By Hill                                         H.B. No. 2962

      75R7223 KEL-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the purposes and powers of the Texas State Affordable

 1-3     Housing Corporation.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter Y, Chapter 2306, Government Code, as

 1-6     added by Chapter 76, Acts of the 74th Legislature, Regular Session,

 1-7     1995, is amended to read as follows:

 1-8                         SUBCHAPTER Y.  TEXAS STATE

 1-9                       AFFORDABLE HOUSING CORPORATION 

1-10           Sec. 2306.551.  DEFINITION.  In this subchapter,

1-11     "corporation" means the Texas State Affordable Housing Corporation.

1-12           Sec. 2306.552.  CREATION.  (a)  The existence of the Texas

1-13     State Affordable Housing Corporation, or any similarly named

1-14     corporation, begins on the date that the secretary of state issues

1-15     the certificate of incorporation.

1-16           (b)  The charter of the corporation must establish the

1-17     corporation as nonprofit and specifically dedicate the

1-18     corporation's activities to the public purpose authorized by this

1-19     subchapter [benefit of the department].

1-20           (c)  The creation of the corporation does not limit or impair

1-21     the rights, powers, and duties of the department under this

1-22     chapter.

1-23           Sec. 2306.553.  PURPOSES.  (a)  The public purpose of the

1-24     corporation is to perform activities and services that the

 2-1     corporation's  board of directors determines will promote the

 2-2     public health, safety, and welfare through the provision of

 2-3     adequate, safe, and sanitary housing for individuals and families

 2-4     of low to moderate income.  The activities and services shall

 2-5     include engaging in mortgage banking activities and lending

 2-6     transactions, acquiring, holding, selling, or leasing real or

 2-7     personal property, and performing other activities and services

 2-8     determined by the corporation's board of directors to further the

 2-9     public purpose of the corporation [corporation shall carry out the

2-10     public purposes of this chapter on behalf of the state].

2-11           (b)  The corporation's primary public purpose is to

2-12     facilitate the provision of housing and the making of affordable

2-13     loans to individuals and families of low to moderate income.  The

2-14     corporation may make loans for single family homes only to

2-15     individuals and families of low to moderate income.  The

2-16     corporation may make loans for multifamily developments if:

2-17                 (1)  at least 40 percent of the units in a multifamily

2-18     development are affordable to individuals and families with incomes

2-19     at or below 60 percent of the median family income, adjusted for

2-20     family size; or

2-21                 (2)  at least 20 percent of the units in a multifamily

2-22     development are affordable to individuals and families with incomes

2-23     at or below 50 percent of the median family income, adjusted for

2-24     family size [corporation may engage only in the performance of

2-25     charitable functions].

2-26           (c)  To the extent reasonably practicable, the corporation

2-27     shall use the services of banks, community banks, savings banks,

 3-1     thrifts, savings and loan associations,  private mortgage

 3-2     companies, nonprofit organizations, and other lenders for the

 3-3     origination of all loans contemplated by this subchapter, and

 3-4     assist the lenders in providing credit to individuals and families

 3-5     of low to moderate income.

 3-6           Sec. 2306.554.  BOARD OF DIRECTORS AND OFFICERS.  (a)  The

 3-7     members of the board serve as the board of directors of the

 3-8     corporation.  Except as described by Subsection (b), members of the

 3-9     corporation's board of directors and the president of the

3-10     corporation serve without compensation but are entitled to

3-11     reimbursement for actual expenses incurred in attending meetings of

3-12     the corporation's board of directors and in performing their

3-13     respective duties as directors and president.

3-14           (b)  The director shall serve ex officio as president of the

3-15     corporation if the director has experience in the field of mortgage

3-16     banking or residential lending, as demonstrated by:

3-17                 (1)  employment in one or more middle or upper level

3-18     management positions for at least two years with a mortgage bank,

3-19     commercial bank, thrift, savings and loan association, private

3-20     mortgage company, mortgage servicing entity, or other financial

3-21     institution; or

3-22                 (2)  employment for at least five years in a position

3-23     providing legal or consulting services to any one of the types of

3-24     entities listed in Subsection (b)(1).

3-25           (c)  If the director does not satisfy the requirements of

3-26     Subsection (b)(1) or (b)(2), the corporation shall employ, for

3-27     compensation to be determined by the corporation's board of

 4-1     directors, an individual who satisfies the requirements of

 4-2     Subsection (b)(1) or (b)(2) to serve as president of the

 4-3     corporation.

 4-4           (d)  The corporation may purchase, with corporation funds,

 4-5     liability insurance for the members of the corporation's board of

 4-6     directors and the officers and other employees of the corporation

 4-7     in an amount that the corporation's board of directors considers

 4-8     reasonably necessary to:

 4-9                 (1)  insure against reasonably foreseeable liabilities;

4-10     and

4-11                 (2)  provide for all costs of defending against those

4-12     liabilities, including court costs and attorney's fees.

4-13           Sec. 2306.555.  POWERS.  (a)  The corporation has the powers

4-14     [and is subject to the limitations] provided for the department

4-15     under this chapter.

4-16           (b)  In addition to the powers granted by Subsection (a), the

4-17     corporation has all rights and powers necessary to accomplish its

4-18     public purpose, including the powers to:

4-19                 (1)  purchase, service, sell, lend on the security of,

4-20     or otherwise transact in:

4-21                       (A)  mortgages, including federal mortgages and

4-22     federally insured mortgages;

4-23                       (B)  mortgage loans;

4-24                       (C)  deeds of trust; and

4-25                       (D)  loans or other advances of credit secured by

4-26     liens against manufactured housing;

4-27                 (2)  guarantee or insure timely payment of mortgage

 5-1     loans and loans or other advances of credit secured by liens

 5-2     against manufactured housing, provided that the corporation's

 5-3     liability on that guaranty or insurance is limited to the assets of

 5-4     a guaranty fund or self-insurance fund established and maintained

 5-5     by the corporation;

 5-6                 (3)  make mortgage loans and loans or other advances of

 5-7     credit secured by liens against manufactured housing to individuals

 5-8     and families of low to moderate income;

 5-9                 (4)  make mortgage loans to provide temporary or

5-10     permanent financing or refinancing for housing or land

5-11     developments, including refunding outstanding obligations,

5-12     mortgages, or advances issued for those purposes;

5-13                 (5)  borrow, give security, pay interest or other

5-14     return, or issue bonds or other obligations, including notes,

5-15     debentures, or mortgage-backed securities, provided that each bond

5-16     or other obligation issued by the corporation must contain a

5-17     statement that the state is not obligated to pay the principal of

5-18     or any premium or interest on the bond or other obligation and that

5-19     the full faith and credit and the taxing power of the state are not

5-20     pledged, given, or loaned to the payment;

5-21                 (6)  acquire, hold, invest, use, pledge, reserve, and

5-22     dispose of its assets, revenues, income, receipts, funds, and money

5-23     from every source and to select one or more depositories, inside or

5-24     outside the state, subject to the terms of any resolution,

5-25     indenture, or other contract under which any bonds or other

5-26     obligations are issued or any guaranty or insurance is provided;

5-27                 (7)  establish, charge, and collect fees, charges, and

 6-1     penalties in connection with the programs, services, and activities

 6-2     of the corporation;

 6-3                 (8)  procure insurance and pay premiums on insurance of

 6-4     any type, in amounts, and from insurers as the corporation's board

 6-5     of directors considers necessary and advisable to further the

 6-6     corporation's public purpose, including, subject to Section

 6-7     2306.554(d), liability insurance for the members of the

 6-8     corporation's board of directors and the officers and other

 6-9     employees of the corporation;

6-10                 (9)  make, enter into, and enforce contracts,

6-11     agreements, leases, indentures, mortgages, deeds, deeds of trust,

6-12     security agreements, pledge agreements, credit agreements, and

6-13     other instruments with any person, including a mortgage lender,

6-14     servicer, housing sponsor, the federal government, or any public

6-15     agency, on terms the corporation determines may be acceptable;

6-16                 (10)  own, rent, lease, or otherwise acquire, accept,

6-17     or hold real, personal, or mixed property, or any interest in

6-18     property, by purchase, exchange, gift, assignment, transfer,

6-19     foreclosure, mortgage, sale, lease, or otherwise and to hold,

6-20     manage, operate, or improve real, personal, or mixed property,

6-21     regardless of location;

6-22                 (11)  sell, lease, encumber, mortgage, exchange,

6-23     donate, convey, or otherwise dispose of any or all of its

6-24     properties or any interest in its properties, deed of trust, or

6-25     mortgage lien interest owned by it or under its control, custody,

6-26     or in its possession, and release or relinquish any right, title,

6-27     claim, lien, interest, easement, or demand however acquired,

 7-1     including any equity or right of redemption in property foreclosed

 7-2     by it, by public or private sale, with or without public bidding;

 7-3                 (12)  lease or rent any improvements, lands, or

 7-4     facilities from any person;

 7-5                 (13)  request, accept, and use gifts, loans, donations,

 7-6     aid, guaranties, allocations, subsidies, grants, or contributions

 7-7     of any item of value to further its public purpose; and

 7-8                 (14)  exercise [Except as specifically provided by this

 7-9     subchapter, the corporation has] the rights and powers of a

7-10     nonprofit corporation incorporated under the Texas Non-Profit

7-11     Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil

7-12     Statutes).

7-13           (c)  The corporation may contract with the department and

7-14     with bond counsel, financial advisors, [or] underwriters, or other

7-15     providers of professional or consulting services.

7-16           (d)  The corporation shall pay its expenses from any

7-17     available fund without resort to general revenues of the state,

7-18     except as specifically appropriated by the legislature.

7-19           Sec. 2306.556.  [TAX] EXEMPT FROM TAXATION AND REGISTRATION.

7-20     (a)  The corporation is exempt from all taxation by the state or a

7-21     political subdivision of the state, including a municipality.

7-22           (b)  A bond or other obligation issued by the corporation is

7-23     an exempt security under The Securities Act (Article 581-1, et

7-24     seq., Vernon's Texas Civil Statutes), and unless specifically

7-25     provided otherwise, under any subsequently enacted securities act.

7-26     Any contract, guaranty, or other document executed in connection

7-27     with the issuance of the bond or other obligation is not an exempt

 8-1     security under that Act, and unless specifically provided

 8-2     otherwise, under any subsequently enacted securities act.

 8-3           Sec. 2306.557.  DISTRIBUTION OF EARNINGS.  Any part of

 8-4     earnings remaining after payment of expenses and any establishment

 8-5     of reserves by the corporation's board of directors may not inure

 8-6     to any  person except that the corporation shall deposit these

 8-7     excess earnings with the department to the credit of the housing

 8-8     trust [general revenue] fund established by Section 2306.201 [for

 8-9     the benefit of the department] if the corporation's board of

8-10     directors determines that sufficient provision has been made for

8-11     the full payment of the expenses, bonds, and other obligations of

8-12     the corporation and for any establishment of reserves by the

8-13     corporation's board of directors.

8-14           Sec. 2306.558.  ALTERATION AND TERMINATION.  (a)  Subject to

8-15     this subchapter and the prohibition on the impairment of contracts

8-16     in the law of this state, the corporation's board of directors by

8-17     written resolution may alter the structure, organization, programs,

8-18     or activities of the corporation or terminate and dissolve the

8-19     corporation.

8-20           (b)  The corporation's board of directors shall dissolve the

8-21     corporation if the board by resolution determines that:

8-22                 (1)  the purposes for which the corporation was formed

8-23     have been substantially fulfilled; and

8-24                 (2)  all bonds and other obligations issued by the

8-25     corporation and all guaranties and insurance and other contractual

8-26     obligations  have been fully paid or provision for that payment has

8-27     been made.

 9-1           (c)  On dissolution, the title to funds and properties

 9-2     previously owned by the corporation shall be transferred to the

 9-3     department.

 9-4           Sec. 2306.559.  REPORTING REQUIREMENTS [ANNUAL REPORT].  (a)

 9-5     The corporation shall file an annual report of the financial

 9-6     activity of the corporation with the department.  Not later than

 9-7     the 30th day after the corporation's board of directors receives

 9-8     the report, the corporation's board of directors shall submit the

 9-9     report to the governor, the lieutenant governor, the speaker of the

9-10     house of representatives, and the comptroller.

9-11           (b)  The corporation shall file the report before the 90th

9-12     day after the last day of the corporation's fiscal year.

9-13           (c)  The corporation shall prepare the report in accordance

9-14     with generally accepted accounting principles.

9-15           (d)  The report must include:

9-16                 (1)  a statement of support, revenue, and expenses and

9-17     change in fund balances;

9-18                 (2)  a statement of functional expenses; and

9-19                 (3)  balance sheets for all funds.

9-20           (e)  The corporation shall file quarterly performance reports

9-21     with the department.

9-22           (f)  Promptly on receipt, the corporation shall file with the

9-23     Bond Review Board a report for the preceding fiscal year.  The

9-24     report must contain the status of all outstanding debts and

9-25     obligations of the corporation, the status of collateral pledged as

9-26     security for those debts and obligations, and a maturity and

9-27     payment schedule for those debts and obligations.

 10-1          Sec. 2306.560.  AUDIT.  The corporation shall hire an

 10-2    independent certified public accountant to audit the corporation's

 10-3    books and accounts for each fiscal year.  The corporation shall

 10-4    file a copy of the audit with the department.  Not later than the

 10-5    30th day after the corporation's board of directors receives the

 10-6    audit, the corporation's board of directors shall submit the audit

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

 10-8    of representatives, the comptroller, and the Bond Review Board.

 10-9          Sec. 2306.561.  LIABILITY.  (a)  The directors, officers, and

10-10    employees of the corporation are not personally liable for bonds or

10-11    other obligations issued or contracts, guaranties, or insurance

10-12    executed by the corporation, or for any other action taken in

10-13    accordance with the powers and duties authorized by this subchapter

10-14    or in the good faith belief that that action was taken in

10-15    accordance with the powers and duties authorized by this

10-16    subchapter.

10-17          (b)  The directors and officers of the corporation are immune

10-18    from civil liability to the same extent that a volunteer who serves

10-19    as an officer, director, or trustee of a charitable organization is

10-20    immune from civil liability under Chapter 84, Civil Practice and

10-21    Remedies Code.

10-22          (c)  The civil liability of an employee of the corporation is

10-23    limited to the same extent that the civil liability of an employee

10-24    of a charitable organization is limited under Chapter 84, Civil

10-25    Practice and Remedies Code.

10-26          (d)  The limitations on liability contained in this section

10-27    do not limit or impair the limitations on liability otherwise

 11-1    available to the corporation's directors, officers, and employees.

 11-2          SECTION 2.  The importance of this legislation and the

 11-3    crowded condition of the calendars in both houses create an

 11-4    emergency and an imperative public necessity that the

 11-5    constitutional rule requiring bills to be read on three several

 11-6    days in each house be suspended, and this rule is hereby suspended,

 11-7    and that this Act take effect and be in force from and after its

 11-8    passage, and it is so enacted.