By Garcia H.B. No. 2281 76R2186 DB-D A BILL TO BE ENTITLED 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 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 2306.705. 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 to provide for the development of affordable 2-2 housing subdivisions in this state. 2-3 (b) To accomplish the goals of this subchapter, the 2-4 department shall: 2-5 (1) determine geographic areas that are in need of 2-6 affordable housing; 2-7 (2) provide for affordable housing development 2-8 projects in those areas by entering into a partnership agreement 2-9 with: 2-10 (A) an eligible builder or developer; and 2-11 (B) housing assistance agencies or other 2-12 nonprofit entities that provide housing assistance to low income 2-13 homebuyers; and 2-14 (3) work with the corporation, the builder or 2-15 developer, or housing assistance agencies or other nonprofit 2-16 entities that provide housing assistance to low income homebuyers 2-17 to obtain housing assistance for homebuyers who purchase homes 2-18 built under the program. 2-19 Sec. 2306.703. BUILDER PARTNERSHIP AGREEMENT. (a) Under a 2-20 partnership agreement for a specific project, the department and 2-21 the builder must agree to: 2-22 (1) a guaranteed purchase agreement in which the 2-23 department agrees to guarantee a negotiated portion of the purchase 2-24 price of a negotiated number of houses to be built under the 2-25 project; 2-26 (2) the terms of a cooperative purchase agreement 2-27 between the department and a housing assistance agency or other 3-1 nonprofit entity that provides housing assistance to low income 3-2 homebuyers; 3-3 (3) the type, style, and number of houses to be built 3-4 under the partnership, within the specifications required by 3-5 Section 2306.707; 3-6 (4) the types of housing assistance to be applied for 3-7 eligible low income homebuyers who purchase homes built under the 3-8 program; and 3-9 (5) any other term that the department determines 3-10 appropriate. 3-11 (b) The builder shall market the homes built under the 3-12 program to individuals and families who qualify for housing 3-13 assistance under department programs in the same manner in which 3-14 private housing development projects are marketed to the general 3-15 public. 3-16 (c) The department may not enter into a partnership 3-17 agreement for a specific project with a builder unless the builder 3-18 agrees to issue warranty deeds for the homes purchased under this 3-19 program. 3-20 Sec. 2306.704. COST PLUS PROFIT STRUCTURE. (a) The builder 3-21 in the partnership agreement may require homebuyers to purchase a 3-22 home under a cost plus profit structure. 3-23 (b) If a builder requires a cost plus profit structure, the 3-24 department and the builder must agree in the partnership agreement 3-25 to a reasonable profit for the builder for each type of home built 3-26 under the program. 3-27 (c) For the purposes of the partnership agreement and 4-1 housing finance assistance by the department or the corporation, 4-2 the profit set under the cost plus profit structure for a home 4-3 built under the program is part of the purchase price of the home. 4-4 Sec. 2306.705. COOPERATIVE PURCHASE AGREEMENT. (a) The 4-5 department shall negotiate and conclude a cooperative purchase 4-6 agreement with a housing assistance agency or other nonprofit 4-7 entity for each project under the program. 4-8 (b) Under the cooperative purchase agreement, a housing 4-9 assistance agency or other nonprofit entity must agree, at the 4-10 option of the builder, to purchase homes built under the project at 4-11 cost if the homes do not have a qualified purchaser within 30 days 4-12 of completion of the construction. 4-13 (c) The department may provide alternative or additional 4-14 conditions under the cooperative purchase agreement as necessary to 4-15 accomplish the purposes of this subchapter. 4-16 Sec. 2306.706. FUNDING. (a) The department and the 4-17 corporation may not spend state money to fund the guaranteed 4-18 purchase agreement required by this subchapter. 4-19 (b) The department and the corporation shall cooperate to 4-20 identify sources of funds that are appropriate for the program. 4-21 Sec. 2306.707. HOUSING STANDARDS. The department shall 4-22 establish and maintain standards for the homes built under the 4-23 program. The standards must include: 4-24 (1) the minimum quality of construction and amenities 4-25 required; 4-26 (2) an average cost between $30,000 and $50,000; 4-27 (3) a style and type of home that can accommodate 5-1 additional construction, but that is flexible enough to serve one 5-2 family; and 5-3 (4) other criteria that the department may provide. 5-4 Sec. 2306.708. HOMEBUYER PROGRAMS. (a) The department and 5-5 the corporation shall cooperate to identify: 5-6 (1) private lenders to provide private market-rate 5-7 mortgages for low income homebuyers who purchase homes under the 5-8 program; and 5-9 (2) housing assistance programs for low income 5-10 homebuyers who do not qualify for private market-rate mortgages. 5-11 (b) The department and the corporation shall provide other 5-12 housing assistance for low income homebuyers as necessary to 5-13 accomplish the purposes of this subchapter. 5-14 Sec. 2306.709. RULEMAKING AUTHORITY. The department may 5-15 adopt rules necessary to accomplish the purposes of this 5-16 subchapter. 5-17 SECTION 2. This Act takes effect September 1, 1999. 5-18 SECTION 3. The importance of this legislation and the 5-19 crowded condition of the calendars in both houses create an 5-20 emergency and an imperative public necessity that the 5-21 constitutional rule requiring bills to be read on three several 5-22 days in each house be suspended, and this rule is hereby suspended.