AN ACT 1-1 relating to a loan guarantee to convert a contract for deed to a 1-2 warranty deed. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter K, Chapter 2306, Government Code, is 1-5 amended by adding Section 2306.255 to read as follows: 1-6 Sec. 2306.255. CONTRACT FOR DEED CONVERSION PROGRAM. 1-7 (a) In this section, "office" means the office established by the 1-8 department to promote initiatives for colonias. 1-9 (b) The office shall establish a program to guarantee loans 1-10 made by private lenders to convert a contract for deed into a 1-11 warranty deed. 1-12 (c) The office shall make agreements with private lenders 1-13 that will issue loans for contract conversions under the guarantee 1-14 of the department. The office and the lender must agree on the 1-15 criteria for issuing a deed conversion loan, including the 1-16 percentage of the guarantee to be issued by the department. 1-17 (d) The office may not make an agreement with a lender 1-18 unless the agreement allows the office to annually renegotiate the 1-19 guarantee percentage for a loan issued by the lender. The office 1-20 shall renegotiate the terms of a guarantee when possible to obtain 1-21 a better guarantee percentage for the state from the lender. 1-22 (e) The office may establish eligibility criteria for a 1-23 holder of a contract for deed who participates in this program. 1-24 The criteria must include a priority for homeowners and owners of 2-1 residential real property who are individuals or families of low, 2-2 very low, or extremely low income. 2-3 (f) The office shall use funds allocated to the department 2-4 under the federal HOME Investment Partnerships program established 2-5 under Title II of the Cranston-Gonzalez National Affordable Housing 2-6 Act (42 U.S.C. Section 12701 et seq.) for a guarantee issued under 2-7 this section. 2-8 (g) The office may use the services of the Texas State 2-9 Affordable Housing Corporation when necessary to accomplish the 2-10 purposes of this section. 2-11 (h) The office shall: 2-12 (1) compose an annual report that evaluates the 2-13 repayment history and coinciding guarantee percentages for 2-14 guarantees issued under this section; and 2-15 (2) deliver a copy of the report to the governor, the 2-16 lieutenant governor, and the speaker of the house of 2-17 representatives. 2-18 (i) The department may adopt rules necessary to accomplish 2-19 the purposes of this section. 2-20 SECTION 2. (a) This Act takes effect September 1, 1999. 2-21 (b) The office established by the Texas Department of 2-22 Housing and Community Affairs to promote initiatives for colonias 2-23 shall deliver the first report required by Subsection (h), Section 2-24 2306.255, Government Code, as added by this Act, not later than 2-25 January 1, 2001. 2-26 SECTION 3. The importance of this legislation and the 3-1 crowded condition of the calendars in both houses create an 3-2 emergency and an imperative public necessity that the 3-3 constitutional rule requiring bills to be read on three several 3-4 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 867 passed the Senate on May 4, 1999, by a viva-voce vote. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 867 passed the House on May 26, 1999, by a non-record vote. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor