1-1 AN ACT
1-2 relating to a program of the Texas Department of Housing and
1-3 Community Affairs to promote for-profit construction of affordable
1-4 homes for low and very low income homebuyers.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 2306, Government Code, is amended by
1-7 adding Subchapter EE to read as follows:
1-8 SUBCHAPTER EE. BUILDER INCENTIVE PARTNERSHIP PROGRAM
1-9 Sec. 2306.701. DEFINITIONS. In this subchapter:
1-10 (1) "Builder" means a person who builds or develops a
1-11 housing subdivision.
1-12 (2) "Cooperative purchase agreement" means an
1-13 agreement described by Section 2306.703.
1-14 (3) "Corporation" means the Texas State Affordable
1-15 Housing Corporation.
1-16 (4) "Cost plus profit structure" means a profit
1-17 structure that sets a fixed monetary profit due for the sale of a
1-18 home as opposed to a profit structure that sets a variable amount
1-19 of profit due for the sale of a home that is based on a percentage
1-20 of the sale price of the home.
1-21 (5) "Program" means the builder incentive partnership
1-22 program developed under this subchapter.
1-23 Sec. 2306.702. BUILDER INCENTIVE PARTNERSHIP PROGRAM. (a)
1-24 The department shall develop and maintain a builder incentive
2-1 partnership program that:
2-2 (1) provides for the development of affordable housing
2-3 subdivisions in this state; and
2-4 (2) does not encourage the further growth of colonias
2-5 in this state.
2-6 (b) To accomplish the goals of this subchapter, the
2-7 department shall:
2-8 (1) determine geographic areas that are in need of
2-9 affordable housing;
2-10 (2) provide for affordable housing development
2-11 projects in those areas by entering into a partnership agreement
2-12 with:
2-13 (A) an eligible builder or developer; and
2-14 (B) housing assistance agencies or other
2-15 nonprofit entities that provide housing assistance to low and very
2-16 low income homebuyers; and
2-17 (3) work with the corporation, the builder or
2-18 developer, or housing assistance agencies or other nonprofit
2-19 entities that provide housing assistance to low and very low income
2-20 homebuyers to obtain housing assistance for homebuyers who purchase
2-21 homes built under the program.
2-22 Sec. 2306.703. COOPERATIVE PURCHASE AGREEMENT. (a) The
2-23 department shall negotiate and conclude a cooperative purchase
2-24 agreement with a housing assistance agency or other nonprofit
2-25 entity for each project under the program.
2-26 (b) Under the cooperative purchase agreement for a specific
2-27 project under the program, a housing assistance agency or other
3-1 nonprofit entity must agree:
3-2 (1) to use funds that the department may provide or
3-3 funds maintained by the agency or entity from other sources to
3-4 guarantee a negotiated portion of the purchase price of a
3-5 negotiated number of houses to be built under the project; and
3-6 (2) at the option of the builder, to purchase homes
3-7 built under the project at cost if the homes do not have a
3-8 qualified purchaser within 30 days of the date of completion of the
3-9 construction.
3-10 (c) The department may provide alternative or additional
3-11 conditions under the cooperative purchase agreement as necessary to
3-12 accomplish the purposes of this subchapter.
3-13 Sec. 2306.704. BUILDER PARTNERSHIP AGREEMENT. (a) Under a
3-14 partnership agreement for a specific project, the department and
3-15 the builder must agree to:
3-16 (1) the terms of a cooperative purchase agreement
3-17 between the department and a housing assistance agency or other
3-18 nonprofit entity that provides housing assistance to low and very
3-19 low income homebuyers;
3-20 (2) the type, style, and number of houses to be built
3-21 under the partnership, within the specifications required by
3-22 Section 2306.707;
3-23 (3) the types of housing assistance to be applied for
3-24 eligible low and very low income homebuyers who purchase homes
3-25 built under the program; and
3-26 (4) any other term that the department determines
3-27 appropriate.
4-1 (b) The builder shall market the homes built under the
4-2 program to individuals and families who qualify for housing
4-3 assistance under department programs in the same manner in which
4-4 private housing development projects are marketed to the general
4-5 public.
4-6 (c) The department may not enter into a partnership
4-7 agreement for a specific project with a builder unless the builder
4-8 agrees to issue the builder's standard warranties for materials and
4-9 labor to the first owner-occupant of a home purchased under this
4-10 program.
4-11 Sec. 2306.705. COST PLUS PROFIT STRUCTURE. (a) The builder
4-12 in the partnership agreement may require homebuyers to purchase a
4-13 home under a cost plus profit structure.
4-14 (b) If a builder requires a cost plus profit structure, the
4-15 department and the builder must agree in the partnership agreement
4-16 to a reasonable profit for the builder for each type of home built
4-17 under the program.
4-18 (c) For the purposes of the partnership agreement and
4-19 housing finance assistance by the department or the corporation,
4-20 the profit set under the cost plus profit structure for a home
4-21 built under the program is part of the purchase price of the home.
4-22 Sec. 2306.706. FUNDING. (a) The department and the
4-23 corporation may not spend state money to fund the guaranteed
4-24 purchase agreement required by this subchapter.
4-25 (b) The department and the corporation shall cooperate to
4-26 identify sources of funds that are appropriate for the program.
4-27 Sec. 2306.707. HOUSING STANDARDS. (a) The department shall
5-1 establish and maintain standards for the homes built under the
5-2 program. The standards must include:
5-3 (1) the minimum quality of construction and amenities
5-4 required;
5-5 (2) a cost not to exceed $70,000;
5-6 (3) a style and type of home that can accommodate
5-7 additional construction, but that is flexible enough to serve one
5-8 family; and
5-9 (4) other criteria that the department may provide.
5-10 (b) The department may require the construction of a
5-11 specific number of homes to be determined by the department that
5-12 must meet access standards, including:
5-13 (1) 32-inch wide doors;
5-14 (2) 36-inch wide hallways;
5-15 (3) light switches 15 inches from the floor; and
5-16 (4) at least one entrance to the home without steps.
5-17 Sec. 2306.708. HOMEBUYER PROGRAMS. (a) The department and
5-18 the corporation shall cooperate to identify:
5-19 (1) private lenders to provide private market-rate
5-20 mortgages for low and very low income homebuyers who purchase homes
5-21 under the program; and
5-22 (2) housing assistance programs for low and very low
5-23 income homebuyers who do not qualify for private market-rate
5-24 mortgages.
5-25 (b) The department and the corporation shall provide other
5-26 housing assistance for low and very low income homebuyers as
5-27 necessary to accomplish the purposes of this subchapter.
6-1 Sec. 2306.709. SUSTAINABLE BUILDING. To encourage the use
6-2 of sustainable products and techniques in the construction of
6-3 affordable housing, the department in cooperation with the
6-4 corporation, governmental entities, and nonprofit organizations
6-5 involved in the development and promotion of sustainable
6-6 construction, shall assist builders in identifying information on
6-7 sustainable building resources and techniques.
6-8 Sec. 2306.710. RULEMAKING AUTHORITY. The department may
6-9 adopt rules necessary to accomplish the purposes of this
6-10 subchapter.
6-11 SECTION 2. This Act takes effect September 1, 1999.
6-12 SECTION 3. The importance of this legislation and the
6-13 crowded condition of the calendars in both houses create an
6-14 emergency and an imperative public necessity that the
6-15 constitutional rule requiring bills to be read on three several
6-16 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2281 was passed by the House on May
14, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2281 was passed by the Senate on May
26, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor