is no longer functional for housing, but the land may have significant value. Many of these transactions can be substantial divestures. Establishing a commission with fiduciary responsibilities to advise the municipal housing authority ensures transparency of transactions of publicly held properties.
S.B. 2605 proposes amendments to Chapter 392 of the Local Government Code by adding Subchapter G, which outlines the formation, membership, powers, and responsibilities of the commission. Having a member board with fiduciary responsibilities and financial expertise to oversee large, consequential transactions fosters community trust, transparency, and informed financial decisions.
As proposed, S.B. 2605 amends current law relating to the formation of a municipal housing authority asset commission by certain municipal housing authorities.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 392, Local Government Code, by adding Subchapter G, as follows:
SUBCHAPTER G. ASSET COMMISSION OF CERTAIN MUNICIPAL HOUSING AUTHORITIES
Sec. 392.151. DEFINITION. Defines "asset commission."
Sec. 392.152. APPLICABILITY. Provides that this subchapter applies only to a municipal housing authority operating in:
(1) a county with a population of 800,000 or more that is located on the international border; and
(2) a municipality with a population of 600,000 or more that is located in a county described by Subdivision (1).
Sec. 392.153. FORMATION OF ASSET COMMISSION. Authorizes the commissioners of a municipal housing authority to adopt a resolution to create a municipal housing authority asset commission (asset commission).
Sec. 392.154. ASSET COMMISSION MEMBERSHIP; TERMS. (a) Provides that an asset commission is composed of five members who serve staggered terms of five years and are appointed by a majority of the commissioners of the municipal housing authority that formed the asset commission. Requires an asset commission member to meet certain qualifications.
(b) Requires at least one of the asset commission members, in addition to the qualifications required by Subsection (a), to have at least 10 years of experience in a field related to the management or operation of apartments funded by low income-housing tax credits.
(c) Prohibits certain persons from serving as an asset commission member.
(d) Requires the commissioners of a municipal housing authority, notwithstanding the provisions of Subsection (a) establishing the terms of an asset commission member, in appointing the initial members to an asset commission under this section, to designate two members to serve a three-year term, two members to serve a four-year term, and one member to serve a five-year term.
Sec. 392.155. CONFLICTS OF INTEREST. (a) Prohibits an asset commission member from having dealings for pecuniary gain with the municipal housing authority that formed the asset commission or a public facility corporation sponsored by the authority or owning, acquiring, or controlling a direct or indirect interest in any item described by Sections 392.042(b)(1)-(5) (relating to prohibiting a commissioner of an authority from owning, acquiring, or controlling a direct or indirect interest in certain items).
(b) Requires an asset commission member, if the member manages, owns, acquires, or controls a direct or indirect interest in an item prohibited by Subsection (a) or otherwise has any other dealings for pecuniary gain with the municipal housing authority, to immediately disclose the interest to the authority and asset commission in writing. Requires that the disclosure be entered in the minutes of the asset commission for the meeting at which the disclosure was made.
(c) Provides that an asset commission member's failure to make a required disclosure under Subsection (b) constitutes misconduct of office.
Sec. 392.156. REMOVAL OF ASSET COMMISSION MEMBER. Authorizes an asset commission member to be removed by a majority of the commissioners of the municipal housing authority that formed the asset commission based on the same criteria and following the same processes for the removal of a commissioner described by Section 392.041 (Removal of a Commissioner).
Sec. 392.157. ASSET COMMISSION MEMBER COMPENSATION AND REIMBURSEMENT. (a) Provides that an asset commission member is entitled to reasonable compensation for the member's services on the asset commission and reimbursement for necessary expenses incurred by the member in carrying out duties related to the member's services on the asset commission, including travel expenses.
(b) Requires the municipal housing authority that forms an asset commission to pay the compensation and reimbursement described by Subsection (a).
Sec. 392.158. POWERS AND DUTIES. (a) Requires an asset commission to approve by majority vote certain actions before the municipal housing authority that formed the asset commission is authorized to perform or approve the action.
(b) Authorizes an asset commission to directly or indirectly hold or own an interest in an asset described by Subsection (a) and any accompanying cash flow or benefit associated with that interest only if the asset commission holds the interest in trust for the sole and exclusive benefit of the municipal housing authority that formed the asset commission.
(c) Authorizes an asset commission to delegate the powers and duties under this section to an agent or employee of the asset commission or the municipal housing authority that formed the asset commission, as determined appropriate by the asset commission.
Sec. 392.159. OFFICERS AND EMPLOYEES OF ASSET COMMISSION. Requires the secretary and executive director employed under Section 392.038 (Other Officers and Employees of a Municipal or County Housing Authority) for a municipal housing authority that forms an asset commission to serve as the secretary and executive director of the asset commission.
Sec. 392.160. MEETINGS OF ASSET COMMISSION. Provides that meetings of an asset commission are subject to Chapter 551 (Open Meetings), Government Code.
SECTION 2. Effective date: September 1, 2025.