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  S.B. No. 679
 
 
 
 
AN ACT
  relating to the administration of certain housing funds by the
  Texas Department of Housing and Community Affairs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2306.201, Government Code, is amended by
  amending Subsection (b) and adding Subsection (c) to read as
  follows:
         (b)  The fund consists of:
               (1)  appropriations or transfers made to the fund;
               (2)  unencumbered fund balances;
               (3)  public or private gifts, [or] grants, or
  donations;
               (4)  investment income, including all interest,
  dividends, capital gains, or other income from the investment of
  any portion of the fund;
               (5)  repayments received on loans made from the fund;
  and
               (6)  funds from any other source.
         (c)  The department may accept gifts, grants, or donations
  for the housing trust fund. All funds received for the housing
  trust fund under Subsection (b) shall be deposited or transferred
  into the Texas Treasury Safekeeping Trust Company.
         SECTION 2.  Subsection (a), Section 2306.202, Government
  Code, is amended to read as follows:
         (a)  The department, through the housing finance division,
  shall use the housing trust fund to provide loans, grants, or other
  comparable forms of assistance to local units of government, public
  housing authorities, nonprofit organizations, and income-eligible
  individuals, families, and households to finance, acquire,
  rehabilitate, and develop decent, safe, and sanitary housing. In
  each biennium the first $2.6 million available through the housing
  trust fund for loans, grants, or other comparable forms of
  assistance shall be set aside and made available exclusively for
  local units of government, public housing authorities, and
  nonprofit organizations. Any additional funds may also be made
  available to for-profit organizations provided that [so long as] at
  least 45 percent of available funds, as determined on September 1 of
  each state fiscal year, in excess of the first $2.6 million shall be
  made available to nonprofit organizations for the purpose of
  acquiring, rehabilitating, and developing decent, safe, and
  sanitary housing. The remaining portion shall be distributed to
  [competed for by] nonprofit organizations, for-profit
  organizations, and other eligible entities. Notwithstanding any
  other section of this chapter, but subject to the limitations in
  Section 2306.251(c), the department may also use the fund to
  acquire property to endow the fund.
         SECTION 3.  Section 2306.203, Government Code, is amended to
  read as follows:
         Sec. 2306.203.  RULES REGARDING ADMINISTRATION OF HOUSING
  TRUST FUND. The board shall adopt rules to administer the housing
  trust fund, including rules providing:
               (1)  that the division give priority to programs that
  maximize federal resources;
               (2)  for a process to set priorities for use of the
  fund, including the distribution of fund resources in accordance
  with a plan that is [under a request for a proposal process]
  developed and approved by the board and included in the
  department's annual report regarding the housing trust fund as
  described in the General Appropriations Act;
               (3)  that the criteria used to evaluate a proposed
  activity [rank proposals] will include the:
                     (A)  leveraging of [federal] resources;
                     (B)  cost-effectiveness of the [a] proposed
  activity [development]; and
                     (C)  extent to which individuals and families of
  very low income are served by the proposed activity [development];
               (4)  that funds may not be made available for a proposed
  activity [to a development] that permanently and involuntarily
  displaces individuals and families of low income;
               (5)  that the board attempt to allocate funds to
  achieve a broad geographical distribution with:
                     (A)  special emphasis on equitably serving rural
  and nonmetropolitan areas; and
                     (B)  consideration of the number and percentage of
  income-qualified families in different geographical areas; and
               (6)  that multifamily housing developed or
  rehabilitated through the fund remain affordable to
  income-qualified households for at least 20 years.
         SECTION 4.  Subsection (b), Section 2306.753, Government
  Code, is amended to read as follows:
         (b)  To be eligible for a loan under this subchapter, an
  owner-builder:
               (1)  may not have an annual income that exceeds 60
  percent, as determined by the department, of the greater of the
  state or local median family income, when combined with the income
  of any person who resides with the owner-builder;
               (2)  must have resided in this state for the preceding
  six months;
               (3)  must have successfully completed an owner-builder
  education class under Section 2306.756; and
               (4)  must agree to:
                     (A)  provide through personal labor at least 65
  [60] percent of the labor necessary to build or rehabilitate the
  proposed housing by working through a state-certified
  owner-builder housing program; [or]
                     (B)  provide an amount of personal labor
  equivalent to the amount required under Paragraph (A) in connection
  with building or rehabilitating housing for others through a
  state-certified [nonprofit] owner-builder housing program;
                     (C)  provide through the noncontract labor of
  friends, family, or volunteers and through personal labor at least
  65 percent of the labor necessary to build or rehabilitate the
  proposed housing by working through a state-certified
  owner-builder housing program; or
                     (D)  if due to documented disability or other
  limiting circumstances as defined by department rule the
  owner-builder cannot provide the amount of personal labor otherwise
  required by this subdivision, provide through the noncontract labor
  of friends, family, or volunteers at least 65 percent of the labor
  necessary to build or rehabilitate the proposed housing by working
  through a state-certified owner-builder housing program.
         SECTION 5.  Subsections (a), (b), and (c), Section 2306.754,
  Government Code, are amended to read as follows:
         (a)  The department may establish the minimum amount of a
  loan under this subchapter, but a loan made by the department may
  not exceed $45,000 [$30,000].
         (b)  If it is not possible for an owner-builder to purchase
  necessary real property and build or rehabilitate adequate housing
  for $45,000 [$30,000], the owner-builder must obtain the amount
  necessary that exceeds $45,000 [$30,000] from other sources of
  funds [one or more local governmental entities, nonprofit
  organizations, or private lenders]. The total amount of amortized,
  repayable loans made by the department and other entities to an
  owner-builder under this subchapter may not exceed $90,000
  [$60,000].
         (c)  A loan made by the department under this subchapter:
               (1)  may not exceed a term of 30 years;
               (2)  may bear interest at a fixed rate of not more than
  three percent or bear interest in the following manner:
                     (A)  no interest for the first two years of the
  loan;
                     (B)  beginning with the second anniversary of the
  date the loan was made, interest at the rate of one percent a year;
                     (C)  beginning on the third anniversary of the
  date the loan was made and ending on the sixth anniversary of the
  date the loan was made, interest at a rate that is one percent
  greater than the rate borne in the preceding year; and
                     (D)  beginning on the sixth anniversary of the
  date the loan was made and continuing through the remainder of the
  loan term, interest at the rate of five percent; and
               (3)  shall [may] be secured by:
                     (A)  a first lien by the department on the real
  property if the loan is the largest amortized, repayable loan
  secured by the real property; or
                     (B)  a co-first lien or subordinate lien as
  determined by department rule, if the loan is not the largest loan
  as described by Paragraph (A)[, including a lien that is
  subordinate to a lien that secures a loan made under Subsection (b)
  and that is greater than the department's lien].
         SECTION 6.  Subsection (a), Section 2306.755, Government
  Code, is amended to read as follows:
         (a)  The department may certify nonprofit owner-builder
  housing programs operated by a tax-exempt organization listed under
  Section 501(c)(3), Internal Revenue Code of 1986, to:
               (1)  qualify potential owner-builders for loans under
  this subchapter;
               (2)  provide owner-builder education classes under
  Section 2306.756;
               (3)  assist owner-builders in building or
  rehabilitating housing; and
               (4)  originate or service loans made under this
  subchapter.
         SECTION 7.  Subsection (a), Section 2306.756, Government
  Code, is amended to read as follows:
         (a)  A state-certified nonprofit owner-builder housing
  program shall offer owner-builder education classes to potential
  owner-builders. A class under this section must provide
  information on:
               (1)  the financial responsibilities of an
  owner-builder under this subchapter, including the consequences of
  an owner-builder's failure to meet those responsibilities;
               (2)  the building or rehabilitation of housing by
  owner-builders;
               (3)  resources for low-cost building materials
  available to owner-builders; and
               (4)  resources for building or rehabilitation
  assistance available to owner-builders.
         SECTION 8.  Section 2306.757, Government Code, is amended to
  read as follows:
         Sec. 2306.757.  LOAN PRIORITY FOR WAIVER OF LOCAL GOVERNMENT
  FEES. In making loans under this subchapter, the department shall
  give priority to loans to owner-builders who will reside in
  counties or municipalities that agree in writing to waive capital
  recovery fees, building permit fees, inspection fees, or other fees
  related to the building or rehabilitation of the housing to be built
  or improved with the loan proceeds.
         SECTION 9.  Subsection (c), Section 2306.758, Government
  Code, is amended to read as follows:
         (c)  In a state fiscal year, the department may use not more
  than 10 percent of the revenue available for purposes of this
  subchapter to enhance the ability of tax-exempt organizations
  described by Section 2306.755(a) to implement the purposes of this
  chapter and to enhance the number of such organizations that are
  able to implement those purposes. The department shall use that
  available revenue to provide financial assistance, technical
  training, and management support for the purposes of this
  subsection.
         SECTION 10.  Subsection (a-1), Section 2306.7581,
  Government Code, is amended to read as follows:
         (a-1)  Each state fiscal year the department shall transfer
  at least $3 million to the owner-builder revolving fund from money
  received 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.), from
  money in the housing trust fund, or from money appropriated by the
  legislature to the department. This subsection expires August 31,
  2020 [2010].
         SECTION 11.  (a)  The change in law made by this Act in
  amending Sections 2306.202, 2306.203, and 2306.758, Government
  Code, applies beginning with the state fiscal year that begins
  September 1, 2009.
         (b)  The change in law made by this Act in amending Sections
  2306.753 and 2306.754, Government Code, applies only to
  owner-builder loans granted by the department on or after the
  effective date of this Act. An owner-builder loan granted before
  the effective date of this Act is governed by the law in effect at
  the time the loan was granted, and the former law is continued in
  effect for that purpose.
         SECTION 12.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2009.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 679 passed the Senate on
  May 7, 2009, by the following vote:  Yeas 31, Nays 0;
  May 29, 2009, Senate refused to concur in House amendment and
  requested appointment of Conference Committee; May 30, 2009, House
  granted request of the Senate; May 31, 2009, Senate adopted
  Conference Committee Report by the following vote:  Yeas 31,
  Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 679 passed the House, with
  amendment, on May 26, 2009, by the following vote:  Yeas 145,
  Nays 0, two present not voting; May 30, 2009, House granted request
  of the Senate for appointment of Conference Committee;
  May 31, 2009, House adopted Conference Committee Report by the
  following vote:  Yeas 142, Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
             Date
 
 
  ______________________________ 
            Governor