1-1 AN ACT
1-2 relating to the operation of the Texas State Affordable Housing
1-3 Corporation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2306.553, Government Code, is amended to
1-6 read as follows:
1-7 Sec. 2306.553. PURPOSES. (a) The public purpose of the
1-8 corporation is to perform activities and services that the
1-9 corporation's board of directors determines will promote the public
1-10 health, safety, and welfare through the provision of adequate,
1-11 safe, and sanitary housing primarily for individuals and families
1-12 of low, [and] very low, [income] and extremely low [families of
1-13 moderate] income. The activities and services shall include
1-14 engaging in mortgage banking activities and lending transactions
1-15 and acquiring, holding, selling, or leasing real or personal
1-16 property.
1-17 (b) The corporation's primary public purpose is to
1-18 facilitate the provision of housing and the making of affordable
1-19 loans to individuals and families of low, [and] very low, [income]
1-20 and extremely low [families of moderate] income. The corporation
1-21 may make first lien, single family purchase money mortgage loans
1-22 for single family homes only to individuals and families of low,
1-23 [and] very low, [income] and extremely low [families of moderate]
1-24 income if the individual's or family's household income is not more
2-1 than the greater of 60 percent of the median income for the state,
2-2 as defined by the United States Department of Housing and Urban
2-3 Development, or 60 percent of the area median family income,
2-4 adjusted for family size, as defined by that department. The
2-5 corporation may make loans for multifamily developments if:
2-6 (1) at least 40 percent of the units in a multifamily
2-7 development are affordable to individuals and families with incomes
2-8 at or below 60 percent of the median family income, adjusted for
2-9 family size; or
2-10 (2) at least 20 percent of the units in a multifamily
2-11 development are affordable to individuals and families with incomes
2-12 at or below 50 percent of the median family income, adjusted for
2-13 family size.
2-14 (c) To the extent reasonably practicable, the corporation
2-15 shall use the services of banks, community banks, savings banks,
2-16 thrifts, savings and loan associations, private mortgage companies,
2-17 nonprofit organizations, and other lenders for the origination of
2-18 all loans contemplated by this subchapter and assist the lenders in
2-19 providing credit primarily to individuals and families of low,
2-20 [and] very low, [income] and extremely low [families of moderate]
2-21 income.
2-22 SECTION 2. Section 2306.554, Government Code, is amended to
2-23 read as follows:
2-24 Sec. 2306.554. BOARD OF DIRECTORS AND OFFICERS. (a) The
2-25 board of directors of the corporation consists of five [six]
2-26 members [as follows:]
2-27 [(1) the presiding officer of the board of directors
3-1 of the department;]
3-2 [(2) the presiding officer of the programs committee
3-3 of the board of directors of the department; and]
3-4 [(3) four members of the board of directors of the
3-5 corporation shall be] appointed by the governor who [and shall]
3-6 represent any of the following areas:
3-7 (1) [(A)] state or federal savings banks or savings
3-8 and loan associations;
3-9 (2) [(B)] community banks with assets of $200 million
3-10 or less;
3-11 (3) [(C)] large metropolitan banks with assets of more
3-12 than $1 billion;
3-13 (4) [(D)] asset management companies;
3-14 (5) [(E)] mortgage servicing companies;
3-15 (6) [(F)] builders;
3-16 (7) [(G)] real estate developers;
3-17 (8) [(H)] real estate brokers;
3-18 (9) [(I)] community or economic development
3-19 organizations;
3-20 (10) [(J)] private mortgage companies;
3-21 (11) [(K)] nonprofit housing development companies;
3-22 (12) [(L)] attorneys;
3-23 (13) [(M)] investment bankers;
3-24 (14) [(N)] underwriters;
3-25 (15) [(O)] private mortgage insurance companies;
3-26 (16) [(P)] appraisers;
3-27 (17) [(Q)] property management companies;
4-1 (18) [(R)] financial advisors;
4-2 (19) [(S)] nonprofit foundations;
4-3 (20) [(T)] financial advisors; or
4-4 (21) [(U)] any other area of expertise that the
4-5 governor finds necessary for the successful operation of the
4-6 corporation.
4-7 (b) The governor shall designate the [appoint a] presiding
4-8 officer of the corporation's board of directors from the members
4-9 [who are not also serving as members of the board of directors of
4-10 the department].
4-11 (c) A member of the corporation's board of directors is not
4-12 entitled to compensation, [except for the members who are also
4-13 members of the department's board of directors,] but is entitled to
4-14 reimbursement of travel expenses incurred by the member while
4-15 conducting the business of the board, as provided by the General
4-16 Appropriations Act.
4-17 (d) The corporation shall employ, for compensation to be
4-18 determined by the corporation's board of directors, a qualified
4-19 individual to serve as president of the corporation [The director
4-20 of the department shall serve ex officio as president of the
4-21 corporation. The president is not entitled to compensation, unless
4-22 the president is not also the executive director of the department,
4-23 but is entitled to reimbursement from the corporation of travel
4-24 expenses incurred by the member while conducting the business of
4-25 the board, as provided by the General Appropriations Act. The
4-26 director of the department shall serve as president of the
4-27 corporation only if the director has experience in the field of
5-1 mortgage banking or residential lending as demonstrated by:]
5-2 [(1) employment in one or more middle or upper level
5-3 management positions for at least two years with a mortgage bank,
5-4 commercial bank, thrift, savings and loan association, private
5-5 mortgage company, mortgage servicing entity, or other financial
5-6 institution; or]
5-7 [(2) employment in a position of providing legal or
5-8 consulting services related to mortgage banking or residential
5-9 lending to any one of the type of entities listed in Subsection
5-10 (d)(1) for at least five years].
5-11 (e) [If the director does not satisfy the requirements of
5-12 Subsection (d)(1) or (2), the corporation shall employ, for
5-13 compensation to be determined by the corporation's board of
5-14 directors, an individual that satisfies the requirements of
5-15 Subsection (d)(1) or (2) to serve as president of the corporation.]
5-16 [(f)] The corporation may purchase, with corporation funds,
5-17 liability insurance for each of the members of the corporation's
5-18 board of directors, officers, and other employees of the
5-19 corporation in an amount that the corporation's board of directors
5-20 considers reasonably necessary to:
5-21 (1) insure against foreseeable liabilities; and
5-22 (2) provide for all costs of defending against those
5-23 liabilities, including, without limitation, court costs and
5-24 attorney's fees.
5-25 SECTION 3. Sections 2306.555(b), (c), and (d), Government
5-26 Code, are amended to read as follows:
5-27 (b) In addition to the powers granted by Subsection (a), the
6-1 corporation has all rights and powers necessary to accomplish its
6-2 public purpose, including the powers to:
6-3 (1) purchase, service, sell, lend on the security of,
6-4 or otherwise transact in:
6-5 (A) mortgages, including federal mortgages and
6-6 federally insured mortgages;
6-7 (B) mortgage loans;
6-8 (C) deeds of trust; and
6-9 (D) loans or other advances of credit secured by
6-10 liens against manufactured housing;
6-11 (2) guarantee or insure timely payment of mortgage
6-12 loans and loans or other advances of credit secured by liens
6-13 against manufactured housing, provided that the corporation's
6-14 liability on that guaranty or insurance is limited to the assets of
6-15 a guaranty fund or self-insurance fund established and maintained
6-16 by the corporation;
6-17 (3) make mortgage loans and loans or other advances of
6-18 credit secured by liens against manufactured housing to individuals
6-19 and families of low [to moderate] income;
6-20 (4) make mortgage loans to provide temporary or
6-21 permanent financing or refinancing for housing or land
6-22 developments, including refunding outstanding obligations,
6-23 mortgages, or advances issued for those purposes;
6-24 (5) borrow, give security, pay interest or other
6-25 return, or issue bonds or other obligations, including notes,
6-26 debentures, or mortgage-backed securities, provided that each bond
6-27 or other obligation issued by the corporation must contain a
7-1 statement that the state is not obligated to pay the principal of
7-2 or any premium or interest on the bond or other obligation and that
7-3 the full faith and credit and the taxing power of the state are not
7-4 pledged, given, or loaned to the payment;
7-5 (6) acquire, hold, invest, use, pledge, reserve, and
7-6 dispose of its assets, revenues, income, receipts, funds, and money
7-7 from every source and to select one or more depositories, inside or
7-8 outside the state, subject to the terms of any resolution,
7-9 indenture, or other contract under which any bonds or other
7-10 obligations are issued or any guaranty or insurance is provided;
7-11 (7) establish, charge, and collect fees, charges, and
7-12 penalties in connection with the programs, services, and activities
7-13 of the corporation;
7-14 (8) procure insurance and pay premiums on insurance of
7-15 any type, in amounts, and from insurers as the corporation's board
7-16 of directors considers necessary and advisable to further the
7-17 corporation's public purpose, including, subject to Section
7-18 2306.554(e) [2306.554(f)], liability insurance for the members of
7-19 the corporation's board of directors and the officers and other
7-20 employees of the corporation;
7-21 (9) make, enter into, and enforce contracts,
7-22 agreements, leases, indentures, mortgages, deeds, deeds of trust,
7-23 security agreements, pledge agreements, credit agreements, and
7-24 other instruments with any person, including a mortgage lender,
7-25 servicer, housing sponsor, the federal government, or any public
7-26 agency, on terms the corporation determines may be acceptable;
7-27 (10) own, rent, lease, or otherwise acquire, accept,
8-1 or hold real, personal, or mixed property, or any interest in
8-2 property, by purchase, exchange, gift, assignment, transfer,
8-3 foreclosure, mortgage, sale, lease, or otherwise and hold, manage,
8-4 operate, or improve real, personal, or mixed property, regardless
8-5 of location;
8-6 (11) sell, lease, encumber, mortgage, exchange,
8-7 donate, convey, or otherwise dispose of any or all of its
8-8 properties or any interest in its properties, deeds of trust, or
8-9 mortgage lien interest owned by it or under its control or custody,
8-10 or in its possession, and release or relinquish any right, title,
8-11 claim, lien, interest, easement, or demand, however acquired,
8-12 including any equity or right of redemption in property foreclosed
8-13 by it, by public or private sale, with or without public bidding;
8-14 (12) lease or rent any improvements, lands, or
8-15 facilities from any person;
8-16 (13) request, accept, and use gifts, loans, donations,
8-17 aid, guaranties, allocations, subsidies, grants, or contributions
8-18 of any item of value to further its public purpose; and
8-19 (14) exercise the rights and powers of a nonprofit
8-20 corporation incorporated under the Texas Non-Profit Corporation Act
8-21 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).
8-22 (c) In exercising the foregoing powers granted to it under
8-23 this chapter, the corporation shall not actively compete with
8-24 private lenders and shall not originate or make a [any] loan that
8-25 [can or] would be made under [at] the same circumstances [time] by
8-26 a private lender on substantially the same or better terms within
8-27 the submarket in which the loan is proposed to be made[, and, to
9-1 the extent practical, the corporation shall rely on private
9-2 mortgage companies, banks, savings banks, thrifts, savings and loan
9-3 associations, or other similar loan originating entities to
9-4 originate loans. The corporation may act as co-originator in a
9-5 loan where the funding resources emanate from the corporation].
9-6 (d) All of the mortgage banking operations shall be
9-7 dedicated to the furtherance of facilitating affordable housing
9-8 finance primarily for the [ultimate] benefit of individuals and
9-9 families of low, [and] very low, [income] and extremely low
9-10 [families of moderate] income who, generally, are not afforded
9-11 housing finance options through conventional lending channels.
9-12 SECTION 4. Section 2306.557, Government Code, is amended to
9-13 read as follows:
9-14 Sec. 2306.557. DISTRIBUTION OF EARNINGS. Any part of
9-15 earnings remaining after payment of expenses and any establishment
9-16 of reserves by the corporation's board of directors may not inure
9-17 to any person except that the corporation shall use [deposit] these
9-18 excess earnings to further the corporation's new or existing
9-19 affordable housing initiatives [with the department to the credit
9-20 of the housing trust fund established by Section 2306.201] if the
9-21 corporation's board of directors determines that sufficient
9-22 provision has been made for the full payment of the expenses,
9-23 bonds, and other obligations of the corporation and for any
9-24 establishment of reserves by the corporation's board of directors.
9-25 SECTION 5. (a) This Act takes effect September 1, 1999.
9-26 (b) As soon as possible after the effective date of this
9-27 Act, the governor shall appoint a person to serve on the board of
10-1 directors of the Texas State Affordable Housing Corporation, as
10-2 required by Section 2306.554(a), Government Code, as amended by
10-3 this Act. The presiding officer of the board of directors of the
10-4 Texas Department of Housing and Community Affairs and the presiding
10-5 officer of the programs committee of the department's board who are
10-6 serving on the corporation's board immediately before the effective
10-7 date of this Act shall continue to serve on the corporation's board
10-8 until the date on which the person appointed by the governor
10-9 assumes membership duties on the corporation's board.
10-10 SECTION 6. The importance of this legislation and the
10-11 crowded condition of the calendars in both houses create an
10-12 emergency and an imperative public necessity that the
10-13 constitutional rule requiring bills to be read on three several
10-14 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. 3059 was passed by the House on May
6, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3059 was passed by the Senate on May
26, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor