By Burnam H.B. No. 3607
76R9336 DB-D
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 federal program, including a
1-10 program under:
1-11 (1) Section 221(d)(3), National Housing Act (12 U.S.C.
1-12 Section 1715l);
1-13 (2) Section 236, National Housing Act (12 U.S.C.
1-14 Section 1715z-1);
1-15 (3) Section 515, Housing Act of 1949 (42 U.S.C.
1-16 Section 1485); or
1-17 (4) Section 8, United States Housing Act of 1937 (42
1-18 U.S.C. Section 1437f).
1-19 (b) This section does not apply to the disposal of property
1-20 because of:
1-21 (1) a governmental taking by eminent domain or
1-22 negotiated purchase;
1-23 (2) a foreclosure action;
1-24 (3) a transfer by gift, devise, or operation of law;
2-1 or
2-2 (4) a sale to a person who would be entitled to an
2-3 interest in the property if the property owner died intestate.
2-4 Sec. 2306.802. PROPERTY OWNER RESTRICTION. Except as
2-5 provided by this subchapter, a property owner under this subchapter
2-6 may not sell, lease, or otherwise dispose of a multifamily housing
2-7 development that is insured or assisted under a federal program if
2-8 that action will cause the disruption or discontinuance of:
2-9 (1) the federal insurance or assistance; or
2-10 (2) the provision of low income housing assistance to
2-11 residents of the development.
2-12 Sec. 2306.803. NOTICE OF INTENT. (a) A property owner of a
2-13 multifamily housing development subject to the restriction under
2-14 Section 2306.802 who intends to sell, lease, or otherwise dispose
2-15 of the development shall provide notice to:
2-16 (1) the residents of the development and the residents
2-17 association of the development;
2-18 (2) the department;
2-19 (3) the local housing authority with jurisdiction over
2-20 the geographic area in which the development is located; and
2-21 (4) the governing body of the municipality in which
2-22 the development is located.
2-23 (b) The notice required under Subsection (a) must provide:
2-24 (1) the essential terms of the sale or lease,
2-25 including relevant pricing and financing requirements, that the
2-26 property owner intends to accept;
2-27 (2) a list of the people receiving the notice and a
3-1 statement that each person listed in the notice has a right of
3-2 first refusal according to the priorities established under Section
3-3 2306.805;
3-4 (3) a statement of residents' rights and sources of
3-5 technical assistance in a form prescribed by the department; and
3-6 (4) relevant information regarding the financial
3-7 requirements and economic status of the development.
3-8 Sec. 2306.804. RIGHT OF FIRST REFUSAL. (a) Except as
3-9 provided by Section 2306.801(b), the department or a person who is
3-10 provided notice as required by Section 2306.803 has a right of
3-11 first refusal to purchase or lease the multifamily housing
3-12 development if:
3-13 (1) not later than the 180th day after the date the
3-14 property owner provides notice under Section 2306.803, the
3-15 department or person submits a proposed purchase or lease agreement
3-16 to the property owner with substantially equivalent terms as the
3-17 terms the property owner intends to accept according to the
3-18 required notice; and
3-19 (2) not later than the first anniversary of the date
3-20 of the submission of a proposed purchase or lease agreement, the
3-21 department or person:
3-22 (A) tenders the purchase amount or the
3-23 appropriate lease amount; and
3-24 (B) obtains the necessary financing to purchase
3-25 or lease the development.
3-26 (b) The property owner may not unreasonably refuse to enter
3-27 into or unreasonably delay the execution of a purchase or lease
4-1 agreement with the department or person if the department or person
4-2 has complied with Subsection (a). The property owner may require a
4-3 person offering to lease the development to place in escrow an
4-4 amount necessary to pay the lease for a period of not more than one
4-5 year after the effective date of the lease agreement.
4-6 (c) A majority of the residents or the residents association
4-7 of a development may conclude an agreement with a nonprofit
4-8 organization or private purchaser in which the nonprofit
4-9 organization or private purchaser agrees to represent the residents
4-10 and maintain the development in a manner that preserves the
4-11 development's low income housing benefits. A nonprofit
4-12 organization or private purchaser under this subsection takes the
4-13 right of first refusal held by the residents or the residents
4-14 association of a development and is subject to the requirements of
4-15 this section.
4-16 Sec. 2306.805. PRIORITY OF RIGHT OF FIRST REFUSAL. The
4-17 right of first refusal under this subchapter is provided according
4-18 to the priorities as follows to:
4-19 (1) the residents of the development or the residents
4-20 association of the development or the nonprofit organization or
4-21 private purchaser that agrees to represent the residents or the
4-22 residents association under Section 2306.804(c);
4-23 (2) the department;
4-24 (3) the local housing authority with jurisdiction over
4-25 the geographic area in which the development is located; and
4-26 (4) the governing body of the municipality in which
4-27 the development is located.
5-1 SECTION 2. Subchapter A, Chapter 2306, Government Code, is
5-2 amended by adding Section 2306.008 to read as follows:
5-3 Sec. 2306.008. FEDERAL MATCHING GRANTS. The department
5-4 shall emphasize the development of programs under this chapter in a
5-5 manner that maximizes federal matching grants to preserve long-term
5-6 affordability for low income housing under federal programs,
5-7 including programs under:
5-8 (1) Section 221(d)(3), National Housing Act (12 U.S.C.
5-9 Section 1715l);
5-10 (2) Section 236, National Housing Act (12 U.S.C.
5-11 Section 1715z-1);
5-12 (3) Section 515, Housing Act of 1949 (42 U.S.C.
5-13 Section 1485); and
5-14 (4) Section 8, United States Housing Act of 1937 (42
5-15 U.S.C. Section 1437f).
5-16 SECTION 3. (a) This Act takes effect September 1, 1999, and
5-17 applies to a multifamily housing development described by Section
5-18 2306.801, Government Code, as added by this Act, that a property
5-19 owner intends to sell, lease, or otherwise dispose of on or after
5-20 January 1, 2000.
5-21 (b) The Texas Department of Housing and Community Affairs
5-22 shall prepare the statement required by Section 2306.803(b)(3),
5-23 Government Code, as added by this Act, not later than January 1,
5-24 2000.
5-25 SECTION 4. The importance of this legislation and the
5-26 crowded condition of the calendars in both houses create an
5-27 emergency and an imperative public necessity that the
6-1 constitutional rule requiring bills to be read on three several
6-2 days in each house be suspended, and this rule is hereby suspended.