By Capelo                                             H.B. No. 2666
         76R3645 DB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a loan guarantee to convert a contract for deed to a
 1-3     warranty deed.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter K, Chapter 2306, Government Code, is
 1-6     amended by adding Section 2306.255 to read as follows:
 1-7           Sec. 2306.255.  CONTRACT FOR DEED CONVERSION PROGRAM.  (a)
 1-8     In this section, "office" means the office established by the
 1-9     department to promote initiatives for colonias.
1-10           (b)  The office shall establish a program to guarantee loans
1-11     made by private lenders to convert a contract for deed into a
1-12     warranty deed.
1-13           (c)  The office shall make agreements with private lenders
1-14     that will issue loans for contract conversions under the guarantee
1-15     of the department.  The office and the lender must agree on the
1-16     criteria for issuing a deed conversion loan, including the
1-17     percentage of the guarantee to be issued by the department.
1-18           (d)  The office may not make an agreement with a lender
1-19     unless the agreement allows the office to annually renegotiate the
1-20     guarantee percentage for a loan issued by the lender. The office
1-21     shall renegotiate the terms of a guarantee when possible to obtain
1-22     a better guarantee percentage for the state from the lender.
1-23           (e)  The office may establish eligibility criteria for a
1-24     holder of a contract for deed who participates in this program.
 2-1     The criteria must include a priority for homeowners and owners of
 2-2     residential real property who are individuals or families of low,
 2-3     very low, or extremely low income.
 2-4           (f)  The office shall use funds allocated to the department
 2-5     under the federal HOME Investment Partnerships program established
 2-6     under Title II of the Cranston-Gonzalez National Affordable Housing
 2-7     Act (42 U.S.C. Section 12701 et seq.) for a guarantee issued under
 2-8     this section.  The office may not spend state money to fund a
 2-9     guarantee for a loan under the program.
2-10           (g)  The office may use the services of the Texas State
2-11     Affordable Housing Corporation when necessary to accomplish the
2-12     purposes of this section.
2-13           (h)  The office shall:
2-14                 (1)  compose an annual report that evaluates the
2-15     repayment history and coinciding guarantee percentages for
2-16     guarantees issued under this section; and
2-17                 (2)  deliver a copy of the report to the governor, the
2-18     lieutenant governor, and the speaker of the house of
2-19     representatives.
2-20           (i)  The department may adopt rules necessary to accomplish
2-21     the purposes of this section.
2-22           SECTION 2.  (a)  This Act takes effect September 1, 1999.
2-23           (b)  The office established by the Texas Department of
2-24     Housing and Community Affairs to promote initiatives for colonias
2-25     shall deliver the first report required by Section 2306.255(h),
2-26     Government Code, as added by this Act, not later than January 1,
2-27     2001.
 3-1           SECTION 3.  The importance of this legislation and the
 3-2     crowded condition of the calendars in both houses create an
 3-3     emergency and an imperative public necessity that the
 3-4     constitutional rule requiring bills to be read on three several
 3-5     days in each house be suspended, and this rule is hereby suspended.