1-1     By:  Hill, et al. (Senate Sponsor - Lucio)            H.B. No. 2577

 1-2           (In the Senate - Received from the House May 10, 1997;

 1-3     May 13, 1997, read first time and referred to Committee on

 1-4     Intergovernmental Relations; May 16, 1997, reported favorably, as

 1-5     amended, by the following vote:  Yeas 11, Nays 0; May 16, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE AMENDMENT NO. 1                                By:  Lucio

 1-8           Amend HB 2577 as follows:

 1-9     1)  DELETE SECTION 5, Sec. 2306.004 Government Code, Number (7) (On

1-10          Page 4, lines 35-37); and substitute the following:

1-11     (7)  "Elderly individual" means an individual 60 years of age or

1-12     older.

1-13     2)  ADD subsection (c) to:  SECTION 47, Section 2306.678 (Page 28,

1-14          (b) after line 13).  To read as follows:

1-15     (c)  The department shall waive grant application fees for

1-16     non-profits that offer expanded services such as child care,

1-17     nutrition programs, job training assistance, health services, or

1-18     human services.

1-19     COMMITTEE AMENDMENT NO. 2                                By:  Lucio

1-20     Amend HB 2577 by adding a new appropriately numbered section to

1-21     read as follows, and renumbering existing sections accordingly:

1-22     SECTION ___.  Section 373.005, Local Government Code, is amended by

1-23     adding a new subsection (d) to read as follows:

1-24     (d)  A municipality may issue notes or other obligations guaranteed

1-25     by the Secretary of Housing and Urban Development under Section 108

1-26     of the Housing and Community Development Act of 1974 (42 U.S.C.

1-27     Section 5308), as amended, for the purpose of providing financing

1-28     for those activities described in Section 108 of the Housing and

1-29     Community Development Act (42 U.S.C. 5308), as amended, in

1-30     furtherance of an approved community development program.  The

1-31     Section 108 guaranteed notes additionally may be secured by and

1-32     made payable from the same sources as obligations issued under

1-33     Subchapter C, Chapter 271, Local Government Code, subject to the

1-34     notice provisions set forth therein.  The Section 108 guaranteed

1-35     notes or other obligations may be issued in such form,

1-36     denominations, manner, terms and conditions, bear interest at such

1-37     rates, be interim or permanent notes or obligations, be subject to

1-38     transfer, exchange, change, conversion, or replacement, and be sold

1-39     in such manner, at such price, and under such terms, all as

1-40     provided in the ordinance or resolution authorizing the issuance of

1-41     such Section 108 guaranteed notes or obligations.

1-42     COMMITTEE AMENDMENT NO. 3                                By:  Lucio

1-43     1.  Amend HB 2577, SECTION 29, Sec. 2306.202 by adding on page 15,

1-44     line 17 after "Chapter," and before "the" but subject to the

1-45     limitations in Section 2306.251(c), Government Code,"

1-46     2.  Amend HB 2577 by adding in SECTION 45, SUBCHAPTER Y, a new

1-47     Section 2306.5543 as follows:

1-48           Sec. 2306.5543.  PERSONNEL POLICIES.  The board of directors

1-49     of the corporation shall develop and implement personnel policies,

1-50     including policies relating to employee conflicts of interest, that

1-51     are substantially similar to comparable policies that govern state

1-52     employees.

1-53     3.  Amend HB 2577 by adding in SECTION 45, SUBCHAPTER Y, a new

1-54     Section 2306.5555 as follows:

1-55           Sec. 2306.5555.  PUBLIC ACCESS.  The board of directors of

1-56     the corporation shall develop and implement policies that provide

1-57     the public with a reasonable opportunity to appear before the board

1-58     of directors and to speak on any issue under the jurisdiction of

1-59     the corporation.

1-60     COMMITTEE AMENDMENT NO. 4                                By:  Lucio

1-61           Amend H.B. 2577 as follows:  Strike Section 49 of the bill

1-62     and renumber the subsequent sections appropriately.

1-63     COMMITTEE AMENDMENT NO. 5                                By:  Lucio

1-64     Amend House Bill 2577, SECTION 23, Section 2306.111, Government

 2-1     Code, by adding on page 13, following line 40 the following:

 2-2     (c)  In administering federal housing funds provided to the state

 2-3     under the Cranston-Gonzalez National Affordable Housing Act (42

 2-4     U.S.C. Section 12704 et seq.) the department shall give the highest

 2-5     priority to utilizing these funds for the benefit of

 2-6     non-participating small cities and rural areas which do not qualify

 2-7     to receive funds under the Cranston-Gonzalez National Affordable

 2-8     Housing Act directly from the U.S. Department of Housing and Urban

 2-9     Development unless the department finds there is insufficient need

2-10     and demand for housing funds within these areas.

2-11     COMMITTEE AMENDMENT NO. 6                                By:  Lucio

2-12           Amend HB 2577 as follows: 1)  Amend SECTION 16, Section

2-13     2306.0723, Government Code (Page 12, line 8) by deleting the line

2-14     after the word "San Antonio", and substituting the following:

2-15     Lower Rio Grande Valley, and at least two

2-16     2)  Amend SECTION 9, Section 2306.033, Government Code (d) (Page 7,

2-17     lines 44-46) as follows:

2-18     Strike on lines 44-45 after the word "board" the words "may have"

2-19     and substitute with "has";

2-20     ADD on line 46 after the word "board" , and provide to said officer

2-21     evidence of such criminal behavior or conduct.

2-22                            A BILL TO BE ENTITLED

2-23                                   AN ACT

2-24     relating to the Texas Department of Housing and Community Affairs

2-25     and to low income and affordable housing.


2-27           SECTION 1.  Section 2166.003(a), Government Code, is amended

2-28     to read as follows:

2-29           (a)  Unless otherwise provided, this chapter does not apply

2-30     to:

2-31                 (1)  a project constructed by and for the Texas

2-32     Department of Transportation;

2-33                 (2)  a project constructed by and for a state

2-34     institution of higher education;

2-35                 (3)  a pen, shed, or ancillary building constructed by

2-36     and for the Department of Agriculture for the processing of

2-37     livestock before export;

2-38                 (4)  a project constructed by the Parks and Wildlife

2-39     Department;

2-40                 (5)  a repair or rehabilitation project, except a major

2-41     renovation, of buildings and grounds on the commission inventory;

2-42                 (6)  a repair and rehabilitation project of another

2-43     using agency, if all labor for the project is provided by the

2-44     regular maintenance force of the using agency under specific

2-45     legislative authorization and the project does not require the

2-46     advance preparation of working plans or drawings;  [or]

2-47                 (7)  a repair and rehabilitation project involving the

2-48     use of contract labor, if the project has been excluded from this

2-49     chapter by commission rule and does not require the advance

2-50     preparation of working plans or drawings; or

2-51                 (8)  a repair, rehabilitation, or construction project

2-52     on property owned by the Texas Department of Housing and Community

2-53     Affairs or the Texas State Affordable Housing Corporation.

2-54           SECTION 2.  Section 2167.001(b), Government Code, is amended

2-55     to read as follows:

2-56           (b)  This chapter does not apply to:

2-57                 (1)  aircraft hangar space;

2-58                 (2)  radio antenna space;

2-59                 (3)  boat storage space;

2-60                 (4)  vehicle parking space;

2-61                 (5)  residential space for a Texas Department of Mental

2-62     Health and Mental Retardation program;

2-63                 (6)  residential space for a Texas Youth Commission

2-64     program;

2-65                 (7)  space to be used for less than one month for

2-66     meetings, conferences, conventions, seminars, displays,

2-67     examinations, auctions, or similar purposes;

2-68                 (8)  district office space for members of the

2-69     legislature;  [or]

 3-1                 (9)  space used by the Texas Employment Commission; or

 3-2                 (10)  residential property acquired by the Texas

 3-3     Department of Housing and Community Affairs or the Texas State

 3-4     Affordable Housing Corporation that is offered for sale or rental

 3-5     to individuals and families of low or very low income or families

 3-6     of moderate income.

 3-7           SECTION 3.  Section 2305.033(a), Government Code, is amended

 3-8     to read as follows:

 3-9           (a)  The Texas Department of Housing and Community Affairs is

3-10     the supervising state agency for the emergency nutrition and

3-11     temporary emergency relief program established under Subchapter AA,

3-12     Chapter 2306 [Chapter 34, Human Resources Code].

3-13           SECTION 4.  Section 2306.001, Government Code, is amended to

3-14     read as follows:

3-15           Sec. 2306.001.  Purposes.  The purposes of the department are

3-16     to:

3-17                 (1)  assist local governments in:

3-18                       (A)  providing essential public services for

3-19     their residents; and

3-20                       (B)  overcoming financial, social, and

3-21     environmental problems;

3-22                 (2)  provide for the housing needs of individuals and

3-23     families of low and very low income and families of moderate

3-24     income;

3-25                 (3)  contribute to the preservation, development, and

3-26     redevelopment of neighborhoods and communities, including

3-27     cooperation in the preservation of government-assisted housing

3-28     occupied by individuals and families of very low and extremely low

3-29     income;

3-30                 (4)  assist the governor and the legislature in

3-31     coordinating federal and state programs affecting local government;

3-32     and

3-33                 (5)  inform state officials and the public of the needs

3-34     of local government.

3-35           SECTION 5.  Section 2306.004, Government Code, is amended to

3-36     read as follows:

3-37           Sec. 2306.004.  DEFINITIONS.  In this chapter:

3-38                 (1)  "Board" means the governing board of the

3-39     department.

3-40                 (2)  "Bond" means an evidence of indebtedness or other

3-41     obligation, regardless of the source of payment, issued by the

3-42     department under Subchapter P, including a bond, note, or bond or

3-43     revenue anticipation note, regardless of whether the obligation is

3-44     general or special, negotiable or nonnegotiable, in bearer or

3-45     registered form, in certified or book-entry form, in temporary or

3-46     permanent form, or with or without interest coupons.

3-47                 (3)  "Contract for Deed" means a seller-financed

3-48     contract for the conveyance of real property under which:

3-49                       (A)  legal title does not pass to the purchaser

3-50     until the consideration of the contract is fully paid to the

3-51     seller; and

3-52                       (B)  the seller's remedy for nonpayment is

3-53     recision or forfeiture or acceleration of any remaining payments

3-54     rather than judicial or nonjudicial foreclosure.

3-55                 (4)  "Department" means the Texas Department of Housing

3-56     and Community Affairs.

3-57                 (5) [(4)]  "Director" means the executive director of

3-58     the department.

3-59                 (6) [(5)]  "Economically depressed or blighted area"

3-60     means an area:

3-61                       (A)  that is a qualified census tract as defined

3-62     by Section 143(j), Internal Revenue Code of 1986 (26 U.S.C. Section

3-63     143(j)) or has been determined by the housing finance division to

3-64     be [a qualified census tract or] an area of chronic economic

3-65     distress under  Section 143 [103A], Internal Revenue Code of 1986

3-66     [1954] (26 U.S.C. Section 143 [103A]);

3-67                       (B)  established in a municipality that has a

3-68     substantial number of substandard, slum, deteriorated, or

3-69     deteriorating structures and that suffers from a high relative rate

 4-1     of unemployment; or

 4-2                       (C)  that has been designated as [designed and

 4-3     included in] a reinvestment zone [tax increment district created]

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

 4-5     Regular Session, 1979 (Article 1066d, Vernon's Texas Civil

 4-6     Statutes)].

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

 4-8     years] of an age specified by the board or by the applicable

 4-9     federal program [or older].

4-10                 (8) [(7)]  "Family of moderate income" means a family:

4-11                       (A)  that is determined by the board to require

4-12     assistance, taking into account:

4-13                             (i)  the amount of the total income

4-14     available for housing needs  of the individuals and families;

4-15                             (ii)  the size of the family;

4-16                             (iii)  the cost and condition of available

4-17     housing facilities;

4-18                             (iv)  the ability of the individuals and

4-19     families to compete successfully in the private housing market and

4-20     to pay the amounts required by private enterprise for sanitary,

4-21     decent, and safe housing; and

4-22                             (v)  standards established for various

4-23     federal programs determining eligibility based on income; and

4-24                       (B)  that does not qualify as a family of low

4-25     income.

4-26                 (9) [(8)]  "Federal government" means the United States

4-27     of America and includes any corporate or other instrumentality of

4-28     the United States of America, including the Resolution Trust

4-29     Corporation.

4-30                 (10) [(9)]  "Federal mortgage" means a mortgage loan

4-31     for residential housing:

4-32                       (A)  that is made by the federal government; or

4-33                       (B)  for which a commitment to make has been

4-34     given by the federal government.

4-35                 (11) [(10)]  "Federally assisted new communities" means

4-36     federally assisted areas that receive or will receive assistance in

4-37     the form of loan guarantees under Title X of the National Housing

4-38     Act (12 U.S.C. Section 1701 et seq.), and a portion of that

4-39     federally assisted area has received grants under Section 107(a)(1)

4-40     of the Housing and Community Development Act of 1974, as amended

4-41     (42 U.S.C. Section 5301 et seq.).

4-42                 (12) [(11)]  "Federally insured mortgage" means a

4-43     mortgage loan for residential housing that:

4-44                       (A)  is insured or guaranteed by the federal

4-45     government; or

4-46                       (B)  the federal government has committed to

4-47     insure or guarantee.

4-48                 (13) [(12)]  "Housing development" means property or

4-49     work or a  project, building, structure, facility, or undertaking,

4-50     whether existing, new construction, remodeling, improvement, or

4-51     rehabilitation, that meets or is designed to meet minimum property

4-52     standards required by the department and that is financed under the

4-53     provisions of this chapter for the primary purpose of providing

4-54     sanitary, decent, and safe dwelling accommodations for rent, lease,

4-55     use, or purchase by individuals and families of low and very low

4-56     income and families of moderate income in need of housing.  The

4-57     term includes:

4-58                       (A)  buildings, structures, land, equipment,

4-59     facilities, or other real or personal properties that are

4-60     necessary, convenient, or desirable appurtenances, including

4-61     streets, water, sewers, utilities, parks, site preparation,

4-62     landscaping, stores, offices, and other nonhousing facilities, such

4-63     as administrative, community, and recreational facilities the

4-64     department determines to be necessary, convenient, or desirable

4-65     appurtenances; and

4-66                       (B)  single and multifamily dwellings in rural

4-67     and urban areas.

4-68                 (14) [(13)]  "Housing sponsor" means:

4-69                       (A)  an individual, including an individual or

 5-1     family of low and very low income or family of moderate income,

 5-2     joint venture, partnership, limited partnership, trust, firm,

 5-3     corporation, or cooperative that is approved by the department as

 5-4     qualified to own, construct, acquire, rehabilitate, operate,

 5-5     manage, or maintain a housing development, subject to the

 5-6     regulatory powers of the department and other terms and conditions

 5-7     in this chapter; or

 5-8                       (B)  in an economically depressed or blighted

 5-9     area, or in a federally assisted new community located within a

5-10     home-rule municipality, the term may include an individual or

5-11     family whose income exceeds the moderate income level if at least

5-12     90 percent of the total mortgage amount available under a mortgage

5-13     revenue bond issue is designated for individuals and families of

5-14     low income or families of moderate income.

5-15                 (15) [(14)]  "Individuals and families of low income"

5-16     means individuals and families earning not more than 80 percent of

5-17     the area median income or applicable federal poverty line, as

5-18     determined under Section 2306.123 or Section 2306.1231.

5-19                 (16) [(15)]  "Individuals and families of very low

5-20     income" means individuals and families earning not more than 60

5-21     percent of the area median income or applicable federal poverty

5-22     line, as determined under Section 2306.123 or Section 2306.1231.

5-23                 (17)  "Individuals and families of extremely low

5-24     income" means individuals and families earning not more than 30

5-25     percent of the area median income or applicable federal poverty

5-26     line, as determined under Section 2306.123 or Section 2306.1231.

5-27                 (18) [(16)]  "Land development" means:

5-28                       (A)  acquiring land for residential housing

5-29     construction; and

5-30                       (B)  making, installing, or constructing

5-31     nonresidential improvements that the department determines are

5-32     necessary or desirable for a housing development to be financed by

5-33     the department, including:

5-34                             (i)  waterlines and water supply

5-35     installations;

5-36                             (ii)  sewer lines and sewage disposal

5-37     installations;

5-38                             (iii)  steam, gas, and electric lines and

5-39     installations; and

5-40                             (iv)  roads, streets, curbs, gutters, and

5-41     sidewalks, whether on or off the site.

5-42                 (19) [(17)]  "Local government" means a county,

5-43     municipality, special district, or any other political subdivision

5-44     of the state, a public, nonprofit housing finance corporation

5-45     created under Chapter 394, Local Government Code, or a combination

5-46     of those entities.

5-47                 (20) [(18)]  "Mortgage" means an [interest-bearing]

5-48     obligation, including a mortgage, mortgage deed, bond, note, deed

5-49     of trust, or other instrument, that is a lien:

5-50                       (A)  on real property; or

5-51                       (B)  on a leasehold under a lease having a

5-52     remaining term that, at the time the lien is acquired, does not

5-53     expire until after the maturity date of the [interest-bearing]

5-54     obligation secured by the lien.

5-55                 (21) [(19)]  "Mortgage lender" means a bank, trust

5-56     company, savings bank, mortgage company, mortgage banker, credit

5-57     union, national banking association, savings and loan association,

5-58     life insurance company, or other financial institution authorized

5-59     to transact business in this state and approved as a mortgage

5-60     lender by the department.

5-61                 (22) [(20)]  "Mortgage loan" means an

5-62     [interest-bearing] obligation secured by a mortgage.

5-63                 (23) [(21)]  "Municipality" includes only a

5-64     municipality in this state.

5-65                 (24) [(22)]  "Public agency" means the department or

5-66     any [an] agency, board, authority, department, commission,

5-67     political subdivision, municipal corporation, district, public

5-68     corporation, body politic, or instrumentality of this state,

5-69     including a county, municipality, housing authority,

 6-1     state-supported institution of higher education, school district,

 6-2     junior college, other district or authority, or other type of

 6-3     governmental entity of this state.

 6-4                 (25) [(23)]  "Real estate owned contractor" means a

 6-5     person required to meet the obligations of a contract with the

 6-6     department [housing finance division] for managing and marketing

 6-7     foreclosed property.

 6-8                 (26) [(24)]  "Real property" means land, including

 6-9     improvements and fixtures on the land, property of any nature

6-10     appurtenant to the land or used in connection with the land, and a

6-11     legal or equitable estate, interest, or right in land, including

6-12     leasehold interests, terms for years, and a judgment, mortgage, or

6-13     other lien.

6-14                 (27) [(25)]  "Reserve fund" means any [the housing

6-15     finance division's] reserve fund established by the department.

6-16                 (28) [(26)]  "Residential housing" means a specific

6-17     work or improvement undertaken primarily to provide dwelling

6-18     accommodations, including the acquisition, construction,

6-19     reconstruction, remodeling, improvement, or rehabilitation of land

6-20     and buildings and improvements to the buildings for residential

6-21     housing and other incidental or appurtenant nonhousing facilities.

6-22                 (29) [(27)]  "Servicer" means a person required to meet

6-23     contractual obligations with the housing finance division or with a

6-24     mortgage lender relating to a loan financed under Subchapter J,

6-25     including:

6-26                       (A)  purchasing mortgage certificates backed by

6-27     mortgage loans;

6-28                       (B)  collecting principal and interest from the

6-29     borrower;

6-30                       (C)  sending principal and interest payments to

6-31     the division;

6-32                       (D)  preparing periodic reports;

6-33                       (E)  notifying the primary mortgage and pool

6-34     insurers of delinquent and foreclosed loans; and

6-35                       (F)  filing insurance claims on foreclosed

6-36     property.

6-37                 (30)  "State low income housing plan" means the

6-38     comprehensive and integrated plan for the state assessment of

6-39     housing needs and allocation of housing resources.

6-40           SECTION 6.  Section 2306.007(a), Government Code, is amended

6-41     to read as follows:

6-42           (a)  To establish an economically depressed or blighted area

6-43     under Section 2306.004(6)(B) [2306.004(5)(B)] or (C), the governing

6-44     body of a municipality must hold a public hearing and find that the

6-45     area:

6-46                 (1)  substantially impairs or arrests the sound growth

6-47     of the municipality; or

6-48                 (2)  is an economic or social liability and is a menace

6-49     to the public health, safety, morals, or welfare in its present

6-50     condition and use.

6-51           SECTION 7.  Section 2306.021(b), Government  Code, is amended

6-52     to read as follows:

6-53           (b)  The department is composed of:

6-54                 (1)  the community affairs division;

6-55                 (2)  the housing finance division;

6-56                 (3)  the manufactured housing division; [and]

6-57                 (4)  the community development division; and

6-58                 (5)  any other division created by the director.

6-59           SECTION 8.  Section 2306.032(b), Government Code, is amended

6-60     to read as follows:

6-61           (b)  The board shall keep complete minutes of board meetings.

6-62     The accounts, minutes, and other records shall be maintained by

6-63     [kept at the principal office of] the department.

6-64           SECTION 9.  Section 2306.033, Government Code, is amended by

6-65     amending Subsection (a) and adding Subsection (d) to read as

6-66     follows:

6-67           (a)  It is a ground for removal from the board that a member:

6-68                 (1)  does not have at the time of appointment the

6-69     qualifications required by Section 2306.026, 2306.027, or 2306.028

 7-1     for appointment to the board;

 7-2                 (2)  does not maintain during the service on the board

 7-3     the qualifications required by Section 2306.026, 2306.027, or

 7-4     2306.028 for appointment to the board;

 7-5                 (3)  violates a prohibition established by Section

 7-6     2306.034 or 2306.035;

 7-7                 (4)  cannot discharge the member's duties for a

 7-8     substantial part of the term for which the member is appointed

 7-9     because of illness or disability; [or]

7-10                 (5)  is absent from more than half of the regularly

7-11     scheduled meetings of the board that the member is eligible to

7-12     attend during a calendar year unless the absence is excused by

7-13     majority vote of the board; or

7-14                 (6)  engages in misconduct or unethical or criminal

7-15     behavior.

7-16           (d)  If a person has knowledge that a member of the board may

7-17     have engaged in criminal behavior or misconduct, the person shall

7-18     notify the presiding officer of the board.  The presiding officer

7-19     shall refer the allegation to the Travis County district attorney

7-20     for investigation.

7-21           SECTION 10.  Subchapter B, Chapter 2306, Government Code, is

7-22     amended by adding Section 2306.039 to read as follows:

7-23           Sec. 2306.039.  OPEN MEETINGS AND OPEN RECORDS.  (a)  Except

7-24     as provided by Subsection (b), the department and the Texas State

7-25     Affordable Housing Corporation are subject to Chapters 551 and 552.

7-26           (b)  This section does not apply to the personal financial

7-27     information submitted by an individual or family for a loan, grant,

7-28     or other housing assistance under a program administered by the

7-29     department or the Texas State Affordable Housing Corporation or

7-30     from bonds issued by the department, except that the department and

7-31     the corporation are permitted to disclose information about any

7-32     applicant in a form that does not reveal the identity of the

7-33     individual or family for purposes of determining eligibility for

7-34     programs and in preparing reports required under this chapter.

7-35           SECTION 11.  Section 2306.053(b), Government Code, is amended

7-36     to read as follows:

7-37           (b)  The department may:

7-38                 (1)  sue and be sued, or plead and be impleaded;

7-39                 (2)  act for and on behalf of this state;

7-40                 (3)  adopt an official seal or alter it;

7-41                 (4)  adopt and enforce bylaws and rules;

7-42                 (5)  contract with the federal government, state, any

7-43     public agency, mortgage lender, person, or other entity;

7-44                 (6)  designate mortgage lenders to act for the

7-45     department for the origination, processing, and servicing of the

7-46     department's mortgage loans under conditions agreed to by the

7-47     parties;

7-48                 (7)  provide, contract, or arrange for consolidated

7-49     processing of a housing development to avoid duplication;

7-50                 (8)  encourage homeless individuals and individuals of

7-51     low or very low income to attend the department's educational

7-52     programs and assist those individuals in attending the programs;

7-53                 (9)  appoint and determine the qualifications, duties,

7-54     and tenure of its agents, counselors, and professional advisors,

7-55     including accountants, appraisers, architects, engineers, financial

7-56     consultants, housing construction and financing experts, and real

7-57     estate consultants;

7-58                 (10)  administer federal housing, community affairs, or

7-59     community development programs, including the low income housing

7-60     tax credit program;

7-61                 (11)  establish eligibility criteria for individuals

7-62     and families of low, very low, and families of moderate income to

7-63     participate in and benefit from programs administered by the

7-64     department;

7-65                 (12)  execute funding agreements;

7-66                 (13)  obtain, retain, and disseminate records and other

7-67     documents in electronic form; and

7-68                 (14) [(12)]  do all things necessary, convenient, or

7-69     desirable to carry out the powers expressly granted or necessarily

 8-1     implied by this chapter.

 8-2           SECTION 12.  Subchapter D, Chapter 2306, Government Code, is

 8-3     amended by adding Section 2306.0661 to read as follows:

 8-4           Sec. 2306.0661.  PUBLIC HEARINGS.  (a)  This section applies

 8-5     only to state-funded housing programs, programs funded with bond

 8-6     proceeds, the low income housing tax credit program, and the state

 8-7     low income housing plan.  Federally funded programs shall comply

 8-8     with the federal public participation requirements and Chapter

 8-9     2105, if applicable.

8-10           (b)  The department shall encourage informed and effective

8-11     public participation in the department's programs and plans through

8-12     holding public hearings and soliciting and accepting public

8-13     comments during those hearings.  In holding a public hearing, the

8-14     department shall ensure that:

8-15                 (1)  the location of the hearing is:

8-16                       (A)  in a public building or facility accessible

8-17     to the public;

8-18                       (B)  accessible to persons with disabilities; and

8-19                       (C)  reasonably accessible by public

8-20     transportation, if available;

8-21                 (2)  hearings are scheduled at times when working and

8-22     nonworking people can attend; and

8-23                 (3)  child care is provided where practical.

8-24           (c)  In scheduling a public hearing, the department shall:

8-25                 (1)  publish notice of the time, place, and subject of

8-26     the hearing in the Texas Register and a newspaper of general

8-27     circulation in the community in which the hearing is to be held at

8-28     least seven days before the date of the hearing.  Whenever

8-29     practical, the department shall publish notice of the time, place,

8-30     and subject of the hearing in the Texas Register and a newspaper of

8-31     general circulation in the community in which the hearing is to be

8-32     held at least thirty days before the date of the hearing;

8-33                 (2)  provide notice of the hearing to each public

8-34     library, in the community in which the hearing is to be held, for

8-35     posting in a public area of the library;

8-36                 (3)  provide notice of the hearing to:

8-37                       (A)  each member of the board;

8-38                       (B)  each member of the advisory committee

8-39     consulted by the department during preparation of the state low

8-40     income housing plan; and

8-41                       (C)  each member of the legislature;

8-42                 (4)  make a reasonable effort to inform interested

8-43     persons and organizations of the hearing;

8-44                 (5)  make information about the hearing, including, if

8-45     appropriate, the qualified allocation plan, application forms for a

8-46     low income housing tax credit, and the state low income housing

8-47     plan, available on the Internet in accordance with Section

8-48     2306.077; and

8-49                 (6)  provide an opportunity for persons to transmit on

8-50     the Internet written testimony or comments on a subject of a

8-51     hearing in accordance with rules adopted by the board.

8-52           SECTION 13.  Section 2306.072, Government Code, is amended to

8-53     read as follows:

8-54           Sec. 2306.072.  ANNUAL LOW INCOME HOUSING REPORT.  (a)  Not

8-55     later than March 1 [the 100th day after the last day] of each [the

8-56     fiscal] year, the director shall prepare and submit to the board an

8-57     annual report of the department's housing activities for the

8-58     preceding [fiscal] year.

8-59           (b)  Not later than the 30th day after the date the board

8-60     receives the report, the board shall submit the report to the

8-61     governor, lieutenant governor, speaker of the house of

8-62     representatives, and members of any legislative oversight committee

8-63     [legislature].

8-64           (c)  The report must include:

8-65                 (1)  a complete operating and financial statement of

8-66     the department;

8-67                 (2)  a comprehensive statement of the activities of the

8-68     department during the preceding [fiscal] year to address the needs

8-69     identified in the state low income housing plan prepared as

 9-1     required by Section 2306.0721, including:

 9-2                       (A)  a statistical and narrative analysis of the

 9-3     department's performance in addressing the housing needs of

 9-4     individuals and families of low and very low income;

 9-5                       (B)  the ethnic and racial composition of

 9-6     individuals and families applying for and receiving assistance from

 9-7     each housing-related program operated by the department; and

 9-8                       (C)  the department's progress in meeting the

 9-9     goals established in the previous housing plan;

9-10                 (3)  an explanation of the efforts made by the

9-11     department to ensure the participation of individuals of low income

9-12     and their community-based institutions in [every aspect of]

9-13     department programs that affect them;

9-14                 (4)  a statement of the evidence that the department

9-15     has made an affirmative effort to ensure the involvement of

9-16     individuals of low income and their community-based institutions in

9-17     the allocation of funds and the planning process;

9-18                 (5)  a statistical analysis, delineated according to

9-19     each ethnic and racial group served by the department, that

9-20     indicates the progress made by the department in implementing the

9-21     state low income housing plan in each of the uniform state service

9-22     regions; [and]

9-23                 (6)  an analysis of fair housing opportunities in each

9-24     housing development that receives financial assistance from the

9-25     department that includes the following information for each housing

9-26     development that contains 20 or more living units:

9-27                       (A)  the street address and municipality or

9-28     county in which the property is located;

9-29                       (B)  the total number of units reported by

9-30     bedroom size;

9-31                       (C)  the total number of units designed for

9-32     individuals who are physically challenged or who have special needs

9-33     and the number of these individuals served annually as reported by

9-34     each housing sponsor;

9-35                       (D)  a statistical analysis of average rents

9-36     reported by county [region, as defined in the comprehensive housing

9-37     affordability strategy];

9-38                       (E)  the race or ethnic makeup of each project as

9-39     reported annually by each housing sponsor;

9-40                       (F)  the number of units occupied by individuals

9-41     receiving government-supported housing assistance as reported by

9-42     each housing sponsor;

9-43                       (G)  a statement as to whether the department has

9-44     been notified of a violation of the fair housing law that has been

9-45     filed with the United States Department of Housing and Urban

9-46     Development, the Commission on Human Rights, or the United States

9-47     Department of Justice; and

9-48                       (H)  a statement as to whether the development

9-49     has any instances of material noncompliance with bond indentures or

9-50     deed restrictions discovered through the normal monitoring

9-51     activities and procedures that include meeting occupancy

9-52     requirements or rent restrictions imposed by deed restriction or

9-53     financing agreements; and

9-54                 (7)  a report on the geographic distribution of low

9-55     income housing tax credits, the amount of unused low income housing

9-56     tax credits, and the amount of low income housing tax credits

9-57     received from the federal pool of unused funds from other states.

9-58           (d)  The annual report submitted in each even-numbered year

9-59     must:

9-60                 (1)  include recommendations designed to strengthen and

9-61     support the Neighborhood Partnership Program in providing home

9-62     ownership opportunities to individuals and families of low and very

9-63     low income; and

9-64                 (2)  describe in detail actions the department has

9-65     taken to assist small municipalities and rural areas in obtaining

9-66     matching funds from public and private sources for participation in

9-67     the Neighborhood Partnership Program.

9-68           SECTION 14.  Section 2306.0721, Government Code, is amended

9-69     to read as follows:

 10-1          Sec. 2306.0721.  LOW INCOME HOUSING PLAN.  (a)  Not later

 10-2    than March 1 [the 100th day after the last day] of each [the

 10-3    fiscal] year, the director shall prepare and submit to the board an

 10-4    integrated state low income housing plan for the next year.

 10-5          (b)  Not later than the 30th day after the date the board

 10-6    receives the plan, the board shall submit the plan to the governor,

 10-7    lieutenant governor, and the speaker of the house of

 10-8    representatives [legislature].

 10-9          (c)  The plan must include:

10-10                (1)  an estimate and analysis of the housing needs of

10-11    the following populations in the state:

10-12                      (A)  individuals and families of moderate, low,

10-13    and very low income;

10-14                      (B)  individuals with special needs; and

10-15                      (C)  homeless individuals;

10-16                (2)  a proposal to use all available housing resources

10-17    to address the housing needs of the populations described by

10-18    Subdivision (1) by establishing funding levels for all

10-19    housing-related programs;

10-20                (3)  an estimate of the number of federally assisted

10-21    housing units available for individuals and families of low and

10-22    very low income and individuals with special needs in each county

10-23    [uniform state service region in the state];

10-24                (4)  a description of state programs [rules and

10-25    policies] that govern the use of all available housing resources;

10-26                (5)  a resource allocation plan that targets all

10-27    available housing resources to individuals and families of low and

10-28    very low income and individuals with special needs;

10-29                (6)  a description of the department's efforts to

10-30    monitor and analyze the unused or underused federal resources of

10-31    other state agencies for housing-related services and services for

10-32    homeless individuals and the department's recommendations to ensure

10-33    the full use by the state of all available federal resources for

10-34    those services; [and]

10-35                (7)  strategies to provide housing for individuals and

10-36    families with special needs;

10-37                (8)  a description of the department's efforts to

10-38    encourage the construction of housing units that incorporate energy

10-39    efficient construction and appliances; and

10-40                (9)  any other housing-related information that the

10-41    state is required to include in the one-year action plan of the

10-42    consolidated plan submitted annually to the United States

10-43    Department of Housing and Urban Development.

10-44          (d)  The priorities and policies in another plan adopted by

10-45    the department must be consistent to the extent practical with the

10-46    priorities and policies established in the state low income housing

10-47    plan.

10-48          (e)  To the extent consistent with federal law, the

10-49    preparation and publication of the state low income housing plan

10-50    shall be consistent with the filing and publication deadlines

10-51    required of the department for the consolidated plan.

10-52          SECTION 15.  Section 2306.0722, Government Code, is amended

10-53    to read as follows:

10-54          Sec. 2306.0722.  PREPARATION OF PLAN AND REPORT.  (a)  Before

10-55    preparing the annual low income housing report under Section

10-56    2306.072 and the state low income housing plan under Section

10-57    2306.0721, the department shall meet with representatives of groups

10-58    with an interest in low income housing, nonprofit housing

10-59    organizations, managers, owners, and developers of affordable

10-60    housing, local government officials, and residents of low income

10-61    housing.  The department shall obtain the comments and suggestions

10-62    of the representatives, officials, and residents about the

10-63    prioritization and allocation of the department's resources in

10-64    regard to housing.

10-65          (b)  In preparing the annual report under Section 2306.072

10-66    and the state low income housing plan under Section 2306.0721, the

10-67    director shall:

10-68                (1)  coordinate local, state, and federal housing

10-69    resources, including tax exempt housing bond financing and low

 11-1    income housing tax credits;

 11-2                (2)  set priorities for the available housing resources

 11-3    to help the neediest individuals;

 11-4                (3)  evaluate the success of publicly supported housing

 11-5    programs;

 11-6                (4)  survey and identify the unmet housing needs of

 11-7    individuals the department is required to assist;

 11-8                (5)  ensure that housing programs benefit an individual

 11-9    without regard to the individual's race, ethnicity, sex, or

11-10    national origin;

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

11-12    families of low and very low income and individuals with special

11-13    housing needs;

11-14                (7)  develop housing programs through an open, fair,

11-15    and public process;

11-16                (8)  set priorities for assistance in a manner that is

11-17    appropriate and consistent with the housing needs of the

11-18    populations described by Section 2306.0721(c)(1); [and]

11-19                (9)  incorporate recommendations that are consistent

11-20    with the consolidated plan [comprehensive housing affordability

11-21    strategy and performance report] submitted annually by the state to

11-22    the United States Department of Housing and Urban Development;

11-23                (10)  identify the organizations and individuals

11-24    consulted by the department in preparing the annual report and

11-25    state low income housing plan and summarize and incorporate

11-26    comments and suggestions provided under Subsection (a) as the board

11-27    determines to be appropriate;

11-28                (11)  develop a plan to respond to changes in federal

11-29    funding and programs for the provision of affordable housing; and

11-30                (12)  use the following standardized categories to

11-31    describe the income of program applicants and beneficiaries:

11-32                      (A)  0 to 30 percent of area median income

11-33    adjusted for family size;

11-34                      (B)  more than 30 to 60 percent of area median

11-35    income adjusted for family size;

11-36                      (C)  more than 60 to 80 percent of area median

11-37    income adjusted for family size;

11-38                      (D)  more than 80 to 115 percent of area median

11-39    income adjusted for family size; or

11-40                      (E)  more than 115 percent of area median income

11-41    adjusted for family size.

11-42          SECTION 16.  Section 2306.0723, Government  Code, is amended

11-43    to read as follows:

11-44          Sec. 2306.0723.  PUBLIC PARTICIPATION REQUIREMENTS

11-45    [HEARINGS].  (a)  The department shall hold [a] public hearings

11-46    [hearing] on [the annual report and] the annual state low income

11-47    housing plan and report before the director submits the report and

11-48    the plan to the board. Public hearings shall be held in Dallas or

11-49    Fort Worth, El Paso, Houston, San Antonio, and at least three

11-50    additional municipalities selected by the department to represent

11-51    geographically diverse communities. The department shall provide

11-52    notice of the public hearings as required by Section  2306.0661,

11-53    except that the department must publish notice of both hearings not

11-54    later than the 30th day before the date of the first public

11-55    hearing.  The published notice must include a summary of the report

11-56    and plan.  The department shall accept comments on the report and

11-57    plan at the public hearings and for at least 30 days after the date

11-58    of the publication of the notice of the hearings.

11-59          (b)  In addition to any other necessary topics relating to

11-60    the report and the plan, each public hearing required by Subsection

11-61    (a) must address:

11-62                (1)  infrastructure needs;

11-63                (2)  home ownership programs;

11-64                (3)  rental housing programs;

11-65                (4)  housing repair programs; and

11-66                (5)  the concerns of individuals with special needs, as

11-67    defined by Section 2306.511.

11-68          (c)  The board shall hold a public hearing on the state low

11-69    income housing report and plan before the board submits the report

 12-1    and the plan to the governor, lieutenant governor, speaker of the

 12-2    house of representatives, and members of the legislature.

 12-3          (d) [(c)]  The board shall include with the report and the

 12-4    plan the board submits to the governor, lieutenant governor,

 12-5    speaker of the house of representatives, members of the [and]

 12-6    legislature, and members of the advisory board formed by the

 12-7    department to advise on the consolidated plan a written summary

 12-8    [report] of public comments on the report and the plan.

 12-9          SECTION 17.  Section 2306.076(a), Government Code, is amended

12-10    to  read as follows:

12-11          (a)  The board may purchase from department funds liability

12-12    insurance for the director, [and] board members, [and] officers,

12-13    and employees of the department.

12-14          SECTION 18.  Subchapter D, Chapter 2306, Government Code, is

12-15    amended by adding Section 2306.077 to read as follows:

12-16          Sec. 2306.077.  INTERNET AVAILABILITY.  (a)  In this section,

12-17    "Internet" means the largest, nonproprietary, nonprofit,

12-18    cooperative, public computer network, popularly known as the

12-19    Internet.

12-20          (b)  The department, to the extent it considers it to be

12-21    feasible and appropriate, shall make information on the

12-22    department's  programs, public hearings, and scheduled public

12-23    meetings available to the public on the Internet.

12-24          (c)  The access to information allowed by this section is in

12-25    addition to the public's free access to the information through

12-26    other electronic or print distribution of the information and does

12-27    not alter, diminish, or relinquish any copyright or other

12-28    proprietary interest or entitlement of this state or a private

12-29    entity under contract with this state.

12-30          SECTION 19.  The heading of Subchapter E, Chapter 2306,

12-31    Government Code, is amended to read as follows:


12-33                           DEVELOPMENT PROGRAMS

12-34          SECTION 20.  Subchapter E, Chapter 2306, Government Code, is

12-35    amended by adding Section 2306.094 to read as follows:

12-36          Sec. 2306.094.  SERVICES FOR THE HOMELESS.  The department

12-37    shall administer the state's allocation of federal funds provided

12-38    under the Emergency Shelter Grants Program (42 U.S.C. Section 11371

12-39    et seq.), as amended, or its successor program, and any other

12-40    federal funds provided for the benefit of homeless individuals and

12-41    families.

12-42          SECTION 21.  Section 2306.097, Government Code, is amended to

12-43    read as follows:

12-44          Sec. 2306.097.  ENERGY SERVICES PROGRAM FOR LOW-INCOME

12-45    INDIVIDUALS.  [(a)]  The Energy Services Program for Low-Income

12-46    Individuals [is in the community affairs division.]

12-47          [(b)  The program] shall operate in conjunction with the

12-48    community services block grant program and has jurisdiction and

12-49    responsibility for administration of the following elements of the

12-50    State Low-Income Energy Assistance Program, from whatever sources

12-51    funded:

12-52                (1)  the Energy Crisis Intervention Program;

12-53                (2)  the weatherization program; and

12-54                (3)  the Low-Income Home Energy Assistance Program.

12-55          SECTION 22.  Section 2306.099, Government Code, is amended to

12-56    read as follows:

12-57          Sec. 2306.099.  TRANSFER OF FEDERAL FUNDS.  (a)  The

12-58    department may enter into an interagency agreement with the Texas

12-59    Department of Commerce to reimburse the Texas Department of

12-60    Commerce for providing on behalf of the department marketing, [and]

12-61    underwriting, and any other services on the portion of the federal

12-62    community  development block grant funds allocated by the

12-63    department for economic development activities.

12-64          (b)  The department shall allocate not more than 20 percent

12-65    of the federal funds received by the department to the Texas

12-66    Department of Commerce to be used for economic development

12-67    activities.

12-68          (c)  The activities undertaken by the Texas Department of

12-69    Commerce under this section must be monitored [approved]  by the

 13-1    department.

 13-2          SECTION 23.  Section 2306.111, Government Code, is amended to

 13-3    read as follows:

 13-4          Sec. 2306.111.  HOUSING FUNDS.  (a)  The department, through

 13-5    the housing finance [any] division, shall administer all [the]

 13-6    federal housing  funds provided to the state under the

 13-7    Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.

 13-8    Section 12704 et seq.) or any other affordable housing program.

 13-9          (b)  The housing finance division shall adopt a goal to apply

13-10    an aggregate [a] minimum of 25 percent of the division's  total

13-11    housing funds toward housing assistance for individuals and

13-12    families of extremely low and very low income.

13-13          SECTION 24.  Section 2306.142, Government Code, is amended to

13-14    read as follows:

13-15          Sec. 2306.142.  AUTHORIZATION OF BONDS.  In its discretion,

13-16    the board shall authorize all bonds issued by the department

13-17    [housing finance division].

13-18          SECTION 25.  Section 2306.171, Government Code, is amended to

13-19    read as follows:


13-21    PURPOSES OF HOUSING FINANCE DIVISION.  The department shall:

13-22                (1)  develop policies and programs designed to increase

13-23    the number of individuals and families of extremely low, [and] very

13-24    low, and low income and families of moderate income  that

13-25    participate in the housing finance division's programs;

13-26                (2)  work with municipalities, counties, public

13-27    agencies, housing sponsors, and nonprofit and for profit

13-28    corporations to  provide:

13-29                      (A)  information on division programs; and

13-30                      (B)  technical assistance to municipalities,

13-31    counties, and nonprofit corporations;

13-32                (3)  encourage private for profit and nonprofit

13-33    corporations and state organizations to match the division's funds

13-34    to assist in providing affordable housing to individuals and

13-35    families of low and very low income and families of moderate

13-36    income;

13-37                (4)  provide matching funds to municipalities,

13-38    counties, public agencies, housing sponsors, and nonprofit

13-39    developers who qualify under the division's programs; and

13-40                (5)  administer the state's allocation of federal funds

13-41    provided under the rental rehabilitation grant program authorized

13-42    by Section 17, Title I, of the United States Housing Act of 1937

13-43    (42 U.S.C. Section 1437o).

13-44          SECTION 26.  Section 2306.177, Government Code, is amended to

13-45    read as follows:

13-46          Sec. 2306.177.  HEARINGS.  The department may:

13-47                (1)  conduct hearings; and

13-48                (2)  take testimony and proof, under oath, at public

13-49    hearings, on matters necessary to carry out the department's

13-50    [housing finance division's] purposes.

13-51          SECTION 27.  Subchapter H, Chapter 2306, Government Code, is

13-52    amended by adding Section 2306.184 to read as follows:

13-53          Sec. 2306.184.  DISCLOSURE OF FEES.  (a)  This section does

13-54    not apply to an application submitted by an individual or family

13-55    for a loan, grant, or other assistance under a program administered

13-56    by the department or the Texas State Affordable Housing Corporation

13-57    or from bonds issued by the department.

13-58          (b)  An application for a loan, grant, or other assistance

13-59    for an eligible affordable housing project or activity under a

13-60    program administered by the department or the Texas State

13-61    Affordable Housing Corporation or from bonds issued by the

13-62    department must include:

13-63                (1)  the name of each person expected to charge the

13-64    applicant a project development fee or project operation fee;

13-65                (2)  the nature and amount of each project development

13-66    fee and project operation fee the applicant is expected to pay; and

13-67                (3)  any interlocking interests of persons listed under

13-68    Subdivision (1).

13-69          (c)  Not later than the 30th day after the date the term of a

 14-1    project for which an application was granted for a grant, loan, or

 14-2    other assistance described by Subsection (b) expires, the recipient

 14-3    must provide to the department a statement that includes:

 14-4                (1)  the name of each person to whom the recipient paid

 14-5    a project development fee or project operation fee during the term

 14-6    of the project;

 14-7                (2)  the nature and amount of each project development

 14-8    fee and project operation fee paid by the recipient during the term

 14-9    of the project; and

14-10                (3)  any interlocking interests of persons listed under

14-11    Subdivision (1).

14-12          (d)  The department shall adopt rules governing penalties and

14-13    sanctions under this section for a person who:

14-14                (1)  does not provide the information required by this

14-15    section; or

14-16                (2)  knowingly discloses false information.

14-17          (e)  In this section:

14-18                (1)  "Project development fee" means a fee charged in

14-19    connection with the planning, design, or development of an

14-20    affordable housing project, including an application fee, tax

14-21    credit consulting fee, development consulting fee, mortgage

14-22    brokerage fee, and financial advising fee.

14-23                (2)  "Project operation fee" means a fee charged in

14-24    connection with the operation, construction, management, or

14-25    administration of an affordable housing project, including a

14-26    management fee, asset management fee, incentive management fee,

14-27    general partner fee, construction supervision fee, and construction

14-28    management fee.

14-29          SECTION 28.  Section 2306.201(b), Government Code, is amended

14-30    to read as follows:

14-31          (b)  The fund consists of:

14-32                (1)  appropriations or transfers made to the fund;

14-33                (2)  unencumbered fund balances; [and]

14-34                (3)  public or private gifts or grants;

14-35                (4)  investment income; and

14-36                (5)  funds from any other source.

14-37          SECTION 29.  Section 2306.202, Government Code, is amended to

14-38    read as follows:

14-39          Sec. 2306.202.  USE OF HOUSING TRUST FUND.  (a)  The

14-40    department, through the housing finance division, shall use the

14-41    housing trust fund to provide loans, grants, or other comparable

14-42    forms of assistance to local units of government, public housing

14-43    authorities, nonprofit organizations, and income-eligible

14-44    individuals, families, and  households to finance, acquire,

14-45    rehabilitate, and develop decent, safe, and sanitary housing.  In

14-46    each biennium the first $2.6 million available through the housing

14-47    trust fund for loans, grants, or other comparable forms of

14-48    assistance shall be set aside and made available exclusively for

14-49    local units of government, public housing authorities, and

14-50    nonprofit organizations.  Any additional funds may also be made

14-51    available to for-profit organizations so long as at least 45

14-52    percent of available funds in excess of the first $2.6 million

14-53    shall be made available to nonprofit organizations for the purpose

14-54    of acquiring, rehabilitating, and developing decent, safe, and

14-55    sanitary housing.  The remaining portion shall be competed for by

14-56    nonprofit organizations, for-profit organizations, and other

14-57    eligible entities.  Notwithstanding any other section of this

14-58    chapter, the department may also use the fund to acquire property

14-59    to endow  the fund.

14-60          (b)  Use of the fund is limited to providing:

14-61                (1)  assistance for individuals and families of low and

14-62    very low income;  [and]

14-63                (2)  technical assistance and capacity building to

14-64    nonprofit organizations engaged in developing housing for

14-65    individuals and families of low and very low income; and

14-66                (3)  security for repayment of revenue bonds issued to

14-67    finance housing for individuals and families of low and very low

14-68    income.

14-69          SECTION 30.  Section 2306.205, Government Code, is amended by

 15-1    adding Subsection (f) to read as follows:

 15-2          (f)  In addition to the money transferred into the housing

 15-3    trust fund under this section, and subject to Subsection (e), the

 15-4    department shall transfer into the fund the amount of any

 15-5    origination fee, asset oversight fee, and servicing fee the

 15-6    department or the Texas State Affordable Housing Corporation

 15-7    receives in relation to the administration of its 501(c)(3) bond

 15-8    program established pursuant to Section 2306.358 that exceeds the

 15-9    amount needed by the department or the Texas State Affordable

15-10    Housing Corporation to pay its operating and overhead costs and

15-11    fund reserves, including an insurance reserve or credit enhancement

15-12    reserve established by the board in administering the program.

15-13          SECTION 31.  Section 2306.207(a), Government Code, is amended

15-14    to read as follows:

15-15          (a)  The department [housing finance division] may create a

15-16    reserve fund with the comptroller [state treasurer] out of:

15-17                (1)  proceeds from the sale of the department's

15-18    [division's] bonds; or

15-19                (2)  other resources.

15-20          SECTION 32.  Section 2306.232, Government Code, is amended to

15-21    read as follows:

15-22          Sec. 2306.232.  TEXAS HOUSING AGENCY LOAN OR GUARANTEE.  A

15-23    loan or guarantee made by the Texas Housing Agency becomes a loan

15-24    or guarantee of the department [housing finance division].

15-25          SECTION 33.  Section 2306.251, Government Code, is amended as

15-26    follows:

15-27          Sec. 2306.251.  PROPERTY OWNERSHIP PROGRAM.  (a)  While it is

15-28    not the intent of the legislature that the department compete with

15-29    the private sector by becoming a long-term owner of real property

15-30    merely for the purpose of owning, managing, and operating tenant

15-31    properties, the [The] department may acquire, [and] own,

15-32    reconstruct, rehabilitate, manage, or operate real property:

15-33                (1)  on an interim basis for sale or rental to:

15-34                      (A) [(1)]  individuals and families of low and

15-35    very low income and families of moderate income; and

15-36                      (B) [(2)]  nonprofit housing organizations and

15-37    other housing organizations to serve the needs of individuals and

15-38    families of low and very low income and families of moderate

15-39    income;

15-40                (2)  for a period of time not to exceed 10 years for

15-41    the purposes of:

15-42                      (A)  preserving publicly financed or subsidized

15-43    housing; or

15-44                      (B)  participating in a risk-sharing program

15-45    entered into with the United States Department of Housing and Urban

15-46    Development, any other insurer or guarantor of any United States

15-47    Department of Housing and Urban Development-related indebtedness, a

15-48    government sponsored enterprise, a housing finance agency or

15-49    corporation, or a public housing authority.

15-50          (b)  [Property acquired by the department must qualify for

15-51    home mortgage insurance after rehabilitation.]

15-52          [(c)]  The department may use money from the housing trust

15-53    fund, unencumbered fund balances, fees received by the housing

15-54    finance division, proceeds from the sale or rental of real

15-55    property, distribution of earnings under Section 2306.557, or

15-56    appropriations, allocations, grants, or gifts from any public or

15-57    private source to purchase property under this section.

15-58          (c)  If the department uses the housing trust fund to finance

15-59    real property acquisitions, it [(d)  The housing finance division]

15-60    may not use more than 10 percent of the yearly balance of the

15-61    [housing trust] fund to acquire the real property.

15-62          (d) [(e)]  If the department acquires property under this

15-63    section, the department shall submit an annual report to the  board

15-64    that includes an analysis of [have an independent audit conducted

15-65    annually to analyze] the property ownership program's:

15-66                (1)  financial stability;

15-67                (2)  cost-effectiveness; and

15-68                (3)  effectiveness in serving individuals and families

15-69    of low and very low income and families of moderate income.

 16-1          SECTION 34.  Section 2306.252, Government Code, is amended to

 16-2    read as follows:

 16-3          Sec. 2306.252.  [LOW AND VERY LOW INCOME] HOUSING RESOURCE

 16-4    CENTER.  (a)  The board shall establish a [low and very low income]

 16-5    housing resource center in the housing finance division.

 16-6          (b)  The center shall:

 16-7                (1)  provide educational material to housing advocates,

 16-8    housing sponsors, borrowers, and tenants;

 16-9                (2)  provide technical assistance to nonprofit housing

16-10    sponsors; and

16-11                (3)  [focus on marketing loans and other programs of

16-12    the housing finance division to individuals and families of low and

16-13    very low income; and]

16-14                [(4)]  assist [lenders] in the development of housing

16-15    policy, including the annual state low income housing plan and

16-16    report and the consolidated plan [marketing loans to individuals

16-17    and families of low and very low income].

16-18          (c)  The housing resource center is intended to assist

16-19    individuals, local organizations, and local governments in

16-20    providing for the housing needs of individuals and families in

16-21    their communities by providing information available to the center

16-22    to housing contractors, nonprofit housing sponsors, community-based

16-23    organizations, and local governments on:

16-24                (1)  local housing needs;

16-25                (2)  housing programs;

16-26                (3)  available funding sources; and

16-27                (4)  programs that affect the creation, improvement, or

16-28    preservation of housing affordable to individuals and families of

16-29    low and very low income.

16-30          SECTION 35.  Section 2306.267, Government Code, is amended to

16-31    read as follows:

16-32          Sec. 2306.267.  COMPLIANCE WITH APPLICABLE LAWS, RULES, AND

16-33    CONTRACT TERMS.  The department may order a housing sponsor to

16-34    perform or refrain from performing certain acts in order to comply

16-35    with the law, department [housing finance division] rules, or terms

16-36    of a contract or agreement to which the housing sponsor is a party.

16-37          SECTION 36.  Section 2306.270, Government Code, is amended to

16-38    read as follows:

16-39          Sec. 2306.270.  REGULATION OF RETIREMENT OF CAPITAL

16-40    INVESTMENT OR REDEMPTION OF STOCK.  The department shall regulate

16-41    the retirement of a capital investment or the redemption of stock

16-42    of a limited profit housing sponsor if the retirement or

16-43    redemption, when added to a dividend or other distribution, exceeds

16-44    in any one fiscal year the permitted percentage, as allowed by the

16-45    department [housing finance division's rules], of the original face

16-46    amount of the limited profit housing sponsor's investment or equity

16-47    in a housing development.

16-48          SECTION 37.  Section 2306.291(a), Government Code, is amended

16-49    to read as follows:

16-50          (a)  The department may purchase and take assignments from

16-51    mortgage lenders or the federal government of notes and other

16-52    obligations, including contracts for deed and mortgages, evidencing

16-53    loans or interest in loans for the construction, remodeling,

16-54    improvement, [or] rehabilitation, purchase, leasing, or refinancing

16-55    of housing developments for individuals and families of low and

16-56    very low income and families of moderate income.

16-57          SECTION 38.  Section 2306.351(a), Government Code, is amended

16-58    to read as follows:

16-59          (a)  The department may issue bonds under this chapter,

16-60    including qualified 501(c)(3) bonds under Section 145,  Internal

16-61    Revenue Code of 1986 (26 U.S.C. Section 145),  and may:

16-62                (1)  provide for and secure payment of the bonds;

16-63                (2)  provide for the rights of the holders of the

16-64    bonds, as permitted by this chapter and the Texas Constitution; and

16-65                (3)  purchase, hold, cancel, resell, or otherwise

16-66    dispose of its bonds, subject to restrictions in a resolution

16-67    authorizing issuance of its bonds.

16-68          SECTION 39.  Section 2306.357, Government Code, is amended to

16-69    read as follows:

 17-1          Sec. 2306.357.  BONDS ISSUED BY TEXAS HOUSING AGENCY.  A

 17-2    general obligation or revenue bond issued by the Texas Housing

 17-3    Agency becomes a general obligation or revenue bond of the

 17-4    department [housing finance division].

 17-5          SECTION 40.  Subchapter P, Chapter 2306, Government Code, is

 17-6    amended by adding Section 2306.358 to read as follows:

 17-7          Sec. 2306.358.  ISSUANCE OF QUALIFIED 501(c)(3) BONDS.  (a)

 17-8    Of the total qualified 501(c)(3) bonds issued under Section 145 of

 17-9    the Internal Revenue Code of 1986 (26 U.S.C. Section 145) in each

17-10    fiscal year,  it is the express intent of the legislature that the

17-11    department shall allocate qualified 501(c)(3) bonding authority as

17-12    follows:

17-13                (1)  at least 50 percent of the total annual issuance

17-14    amount authorized through the memorandum of understanding provided

17-15    for in Subsection (b) of this section is reserved for the purposes

17-16    of new construction or acquisition with substantial rehabilitation;

17-17                (2)  not more than 25 percent of the total annual

17-18    issuance amount authorized through the memorandum of understanding

17-19    provided for in Subsection (b) of this section may be used for

17-20    projects in any one metropolitan area; and

17-21                (3)  at least 15 percent of the annual issuance amount

17-22    authorized through the memorandum of understanding provided for in

17-23    Subsection (b) of this section is reserved for projects in rural

17-24    areas.

17-25          (a-1)  For the purposes of Subsection (a):

17-26                (1)  "Rural area" and "metropolitan area" shall be

17-27    defined through the memorandum of understanding provided for in

17-28    Subsection (b) of this section.

17-29                (2)  "Substantial rehabilitation" means rehabilitation

17-30    of a project with a minimum of $5,000 of rehabilitation cost per

17-31    unit.

17-32          (b)  A qualified 501(c)(3) bond may not be issued unless

17-33    approved by the Bond Review Board.  In addition, the Bond Review

17-34    Board shall enter into a memorandum of understanding with the

17-35    department specifying the amount of bonds to be issued in each

17-36    fiscal year.  The Bond Review Board may not approve a proposal to

17-37    issue qualified 501(c)(3) bonds unless they meet the requirements

17-38    of this section, including the memorandum of understanding, and all

17-39    other laws that may apply.

17-40          (c)  In addition to the requirements of Section 145 of the

17-41    Internal Revenue Code of 1986 (26 U.S.C. Section 145), a qualified

17-42    501(c)(3) organization must:

17-43                (1)  demonstrate to the department that the project is

17-44    carefully and conservatively underwritten to:

17-45                      (A)  ensure that the project is well run, well

17-46    maintained, and financially viable; and 

17-47                      (B)  minimize the risk of the organization's

17-48    default;

17-49                (2)  ensure that at least 60 percent of the housing to

17-50    be provided under the project is affordable housing provided to

17-51    individuals and families of low and very low income and:

17-52                      (A)  at least 40 percent of the units in a

17-53    multifamily development are affordable to individuals and families

17-54    with incomes at or below 60 percent of the median family income,

17-55    adjusted for family size; or

17-56                      (B)  at least 20 percent of the units in a

17-57    multifamily development are affordable to individuals and families

17-58    with incomes at or below 50 percent of the median family income,

17-59    adjusted for family size; and

17-60                (3)  enter into an agreement with the department in

17-61    which the 501(c)(3) organization:

17-62                      (A)  agrees during the term of the agreement to

17-63    reserve at least 60 percent of the housing to be provided under the

17-64    project for individuals and families of low and very low income;

17-65                      (B)  ensures that the reserved housing will

17-66    remain affordable to individuals and families of low and very low

17-67    income during the term of the agreement;

17-68                      (C)  agrees to not discriminate against a tenant

17-69    applicant solely because the applicant receives public rental

 18-1    assistance payments, except if at least 15 percent of the housing

 18-2    units provided under the project are occupied by tenants who

 18-3    receive public rental assistance payments; and

 18-4                      (D)  agrees to restrict the rents charged on

 18-5    those units reserved for individuals and families of low and very

 18-6    low income at 30 percent of the area median income adjusted for

 18-7    family size and utility allowance, unless this requirement is

 18-8    waived or modified on a case-by-case basis by the board, and

 18-9    approved by the Bond Review Board, if both boards determine that

18-10    the waiver or modification is necessary for an area of the state

18-11    because the area's median income would prevent the construction of

18-12    new affordable projects.

18-13          (d)  Subsection (c)(3)(C) does not prohibit an organization

18-14    from requiring a tenant applicant who receives public assistance to

18-15    meet the organization's standard criteria for occupancy, including

18-16    such criteria as satisfactory creditworthiness and lack of criminal

18-17    history.

18-18          (e)  The agreement provided for in Subsection (c)(3) may

18-19    provide for the lease or sale of the project to a nonprofit

18-20    corporation approved by the department subject to the conditions

18-21    specified in Subsection (c).

18-22          (f)  Neither the department nor the Texas State Affordable

18-23    Housing Corporation may use state or federal money to provide for

18-24    credit enhancement of a bond issued under this section unless the

18-25    credit enhancement would facilitate the issuance of bonds for the

18-26    purpose of financing the creation or preservation of affordable

18-27    housing by 501(c)(3) nonprofit entities.

18-28          (g)  In lieu of complying with the set-aside requirements

18-29    specified in Subsection (c)(2), a qualified 501(c)(3) organization

18-30    may comply with such other set-asides or restrictions as are

18-31    approved by the Internal Revenue Service as a basis for the

18-32    determination letter addressed to the qualified 501(c)(3)

18-33    organization.

18-34          (h)  For purposes of this section, "rural area" and

18-35    "metropolitan area" shall be defined through the memorandum of

18-36    understanding provided for in Subsection (b) of this section.

18-37          SECTION 41.  Section 2306.375, Government Code, is amended to

18-38    read as follows:

18-39          Sec. 2306.375.  PERSONAL LIABILITY OF BOARD MEMBER OR

18-40    DIRECTOR.  A member of the board or the director is not liable

18-41    personally for bonds issued or contracts executed by the department

18-42    or for any other action taken in accordance with the powers  and

18-43    duties authorized by this chapter [housing finance division].

18-44          SECTION 42.  Section 2306.411(a), Government Code, is amended

18-45    to read as follows:

18-46          (a)  In addition to other security for the department's bonds

18-47    authorized by this chapter, payment of the principal and interest

18-48    and redemption premium, if any, on the department's bonds may be

18-49    secured by a first or subordinate lien on and pledge of all or part

18-50    of:

18-51                (1)  the department's assets and real, personal, or

18-52    mixed property, including:

18-53                      (A)  mortgages or other obligations securing the

18-54    assets of property;

18-55                      (B)  investments; and

18-56                      (C)  trust agreements or trust indentures

18-57    administered by one or more corporate trustees as allowed by the

18-58    board; and

18-59                (2)  the reserves or funds of the department [housing

18-60    finance division].

18-61          SECTION 43.  Section 2306.412(a), Government Code, is amended

18-62    to read as follows:

18-63          (a)  A lien on or pledge of revenues, income, assets,

18-64    reserves, funds, or other resources of the department [housing

18-65    finance division], as authorized by this chapter, is valid and

18-66    binding from the time of payment for and delivery of the bonds

18-67    authorized by the board resolution creating or confirming the lien

18-68    or pledge.

18-69          SECTION 44.  Section 2306.491, Government Code, is amended to

 19-1    read as follows:

 19-2          Sec. 2306.491.  BONDS NEGOTIABLE INSTRUMENTS.

 19-3    Notwithstanding any other statute, a bond and interest coupon

 19-4    issued and delivered by the department [housing finance division]

 19-5    is a negotiable instrument under the Uniform Commercial Code,

 19-6    except that the bond may be registered or subject to registration

 19-7    under this chapter.

 19-8          SECTION 45.  Subchapter Y, Chapter 2306, Government Code, as

 19-9    added by Chapter 76, Acts of the 74th Legislature, Regular Session,

19-10    1995, is amended to read as follows:


19-12          Sec. 2306.551.  DEFINITION.  In this subchapter,

19-13    "corporation" means the Texas State Affordable Housing Corporation.

19-14          Sec. 2306.552.  CREATION.  (a)  The existence of the Texas

19-15    State Affordable Housing Corporation, or any similarly named

19-16    corporation, begins on the date that the secretary of state issues

19-17    the certificate of incorporation.

19-18          (b)  The charter of the corporation must establish the

19-19    corporation as nonprofit and specifically dedicate the

19-20    corporation's activities to the public purpose authorized by this

19-21    subchapter [benefit of the department].

19-22          (c)  The creation of the corporation does not limit or impair

19-23    the rights, powers, and duties of the department under this

19-24    chapter.

19-25          Sec. 2306.553.  PURPOSES.  (a)  The public purpose of the

19-26    corporation is to perform activities and services that the

19-27    corporation's board of directors determines will promote the public

19-28    health, safety, and welfare through the provision of adequate,

19-29    safe, and sanitary housing for individuals and families of low and

19-30    very low income and families of moderate income.  The activities

19-31    and services shall include engaging in mortgage banking activities

19-32    and lending transactions and acquiring, holding, selling, or

19-33    leasing real or personal property [corporation shall carry out the

19-34    public purposes of this chapter on behalf of the state].

19-35          (b)  The corporation's primary public purpose is to

19-36    facilitate the provision of housing and the making of affordable

19-37    loans to individuals and families of low and very low income and

19-38    families of moderate income.  The corporation may make loans for

19-39    single family homes only to individuals and families of low and

19-40    very low income and families of moderate income.  The corporation

19-41    may make loans for multifamily developments if:

19-42                (1)  at least 40 percent of the units in a multifamily

19-43    development are affordable to individuals and families with incomes

19-44    at or below 60 percent of the median family income, adjusted for

19-45    family size; or

19-46                (2)  at least 20 percent of the units in a multifamily

19-47    development are affordable to individuals and families with incomes

19-48    at or below 50 percent of the median family income, adjusted for

19-49    family size [corporation may engage only in the performance of

19-50    charitable functions].

19-51          (c)  To the extent reasonably practicable, the corporation

19-52    shall use the services of banks, community banks, savings banks,

19-53    thrifts, savings and loan associations, private mortgage companies,

19-54    nonprofit organizations, and other lenders for the origination of

19-55    all loans contemplated by this subchapter and assist the lenders in

19-56    providing credit to individuals and families of low and very low

19-57    income and families of moderate income.

19-58          Sec. 2306.554.  BOARD OF DIRECTORS AND OFFICERS.

19-59                      (a)  The [members of the board serve as the]

19-60    board of directors of the corporation consists of six members as

19-61    follows:

19-62                (1)  the presiding officer of the board of directors of

19-63    the department;

19-64                (2)  the presiding officer of the programs committee of

19-65    the board of directors of the department; and

19-66                (3)  four members of the board of directors of the

19-67    corporation shall be appointed by the governor and shall represent

19-68    any of the following areas:

19-69                      (A)  state or federal savings banks or savings

 20-1    and loan associations;

 20-2                      (B)  community banks with assets of $200 million

 20-3    or less;

 20-4                      (C)  large metropolitan banks with assets of more

 20-5    than $1 billion;

 20-6                      (D)  asset management companies;

 20-7                      (E)  mortgage servicing companies;

 20-8                      (F)  builders;

 20-9                      (G)  real estate developers;

20-10                      (H)  real estate brokers;

20-11                      (I)  community or economic development

20-12    organizations;

20-13                      (J)  private mortgage companies;

20-14                      (K)  nonprofit housing development companies;

20-15                      (L)  attorneys;

20-16                      (M)  investment bankers;

20-17                      (N)  underwriters;

20-18                      (O)  private mortgage insurance companies;

20-19                      (P)  appraisers;

20-20                      (Q)  property management companies;

20-21                      (R)  financial advisors;

20-22                      (S)  nonprofit foundations;

20-23                      (T)  financial advisors; or

20-24                      (U)  any other area of expertise that the

20-25    governor finds necessary for the successful operation of the

20-26    corporation.

20-27          (b)  The governor shall appoint a presiding officer from the

20-28    members who are not also serving as members of the board of

20-29    directors of the department.

20-30          (c)  A member of the corporation's board of directors is not

20-31    entitled to compensation, except for the members who are also

20-32    members of the department's board of directors, but is entitled to

20-33    reimbursement of travel expenses incurred by the member while

20-34    conducting the business of the board, as provided by the General

20-35    Appropriations Act.

20-36          (d)  The director of the department shall serve ex officio as

20-37    president of the corporation.  The president is not entitled to

20-38    compensation, unless the president is not also the executive

20-39    director of the department, but is entitled to reimbursement from

20-40    the corporation of travel expenses incurred by the member while

20-41    conducting the business of the board, as provided by the General

20-42    Appropriations Act.  The director of the department shall serve as

20-43    president of the corporation only if the director has experience in

20-44    the field of mortgage banking or residential lending as

20-45    demonstrated by:

20-46                (1)  employment in one or more middle or upper level

20-47    management positions for at least two years with a mortgage bank,

20-48    commercial bank, thrift, savings and loan association, private

20-49    mortgage company, mortgage servicing entity, or other financial

20-50    institution; or

20-51                (2)  employment in a position of providing legal or

20-52    consulting services related to mortgage banking or residential

20-53    lending to any one of the type of entities listed in Subsection

20-54    (d)(1) for at least five years.

20-55          (e)  If the director does not satisfy the requirements of

20-56    Subsection (d)(1) or (2), the corporation shall employ, for

20-57    compensation to be determined by the corporation's board of

20-58    directors, an individual that satisfies the requirements of

20-59    Subsection (d)(1) or (2) to serve as president of the corporation.

20-60          (f)  The corporation may purchase, with corporation funds,

20-61    liability insurance for each of the members of the corporation's

20-62    board of directors, officers, and other employees of the

20-63    corporation in an amount that the corporation's board of directors

20-64    considers reasonably necessary to:

20-65                (1)  insure against foreseeable liabilities; and

20-66                (2)  provide for all costs of defending against those

20-67    liabilities, including, without limitation, court costs and

20-68    attorney's fees.

20-69          Sec. 2306.555.  POWERS.  (a)  The corporation has the powers

 21-1    [and is subject to the limitations] provided for the department

 21-2    under this chapter.

 21-3          (b)  In addition to the powers granted by Subsection (a), the

 21-4    corporation has all rights and powers necessary to accomplish its

 21-5    public purpose, including the powers to:

 21-6                (1)  purchase, service, sell, lend on the security of,

 21-7    or otherwise transact in:

 21-8                      (A)  mortgages, including federal mortgages and

 21-9    federally insured mortgages;

21-10                      (B)  mortgage loans;

21-11                      (C)  deeds of trust; and

21-12                      (D)  loans or other advances of credit secured by

21-13    liens against manufactured housing;

21-14                (2)  guarantee or insure timely payment of mortgage

21-15    loans and loans or other advances of credit secured by liens

21-16    against manufactured housing, provided that the corporation's

21-17    liability on that guaranty or insurance is limited to the assets of

21-18    a guaranty fund or self-insurance fund established and maintained

21-19    by the corporation;

21-20                (3)  make mortgage loans and loans or other advances of

21-21    credit secured by liens against manufactured housing to individuals

21-22    and families of low to moderate income;

21-23                (4)  make mortgage loans to provide temporary or

21-24    permanent financing or refinancing for housing or land

21-25    developments, including refunding outstanding obligations,

21-26    mortgages, or advances issued for those purposes;

21-27                (5)  borrow, give security, pay interest or other

21-28    return, or issue bonds or other obligations, including notes,

21-29    debentures, or mortgage-backed securities, provided that each bond

21-30    or other obligation issued by the corporation must contain a

21-31    statement that the state is not obligated to pay the principal of

21-32    or any premium or interest on the bond or other obligation and that

21-33    the full faith and credit and the taxing power of the state are not

21-34    pledged, given, or loaned to the payment;

21-35                (6)  acquire, hold, invest, use, pledge, reserve, and

21-36    dispose of its assets, revenues, income, receipts, funds, and money

21-37    from every source and to select one or more depositories, inside or

21-38    outside the state, subject to the terms of any resolution,

21-39    indenture, or other contract under which any bonds or other

21-40    obligations are issued or any guaranty or insurance is provided;

21-41                (7)  establish, charge, and collect fees, charges, and

21-42    penalties in connection with the programs, services, and activities

21-43    of the corporation;

21-44                (8)  procure insurance and pay premiums on insurance of

21-45    any type, in amounts, and from insurers as the corporation's board

21-46    of directors considers necessary and advisable to further the

21-47    corporation's public purpose, including, subject to Section

21-48    2306.554(f), liability insurance for the members of the

21-49    corporation's board of directors and the officers and other

21-50    employees of the corporation;

21-51                (9)  make, enter into, and enforce contracts,

21-52    agreements, leases, indentures, mortgages, deeds, deeds of trust,

21-53    security agreements, pledge agreements, credit agreements, and

21-54    other instruments with any person, including a mortgage lender,

21-55    servicer, housing sponsor, the federal government, or any public

21-56    agency, on terms the corporation determines may be acceptable;

21-57                (10)  own, rent, lease, or otherwise acquire, accept,

21-58    or hold real, personal, or mixed property, or any interest in

21-59    property, by purchase, exchange, gift, assignment, transfer,

21-60    foreclosure, mortgage, sale, lease, or otherwise and hold, manage,

21-61    operate, or improve real, personal, or mixed property, regardless

21-62    of location;

21-63                (11)  sell, lease, encumber, mortgage, exchange,

21-64    donate, convey, or otherwise dispose of any or all of its

21-65    properties or any interest in its properties, deeds of trust, or

21-66    mortgage lien interest owned by it or under its control or custody,

21-67    or in its possession, and release or relinquish any right, title,

21-68    claim, lien, interest, easement, or demand, however acquired,

21-69    including any equity or right of redemption in property foreclosed

 22-1    by it, by public or private sale, with or without public bidding;

 22-2                (12)  lease or rent any improvements, lands, or

 22-3    facilities from any person;

 22-4                (13)  request, accept, and use gifts, loans, donations,

 22-5    aid, guaranties, allocations, subsidies, grants, or contributions

 22-6    of any item of value to further its public purpose; and

 22-7                (14)  exercise [Except as specifically provided by this

 22-8    subchapter, the corporation has] the rights and powers of a

 22-9    nonprofit corporation incorporated under the Texas Non-Profit

22-10    Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil

22-11    Statutes).

22-12          (c)  In exercising the foregoing powers granted to it under

22-13    this chapter, the corporation shall not compete with private

22-14    lenders and shall not originate or make any loan that can or would

22-15    be made at the same time by a private lender on substantially the

22-16    same or better terms within the submarket in which the loan is

22-17    proposed to be made, and, to the extent practical, the corporation

22-18    shall rely on private mortgage companies, banks, savings banks,

22-19    thrifts, savings and loan associations, or other similar loan

22-20    originating entities to originate loans.  The corporation may act

22-21    as co-originator in a loan where the funding resources emanate from

22-22    the corporation.

22-23          (d)  All of the mortgage banking operations shall be

22-24    dedicated to the furtherance of facilitating affordable housing

22-25    finance for the ultimate benefit of individuals and families of low

22-26    and very low income and families of moderate income who, generally,

22-27    are not afforded housing finance options through conventional

22-28    lending channels.

22-29          (e)  The corporation may contract with the department and

22-30    with bond counsel, financial advisors, [or] underwriters, or other

22-31    providers of professional or consulting services.

22-32          (f)  The corporation shall pay its expenses from any

22-33    available fund without resort to the general revenues of the state,

22-34    except as specifically appropriated by the legislature.

22-35          (g)  The department may not transfer any funds to the

22-36    corporation to support the administration of the corporation or to

22-37    subsidize its operations in any way.  The department shall be fully

22-38    compensated by the corporation for any property or employees that

22-39    are shared by the corporation and the department, and it is the

22-40    intent of the legislature that no employees be shared beyond the

22-41    time at which such sharing is absolutely necessary.  This

22-42    subsection does not prohibit the corporation from receiving grants,

22-43    loans, or other program funds of a kind that are available to other

22-44    nonprofit corporations, or from using that portion of the program

22-45    funds that are allowed for administration of the program for

22-46    administrative purposes.

22-47          (h)  Transfers of property from the department to the

22-48    corporation shall be fully compensated.

22-49          Sec. 2306.556.  [TAX] EXEMPT FROM TAXATION AND REGISTRATION.

22-50    (a)  The corporation is exempt from all taxation by the state or a

22-51    political subdivision of the state, including a municipality.

22-52          (b)  A bond or other obligation issued by the corporation is

22-53    an exempt security under The Securities Act (Article 581-1 et seq.,

22-54    Vernon's Texas Civil Statutes), and unless specifically provided

22-55    otherwise, under any subsequently enacted securities act.  Any

22-56    contract, guaranty, or other document executed in connection with

22-57    the issuance of the bond or other obligation is not an exempt

22-58    security under that Act, and unless specifically provided

22-59    otherwise, under any subsequently enacted securities act.

22-60          Sec. 2306.557.  DISTRIBUTION OF EARNINGS.  Any part of

22-61    earnings remaining after payment of expenses and any establishment

22-62    of reserves by the corporation's board of directors may not inure

22-63    to any person except that the corporation shall deposit these

22-64    excess earnings with the department to the credit of the housing

22-65    trust [general revenue] fund established by Section 2306.201 [for

22-66    the benefit of the department] if the corporation's board of

22-67    directors determines that sufficient provision has been made for

22-68    the full payment of the expenses, bonds, and other obligations of

22-69    the corporation and for any establishment of reserves by the

 23-1    corporation's board of directors.

 23-2          Sec. 2306.558.  ALTERATION AND TERMINATION.  (a)  Subject to

 23-3    this subchapter and the prohibition on the impairment of contracts

 23-4    in the law of this state, the corporation's board of directors by

 23-5    written resolution may alter the structure, organization, programs,

 23-6    or activities of the corporation or terminate and dissolve the

 23-7    corporation.

 23-8          (b)  The corporation's board of directors shall dissolve the

 23-9    corporation if the board by resolution determines that:

23-10                (1)  the purposes for which the corporation was formed

23-11    have been substantially fulfilled; and

23-12                (2)  all bonds and other obligations issued by the

23-13    corporation and all guaranties and insurance and other contractual

23-14    obligations  have been fully paid or provision for that payment has

23-15    been made.

23-16          (c)  On dissolution, the title to funds and properties

23-17    previously owned by the corporation shall be transferred to the

23-18    department.

23-19          Sec. 2306.559.  REPORTING REQUIREMENTS [ANNUAL REPORT].  (a)

23-20    The corporation shall file an annual report of the financial

23-21    activity of the corporation with the department.  Not later than

23-22    the 30th day after the date the corporation's board of directors

23-23    receives the report, the corporation's board of directors shall

23-24    submit the report to the governor, lieutenant governor, speaker of

23-25    the house of representatives, comptroller, and Legislative Budget

23-26    Board.

23-27          (b)  The corporation shall file the report before the 90th

23-28    day after the last day of the corporation's fiscal year.

23-29          (c)  The corporation shall prepare the report in accordance

23-30    with generally accepted accounting principles.

23-31          (d)  The report must include:

23-32                (1)  a statement of support, revenue, and expenses and

23-33    change in fund balances;

23-34                (2)  a statement of functional expenses; and

23-35                (3)  balance sheets for all funds.

23-36          (e)  The corporation shall file quarterly performance reports

23-37    with the department.

23-38          (f)  Promptly on receipt, the corporation shall file with the

23-39    Bond Review Board a report for the preceding fiscal year.  The

23-40    report must contain the status of all outstanding debts and

23-41    obligations of the corporation, the status of collateral pledged as

23-42    security for those debts and obligations, and a maturity and

23-43    payment schedule for those debts and obligations.

23-44          Sec. 2306.560.  AUDIT.  (a)  The corporation shall hire an

23-45    independent certified public accountant to audit the corporation's

23-46    books and accounts for each fiscal year.  The corporation shall

23-47    file a copy of the audit with the department.  Not later than the

23-48    30th day after the date the corporation's board of directors

23-49    receives the audit, the corporation's board of directors shall

23-50    submit the audit to the governor, lieutenant governor, speaker of

23-51    the house of representatives, comptroller, Bond Review Board, State

23-52    Auditor's Office, and Legislative Budget Board.

23-53          (b)  The corporation is subject to audit by the state

23-54    auditor.

23-55          (c)  The corporation shall submit budget and financial

23-56    information to the legislative budget office as required by the

23-57    director of the legislative budget office.

23-58          Sec. 2306.561.  LIABILITY.  (a)  The directors, officers, and

23-59    employees of the corporation are not personally liable for bonds or

23-60    other obligations issued or contracts, guaranties, or insurance

23-61    executed by the corporation, or for any other action taken in

23-62    accordance with the powers and duties authorized by this subchapter

23-63    or in the good faith belief that that action was taken in

23-64    accordance with the powers and duties authorized by this

23-65    subchapter.

23-66          (b)  The directors and officers of the corporation are immune

23-67    from civil liability to the same extent that a volunteer who serves

23-68    as an officer, director, or trustee of a charitable organization is

23-69    immune from civil liability under Chapter 84, Civil Practice and

 24-1    Remedies Code.

 24-2          (c)  The civil liability of an employee of the corporation is

 24-3    limited to the same extent that the civil liability of an employee

 24-4    of a charitable organization is limited under Chapter 84, Civil

 24-5    Practice and Remedies Code.

 24-6          (d)  The limitations on liability contained in this section

 24-7    do not limit or impair the limitations on liability otherwise

 24-8    available to the corporation's directors, officers, and employees.

 24-9          SECTION 46.  Chapter 2306, Government Code, is amended by

24-10    adding Subchapter AA to read as follows:


24-12                              RELIEF PROGRAM

24-13          Sec. 2306.651.  DEFINITIONS.  In this subchapter:

24-14                (1)  "Applicant" means the commissioners court of a

24-15    county, the governing body of another political subdivision, or a

24-16    nonprofit organization.

24-17                (2)  "Nonprofit organization" means a private,

24-18    nonprofit, tax-exempt corporation under Section 501(c)(3), Internal

24-19    Revenue Code of 1986 (26 U.S.C. Section 501(c)(3)).

24-20                (3)  "Program" means a system of providing temporary

24-21    emergency relief to needy persons.

24-22          Sec. 2306.652.  TEMPORARY EMERGENCY RELIEF PROGRAM.  (a)  The

24-23    department shall establish a temporary emergency relief program to

24-24    assist counties, in cooperation with other public entities and

24-25    nonprofit organizations, in meeting the needs of individuals and

24-26    families for temporary emergency relief.

24-27          (b)  The department shall establish the emergency nutrition

24-28    program as part of the temporary emergency relief program

24-29    established under this subchapter to meet the unmet need for

24-30    emergency food assistance.  The department shall administer the

24-31    emergency nutrition program in the same fashion and under the same

24-32    procedures as govern the administration of the temporary emergency

24-33    relief program.

24-34          Sec. 2306.653.  APPLICATION.  (a) A county may apply to the

24-35    department for a grant-in-aid to establish and administer a program

24-36    under this subchapter.

24-37          (b)  If a county declines to act, the department may accept

24-38    applications from other political subdivisions or from nonprofit

24-39    organizations.  The political subdivision or nonprofit organization

24-40    must first notify the county judge of its intention to submit an

24-41    application for a grant-in-aid.

24-42          (c)  An application submitted under this section must provide

24-43    evidence that a county requires assistance and that the applicant

24-44    has consulted with public entities, nonprofit organizations,

24-45    voluntary associations, representatives of low-income persons, and

24-46    other groups involved in providing assistance to needy persons.

24-47          (d)  The department shall adopt rules establishing the

24-48    criteria for determining whether an applicant qualifies under this

24-49    subchapter.  The department may approve only one program for each

24-50    county.

24-51          (e)  A decision by a county to administer a program under

24-52    this subchapter remains in effect until the county notifies the

24-53    department that the county no longer wants to participate in the

24-54    program.  If a county decides to discontinue its participation, the

24-55    department may choose an applicant as an alternative participant as

24-56    prescribed by Subsection (b) of this section and by department

24-57    rules.

24-58          (f)  The department shall develop standards and procedures

24-59    for the program that permit all counties in the state to

24-60    participate.

24-61          Sec. 2306.654.  LOCAL ALLOCATION.  (a)  State funds provided

24-62    to a local applicant under this subchapter may not be used for

24-63    local administrative costs.

24-64          (b)  An allocation to a county from the program established

24-65    by Section 2306.652 shall be based on the county's demonstrated

24-66    need for the money.  The formula used by the department to allocate

24-67    the money shall include:

24-68                (1)  the number of unemployed persons in the county

24-69    during the  most recent 12-month period for which data is available

 25-1    compared to the number of unemployed people in the state during

 25-2    that same 12-month period; and

 25-3                (2)  the number of people at or below the poverty line

 25-4    in the county during the most recent 12-month period for which data

 25-5    is available compared to the number of people at or below the

 25-6    poverty line in the state during that same 12-month period.

 25-7          Sec. 2306.655.  LOCAL PLAN; DISBURSEMENT.  (a)  An applicant

 25-8    must submit to the department a plan for providing emergency

 25-9    relief.

25-10          (b)  The plan must contain a description of the target

25-11    population, the eligibility criteria for receipt of services, the

25-12    nature and scope of benefits to be provided, methods of

25-13    administration, and a budget.

25-14          (c)  The plan must also show evidence of consultation with

25-15    the entities listed in Section 2306.653(c).

25-16          (d)  On certification by the department that the applicant

25-17    qualifies under this subchapter, the department shall disburse

25-18    money available for that purpose to the applicant to be used to

25-19    establish a program in the affected county.

25-20          Sec. 2306.656.  ELIGIBILITY FOR ASSISTANCE.  (a)  Each

25-21    county, political subdivision, or nonprofit organization approved

25-22    by the department for establishing a program shall establish its

25-23    own criteria for persons eligible to receive benefits under the

25-24    program and shall include the criteria in the plan for providing

25-25    emergency relief submitted to the department.

25-26          (b)  Before establishing eligibility and the frequency and

25-27    duration of benefits provided under the program, the county,

25-28    political subdivision, or nonprofit organization shall allow

25-29    adequate notice and opportunity for public comment, including

25-30    comments from entities listed in Section 2306.653(c).

25-31          (c)  A county, political subdivision, or nonprofit

25-32    organization may not set the eligibility level at less than 75

25-33    percent of the federal poverty level based on the federal Office of

25-34    Management and Budget poverty index in effect at the time the plan

25-35    is submitted to the department.

25-36          (d)  Assistance to persons eligible to participate in a

25-37    program authorized by this subchapter shall be provided through

25-38    vouchers and purchased services in accordance with the approved

25-39    plan submitted to the department.  The assistance may include the

25-40    provision of utilities, food, housing, and clothing to needy

25-41    persons.

25-42          (e)  Records pertaining to a program under this subchapter

25-43    are subject to audit by the department, an auditor approved by the

25-44    department, or the state auditor.

25-45          Sec. 2306.657.  REPORTS AND PUBLIC NOTICES.  (a)  As part of

25-46    the annual report required by Section 2306.072, Government Code,

25-47    the director shall include a written report describing and

25-48    analyzing the operation of programs under this subchapter.

25-49          (b)  A county, political subdivision, or nonprofit

25-50    organization funded under this subchapter shall assure the

25-51    department that information is provided to the public regarding

25-52    eligibility for and the nature of a program operated under this

25-53    subchapter.

25-54          Sec. 2306.658.  RELATIONSHIP TO FEDERAL LAW.  (a)  If a

25-55    federal law or regulation is changed without making a provision for

25-56    temporary waivers to allow compliance with state law and, as a

25-57    result of this change, there is insufficient time to comply with

25-58    all the procedures required by this subchapter, the agency or

25-59    entity affected may act so as to comply with federal law and shall

25-60    comply with the applicable procedures required by this subchapter

25-61    as soon as possible.

25-62          (b)  If a federal statute or court order conflicts with this

25-63    subchapter, the federal law or court order prevails over this

25-64    subchapter.

25-65          SECTION 47.  Chapter 2306, Government Code, is amended by

25-66    adding Subchapter BB to read as follows:


25-68          Sec. 2306.671.  DEADLINES FOR ALLOCATION OF LOW INCOME

25-69    HOUSING TAX CREDITS.  (a)  Not later than November 15 of each year,

 26-1    the department shall prepare and submit to the board for adoption

 26-2    the qualified allocation plan required by federal law for use by

 26-3    the department in setting criteria and priorities for the

 26-4    allocation of tax credits under the low income housing tax credit

 26-5    program.

 26-6          (b)  The board shall adopt and submit to the governor the

 26-7    qualified allocation plan not later than January 31.

 26-8          (c)  The governor shall approve, reject, or modify and

 26-9    approve the qualified allocation plan not later than February 28.

26-10          (d)  An applicant for a low income housing tax credit to be

26-11    issued a commitment during the initial allocation cycle in a

26-12    calendar year must submit an application to the department not

26-13    later than May 15.

26-14          (e)  The board shall issue a commitment for allocation for

26-15    the initial cycle of low income housing tax credits each year in

26-16    accordance with the qualified allocation plan not later than July

26-17    31.

26-18          Sec. 2306.672.  SCORING OF APPLICATIONS.  (a)  The goal of

26-19    the low income housing tax credit program is to provide permanent

26-20    affordable housing.  In allocating low income housing tax credits,

26-21    the department shall score each application using a point system

26-22    based on criteria adopted by the department that are consistent

26-23    with the department's housing goals. The department shall publish

26-24    in the qualified allocation plan any discretionary factor that the

26-25    department will consider in scoring an application.

26-26          (b)  If an applicant meets the department's scoring and

26-27    underwriting criteria, the department shall add:

26-28                (1)  five bonus points to the applicant's score if the

26-29    applicant agrees to provide to a qualified nonprofit organization

26-30    or tenant organization a right of first refusal to purchase the

26-31    property to which the tax credit applies at the minimum price

26-32    provided in, and in accordance with the requirements of, Section

26-33    42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section

26-34    42(i)(7)); and

26-35                (2)  two bonus points to the applicant's score if the

26-36    application is received within the first 10 days of the application

26-37    acceptance period.

26-38          (c)  The department shall provide the score of each

26-39    application on each criterion to the board and the governor.  The

26-40    results of the scoring shall be available to the public.

26-41          (d)  Upon awarding tax credit allocations, the board shall

26-42    document the reasons for each project's selection, including an

26-43    explanation of all discretionary factors used in making its

26-44    determination.


26-46    PROPERTY.  (a)  Not later than two years before the expiration of

26-47    the compliance period, a recipient of a low income housing tax

26-48    credit who agreed to provide a right of first refusal under Section

26-49    2306.672(b)(1) and who intends to sell the property shall notify

26-50    the department of the recipient's intent to sell.  The recipient

26-51    shall notify qualified nonprofit organizations and tenant

26-52    organizations of the opportunity to purchase the property.

26-53          (b)  The recipient may:

26-54                (1)  during the first six-month period after notifying

26-55    the department, negotiate or enter into a purchase agreement only

26-56    with a qualified nonprofit organization that is also a community

26-57    housing development organization as defined by the federal home

26-58    investment partnership program;

26-59                (2)  during the second six-month period after notifying

26-60    the department, negotiate or enter into a purchase agreement with

26-61    any qualified nonprofit organization or tenant organization; and

26-62                (3)  during the year before the expiration of the

26-63    compliance period, negotiate or enter into a purchase agreement

26-64    with the department or any qualified nonprofit organization or

26-65    tenant organization approved by the department.

26-66          (c)  Notwithstanding an agreement under Section

26-67    2306.672(b)(1), a recipient of a low income housing tax credit may

26-68    sell property to which the tax credit applies to any purchaser

26-69    after the expiration of the compliance period if a qualified

 27-1    nonprofit organization  or tenant organization does not offer to

 27-2    purchase the property at the minimum price provided by Section

 27-3    42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section

 27-4    42(i)(7)), and the department declines to purchase the property.

 27-5          (d)  In this section, "compliance period" has the meaning

 27-6    assigned by Section 42(i)(1), Internal Revenue Code of 1986 (26

 27-7    U.S.C. Section 42(i)(1)).


 27-9    CREDIT PROPERTY.  The board by rule may develop and implement a

27-10    program to purchase low income housing tax credit property that is

27-11    not purchased by a qualified nonprofit organization or tenant

27-12    organization.  The department may not purchase low income housing

27-13    tax credit property if the board finds that the purchase is not in

27-14    the best interest of the state.


27-16    (a)  Department staff shall provide recommendations to the board

27-17    concerning the financial or programmatic viability of each

27-18    application for a low income housing tax credit before the board

27-19    makes a decision relating to the allocation of tax credits.

27-20          (b)  Not later than the deadline specified in Section

27-21    2306.671(e), the board shall issue a commitment for tax credits

27-22    available to the  department.  Concurrently with the issuance of a

27-23    commitment for initial tax credits, the board shall establish a

27-24    waiting list of additional applications, ranked in descending order

27-25    of priority, to be issued a commitment for tax credits if

27-26    additional credits become available.

27-27          Sec. 2306.676.  EQUAL ACCESS TO PROGRAM.  The department

27-28    shall establish procedures through the qualified allocation plan to

27-29    ensure that each applicant for a low income housing tax credit has

27-30    a fair and equal opportunity to submit or resubmit an application

27-31    and submit for consideration any authorized supplementary materials

27-32    and information.

27-33          Sec. 2306.677.  BOARD INFLUENCE PROHIBITED.  (a)  A board

27-34    member may not contact department staff in any manner with the

27-35    intent to influence the processing of an application for a low

27-36    income housing tax credit.

27-37          (b)  During the period between the department's initial

27-38    solicitation of applications for tax credits and the final issuance

27-39    of commitments of tax credits by the board, a member of the board

27-40    may not have contact with the department staff concerning an

27-41    application, other than written communications or public oral

27-42    communications during a public meeting of the department.  A

27-43    written communication authorized by this subsection is subject to

27-44    disclosure as a public record.

27-45          Sec. 2306.678.  FEES.  (a)  A fee charged by the department

27-46    to an applicant for a low income housing tax credit may not be

27-47    excessive and must reflect the department's actual costs in

27-48    processing applications and providing copies of documents in

27-49    connection with the allocation process.

27-50          (b)  The department shall refund a fee charged to an

27-51    applicant if the department does not score the applicant's

27-52    application, except  the department may retain a reasonable portion

27-53    of the fee to compensate the department for costs associated with

27-54    the application.


27-56    (a)  The department shall provide information regarding the low

27-57    income housing tax credit program, including notices of public

27-58    hearings, meetings, and opening and closing dates for applications

27-59    for a low income housing tax credit, to local housing departments,

27-60    newspapers, nonprofit organizations, on-site property managers of

27-61    occupied projects that are the subject of tax credit applications

27-62    for posting in prominent locations at those projects, and other

27-63    interested persons and community groups, who request the

27-64    information.

27-65          (b)  The department shall hold at least three public hearings

27-66    in different regions of the state to receive public comments on low

27-67    income housing tax credit applications.

27-68          SECTION 48.  Section 11.001, Human Resources Code, is amended

27-69    to read as follows:

 28-1          Sec. 11.001.  Definitions.  Except as provided by Section

 28-2    [34.002 or] 40.001, in this title:

 28-3                (1)  "Board" means the Texas Board of Human Services.

 28-4                (2)  "Department" means the Texas Department of Human

 28-5    Services.

 28-6                (3)  "Commissioner" means the Commissioner of Human

 28-7    Services.

 28-8                (4)  "Assistance" means all forms of assistance and

 28-9    services for needy persons authorized by Subtitle C.

28-10                (5)  "Financial assistance" means money payments for

28-11    needy persons authorized by Chapter 31.

28-12                (6)  "Medical assistance" means assistance for needy

28-13    persons authorized by Chapter 32.

28-14          SECTION 49.  Sections 7(a) and (c), Chapter 1092, Acts of the

28-15    70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's

28-16    Texas Civil Statutes), are amended to read as follows:

28-17          (a)  Except as provided in Subsection (b) of this section,

28-18    the issuer shall close on the bonds for which a reservation has

28-19    been granted not later than the 150th [90th] day after the

28-20    reservation date.

28-21          (c)  If the issuer does not timely close on the bonds, the

28-22    issue's reservation is canceled and during the 180-day [120-day]

28-23    period  beginning on the reservation date of the canceled

28-24    reservation:

28-25                (1)  the issuer or any other issuer may not submit an

28-26    application for a reservation for the same project; and

28-27                (2)  the issuer is eligible for a carryforward

28-28    designation for the project only as provided by Section 9 of this

28-29    Act.

28-30          SECTION 50.  Section 395.016, Local Government Code, is

28-31    amended by adding Subsection (g) to read as follows:

28-32          (g)  Notwithstanding Subsections (a)-(e) and Section 395.017,

28-33    the political subdivision may reduce or waive an impact fee for any

28-34    service unit that would qualify as affordable housing under 42

28-35    U.S.C. Section 12745, as amended, once the service unit is

28-36    constructed.  If affordable housing as defined by 42 U.S.C. Section

28-37    12745, as amended, is not constructed, the political subdivision

28-38    may reverse its decision to waive or reduce the impact fee, and the

28-39    political subdivision may assess an impact fee at any time during

28-40    the development approval or building process or after the building

28-41    process if an impact fee was not already assessed.

28-42          SECTION 51.  Effective January 1, 1998, Subchapter B, Chapter

28-43    23, Tax Code, is amended by adding Section 23.21 to read as

28-44    follows:


28-46    appraising real property that is rented or leased to a low-income

28-47    individual or family meeting income-eligibility standards

28-48    established by the owner of the property under regulations or

28-49    restrictions limiting to a percentage of the individual's or the

28-50    family's income the amount that the individual or family may be

28-51    required to pay for the rental or lease of the property, the chief

28-52    appraiser shall take into account the extent to which that use and

28-53    limitation reduce the market value of the property.

28-54          SECTION 52.  The following laws are repealed:

28-55                (1)  Sections 2306.122, 2306.143, and 2306.513(e),

28-56    Government Code; and

28-57                (2)  Chapter 34, Human Resources Code.

28-58          SECTION 53.  Section 395.016(g), Local Government Code, as

28-59    added by this Act, applies to any assessed or unassessed impact fee

28-60    that is not collected before the effective date of this Act. An

28-61    impact fee that is collected before the effective date of this Act

28-62    is governed by the law in effect on the day it was collected, and

28-63    the former law is continued in effect for that purpose.

28-64          SECTION 54.  This Act takes effect September 1, 1997.

28-65          SECTION 55.  The change in law made to Section 2306.053,

28-66    Government Code, by this Act applies to a cause of action filed on

28-67    or after the effective date of this Act.  A cause of action filed

28-68    before the effective date of this Act is governed by the law in

28-69    existence when the cause of action was filed, and that law is

 29-1    continued in effect for that purpose.

 29-2          SECTION 56.  The importance of this legislation and the

 29-3    crowded condition of the calendars in both houses create an

 29-4    emergency and an imperative public necessity that the

 29-5    constitutional rule requiring bills to be read on three several

 29-6    days in each house be suspended, and this rule is hereby suspended.

 29-7                                 * * * * *