By:  Barrientos                                       S.B. No. 1365

         Line and page numbers may not match official copy.

         Bill not drafted by TLC or Senate E&E.

                                A BILL TO BE ENTITLED

                                       AN ACT

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

 1-2     Housing Corporation.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subchapter Y, Chapter 2306, Government Code, is

 1-5     amended to read as follows:

 1-6          SUBCHAPTER Y.  TEXAS STATE AFFORDABLE HOUSING CORPORATION

 1-7           Sec. 2306.551.  DEFINITION.  In this subchapter,

 1-8     "corporation" means the Texas State Affordable Housing Corporation.

 1-9           Sec. 2306.552.  CREATION.  (a)  The existence of the Texas

1-10     State Affordable Housing Corporation, or any similarly named

1-11     corporation, begins on the date that the secretary of state issues

1-12     the certificate of incorporation.

1-13           (b)  The charter of the corporation must establish the

1-14     corporation as nonprofit and specifically dedicate the

1-15     corporation's activities to the public purposes authorized by this

1-16     subchapter [benefit of the department].

1-17           (c)  The creation of the corporation does not limit or impair

1-18     the rights, powers, and duties of the department under this

1-19     chapter.

1-20           Sec. 2306.553.  PURPOSES.  (a)  The public purpose of the

1-21     corporation is to perform such activities and services as are

 2-1     determined by the corporation's board of directors to promote the

 2-2     health, safety, and welfare of the state and its citizens through

 2-3     the provision of adequate, safe, and sanitary housing for

 2-4     individuals and families of low and very low income and families of

 2-5     moderate income.  Such activities and services shall include,

 2-6     without limitation, engaging in mortgage banking activities and

 2-7     lending transactions, acquiring, holding, and selling or leasing

 2-8     real and personal property, and performing such other activities

 2-9     and services as the corporation's board of directors determines are

2-10     in furtherance of the public purposes of the corporation. [The

2-11     corporation shall carry out the public purposes of this chapter on

2-12     behalf of the state.]

2-13           [(b)  The corporation may engage only in the performance of

2-14     charitable functions.]

2-15           (b)  The corporation's primary purpose shall be to facilitate

2-16     the provision of housing and the making of loans affordable to

2-17     individuals and families of low and very low income and families of

2-18     moderate income.  All loans for single family homes shall be made

2-19     only to individuals and families of low and very low income and

2-20     families of moderate income.  Multifamily activities may be

2-21     undertaken which benefit mixed income groups but only so long as at

2-22     least twenty percent (20%) of the units in a multifamily

2-23     development assisted are affordable to individuals and families at

2-24     or below sixty percent (60%) of the applicable median family

2-25     income, adjusted for family size.

 3-1           (c)  To the extent reasonably practicable, the corporation

 3-2     shall utilize the services of banks, community banks, savings

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

 3-4     companies, nonprofit organizations and other lenders for the

 3-5     origination of all loans contemplated by this subchapter, and

 3-6     assist such lenders in the facilitation of the provision of credit

 3-7     to individuals and families of low and very low income, and

 3-8     families of moderate income.

 3-9           Sec. 2306.554.  BOARD OF DIRECTORS AND OFFICERS.  (a)  The

3-10     members of the board serve as the board of directors of the

3-11     corporation.  Except as described in Subsection (b), members of the

3-12     corporation's board of directors and the president serve without

3-13     compensation but are entitled to reimbursement for actual expenses

3-14     incurred in attending meetings of the corporation's board of

3-15     directors and in performing their respective duties as directors

3-16     and president.

3-17           (b)  The director shall serve ex-officio as president of the

3-18     corporation only if the director has experience in the field of

3-19     mortgage banking or residential lending as demonstrated by

3-20                 (1)  employment in one or more middle or upper level

3-21     management positions for at least two (2) years with a mortgage

3-22     bank, commercial bank, thrift, savings and loan association,

3-23     private mortgage company, mortgage servicing entity or other

3-24     financial institution, or

3-25                 (2)  employment in a position of providing legal or

 4-1     consulting services related to mortgage banking or residential

 4-2     lending to any one of the type of entities listed in Subsection

 4-3     (b)(1) for at least five (5) years.  If the director does not

 4-4     satisfy the requirements of Subsection (b)(1) or (2), the

 4-5     corporation shall employ, for compensation to be determined by the

 4-6     corporation's board of directors, an individual that satisfies the

 4-7     requirements of Subsection (b)(1) or (2) to serve as president of

 4-8     the corporation.

 4-9           (c)  The corporation may purchase, with corporation funds,

4-10     liability insurance for each of the members of the corporation's

4-11     board of directors and the officers and other employees of the

4-12     corporation in an amount that the corporation's board of directors

4-13     considers reasonably necessary to:

4-14                 (1)  insure against reasonably foreseeable liabilities;

4-15     and

4-16                 (2)  provide for all costs of defending against those

4-17     liabilities, including, without limitation, court costs and

4-18     attorneys' fees.

4-19           Sec. 2306.555.  POWERS.  (a)  The corporation has the powers

4-20     [and is subject to the limitations] provided for the department

4-21     under this chapter.

4-22           (b)  [Except as specifically provided by this subchapter, the

4-23     corporation has] In addition to the powers granted in Subsection

4-24     (a), the corporation has all rights and powers necessary to

4-25     accomplish its public purposes, including, without limitation, the

 5-1     power:

 5-2                 (1)  to purchase, service, sell, lend on the security

 5-3     of, or otherwise transact in:

 5-4                       (A)  mortgages, including federal mortgages and

 5-5     federally insured mortgages;

 5-6                       (B)  mortgage loans;

 5-7                       (C)  deeds of trust; and

 5-8                       (D)  loans or other advances of credit (secured

 5-9     by liens against manufactured housing);

5-10                 (2)  to guarantee or insure timely payment of mortgage

5-11     loans and loans or other advances of credit secured by liens

5-12     against manufactured housing, provided that the corporation's

5-13     liability on such guaranty or insurance shall be limited to the

5-14     assets of a guaranty fund or self-insurance fund, or both,

5-15     established and maintained by the corporation;

5-16                 (3)  to make mortgage loans and loans or other advances

5-17     of credit secured by liens against manufactured housing to

5-18     individuals and families of low and very low income and families of

5-19     moderate income;

5-20                 (4)  to make mortgage loans for the purpose of

5-21     providing temporary or permanent financing or refinancing for

5-22     housing developments and land developments, including the refunding

5-23     of outstanding obligations, mortgages, or advances issued for those

5-24     purposes;

5-25                 (5)  to borrow, give security, pay interest or other

 6-1     return and issue bonds or other obligations, including notes,

 6-2     debentures or mortgage-backed securities, provided that each bond

 6-3     or other obligation issued by the corporation must contain a

 6-4     statement that the state is not obligated to pay the principal

 6-5     thereof, or any premium or interest thereon, and that neither the

 6-6     faith or credit, nor the taxing power, of the state is pledged,

 6-7     given or loaned to such a payment;

 6-8                 (6)  to acquire, hold, invest, use, pledge, reserve,

 6-9     and dispose of its assets, revenues, income, receipts, funds, and

6-10     money from every source and to select one or more depositories,

6-11     inside or outside the state, all subject to the terms of any

6-12     resolution, indenture, or other contract pursuant to which any

6-13     bonds or other obligations are issued or any guaranty or insurance

6-14     is provided;

6-15                 (7)  to establish, charge, and collect fees, charges,

6-16     and penalties in connection with the programs, services, and

6-17     activities of the corporation;

6-18                 (8)  to procure insurance and pay premiums on insurance

6-19     of any type, in amounts, and from insurers as the corporation's

6-20     board of directors considers necessary and advisable to further any

6-21     of the corporation's purposes, including, subject to Section

6-22     2306.554(c), liability insurance for the members of the

6-23     corporation's board of directors and officers and other employees

6-24     of the corporation;

6-25                 (9)  to make, enter into, and enforce contracts,

 7-1     agreements, leases, indentures, mortgages, deeds, deeds of trust,

 7-2     security agreements, pledge agreements, credit agreements, and

 7-3     other instruments with any person, including any mortgage lender,

 7-4     any servicer, any housing sponsor, the federal government, or any

 7-5     public agency, on such terms as may be acceptable to the

 7-6     corporation;

 7-7                 (10)  to own, rent, lease, or otherwise acquire,

 7-8     accept, or hold real, personal, or mixed property, or any interest

 7-9     in property, by purchase, exchange, gift, assignment, transfer,

7-10     foreclosure, mortgage, sale, lease, or otherwise and to hold,

7-11     manage, operate, or improve real, personal, or mixed property,

7-12     wherever situated;

7-13                 (11)  to sell, lease, encumber, mortgage, exchange,

7-14     donate, convey, or otherwise dispose of any or all of its

7-15     properties or any interest in its properties, deed of trust or

7-16     mortgage lien interest owned by it or under its control, custody,

7-17     or in its possession, and release or relinquish any right, title,

7-18     claim, lien, interest, easement, or demand however acquired,

7-19     including any equity or right of redemption in property foreclosed

7-20     by it, and to do any of the foregoing by public or private sale,

7-21     with or without public bidding; and to lease or rent any

7-22     improvements, lands, or facilities from any person;

7-23                 (12)  to request, accept, and use gifts, loans,

7-24     donations, aid, guaranties, allocations, subsidies, grants, or

7-25     contributions of any item of value for the furtherance of any of

 8-1     its purposes; and

 8-2                 (13)  to exercise the rights and powers of a nonprofit

 8-3     corporation incorporated under the Texas Non-Profit Corporation Act

 8-4     (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).

 8-5           (c)  The corporation may contract with the department and

 8-6     with bond counsel, financial advisors, [or] underwriters or other

 8-7     providers of professional or consulting services related to its

 8-8     activities.

 8-9           (d)  All expenses of the corporation shall be paid from any

8-10     and all funds available to the corporation without resort to

8-11     general revenues of the state, except as are otherwise specifically

8-12     appropriated.

8-13           Sec. 2306.556.  [TAX] EXEMPT FROM TAXATION AND REGISTRATION.

8-14     (a)  The corporation is exempt from all taxation by the state or a

8-15     political subdivision of the state, including a municipality.

8-16           (b)  The bonds and other obligations issued by the

8-17     corporation are exempt securities under The Securities Act (Article

8-18     581-1, et seq., Vernon's Texas Civil Statutes), and unless

8-19     specifically provided otherwise, under any subsequently enacted

8-20     securities act.  Any contract, guaranty, or other document executed

8-21     in connection with the issuance of such bonds and other obligations

8-22     is not a security under The Securities Act (Article 581-1, et seq.,

8-23     Vernon's Texas Civil Statutes), and, unless specifically provided

8-24     otherwise, any subsequently enacted securities act.

8-25           Sec. 2306.557.  Distribution of Earnings.  Any part of

 9-1     earnings remaining after payment of expenses and the establishment

 9-2     of reserves as determined by the corporation's board of directors

 9-3     may not inure to any person except that the corporation shall

 9-4     deposit these excess earnings with the department to the credit of

 9-5     the housing trust [general revenue] fund established in Section

 9-6     2306.201 [for the benefit of the department] if the corporation's

 9-7     board of directors determines that sufficient provision has been

 9-8     made for the full payment of the expenses, bonds, and other

 9-9     obligations of the corporation and the establishment of sufficient

9-10     reserves, if any, for such purposes.

9-11           Sec. 2306.558.  Alteration and Termination.  (a)  Subject to

9-12     this subchapter and the prohibition on the impairment of contracts

9-13     in the law of this state, the corporation's board of directors by

9-14     written resolution may alter the structure, organization, programs,

9-15     or activities of the corporation or terminate and dissolve the

9-16     corporation.

9-17           (b)  The corporation's board of directors shall dissolve the

9-18     corporation if the board by resolution determines that:

9-19                 (1)  the purposes for which the corporation was formed

9-20     have been substantially fulfilled; and

9-21                 (2)  all bonds and other obligations issued by the

9-22     corporation and all guaranties and insurance and other contractual

9-23     obligations have been fully paid or provided for.

9-24           (c)  On dissolution, the title to funds and properties

9-25     previously owned by the corporation shall be transferred to the

 10-1    department.

 10-2          Sec. 2306.559.  REPORTING REQUIREMENTS [ANNUAL REPORT].

 10-3    (a)  The corporation shall file an annual report of the financial

 10-4    activity of the corporation with the department.  Not later than

 10-5    thirty days after the board receives the report, the board shall

 10-6    submit the report to the governor, the lieutenant governor, the

 10-7    speaker of the house of representatives, and the comptroller of

 10-8    public accounts.

 10-9          (b)  The corporation shall file the report before the 90th

10-10    day after the last day of the corporation's fiscal year.

10-11          (c)  The corporation shall prepare the report in accordance

10-12    with generally accepted accounting principles.

10-13          (d)  The report must include:

10-14                (1)  a statement of support, revenue, and expenses and

10-15    change in fund balances;

10-16                (2)  a statement of functional expenses; and

10-17                (3)  balance sheets for all funds.

10-18          (e)  The corporation shall file quarterly performance reports

10-19    of its activities with the department.

10-20          (f)  The corporation shall file with the Texas Bond Review

10-21    Board a report for the preceding fiscal year, promptly upon receipt

10-22    of the same, containing the status of all outstanding debts and

10-23    obligations of the corporation, and the collateral pledged as

10-24    security for such debts and obligations, and a maturity and payment

10-25    schedule for all outstanding debts and obligations of the

 11-1    corporation.

 11-2          Sec.  2306.560.  AUDIT.  The corporation shall hire an

 11-3    independent certified public accountant to audit the corporation's

 11-4    books and accounts for each of the corporation's fiscal years.  The

 11-5    corporation shall file a copy of the audit with the department.

 11-6    Not later than thirty days after the board receives the audit, the

 11-7    board shall submit the audit to the governor, the lieutenant

 11-8    governor, the speaker of the house of representatives, the

 11-9    comptroller of public accounts and the Texas Bond Review Board.

11-10          Sec. 2306.561.  LIABILITY.  (a)  The directors, officers, and

11-11    employees of the corporation shall not be liable personally for

11-12    bonds or other obligations issued or contracts, guaranties, and

11-13    insurance executed by the corporation, or for any other action

11-14    taken in accordance with the powers and duties authorized by this

11-15    subchapter or in the good faith belief that such action was taken

11-16    in accordance with the powers and duties authorized by this

11-17    subchapter.

11-18          (b)  The directors and officers of the corporation shall be

11-19    immune from civil liability to the same extent that a volunteer who

11-20    is serving as an officer, director, or trustee of a charitable

11-21    organization is immune from civil liability pursuant to the

11-22    Charitable Immunity and Liability Act of 1987 (Chapter 84, Civil

11-23    Practices and Remedies Code, Vernon's Texas Codes).

11-24          (c)  The civil liability of employees of the corporation

11-25    shall be limited to the same extent that the civil liability of

 12-1    employees of a charitable organization is limited pursuant to the

 12-2    Charitable Immunity and Liability Act of 1987 (Chapter 84, Civil

 12-3    Practices and Remedies Code, Vernon's Texas Codes).

 12-4          (d)  The limitations on liability contained in this section

 12-5    shall not limit or impair the limitations on liability otherwise

 12-6    available to the corporation's directors, officers and employees.

 12-7          SECTION 2.  The importance of this legislation and the

 12-8    crowded condition of the calendars in both houses create an

 12-9    emergency and an imperative public necessity that the

12-10    constitutional rule requiring bills to be read on three several

12-11    days in each house be suspended, and this rule is hereby suspended,

12-12    and that this Act take effect and be in force from and after its

12-13    passage, and it is so enacted.