| 1 | 1 | | 89R11993 JAM-D |
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| 2 | 2 | | By: Johnson S.B. No. 960 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the establishment of the workforce housing program by |
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| 10 | 10 | | the Texas Department of Housing and Community Affairs. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Subchapter K, Chapter 2306, Government Code, is |
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| 13 | 13 | | amended by adding Section 2306.2595 to read as follows: |
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| 14 | 14 | | Sec. 2306.2595. WORKFORCE HOUSING PROGRAM. (a) In this |
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| 15 | 15 | | section: |
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| 16 | 16 | | (1) "Fund" means the workforce housing fund. |
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| 17 | 17 | | (2) "Mezzanine real estate loan" has the meaning |
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| 18 | 18 | | assigned by Section 425.1185, Insurance Code. |
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| 19 | 19 | | (3) "Program" means the workforce housing program. |
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| 20 | 20 | | (b) The department shall establish: |
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| 21 | 21 | | (1) the workforce housing program to provide financial |
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| 22 | 22 | | assistance to developers of multifamily housing to facilitate the |
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| 23 | 23 | | construction and rehabilitation of eligible workforce housing |
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| 24 | 24 | | developments in this state; and |
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| 25 | 25 | | (2) a workforce housing advisory committee to assist |
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| 26 | 26 | | the department in implementing this section. |
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| 27 | 27 | | (c) Financial assistance may be awarded for the purposes |
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| 28 | 28 | | described by this section from the fund described by Subsection (f) |
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| 29 | 29 | | to developers in the form of low-interest loans offered below |
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| 30 | 30 | | market rate, which: |
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| 31 | 31 | | (1) must be structured as mezzanine real estate loans; |
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| 32 | 32 | | (2) must be set at a rate that is one percent higher |
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| 33 | 33 | | than the secured overnight financing rate published by the Federal |
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| 34 | 34 | | Reserve Bank of New York or its successor entity; and |
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| 35 | 35 | | (3) may not exceed 20 percent of the initial |
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| 36 | 36 | | construction or rehabilitation costs of the eligible development. |
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| 37 | 37 | | (d) To be eligible for the financial assistance received by |
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| 38 | 38 | | a developer under the program, a workforce housing development: |
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| 39 | 39 | | (1) must consist of new construction or a substantial |
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| 40 | 40 | | rehabilitation of an existing facility; |
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| 41 | 41 | | (2) must reserve at least 75 percent of the units in |
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| 42 | 42 | | the development for occupancy of individuals and families earning |
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| 43 | 43 | | not more than 120 percent of the area median income, adjusted for |
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| 44 | 44 | | family size; |
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| 45 | 45 | | (3) for an income-restricted unit, may not charge rent |
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| 46 | 46 | | in an amount that exceeds 30 percent of the monthly income |
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| 47 | 47 | | restriction described by Subdivision (2); and |
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| 48 | 48 | | (4) must maintain the affordability requirements |
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| 49 | 49 | | described by Subdivisions (2) and (3) for a period of not less than |
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| 50 | 50 | | 20 years following the date of receipt of financial assistance |
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| 51 | 51 | | under this section. |
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| 52 | 52 | | (e) The department, in consultation with the workforce |
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| 53 | 53 | | housing advisory committee established under Subsection (b)(2), |
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| 54 | 54 | | shall adopt rules to implement the program, including rules that: |
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| 55 | 55 | | (1) provide criteria for determining which developers |
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| 56 | 56 | | and workforce housing developments may participate in the program; |
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| 57 | 57 | | and |
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| 58 | 58 | | (2) provide a scoring system to prioritize the |
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| 59 | 59 | | developments for which developers may use financial assistance |
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| 60 | 60 | | under the program. |
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| 61 | 61 | | (f) The workforce housing fund is a special account in the |
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| 62 | 62 | | state treasury. The fund consists of: |
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| 63 | 63 | | (1) money appropriated to the board for a purpose of |
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| 64 | 64 | | the fund; |
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| 65 | 65 | | (2) repayment of principal and interest from loans |
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| 66 | 66 | | made from the fund; |
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| 67 | 67 | | (3) money the board transfers to the fund from any |
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| 68 | 68 | | available source; |
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| 69 | 69 | | (4) depository interest allocable to the fund and |
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| 70 | 70 | | other investment returns on money in the fund; |
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| 71 | 71 | | (5) money from gifts, grants, or donations to the |
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| 72 | 72 | | fund; and |
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| 73 | 73 | | (6) any other fees or sources of revenue that the |
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| 74 | 74 | | legislature may dedicate for deposit to the fund. |
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| 75 | 75 | | (g) Financial assistance provided from the fund to a |
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| 76 | 76 | | developer for an eligible workforce housing development must be |
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| 77 | 77 | | spent by the recipient on the development not later than 36 months |
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| 78 | 78 | | after the date the assistance is received. |
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| 79 | 79 | | (h) Money provided from the fund that is not spent as |
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| 80 | 80 | | required by Subsection (g) must be returned to the department and |
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| 81 | 81 | | deposited to the credit of the fund. |
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| 82 | 82 | | SECTION 2. This Act takes effect September 1, 2025. |
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