76R13830 E By Burnam H.B. No. 3607 Substitute the following for H.B. No. 3607: By Burnam C.S.H.B. No. 3607 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the preservation of long-term affordable housing. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Chapter 2306, Government Code, is amended by 1-5 adding Subchapter EE to read as follows: 1-6 SUBCHAPTER EE. AFFORDABLE HOUSING PRESERVATION 1-7 Sec. 2306.801. APPLICATION. (a) This subchapter applies 1-8 only to a property owner of a multifamily housing development that 1-9 is insured or assisted under a program under: 1-10 (1) Section 221(d)(3), National Housing Act (12 U.S.C. 1-11 Section 1715l); 1-12 (2) Section 236, National Housing Act (12 U.S.C. 1-13 Section 1715z-1); 1-14 (3) Section 515, Housing Act of 1949 (42 U.S.C. 1-15 Section 1485); or 1-16 (4) Section 8, United States Housing Act of 1937 (42 1-17 U.S.C. Section 1437f). 1-18 (b) This subchapter does not apply to a property owner of a 1-19 multifamily housing development that is insured or assisted under a 1-20 program described by Subsection (a)(1), (2), or (3) unless the 1-21 development is financed by a mortgage that is eligible for 1-22 prepayment at the option of the property owner. 1-23 (c) This subchapter does not apply to the disposal of 1-24 property because of: 2-1 (1) a governmental taking by eminent domain or 2-2 negotiated purchase; 2-3 (2) a foreclosure action; 2-4 (3) a transfer by gift, devise, or operation of law; 2-5 or 2-6 (4) a sale to a person who would be entitled to an 2-7 interest in the property if the property owner died intestate. 2-8 (d) This subchapter does not apply to property included in a 2-9 restructuring program with a participating administrative entity 2-10 designated by the United States Department of Housing and Urban 2-11 Development. 2-12 Sec. 2306.802. PROPERTY OWNER RESTRICTION. Except as 2-13 provided by this subchapter, a property owner under this subchapter 2-14 may not sell, lease, dispose of, or take any other action involving 2-15 a multifamily housing development that is insured or assisted under 2-16 a program described by Section 2306.801(a) if that action will 2-17 cause the disruption or discontinuance of: 2-18 (1) the federal insurance or assistance; or 2-19 (2) the provision of low income housing assistance to 2-20 residents of the development. 2-21 Sec. 2306.803. NOTICE OF INTENT. (a) A property owner of a 2-22 multifamily housing development subject to the restriction under 2-23 Section 2306.802 may sell, lease, or otherwise dispose of the 2-24 development if the property owner provides notice by mail of the 2-25 intent to sell, lease, or otherwise dispose of the development to: 2-26 (1) the residents of the development and the residents 2-27 association of the development; 3-1 (2) the local housing authority with jurisdiction over 3-2 the geographic area in which the development is located; 3-3 (3) the governing body of the municipality in which 3-4 the development is located; and 3-5 (4) the department. 3-6 (b) The property owner shall provide the notice required by 3-7 Subsection (a) at the time notice is required under federal law 3-8 that: 3-9 (1) the property owner intends to prepay a mortgage 3-10 under a program described by Section 2306.801(a)(1), (2), or (3); 3-11 or 3-12 (2) a contract concluded under a program described by 3-13 Section 2306.801(a)(4) will expire. 3-14 Sec. 2306.804. DEMONSTRATION PROGRAM. The department shall 3-15 develop a demonstration program to preserve housing described in 3-16 this subchapter in accordance with Section 2306.251. The 3-17 department may use existing funds that are not targeted for other 3-18 purposes to preserve such housing. 3-19 SECTION 2. Subchapter A, Chapter 2306, Government Code, is 3-20 amended by adding Section 2306.008 to read as follows: 3-21 Sec. 2306.008. FEDERAL MATCHING GRANTS. The department 3-22 shall emphasize the development of programs and policies under this 3-23 chapter in a manner that maximizes federal matching grants to 3-24 preserve long-term affordability for low income housing under 3-25 federal programs, including programs under: 3-26 (1) Section 221(d)(3), National Housing Act (12 U.S.C. 3-27 Section 1715l); 4-1 (2) Section 236, National Housing Act (12 U.S.C. 4-2 Section 1715z-1); 4-3 (3) Section 515, Housing Act of 1949 (42 U.S.C. 4-4 Section 1485); and 4-5 (4) Section 8, United States Housing Act of 1937 (42 4-6 U.S.C. Section 1437f). 4-7 SECTION 3. This Act takes effect September 1, 1999, and 4-8 applies to a multifamily housing development described by Section 4-9 2306.801, Government Code, as added by this Act, that a property 4-10 owner intends to sell, lease, dispose of, or take action involving 4-11 on or after January 1, 2000. 4-12 SECTION 4. The importance of this legislation and the 4-13 crowded condition of the calendars in both houses create an 4-14 emergency and an imperative public necessity that the 4-15 constitutional rule requiring bills to be read on three several 4-16 days in each house be suspended, and this rule is hereby suspended.