1-1     By:  Garcia, et al. (Senate Sponsor - Lucio)          H.B. No. 2281
 1-2           (In the Senate - Received from the House May 14, 1999;
 1-3     May 14, 1999, read first time and referred to Committee on
 1-4     Intergovernmental Relations; May 14, 1999, reported favorably by
 1-5     the following vote:  Yeas 3, Nays 0; May 14, 1999, sent to
 1-6     printer.)
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to a program of the Texas Department of Housing and
1-10     Community Affairs to promote for-profit construction of affordable
1-11     homes for low and very low income homebuyers.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Chapter 2306, Government Code, is amended by
1-14     adding Subchapter EE to read as follows:
1-15            SUBCHAPTER EE.  BUILDER INCENTIVE PARTNERSHIP PROGRAM
1-16           Sec. 2306.701.  DEFINITIONS.  In this subchapter:
1-17                 (1)  "Builder" means a person who builds or develops a
1-18     housing subdivision.
1-19                 (2)  "Cooperative purchase agreement" means an
1-20     agreement described by Section 2306.703.
1-21                 (3)  "Corporation" means the Texas State Affordable
1-22     Housing Corporation.
1-23                 (4)  "Cost plus profit structure" means a profit
1-24     structure that sets a fixed monetary profit due for the sale of a
1-25     home as opposed to a profit structure that sets a variable amount
1-26     of profit due for the sale of a home that is based on a percentage
1-27     of the sale price of the home.
1-28                 (5)  "Program" means the builder incentive partnership
1-29     program developed under this subchapter.
1-30           Sec. 2306.702.  BUILDER INCENTIVE PARTNERSHIP PROGRAM.  (a)
1-31     The department shall develop and maintain a builder incentive
1-32     partnership program that:
1-33                 (1)  provides for the development of affordable housing
1-34     subdivisions in this state; and
1-35                 (2)  does not encourage the further growth of colonias
1-36     in this state.
1-37           (b)  To accomplish the goals of this subchapter, the
1-38     department shall:
1-39                 (1)  determine geographic areas that are in need of
1-40     affordable housing;
1-41                 (2)  provide for affordable housing development
1-42     projects in those areas by entering into a partnership agreement
1-43     with:
1-44                       (A)  an eligible builder or developer; and
1-45                       (B)  housing assistance agencies or other
1-46     nonprofit entities that provide housing assistance to low and very
1-47     low income homebuyers; and
1-48                 (3)  work with the corporation, the builder or
1-49     developer, or housing assistance agencies or other nonprofit
1-50     entities that provide housing assistance to low and very low income
1-51     homebuyers to obtain housing assistance for homebuyers who purchase
1-52     homes built under the program.
1-53           Sec. 2306.703.  COOPERATIVE PURCHASE AGREEMENT.  (a)  The
1-54     department shall negotiate and conclude a cooperative purchase
1-55     agreement with a housing assistance agency or other nonprofit
1-56     entity for each project under the program.
1-57           (b)  Under the cooperative purchase agreement for a specific
1-58     project under the program, a housing assistance agency or other
1-59     nonprofit entity must agree:
1-60                 (1)  to use funds that the department may provide or
1-61     funds maintained by the agency or entity from other sources to
1-62     guarantee a negotiated portion of the purchase price of a
1-63     negotiated number of houses to be built under the project; and
1-64                 (2)  at the option of the builder, to purchase homes
 2-1     built under the project at cost if the  homes do not have a
 2-2     qualified purchaser within 30 days of the date of completion of the
 2-3     construction.
 2-4           (c)  The department may provide alternative or additional
 2-5     conditions under the cooperative purchase agreement as necessary to
 2-6     accomplish the purposes of this subchapter.
 2-7           Sec. 2306.704.  BUILDER PARTNERSHIP AGREEMENT.  (a)  Under a
 2-8     partnership agreement for a specific project, the department and
 2-9     the builder must agree to:
2-10                 (1)  the terms of a cooperative purchase agreement
2-11     between the department and a housing assistance agency or other
2-12     nonprofit entity that provides housing assistance to low and very
2-13     low income homebuyers;
2-14                 (2)  the type, style, and number of houses to be built
2-15     under the partnership, within the specifications required by
2-16     Section 2306.707;
2-17                 (3)  the types of housing assistance to be applied for
2-18     eligible low and very low income homebuyers who purchase homes
2-19     built under the program; and
2-20                 (4)  any other term that the department determines
2-21     appropriate.
2-22           (b)  The builder shall market the homes built under the
2-23     program to individuals and families who qualify for housing
2-24     assistance under department programs in the same manner in which
2-25     private housing development projects are marketed to the general
2-26     public.
2-27           (c)  The department may not enter into a partnership
2-28     agreement for a specific project with a builder unless the builder
2-29     agrees to issue the builder's standard warranties for materials and
2-30     labor to the first owner-occupant of a home purchased under this
2-31     program.
2-32           Sec. 2306.705.  COST PLUS PROFIT STRUCTURE.  (a)  The builder
2-33     in the partnership agreement may require homebuyers to purchase a
2-34     home under a cost plus profit structure.
2-35           (b)  If a builder requires a cost plus profit structure, the
2-36     department and the builder must agree in the partnership agreement
2-37     to a reasonable profit for the builder for each type of home built
2-38     under the program.
2-39           (c)  For the purposes of the partnership agreement and
2-40     housing finance assistance by the department or the corporation,
2-41     the profit set under the cost plus profit structure for a home
2-42     built under the program is part of the purchase price of the home.
2-43           Sec. 2306.706.  FUNDING.  (a)  The department and the
2-44     corporation may not spend state money to fund the guaranteed
2-45     purchase agreement required by this subchapter.
2-46           (b)  The department and the corporation shall cooperate to
2-47     identify sources of funds that are appropriate for the program.
2-48           Sec. 2306.707.  HOUSING STANDARDS.  (a)  The department shall
2-49     establish and maintain standards for the homes built under the
2-50     program.  The standards must include:
2-51                 (1)  the minimum quality of construction and amenities
2-52     required;
2-53                 (2)  a cost not to exceed $70,000;
2-54                 (3)  a style and type of home that can accommodate
2-55     additional construction, but that is flexible enough to serve one
2-56     family; and
2-57                 (4)  other criteria that the department may provide.
2-58           (b)  The department may require the construction of a
2-59     specific number of homes to be determined by the department that
2-60     must meet access standards, including:
2-61                 (1)  32-inch wide doors;
2-62                 (2)  36-inch wide hallways;
2-63                 (3)  light switches 15 inches from the floor; and
2-64                 (4)  at least one entrance to the home without steps.
2-65           Sec. 2306.708.  HOMEBUYER PROGRAMS.  (a)  The department and
2-66     the corporation shall cooperate to identify:
2-67                 (1)  private lenders to provide private market-rate
2-68     mortgages for low and very low income homebuyers who purchase homes
2-69     under the program; and
 3-1                 (2)  housing assistance programs for low and very low
 3-2     income homebuyers who do not qualify for private market-rate
 3-3     mortgages.
 3-4           (b)  The department and the corporation shall provide other
 3-5     housing assistance for low and very low income homebuyers as
 3-6     necessary to accomplish the purposes of this subchapter.
 3-7           Sec. 2306.709.  SUSTAINABLE BUILDING.  To encourage the use
 3-8     of sustainable products and techniques in the construction of
 3-9     affordable housing, the department in cooperation with the
3-10     corporation, governmental entities, and nonprofit organizations
3-11     involved in the development and promotion of sustainable
3-12     construction, shall assist builders in identifying information on
3-13     sustainable building resources and techniques.
3-14           Sec. 2306.710.  RULEMAKING AUTHORITY.  The department may
3-15     adopt rules necessary to accomplish the purposes of this
3-16     subchapter.
3-17           SECTION 2.  This Act takes effect September 1, 1999.
3-18           SECTION 3.  The importance of this legislation and the
3-19     crowded condition of the calendars in both houses create an
3-20     emergency and an imperative public necessity that the
3-21     constitutional rule requiring bills to be read on three several
3-22     days in each house be suspended, and this rule is hereby suspended.
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