By Hill                                         H.B. No. 2577

      75R7230 GJH-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the Texas Department of Housing and Community Affairs.


 1-4           SECTION 1.  Section 2166.003(a), Government Code, is amended

 1-5     to read as follows:

 1-6           (a)  Unless otherwise provided, this chapter does not apply

 1-7     to:

 1-8                 (1)  a project constructed by and for the Texas

 1-9     Department of Transportation;

1-10                 (2)  a project constructed by and for a state

1-11     institution of higher education;

1-12                 (3)  a pen, shed, or ancillary building constructed by

1-13     and for the Department of Agriculture for the processing of

1-14     livestock before export;

1-15                 (4)  a project constructed by the Parks and Wildlife

1-16     Department;

1-17                 (5)  a repair or rehabilitation project, except a major

1-18     renovation, of buildings and grounds on the commission inventory;

1-19                 (6)  a repair and rehabilitation project of another

1-20     using agency, if all labor for the project is provided by the

1-21     regular maintenance force of the using agency under specific

1-22     legislative authorization and the project does not require the

1-23     advance preparation of working plans or drawings;  [or]

1-24                 (7)  a repair and rehabilitation project involving the

 2-1     use of contract labor, if the project has been excluded from this

 2-2     chapter by commission rule and does not require the advance

 2-3     preparation of working plans or drawings; or

 2-4                 (8)  a repair, rehabilitation, or construction project

 2-5     on property owned by the Texas Department of Housing and Community

 2-6     Affairs or the Texas State Affordable Housing Corporation.

 2-7           SECTION 2.  Section 2167.001(b), Government Code, is amended

 2-8     to read as follows:

 2-9           (b)  This chapter does not apply to:

2-10                 (1)  aircraft hangar space;

2-11                 (2)  radio antenna space;

2-12                 (3)  boat storage space;

2-13                 (4)  vehicle parking space;

2-14                 (5)  residential space for a Texas Department of Mental

2-15     Health and Mental Retardation program;

2-16                 (6)  residential space for a Texas Youth Commission

2-17     program;

2-18                 (7)  space to be used for less than one month for

2-19     meetings, conferences, conventions, seminars, displays,

2-20     examinations, auctions, or similar purposes;

2-21                 (8)  district office space for members of the

2-22     legislature;  [or]

2-23                 (9)  space used by the Texas Employment Commission; or

2-24                 (10)  residential property acquired by the Texas

2-25     Department of Housing and Community Affairs or the Texas State

2-26     Affordable Housing Corporation that is offered for sale or rental

2-27     to individuals and families of low or very low income or families

 3-1     of moderate income.

 3-2           SECTION 3.  Section 2305.033(a), Government Code, is amended

 3-3     to read as follows:

 3-4           (a)  The Texas Department of Housing and Community Affairs is

 3-5     the supervising state agency for the emergency nutrition and

 3-6     temporary emergency relief program established under Subchapter AA,

 3-7     Chapter 2306 [Chapter 34, Human Resouces Code].

 3-8           SECTION 4.  Section 2306.004, Government Code, is amended to

 3-9     read as follows:

3-10           Sec. 2306.004.  DEFINITIONS.  In this chapter:

3-11                 (1)  "Board" means the governing board of the

3-12     department.

3-13                 (2)  "Bond" means an evidence of indebtedness or other

3-14     obligation, regardless of the source of payment, issued by the

3-15     department under Subchapter P, including a bond, note, or bond or

3-16     revenue anticipation note, regardless of whether the obligation is

3-17     general or special, negotiable or nonnegotiable, in bearer or

3-18     registered form, in certified or book-entry form, in temporary or

3-19     permanent form, or with or without interest coupons.

3-20                 (3)  "Contract for Deed" means a seller-financed

3-21     contract for the conveyance of real property under which:

3-22                       (A)  legal title does not pass to the purchaser

3-23     until the consideration of the contract is fully paid to the

3-24     seller; and

3-25                       (B)  the seller's remedy for nonpayment is

3-26     recision or forfeiture or acceleration of any remaining payments

3-27     rather than judicial or nonjudicial foreclosure.

 4-1                 (4)  "Department" means the Texas Department of Housing

 4-2     and Community Affairs.

 4-3                 (5) [(4)]  "Director" means the executive director of

 4-4     the department.

 4-5                 (6) [(5)]  "Economically depressed or blighted area"

 4-6     means an area:

 4-7                       (A)  that is a qualified census tract as defined

 4-8     by Section 143(j), Internal Revenue Code of 1986 (26 U.S.C. Section

 4-9     143(j)) or has been determined by the housing finance division to

4-10     be [a qualified census tract or] an area of chronic economic

4-11     distress under  Section 143 [103A], Internal Revenue Code of 1986

4-12     [1954] (26 U.S.C. Section 143 [103A]);

4-13                       (B)  established in a municipality that has a

4-14     substantial number of substandard, slum, deteriorated, or

4-15     deteriorating structures and that suffers from a high relative rate

4-16     of unemployment; or

4-17                       (C)  that has been designated as [designed and

4-18     included in] a reinvestment zone [tax increment district created]

4-19     under Chapter 311, Tax Code [695, Acts of the 66th Legislature,

4-20     Regular Session, 1979 (Article 1066d, Vernon's Texas Civil

4-21     Statutes)].

4-22                 (7) [(6)]  "Elderly individual" means an individual [60

4-23     years] of an age specified by the board or by the applicable

4-24     federal program [or older].

4-25                 (8) [(7)]  "Family of moderate income" means a family:

4-26                       (A)  that is determined by the board to require

4-27     assistance, taking into account:

 5-1                             (i)  the amount of the total income

 5-2     available for housing needs  of the individuals and families;

 5-3                             (ii)  the size of the family;

 5-4                             (iii)  the cost and condition of available

 5-5     housing facilities;

 5-6                             (iv)  the ability of the individuals and

 5-7     families to compete successfully in the private housing market and

 5-8     to pay the amounts required by private enterprise for sanitary,

 5-9     decent, and safe housing; and

5-10                             (v)  standards established for various

5-11     federal programs determining eligibility based on income; and

5-12                       (B)  that does not qualify as a family of low

5-13     income.

5-14                 (9) [(8)]  "Federal government" means the United States

5-15     of America and includes any corporate or other instrumentality of

5-16     the United States of America, including the Resolution Trust

5-17     Corporation.

5-18                 (10) [(9)]  "Federal mortgage" means a mortgage loan

5-19     for residential housing:

5-20                       (A)  that is made by the federal government; or

5-21                       (B)  for which a commitment to make has been

5-22     given by the federal government.

5-23                 (11) [(10)]  "Federally assisted new communities" means

5-24     federally assisted areas that receive or will receive assistance in

5-25     the form of loan guarantees under Title X of the National Housing

5-26     Act (12 U.S.C. Section 1701 et seq.), and a portion of that

5-27     federally assisted area has received grants under Section 107(a)(1)

 6-1     of the Housing and Community Development Act of 1974, as amended

 6-2     (42 U.S.C. Section 5301 et seq.).

 6-3                 (12) [(11)]  "Federally insured mortgage" means a

 6-4     mortgage loan for residential housing that:

 6-5                       (A)  is insured or guaranteed by the federal

 6-6     government; or

 6-7                       (B)  the federal government has committed to

 6-8     insure or guarantee.

 6-9                 (13) [(12)]  "Housing development" means property or

6-10     work or a  project, building, structure, facility, or undertaking,

6-11     whether existing, new construction, remodeling, improvement, or

6-12     rehabilitation, that meets or is designed to meet minimum property

6-13     standards required by the department and that is financed under the

6-14     provisions of this chapter for the primary purpose of providing

6-15     sanitary, decent, and safe dwelling accommodations for rent, lease,

6-16     use, or purchase by individuals and families of low and very low

6-17     income and families of moderate income in need of housing.  The

6-18     term includes:

6-19                       (A)  buildings, structures, land, equipment,

6-20     facilities, or other real or personal properties that are

6-21     necessary, convenient, or desirable appurtenances, including

6-22     streets, water, sewers, utilities, parks, site preparation,

6-23     landscaping, stores, offices, and other nonhousing facilities, such

6-24     as administrative, community, and recreational facilities the

6-25     department determines to be necessary, convenient, or desirable

6-26     appurtenances; and

6-27                       (B)  single and multifamily dwellings in rural

 7-1     and urban areas.

 7-2                 (14) [(13)]  "Housing sponsor" means:

 7-3                       (A)  an individual, including an individual or

 7-4     family of low and very low income or family of moderate income,

 7-5     joint venture, partnership, limited partnership, trust, firm,

 7-6     corporation, or cooperative that is approved by the department as

 7-7     qualified to own, construct, acquire, rehabilitate, operate,

 7-8     manage, or maintain a housing development, subject to the

 7-9     regulatory powers of the department and other terms and conditions

7-10     in this chapter; or

7-11                       (B)  in an economically depressed or blighted

7-12     area, or in a federally assisted new community located within a

7-13     home-rule municipality, the term may include an individual or

7-14     family whose income exceeds the moderate income level if at least

7-15     90 percent of the total mortgage amount available under a mortgage

7-16     revenue bond issue is designated for individuals and families of

7-17     low income or families of moderate income.

7-18                 (15) [(14)]  "Individuals and families of low income"

7-19     means individuals and families earning not more than 80 percent of

7-20     the area median income or applicable federal poverty line, as

7-21     determined under Section 2306.123 or Section 2306.1231.

7-22                 (16) [(15)]  "Individuals and families of very low

7-23     income" means individuals and families earning not more than 60

7-24     percent of the area median income or applicable federal poverty

7-25     line, as determined under Section 2306.123 or Section 2306.1231.

7-26                 (17) [(16)]  "Land development" means:

7-27                       (A)  acquiring land for residential housing

 8-1     construction; and

 8-2                       (B)  making, installing, or constructing

 8-3     nonresidential improvements that the department determines are

 8-4     necessary or desirable for a housing development to be financed by

 8-5     the department, including:

 8-6                             (i)  waterlines and water supply

 8-7     installations;

 8-8                             (ii)  sewer lines and sewage disposal

 8-9     installations;

8-10                             (iii)  steam, gas, and electric lines and

8-11     installations; and

8-12                             (iv)  roads, streets, curbs, gutters, and

8-13     sidewalks, whether on or off the site.

8-14                 (18) [(17)]  "Local government" means a county,

8-15     municipality, special district, or any other political subdivision

8-16     of the state, a public, nonprofit housing finance corporation

8-17     created under Chapter 394, Local Government Code, or a combination

8-18     of those entities.

8-19                 (19) [(18)]  "Mortgage" means an [interest-bearing]

8-20     obligation, including a mortgage, mortgage deed, bond, note, deed

8-21     of trust, or other instrument, that is a lien:

8-22                       (A)  on real property; or

8-23                       (B)  on a leasehold under a lease having a

8-24     remaining term that, at the time the lien is acquired, does not

8-25     expire until after the maturity date of the [interest-bearing]

8-26     obligation secured by the lien.

8-27                 (20) [(19)]  "Mortgage lender" means a bank, trust

 9-1     company, savings bank, mortgage company, mortgage banker, credit

 9-2     union, national banking association, savings and loan association,

 9-3     life insurance company, or other financial institution authorized

 9-4     to transact business in this state and approved as a mortgage

 9-5     lender by the department.

 9-6                 (21) [(20)]  "Mortgage loan" means an

 9-7     [interest-bearing] obligation secured by a mortgage.

 9-8                 (22) [(21)]  "Municipality" includes only a

 9-9     municipality in this state.

9-10                 (23) [(22)]  "Public agency" means the department or

9-11     any [an] agency, board, authority, department, commission,

9-12     political subdivision, municipal corporation, district, public

9-13     corporation, body politic, or instrumentality of this state,

9-14     including a county, municipality, housing authority,

9-15     state-supported institution of higher education, school district,

9-16     junior college, other district or authority, or other type of

9-17     governmental entity of this state.

9-18                 (24) [(23)]  "Real estate owned contractor" means a

9-19     person required to meet the obligations of a contract with the

9-20     department [housing finance division] for managing and marketing

9-21     foreclosed property.

9-22                 (25) [(24)]  "Real property" means land, including

9-23     improvements and fixtures on the land, property of any nature

9-24     appurtenant to the land or used in connection with the land, and a

9-25     legal or equitable estate, interest, or right in land, including

9-26     leasehold interests, terms for years, and a judgment, mortgage, or

9-27     other lien.

 10-1                (26) [(25)]  "Reserve fund" means any [the housing

 10-2    finance division's] reserve fund established by the department.

 10-3                (27) [(26)]  "Residential housing" means a specific

 10-4    work or improvement undertaken primarily to provide dwelling

 10-5    accommodations, including the acquisition, construction,

 10-6    reconstruction, remodeling, improvement, or rehabilitation of land

 10-7    and buildings and improvements to the buildings for residential

 10-8    housing and other incidental or appurtenant nonhousing facilities.

 10-9                (28) [(27)]  "Servicer" means a person required to meet

10-10    contractual obligations with the housing finance division or with a

10-11    mortgage lender relating to a loan financed under Subchapter J,

10-12    including:

10-13                      (A)  purchasing mortgage certificates backed by

10-14    mortgage loans;

10-15                      (B)  collecting principal and interest from the

10-16    borrower;

10-17                      (C)  sending principal and interest payments to

10-18    the division;

10-19                      (D)  preparing periodic reports;

10-20                      (E)  notifying the primary mortgage and pool

10-21    insurers of delinquent and foreclosed loans; and

10-22                      (F)  filing insurance claims on foreclosed

10-23    property.

10-24          SECTION 5.  Section 2306.007(a), Government Code, is amended

10-25    to read as follows:

10-26          (a)  To establish an economically depressed or blighted area

10-27    under Section 2306.004(6)(B) [2306.004(5)(B)] or (C), the governing

 11-1    body of a municipality must hold a public hearing and find that the

 11-2    area:

 11-3                (1)  substantially impairs or arrests the sound growth

 11-4    of the municipality; or

 11-5                (2)  is an economic or social liability and is a menace

 11-6    to the public health, safety, morals, or welfare in its present

 11-7    condition and use.

 11-8          SECTION 6.  Section 2306.021(b), Government  Code, is amended

 11-9    to read as follows:

11-10          (b)  The department is composed of:

11-11                (1)  the community affairs division;

11-12                (2)  the housing finance division;

11-13                (3)  the manufactured housing division; [and]

11-14                (4)  the community development division; and

11-15                (5)  any other division created by the director.

11-16          SECTION 7.  Section 2306.032, Government Code, is amended by

11-17    amending Subsection (b) and adding Subsection (c) to read as

11-18    follows:

11-19          (b)  The board shall keep complete minutes of board meetings.

11-20    The accounts, minutes, and other records shall be maintained by

11-21    [kept at the principal office of] the department.

11-22          (c)  The open meetings law, Chapter 551, applies to the

11-23    department.  However, the department may conduct a closed meeting

11-24    to discuss proprietary, financial, or commercial affairs of a

11-25    private applicant, borrower, or other recipient of funds from the

11-26    department.

11-27          SECTION 8.  Section 2306.053, Government Code, is amended by

 12-1    amending Subsection (b) and by adding Subsections (c) and (d) to

 12-2    read as follows:

 12-3          (b)  The department may:

 12-4                (1)  [sue and be sued, or plead and be impleaded;]

 12-5                [(2)]  act for and on behalf of this state;

 12-6                (2) [(3)]  adopt an official seal or alter it;

 12-7                (3) [(4)]  adopt and enforce bylaws and rules;

 12-8                (4) [(5)]  contract with the federal government, state,

 12-9    any public agency, mortgage lender, person, or other entity;

12-10                (5) [(6)]  designate mortgage lenders to act for the

12-11    department for the origination, processing, and servicing of the

12-12    department's mortgage loans under conditions agreed to by the

12-13    parties;

12-14                (6) [(7)]  provide, contract, or arrange for

12-15    consolidated processing of a housing development to avoid

12-16    duplication;

12-17                (7) [(8)]  encourage homeless individuals and

12-18    individuals of low or very low income to attend the department's

12-19    educational programs and assist those individuals in attending the

12-20    programs;

12-21                (8) [(9)]  appoint and determine the qualifications,

12-22    duties, and tenure of its agents, counselors, and professional

12-23    advisors, including accountants, appraisers, architects, engineers,

12-24    financial consultants, housing construction and financing experts,

12-25    and real estate consultants;

12-26                (9) [(10)]  administer federal housing, community

12-27    affairs, or community development programs, including the low

 13-1    income housing tax credit program;

 13-2                (10) [(11)]  establish eligibility criteria for

 13-3    individuals and families of low, very low, and moderate income to

 13-4    participate in and benefit from programs administered by the

 13-5    department;

 13-6                (11)  execute funding agreements; [and]

 13-7                (12)  obtain, retain, and disseminate records and other

 13-8    documents in electronic form; and

 13-9                (13)  do all things necessary, convenient, or desirable

13-10    to carry out the powers expressly granted or necessarily implied by

13-11    this chapter.

13-12          (c)  The department is subject to the open records law,

13-13    Chapter 552.

13-14          (d)  Proprietary, financial, or commercial records of a

13-15    private applicant, borrower, or other recipient of funds from the

13-16    department are confidential and not subject to disclosure under

13-17    Chapter 552.

13-18          SECTION 9.  Section 2306.072, Government Code, is amended to

13-19    read as follows:

13-20          Sec. 2306.072.  ANNUAL LOW INCOME HOUSING REPORT.  (a)  Not

13-21    later than March 1 [the 100th day after the last day] of each [the

13-22    fiscal] year, the director shall prepare and submit to the board an

13-23    annual report of the department's housing activities for the

13-24    preceding [fiscal] year.

13-25          (b)  Not later than the 30th day after the date the board

13-26    receives the report, the board shall submit the report to the

13-27    governor, lieutenant governor, and speaker of the house of

 14-1    representatives [legislature].

 14-2          (c)  The report must include:

 14-3                (1)  [a complete operating and financial statement of

 14-4    the department;]

 14-5                [(2)]  a comprehensive statement of the activities of

 14-6    the department during the preceding [fiscal] year to address the

 14-7    needs identified in the state low income housing plan prepared as

 14-8    required by Section 2306.0721, including:

 14-9                      (A)  an [a statistical and narrative] analysis of

14-10    the department's performance in addressing the housing needs of

14-11    individuals and families of low and very low income;

14-12                      (B)  the ethnic and racial composition of

14-13    individuals and families [applying for and] receiving assistance

14-14    from each housing-related program operated by the department; and

14-15                      (C)  the department's progress in meeting the

14-16    goals established in the previous housing plan;

14-17                (2) [(3)]  an explanation of the efforts made by the

14-18    department to involve [ensure] the participation of individuals of

14-19    low income and their community-based institutions in [every aspect

14-20    of] department programs that affect them;

14-21                (3) [(4)]  a statement of the evidence that the

14-22    department has made an affirmative effort to involve [ensure the

14-23    involvement of] individuals of low income and their community-based

14-24    institutions in the allocation of funds and the planning process;

14-25                (4) [(5)]  a statistical analysis, delineated according

14-26    to each ethnic and racial group served by the department, that

14-27    indicates the progress made by the department in implementing the

 15-1    state low income housing plan in each of the uniform state service

 15-2    regions; and

 15-3                (5) [(6)]  an analysis of [fair housing opportunities

 15-4    in] each housing development that receives financial assistance

 15-5    from the department that includes the following information for

 15-6    each housing development that contains 20 or more living units:

 15-7                      (A)  the street address and municipality or

 15-8    county in which the property is located;

 15-9                      (B)  the total number of units reported by

15-10    bedroom size;

15-11                      (C)  the total number of units designed for

15-12    individuals who are physically challenged or who have special needs

15-13    and the number of these individuals served annually as reported by

15-14    each housing sponsor;

15-15                      (D)  a statistical analysis of average rents

15-16    reported by county [region, as defined in the comprehensive housing

15-17    affordability strategy];

15-18                      (E)  the race or ethnic makeup of each project as

15-19    reported annually by each housing sponsor;

15-20                      (F)  the number of units occupied by individuals

15-21    receiving government-supported housing assistance as reported by

15-22    each housing sponsor;

15-23                      (G)  a statement as to whether the department has

15-24    been notified of a violation of the fair housing law that has been

15-25    filed with the United States Department of Housing and Urban

15-26    Development, the Commission on Human Rights, or the United States

15-27    Department of Justice; and

 16-1                      (H)  a statement as to whether the development

 16-2    has any instances of material noncompliance with bond indentures or

 16-3    deed restrictions discovered through the normal monitoring

 16-4    activities and procedures that include meeting occupancy

 16-5    requirements or rent restrictions imposed by deed restriction or

 16-6    financing agreements.

 16-7          SECTION 10.  Section 2306.0721, Government Code, is amended

 16-8    to read as follows:

 16-9          Sec. 2306.0721.  LOW INCOME HOUSING PLAN.  (a)  Not later

16-10    than March 1 [the 100th day after the last day] of each [the

16-11    fiscal] year, the director shall prepare and submit to the board an

16-12    integrated state low income housing plan for the next year.

16-13          (b)  Not later than the 30th day after the date the board

16-14    receives the plan, the board shall submit the plan to the governor,

16-15    lieutenant governor, and the speaker of the house of

16-16    representatives [legislature].

16-17          (c)  The plan must include:

16-18                (1)  an estimate and analysis of the housing needs of

16-19    the following populations in the state:

16-20                      (A)  individuals and families of moderate, low,

16-21    and very low income;

16-22                      (B)  individuals with special needs; and

16-23                      (C)  homeless individuals;

16-24                (2)  a proposal to use all available housing resources

16-25    to address the housing needs of the populations described by

16-26    Subdivision (1) by establishing funding levels for all

16-27    housing-related programs;

 17-1                (3)  an estimate of the number of [federally assisted]

 17-2    housing units that have received assistance through department

 17-3    funding and that are available for individuals and families of low

 17-4    and very low income and individuals with special needs in each

 17-5    county [uniform state service region in the state];

 17-6                (4)  a description of state programs [rules and

 17-7    policies] that govern the use of all available housing resources;

 17-8                (5)  a resource allocation plan that targets all of the

 17-9    department's available housing resources to individuals and

17-10    families of low and very  low income and individuals with special

17-11    needs;

17-12                (6)  a description of the department's efforts to

17-13    monitor and analyze the unused or underused federal resources of

17-14    other state agencies for housing-related services and services for

17-15    homeless individuals and the department's recommendations to ensure

17-16    the full use by the state of all available federal resources for

17-17    those services; and

17-18                (7)  strategies to provide housing for individuals and

17-19    families with special needs.

17-20          SECTION 11.  Section 2306.0722, Government Code, is amended

17-21    to read as follows:

17-22          Sec. 2306.0722.  PREPARATION OF PLAN AND REPORT.  In

17-23    preparing the annual report under Section 2306.072 and the state

17-24    low income housing plan under Section 2306.0721, the director

17-25    shall:

17-26                (1)  coordinate local, state, and federal housing

17-27    resources, including tax exempt housing bond financing and low

 18-1    income housing tax credits;

 18-2                (2)  set priorities for the available housing resources

 18-3    to help the neediest individuals;

 18-4                (3)  evaluate the success of publicly supported housing

 18-5    programs;

 18-6                (4)  survey and identify the unmet housing needs of

 18-7    individuals the department is required to assist;

 18-8                (5)  ensure that housing programs benefit an individual

 18-9    without regard to the individual's race, ethnicity, sex, or

18-10    national origin;

18-11                (6)  develop housing opportunities for individuals and

18-12    families of low and very low income and individuals with special

18-13    housing needs;

18-14                (7)  develop housing programs through an open, fair,

18-15    and public process;

18-16                (8)  set priorities for assistance in a manner that is

18-17    appropriate and consistent with the housing needs of the

18-18    populations described by Section 2306.0721(c)(1); and

18-19                (9)  incorporate recommendations that are consistent

18-20    with the consolidated plan [comprehensive housing affordability

18-21    strategy and performance report] submitted annually by the state to

18-22    the United States Department of Housing and Urban Development.

18-23          SECTION 12.  Section 2306.0723, Government  Code, is amended

18-24    to read as follows:

18-25          Sec. 2306.0723.  PUBLIC PARTICIPATION REQUIREMENTS

18-26    [HEARINGS].  (a)  The department shall hold two [a] public hearings

18-27    [hearing] on [the annual report and] the annual state low income

 19-1    housing plan and report before the director submits the report and

 19-2    the plan to the board.  At least 14 days before the date of the

 19-3    first public hearing, the department shall publish notice of both

 19-4    hearings and a summary of the report and plan in the Texas Register

 19-5    and in at least one newspaper with broad circulation in this state.

 19-6    The department shall accept comments on the report and plan at the

 19-7    two public hearings and for at least 30 days after the date of the

 19-8    publication of the notice of the hearings.

 19-9          (b)  The board shall hold a public hearing on the state low

19-10    income housing report and plan before the board submits the report

19-11    and the plan to the governor, lieutenant governor, and speaker of

19-12    the house of representatives [legislature].

19-13          (c)  The board shall include with the report and the plan the

19-14    board submits to the governor, lieutenant governor, and speaker of

19-15    the house of representatives [legislature] a written summary

19-16    [report] of public comments on the report and the plan.

19-17          SECTION 13.  Section 2306.076(a), Government Code, is amended

19-18    to  read as follows:

19-19          (a)  The board may purchase from department funds liability

19-20    insurance for the director, [and] board members, [and] officers,

19-21    and  employees of the department.

19-22          SECTION 14.  The heading of Subchapter E, Chapter 2306,

19-23    Government Code, is amended to read as follows:


19-25                                 PROGRAMS

19-26          SECTION 15.  Subchapter E, Chapter 2306, Government Code, is

19-27    amended by adding Section 2306.094 to read as follows:

 20-1          Sec. 2306.094.  SERVICES FOR THE HOMELESS.  The department

 20-2    shall administer the state's allocation of federal funds provided

 20-3    under the Emergency Shelter Grants Program (42 U.S.C. Section 11371

 20-4    et seq.), as amended, or its successor program, and any other

 20-5    federal funds provided for the benefit of homeless individuals and

 20-6    families.

 20-7          SECTION 16.  Section 2306.097, Government Code, is amended to

 20-8    read as follows:

 20-9          Sec. 2306.097.  ENERGY SERVICES PROGRAM FOR LOW-INCOME

20-10    INDIVIDUALS.  [(a)]  The Energy Services Program for Low-Income

20-11    Individuals [is in the community affairs division.]

20-12          [(b)  The program] shall operate in conjunction with the

20-13    community services block grant program and has jurisdiction and

20-14    responsibility for administration of the following elements of the

20-15    State Low-Income Energy Assistance Program, from whatever sources

20-16    funded:

20-17                (1)  the Energy Crisis Intervention Program;

20-18                (2)  the weatherization program; and

20-19                (3)  the Low-Income Home Energy Assistance Program.

20-20          SECTION 17.  Section 2306.099, Government Code, is amended to

20-21    read as follows:

20-22          Sec. 2306.099.  TRANSFER OF FEDERAL FUNDS.  (a)  The

20-23    department may enter into an interagency agreement with the Texas

20-24    Department of Commerce to reimburse the Texas Department of

20-25    Commerce for providing on behalf of the department marketing, [and]

20-26    underwriting, and any other services on the portion of the federal

20-27    community development block grant funds allocated by the department

 21-1    for economic development activities.

 21-2          (b)  The department shall allocate not more than 20 percent

 21-3    of the federal funds received by the department [to the Texas

 21-4    Department of Commerce to be used] for economic development

 21-5    activities.

 21-6          (c)  The activities undertaken by the Texas Department of

 21-7    Commerce under this section must be monitored [approved] by the

 21-8    department.

 21-9          SECTION 18.  Section 2306.111(a), Government Code, is amended

21-10    to read as follows:

21-11          (a)  The department, through the housing finance [any]

21-12    division, shall administer all [the] federal housing funds provided

21-13    to the state under the Cranston-Gonzalez National Affordable

21-14    Housing Act (42 U.S.C. Section 12704 et seq.) or any other

21-15    affordable housing program.

21-16          SECTION 19.  Section 2306.142, Government Code, is amended to

21-17    read as follows:

21-18          Sec. 2306.142.  AUTHORIZATION OF BONDS.  In its discretion,

21-19    the board shall authorize all bonds issued by the department

21-20    [housing finance division].

21-21          SECTION 20.  Section 2306.171, Government Code, is amended to

21-22    read as follows:


21-24    PURPOSES OF HOUSING FINANCE DIVISION.  The department shall:

21-25                (1)  develop policies and programs designed to increase

21-26    the number of individuals and families of low and very low income

21-27    and families of moderate income that participate in the housing

 22-1    finance division's programs;

 22-2                (2)  work with municipalities, counties, public

 22-3    agencies, housing sponsors, and nonprofit and for profit

 22-4    corporations to provide:

 22-5                      (A)  information on division programs; and

 22-6                      (B)  technical assistance to municipalities,

 22-7    counties, and nonprofit corporations;

 22-8                (3)  encourage private for profit and nonprofit

 22-9    corporations and state organizations to match the division's funds

22-10    to assist in providing affordable housing to individuals and

22-11    families of low and very low income and families of moderate

22-12    income;

22-13                (4)  provide matching funds to municipalities,

22-14    counties, public agencies, housing sponsors, and nonprofit

22-15    developers who qualify under the division's programs; and

22-16                (5)  administer the state's allocation of federal funds

22-17    provided under the rental rehabilitation grant program authorized

22-18    by Section 17, Title I, of the United States Housing Act of 1937

22-19    (42 U.S.C. Section 1437o).

22-20          SECTION 21.  Section 2306.177, Government Code, is amended to

22-21    read as follows:

22-22          Sec. 2306.177.  HEARINGS.  The department may:

22-23                (1)  conduct hearings; and

22-24                (2)  take testimony and proof, under oath, at public

22-25    hearings, on matters necessary to carry out the department's

22-26    [housing finance division's] purposes.

22-27          SECTION 22.  Section 2306.201(b), Government Code, is amended

 23-1    to read as follows:

 23-2          (b)  The fund consists of:

 23-3                (1)  appropriations or transfers made to the fund;

 23-4                (2)  unencumbered fund balances; [and]

 23-5                (3)  public or private gifts or grants;

 23-6                (4)  investment income; and

 23-7                (5)  funds from any other source.

 23-8          SECTION 23.  Section 2306.202, Government Code, is amended to

 23-9    read as follows:

23-10          Sec. 2306.202.  USE OF HOUSING TRUST FUND.  (a)  The

23-11    department, through the housing finance division, shall use the

23-12    housing trust fund to provide loans, grants, or other comparable

23-13    forms of assistance to local units of government, public housing

23-14    authorities, nonprofit or for profit organizations, and

23-15    income-eligible individuals, families, and households to finance,

23-16    acquire, rehabilitate, and develop decent, safe, and sanitary

23-17    housing.  Notwithstanding any other section of this chapter, the

23-18    department may also use the fund to acquire property to endow the

23-19    fund.

23-20          (b)  Use of the fund is limited to providing:

23-21                (1)  assistance for individuals and families of low and

23-22    very low income;  [and]

23-23                (2)  technical assistance and capacity building to

23-24    nonprofit organizations engaged in developing housing for

23-25    individuals and families of low and very low income; and

23-26                (3)  security for repayment of revenue bonds issued to

23-27    finance housing for individuals and families of low and very low

 24-1    income.

 24-2          SECTION 24.  Section 2306.207(a), Government Code, is amended

 24-3    to read as follows:

 24-4          (a)  The department [housing finance division] may create a

 24-5    reserve fund with the comptroller [state treasurer] out of:

 24-6                (1)  proceeds from the sale of the department's

 24-7    [division's] bonds; or

 24-8                (2)  other resources.

 24-9          SECTION 25.  Section 2306.232, Government Code, is amended to

24-10    read as follows:

24-11          Sec. 2306.232.  TEXAS HOUSING AGENCY LOAN OR GUARANTEE.  A

24-12    loan or guarantee made by the Texas Housing Agency becomes a loan

24-13    or guarantee of the department [housing finance division].

24-14          SECTION 26.  The heading of Subchapter K, Chapter 2306,

24-15    Government Code, is amended to read as follows:


24-17          SECTION 27.  Section 2306.251, Government Code, is amended as

24-18    follows:

24-19          Sec. 2306.251.  PROPERTY OWNERSHIP PROGRAM.  (a)  The

24-20    department may acquire, [and] own, reconstruct, rehabilitate,

24-21    manage, or operate real property:

24-22                (1)  [on an interim basis] for sale or rental to:

24-23                      (A) [(1)]  individuals and families of low and

24-24    very low income and families of moderate income; and

24-25                      (B) [(2)]  nonprofit housing organizations and

24-26    other housing organizations to serve the needs of individuals and

24-27    families of low and very low income and families of moderate

 25-1    income;

 25-2                (2)  to preserve publicly financed or subsidized

 25-3    housing; or

 25-4                (3)  to participate in a risk-sharing program entered

 25-5    into with the United States Department of Housing and Urban

 25-6    Development, any other insurer or guarantor of any United States

 25-7    Department of Housing and Urban Development-related indebtedness, a

 25-8    government sponsored enterprise, a housing finance agency or

 25-9    corporation, or a public housing authority.

25-10          (b)  [Property acquired by the department must qualify for

25-11    home mortgage insurance after rehabilitation.]

25-12          [(c)]  The department may use money from the housing trust

25-13    fund, unencumbered fund balances, fees received by the housing

25-14    finance division, proceeds from the sale or rental of real

25-15    property, distribution of earnings under Section 2306.557, or

25-16    appropriations, allocations, grants, or gifts from any public or

25-17    private source to purchase property under this section.

25-18          (c)  If the department uses the housing trust fund to finance

25-19    real property acquisitions, it [(d)  The housing finance division]

25-20    may not use more than 10 percent of the yearly balance of the

25-21    [housing trust] fund to acquire the real property.

25-22          (d) [(e)]  If the department acquires property under this

25-23    section, the department shall submit an annual report to the board

25-24    that includes an analysis of [have an independent audit conducted

25-25    annually to analyze] the property ownership program's:

25-26                (1)  financial stability;

25-27                (2)  cost-effectiveness; and

 26-1                (3)  effectiveness in serving individuals and families

 26-2    of low and very low income and families of moderate income.

 26-3          SECTION 28.  Section 2306.252(b), Government Code, is amended

 26-4    to read as follows:

 26-5          (b)  The center shall:

 26-6                (1)  provide educational material to housing advocates,

 26-7    housing sponsors, borrowers, and tenants;

 26-8                (2)  provide technical assistance to nonprofit housing

 26-9    sponsors; and

26-10                (3)  [focus on marketing loans and other programs of

26-11    the housing finance division to individuals and families of low and

26-12    very low income; and]

26-13                [(4)]  assist [lenders] in the development of housing

26-14    policy, including the annual state low income housing plan and

26-15    report and the consolidated plan [marketing loans to individuals

26-16    and families of low and very low income].

26-17          SECTION 29.  Section 2306.267, Government Code, is amended to

26-18    read as follows:

26-19          Sec. 2306.267.  COMPLIANCE WITH APPLICABLE LAWS, RULES, AND

26-20    CONTRACT TERMS.  The department may order a housing sponsor to

26-21    perform or refrain from performing certain acts in order to comply

26-22    with the law, department [housing finance division] rules, or terms

26-23    of a contract or agreement to which the housing sponsor is a party.

26-24          SECTION 30.  Section 2306.270, Government Code, is amended to

26-25    read as follows:

26-26          Sec. 2306.270.  REGULATION OF RETIREMENT OF CAPITAL

26-27    INVESTMENT OR REDEMPTION OF STOCK.  The department shall regulate

 27-1    the retirement of a capital investment or the redemption of stock

 27-2    of a limited profit housing sponsor if the retirement or

 27-3    redemption, when added to a dividend or other distribution, exceeds

 27-4    in any one fiscal year the permitted percentage, as allowed by the

 27-5    department [housing finance division's rules], of the original face

 27-6    amount of the limited profit housing sponsor's investment or equity

 27-7    in a housing development.

 27-8          SECTION 31.  Section 2306.291(a), Government Code, is amended

 27-9    to read as follows:

27-10          (a)  The department may purchase and take assignments from

27-11    mortgage lenders or the federal government of notes and other

27-12    obligations, including contracts for deed and mortgages, evidencing

27-13    loans or interest in loans for the construction, remodeling,

27-14    improvement, [or] rehabilitation, purchase, leasing, or refinancing

27-15    of housing developments for individuals and families of low and

27-16    very low income and families of moderate income.

27-17          SECTION 32.  Section 2306.351(a), Government Code, is amended

27-18    to read as follows:

27-19          (a)  The department may issue bonds under this chapter,

27-20    including qualified 501(c)(3) bonds under Section 145,  Internal

27-21    Revenue Code of 1986 (26 U.S.C. Section 145),  and may:

27-22                (1)  provide for and secure payment of the bonds;

27-23                (2)  provide for the rights of the holders of the

27-24    bonds, as permitted by this chapter and the Texas Constitution; and

27-25                (3)  purchase, hold, cancel, resell, or otherwise

27-26    dispose of its bonds, subject to restrictions in a resolution

27-27    authorizing issuance of its bonds.

 28-1          SECTION 33.  Section 2306.357, Government Code, is amended to

 28-2    read as follows:

 28-3          Sec. 2306.357.  BONDS ISSUED BY TEXAS HOUSING AGENCY.  A

 28-4    general obligation or revenue bond issued by the Texas Housing

 28-5    Agency becomes a general obligation or revenue bond of the

 28-6    department [housing finance division].

 28-7          SECTION 34.  Section 2306.375, Government Code, is amended to

 28-8    read as follows:

 28-9          Sec. 2306.375.  PERSONAL LIABILITY OF BOARD MEMBER OR

28-10    DIRECTOR.  A member of the board or the director is not liable

28-11    personally for bonds issued or contracts executed by the department

28-12    or for any other action taken in accordance with the powers  and

28-13    duties authorized by this chapter [housing finance division].

28-14          SECTION 35.  Section 2306.411(a), Government Code, is amended

28-15    to read as follows:

28-16          (a)  In addition to other security for the department's bonds

28-17    authorized by this chapter, payment of the principal and interest

28-18    and redemption premium, if any, on the department's bonds may be

28-19    secured by a first or subordinate lien on and pledge of all or part

28-20    of:

28-21                (1)  the department's assets and real, personal, or

28-22    mixed property, including:

28-23                      (A)  mortgages or other obligations securing the

28-24    assets of property;

28-25                      (B)  investments; and

28-26                      (C)  trust agreements or trust indentures

28-27    administered by one or more corporate trustees as allowed by the

 29-1    board; and

 29-2                (2)  the reserves or funds of the department [housing

 29-3    finance division].

 29-4          SECTION 36.  Section 2306.412(a), Government Code, is amended

 29-5    to read as follows:

 29-6          (a)  A lien on or pledge of revenues, income, assets,

 29-7    reserves, funds, or other resources of the department [housing

 29-8    finance division], as authorized by this chapter, is valid and

 29-9    binding from the time of payment for and delivery of the bonds

29-10    authorized by the board resolution creating or confirming the lien

29-11    or pledge.

29-12          SECTION 37.  Section 2306.491, Government Code, is amended to

29-13    read as follows:

29-14          Sec. 2306.491.  BONDS NEGOTIABLE INSTRUMENTS.

29-15    Notwithstanding any other statute, a bond and interest coupon

29-16    issued and delivered by the department [housing finance division]

29-17    is a negotiable instrument under the Uniform Commercial Code,

29-18    except that the bond may be registered or subject to registration

29-19    under this chapter.

29-20          SECTION 38.  Chapter 2306, Government Code, is amended by

29-21    adding Subchapter AA to read as follows:


29-23                              RELIEF PROGRAM

29-24          Sec. 2306.651.  DEFINITIONS.  In this subchapter:

29-25                (1)  "Applicant" means the commissioners court of a

29-26    county, the governing body of another political subdivision, or a

29-27    nonprofit organization.

 30-1                (2)  "Nonprofit organization" means a private,

 30-2    nonprofit, tax-exempt corporation under Section 501(c)(3), Internal

 30-3    Revenue Code of 1986 (26 U.S.C. Section 501(c)(3)).

 30-4                (3)  "Program" means a system of providing temporary

 30-5    emergency relief to needy persons.

 30-6          Sec. 2306.652.  TEMPORARY EMERGENCY RELIEF PROGRAM.  (a)  The

 30-7    department shall establish a temporary emergency relief program to

 30-8    assist counties, in cooperation with other public entities and

 30-9    nonprofit organizations, in meeting the needs of individuals and

30-10    families for temporary emergency relief.

30-11          (b)  The department shall establish the emergency nutrition

30-12    program as part of the temporary emergency relief program

30-13    established under this subchapter to meet the unmet need for

30-14    emergency food assistance.  The department shall administer the

30-15    emergency nutrition program in the same fashion and under the same

30-16    procedures as govern the administration of the temporary emergency

30-17    relief program.

30-18          Sec. 2306.653.  APPLICATION.  (a) A county may apply to the

30-19    department for a grant-in-aid to establish and administer a program

30-20    under this subchapter.

30-21          (b)  If a county declines to act, the department may accept

30-22    applications from other political subdivisions or from nonprofit

30-23    organizations.  The political subdivision or nonprofit organization

30-24    must first notify the county judge of its intention to submit an

30-25    application for a grant-in-aid.

30-26          (c)  An application submitted under this section must provide

30-27    evidence that a county requires assistance and that the applicant

 31-1    has consulted with public entities, nonprofit organizations,

 31-2    voluntary associations, representatives of low-income persons, and

 31-3    other groups involved in providing assistance to needy persons.

 31-4          (d)  The department shall adopt rules establishing the

 31-5    criteria for determining whether an applicant qualifies under this

 31-6    subchapter.  The department may approve only one program for each

 31-7    county.

 31-8          (e)  A decision by a county to administer a program under

 31-9    this subchapter remains in effect until the county notifies the

31-10    department that the county no longer wants to participate in the

31-11    program.  If a county decides to discontinue its participation, the

31-12    department may choose an applicant as an alternative participant as

31-13    prescribed by Subsection (b) of this section and by department

31-14    rules.

31-15          (f)  The department shall develop standards and procedures

31-16    for the program that permit all counties in the state to

31-17    participate.

31-18          Sec. 2306.654.  LOCAL ALLOCATION.  (a)  State funds provided

31-19    to a local applicant under this subchapter may not be used for

31-20    local administrative costs.

31-21          (b)  An allocation to a county from the program established

31-22    by Section 2306.652 shall be based on the county's demonstrated

31-23    need for the money.  The formula used by the department to allocate

31-24    the money shall include:

31-25                (1)  the number of unemployed persons in the county

31-26    during the  most recent 12-month period for which data is available

31-27    compared to the number of unemployed people in the state during

 32-1    that same 12-month period; and

 32-2                (2)  the number of people at or below the poverty line

 32-3    in the county during the most recent 12-month period for which data

 32-4    is available compared to the number of people at or below the

 32-5    poverty line in the state during that same 12-month period.

 32-6          Sec. 2306.655.  LOCAL PLAN; DISBURSEMENT.  (a)  An applicant

 32-7    must submit to the department a plan for providing emergency

 32-8    relief.

 32-9          (b)  The plan must contain a description of the target

32-10    population, the eligibility criteria for receipt of services, the

32-11    nature and scope of benefits to be provided, methods of

32-12    administration, and a budget.

32-13          (c)  The plan must also show evidence of consultation with

32-14    the entities listed in Section 2306.653(c).

32-15          (d)  On certification by the department that the applicant

32-16    qualifies under this subchapter, the department shall disburse

32-17    money available for that purpose to the applicant to be used to

32-18    establish a program in the affected county.

32-19          Sec. 2306.656.  ELIGIBILITY FOR ASSISTANCE.  (a)  Each

32-20    county, political subdivision, or nonprofit organization approved

32-21    by the department for establishing a program shall establish its

32-22    own criteria for persons eligible to receive benefits under the

32-23    program and shall include the criteria in the plan for providing

32-24    emergency relief submitted to the department.

32-25          (b)  Before establishing eligibility and the frequency and

32-26    duration of benefits provided under the program, the county,

32-27    political subdivision, or nonprofit organization shall allow

 33-1    adequate notice and opportunity for public comment, including

 33-2    comments from entities listed in Section 2306.653(c).

 33-3          (c)  A county, political subdivision, or nonprofit

 33-4    organization may not set the eligibility level at less than 75

 33-5    percent of the federal poverty level based on the federal Office of

 33-6    Management and Budget poverty index in effect at the time the plan

 33-7    is submitted to the department.

 33-8          (d)  Assistance to persons eligible to participate in a

 33-9    program authorized by this subchapter shall be provided through

33-10    vouchers and purchased services in accordance with the approved

33-11    plan submitted to the department.  The assistance may include the

33-12    provision of utilities, food, housing, and clothing to needy

33-13    persons.

33-14          (e)  Records pertaining to a program under this subchapter

33-15    are subject to audit by the department, an auditor approved by the

33-16    department, or the state auditor.

33-17          Sec. 2306.657.  REPORTS AND PUBLIC NOTICES.  (a)  As part of

33-18    the annual report required by Section 2306.072, Government Code,

33-19    the director shall include a written report describing and

33-20    analyzing the operation of programs under this subchapter.

33-21          (b)  A county, political subdivision, or nonprofit

33-22    organization funded under this subchapter shall assure the

33-23    department that information is provided to the public regarding

33-24    eligibility for and the nature of a program operated under this

33-25    subchapter.

33-26          Sec. 2306.658.  RELATIONSHIP TO FEDERAL LAW.  (a)  If a

33-27    federal law or regulation is changed without making a provision for

 34-1    temporary waivers to allow compliance with state law and, as a

 34-2    result of this change, there is insufficient time to comply with

 34-3    all the procedures required by this subchapter, the agency or

 34-4    entity affected may act so as to comply with federal law and shall

 34-5    comply with the applicable procedures required by this subchapter

 34-6    as soon as possible.

 34-7          (b)  If a federal statute or court order conflicts with this

 34-8    subchapter, the federal law or court order prevails over this

 34-9    subchapter.

34-10          SECTION 39.  Section 11.001, Human Resources Code, is amended

34-11    to read as follows:

34-12          Sec. 11.001.  Definitions.  Except as provided by Section

34-13    [34.002 or] 40.001, in this title:

34-14                (1)  "Board" means the Texas Board of Human Services.

34-15                (2)  "Department" means the Texas Department of Human

34-16    Services.

34-17                (3)  "Commissioner" means the Commissioner of Human

34-18    Services.

34-19                (4)  "Assistance" means all forms of assistance and

34-20    services for needy persons authorized by Subtitle C.

34-21                (5)  "Financial assistance" means money payments for

34-22    needy persons authorized by Chapter 31.

34-23                (6)  "Medical assistance" means assistance for needy

34-24    persons authorized by Chapter 32.

34-25          SECTION 40.  The following laws are repealed:

34-26                (1)  Sections 2306.122, 2306.143, and 2306.513(e),

34-27    Government Code; and

 35-1                (2)  Chapter 34, Human Resources Code.

 35-2          SECTION 41.  This Act takes effect September 1, 1997.

 35-3          SECTION 42.  The change in law made to Section 2306.053,

 35-4    Government Code, by this Act applies to a cause of action filed on

 35-5    or after the effective date of this Act.  A cause of action filed

 35-6    before the effective date of this Act is governed by the law in

 35-7    existence when the cause of action was filed, and that law is

 35-8    continued in effect for that purpose.

 35-9          SECTION 43.  The importance of this legislation and the

35-10    crowded condition of the calendars in both houses create an

35-11    emergency and an imperative public necessity that the

35-12    constitutional rule requiring bills to be read on three several

35-13    days in each house be suspended, and this rule is hereby suspended.