SRC-AAA S.B. 1635 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1635
By: Duncan
Intergovernmental Relations
4-13-97
As Filed


DIGEST 

Recently, there have been several  housing finance corporations which have
joined together to form new housing finance corporations or  housing
finance corporations which have split off of a  regional  
for the purpose of getting an advantage in the bond allocation process.
Under current funds are allocated to those priority one issuers who have
issued bonds least recently.  This makes the allocation process
unpredictable.  This bill provides that a housing finance corporation will
not be able to reorganize to gain an advantage in order to attain its next
private activity bond allocation. 

PURPOSE

As proposed, S.B. 1635 prohibits a housing finance corporation from
reorganizing to gain an advantage in order to attain its next private
activity bond allocation. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 3(c), Article 5190.9a, V.T.C.S., to prohibit a
governmental unit from joining or separating from an issuer composed of
more than one jurisdiction simply for the purpose of obtaining a higher
priority.  Sets forth requirements for separating from an issuer. 

SECTION 2. Amends Section 7, Article 5190.9a, V.T.C.S., to provide that
issuers of qualified mortgage bonds who receive an allocation prior to
June 1 have until July 31 or 90 days after the reservation date, whichever
is later.  Makes conforming changes.  

SECTION 3. Amends Section 394.003, Government Code, by adding Subsection
(13), to redefine "residential development." 

SECTION 4. Amends Section 394.012, Government Code, by adding Subsection
(h), to provide that for the purposes of determining the applicable
population for Article 5190.9a, Section 3(b), V.T.C.S., the joint housing
finance corporation may only consider area in its own state planning
region. 

SECTION 5. Amends Section 394.032, Government Code, by adding Subsection
(e), to authorize a housing finance corporation to enter into co-operative
agreements with other  housing finance corporations to make home mortgages
available in jurisdictions of other housing finance corporations anywhere
within the state. 

SECTION 6. Amends Section 394.037, Government Code, by amending Subsection
(a), to authorize a housing finance corporation to issue bonds to defray
in whole or in part costs of funding the making of home mortgages, either
on a first come, first served basis or by selling lender commitments. 

SECTION 7. Amends Section 394.040, Government Code, to authorize a housing
finance corporation to make, contact to make, but is in no way required to
make home mortgages by lending institutions.  
 
SECTION 8. Amends Section 394.051, Government Code, by adding Subsection
(h), to set forth requirements regarding a housing finance corporation.