By Carter H.B. No. 3232
77R3515 KEL-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a program to meet the need for affordable housing in
1-3 this state.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 2306, Government Code, is amended by
1-6 adding Subchapter GG to read as follows:
1-7 SUBCHAPTER GG. TEXAS AFFORDABLE HOUSING PARTNERSHIP PROGRAM
1-8 Sec. 2306.801. DEFINITIONS. (a) In this subchapter:
1-9 (1) "Affordable housing advisory committee" means the
1-10 committee appointed by the commissioners court of a county or the
1-11 governing body of an eligible municipality for the purpose of
1-12 recommending specific initiatives to encourage or facilitate
1-13 affordable housing.
1-14 (2) "Award" means a loan, grant, or subsidy funded
1-15 wholly or partially by a local housing assistance trust fund.
1-16 (3) "Eligible municipality" means:
1-17 (A) a municipality that is eligible for federal
1-18 community development block grant entitlement funds as an
1-19 entitlement community under that program; or
1-20 (B) a nonentitlement municipality that is
1-21 receiving a local housing distribution under an interlocal
1-22 agreement described by this subchapter.
1-23 (4) "Eligible person" or "eligible household" means
1-24 one or more individuals or a family determined by a county or
2-1 eligible municipality to be of very low income, low income, or
2-2 moderate income according to the income limits published annually
2-3 by the United States Department of Housing and Urban Development,
2-4 adjusted for family size and based on the annual gross income of
2-5 the household.
2-6 (5) "Eligible sponsor" means a person or private or
2-7 public for-profit or nonprofit entity that applies for an award
2-8 under a local housing assistance plan to provide housing for
2-9 eligible persons.
2-10 (6) "Grant" means an award that:
2-11 (A) is made from a local housing assistance
2-12 trust fund to an eligible sponsor or eligible person to:
2-13 (i) assist in the construction,
2-14 rehabilitation, or financing of eligible housing; or
2-15 (ii) assist with the costs of meeting
2-16 tenant or ownership qualifications; and
2-17 (B) does not require repayment if the conditions
2-18 of the award are met.
2-19 (7) "Loan" means an award that:
2-20 (A) is made from a local housing assistance
2-21 trust fund to an eligible sponsor or eligible person to assist in
2-22 financing the acquisition, construction, or rehabilitation of
2-23 housing; and
2-24 (B) requires repayment or, if the conditions of
2-25 the award are met, allows for forgiveness of repayment.
2-26 (8) "Local housing assistance plan" means a
2-27 description of local housing assistance programs and local housing
3-1 incentive programs adopted by a commissioners court or a governing
3-2 body of an eligible municipality with an explanation of the way in
3-3 which the programs meet the requirements of this subchapter.
3-4 (9) "Local housing assistance program" means a housing
3-5 construction, rehabilitation, repair, or finance program
3-6 implemented by a county or eligible municipality with a local
3-7 housing distribution or other funds deposited into a local housing
3-8 assistance trust fund.
3-9 (10) "Local housing incentive program" means a local
3-10 regulatory scheme or incentive program that:
3-11 (A) is designed to encourage or facilitate
3-12 affordable housing production, including an ongoing process for
3-13 pre-adoption review of local policies, ordinances, regulations, and
3-14 plan provisions that increase housing costs; and
3-15 (B) includes a schedule for implementing the
3-16 incentive program.
3-17 (11) "Local housing partnership" means the
3-18 implementation of the local housing assistance plan in a manner
3-19 that involves the applicable county or eligible municipal lending
3-20 institutions, housing builders and developers, real estate
3-21 professionals, advocates for low-income persons, and providers of
3-22 professional services related to affordable housing.
3-23 (12) "Plan amendment" means any addition to or
3-24 deletion of a local housing assistance program or local housing
3-25 incentive program that is consistent with program requirements and
3-26 is reviewed by the department.
3-27 (13) "Population" means the latest official state
4-1 estimate of population certified by the Texas State Data Center
4-2 before the beginning of the state fiscal year.
4-3 (14) "Program" means the Texas Affordable Housing
4-4 Partnership Program established under this subchapter.
4-5 (15) "Program income" means:
4-6 (A) proceeds derived from interest earned on or
4-7 investment of a local housing distribution and other funds
4-8 deposited into a local housing assistance trust fund;
4-9 (B) proceeds from loan payments;
4-10 (C) recycled funds; and
4-11 (D) all other income derived from use of funds
4-12 deposited in a local housing assistance trust fund.
4-13 (b) Deferred participation by an eligible municipality in
4-14 the federal community development block grant program does not
4-15 affect the eligibility of the municipality to participate in the
4-16 program established under this subchapter.
4-17 Sec. 2306.802. PROGRAM PURPOSES. The purposes of the
4-18 program are to:
4-19 (1) provide funds to counties and eligible
4-20 municipalities as an incentive for the creation of local housing
4-21 partnerships;
4-22 (2) expand production and preservation of affordable
4-23 housing;
4-24 (3) further any component of a local government
4-25 comprehensive plan relating to affordable housing;
4-26 (4) increase housing-related employment; and
4-27 (5) encourage local governments to combine available
5-1 resources by encouraging active partnerships between government
5-2 lenders, builders and developers, real estate professionals,
5-3 advocates for very low, low, and medium income persons, and
5-4 community groups to produce affordable housing and provide related
5-5 services.
5-6 Sec. 2306.803. PROGRAM ADMINISTRATION. (a) The program is
5-7 under the direction of the commissioners court of a county or the
5-8 governing body of an eligible municipality, as applicable.
5-9 (b) The commissioners court or the governing body of an
5-10 eligible municipality may appoint by resolution a local affordable
5-11 housing advisory committee to recommend monetary and nonmonetary
5-12 incentives for affordable housing. The resolution must provide for
5-13 the appointment and terms of nine advisory committee members
5-14 consisting of the following:
5-15 (1) one member who is actively engaged in the
5-16 residential home building industry in connection with affordable
5-17 housing;
5-18 (2) one member who is actively engaged in the banking
5-19 or mortgage banking industry in connection with affordable housing;
5-20 (3) one member who is a representative of building
5-21 contractors and subcontractors actively engaged in home building in
5-22 connection with affordable housing;
5-23 (4) one member who is actively engaged as an advocate
5-24 for low-income persons in connection with affordable housing;
5-25 (5) one member who is actively engaged as a for-profit
5-26 provider of affordable housing;
5-27 (6) one member who is actively engaged as a nonprofit
6-1 provider of affordable housing;
6-2 (7) one member who is actively engaged as a real
6-3 estate professional in connection with affordable housing;
6-4 (8) one member who actively serves on the local
6-5 planning agency; and
6-6 (9) one member who resides within the jurisdiction of
6-7 the commissioners court or governing body making the appointments.
6-8 (c) All meetings conducted for purposes of county or
6-9 municipal participation in the program are public, and all records
6-10 maintained in connection with the program are public information.
6-11 (d) A commissioners court, the governing body of an eligible
6-12 municipality, or, if applicable, an affordable housing advisory
6-13 committee shall:
6-14 (1) review the established policies and procedures,
6-15 ordinances, real property development regulations, and adopted
6-16 local government comprehensive plan; and
6-17 (2) recommend specific initiatives to encourage or
6-18 facilitate affordable housing while protecting the ability of the
6-19 property to appreciate in value.
6-20 (e) Recommendations under Subsection (d)(2) may include:
6-21 (1) modification or repeal of existing policies,
6-22 procedures, ordinances, regulations, or plan provisions;
6-23 (2) creation of exceptions applicable to affordable
6-24 housing; and
6-25 (3) adoption of new policies, procedures, ordinances,
6-26 regulations, or plan provisions.
6-27 (f) To receive program funds, a commissioners court, the
7-1 governing body of an eligible municipality, or, if applicable, an
7-2 affordable housing advisory committee must submit to the department
7-3 a plan describing local housing assistance programs.
7-4 (g) Not later than the first anniversary of the date of
7-5 adoption of the local housing assistance plan, the commissioners
7-6 court or governing body of an eligible municipality must amend its
7-7 plan to incorporate its local housing incentive programs. An
7-8 affordable housing advisory committee may make recommendations to
7-9 the commissioners court or governing body of an eligible
7-10 municipality relating to the housing programs enumerated in the
7-11 plan.
7-12 (h) Not later than the first anniversary of the date of
7-13 adoption of the local housing assistance plan, the commissioners
7-14 court or governing body must amend its real property development
7-15 regulations or establish local policies and procedures as necessary
7-16 to implement its local housing incentive programs. The
7-17 commissioners court or governing body of an eligible municipality
7-18 may receive recommendations from an affordable housing advisory
7-19 committee to accomplish the required amendment.
7-20 (i) To receive its share of local housing distributions, a
7-21 commissioners court or governing body of an eligible municipality
7-22 must adopt an order or ordinance containing the following
7-23 provisions:
7-24 (1) the creation of a local housing assistance trust
7-25 fund;
7-26 (2) the adoption by resolution of a local housing
7-27 assistance plan to be implemented through a local housing
8-1 partnership;
8-2 (3) the designation of the responsibility for the
8-3 administration of the local housing assistance plan; and
8-4 (4) if applicable, the appointment by resolution of an
8-5 affordable housing advisory committee.
8-6 (j) The order or ordinance may also provide for the
8-7 contracting of all or part of the administrative or other functions
8-8 of the program to a third party.
8-9 (k) The commissioners court or governing body of an eligible
8-10 municipality shall submit to the department one copy of its local
8-11 housing assistance plan.
8-12 (l) The transmittal of the local housing assistance plan
8-13 must include a copy of the order or ordinance, the resolution
8-14 adopting the plan, and any other information required by the
8-15 department that does not place an undue burden on the county or
8-16 eligible municipality. Not later than the 30th day after the date
8-17 of receipt of the plan, the department shall review the plan and
8-18 either certify the plan or identify inconsistencies with the
8-19 requirements of the program. The department shall assist the local
8-20 government in revising the plan if it initially proves to be
8-21 inconsistent with program requirements.
8-22 (m) The approval of local housing assistance plans shall be
8-23 expedited to ensure that the production of needed housing occurs as
8-24 quickly as possible. After being approved for funding, the
8-25 commissioners court or governing body of an eligible municipality
8-26 may amend by resolution its local housing assistance plan if the
8-27 plan as amended complies with program requirements. A local
9-1 government must submit its amended plan for review according to the
9-2 process established under this subchapter.
9-3 Sec. 2306.804. TEXAS AFFORDABLE HOUSING ASSISTANCE TRUST
9-4 FUND. (a) The Texas affordable housing assistance trust fund is a
9-5 state trust fund with the comptroller for the purpose of making
9-6 distributions under this subchapter. All money collected under
9-7 this subchapter shall be deposited to the credit of the state trust
9-8 fund.
9-9 (b) The comptroller annually shall distribute the money in
9-10 the state trust fund as follows:
9-11 (1) 80 percent to local housing assistance trust
9-12 funds, to be disbursed as follows:
9-13 (A) 75 percent or $15,000, whichever is greater,
9-14 shall be transferred to counties with a population that is less
9-15 than 150,001 or with an average median income of less than $44,000,
9-16 as determined annually by the secretary of the United States
9-17 Department of Housing and Urban Development; and
9-18 (B) the remaining amount of the money shall be
9-19 transferred to counties with a population that is greater than
9-20 150,001 or with an average median income of $44,000 or more, as
9-21 determined annually by the secretary of the United States
9-22 Department of Housing and Urban Development; and
9-23 (2) 20 percent to the housing trust fund established
9-24 under Section 2306.201 for use in accordance with the purposes of
9-25 that fund.
9-26 Sec. 2306.805. LOCAL HOUSING DISTRIBUTIONS. (a) The
9-27 comptroller shall make a local housing distribution from the Texas
10-1 affordable housing assistance trust fund to a local housing
10-2 assistance trust fund annually beginning the first day of the state
10-3 fiscal year following the date the program is approved.
10-4 (b) The portion for each county is computed by multiplying
10-5 the total funds for the group of counties described by Section
10-6 2306.804(b)(1)(A) or (B) by a fraction, the numerator of which is
10-7 the population of the county and the denominator of which is the
10-8 total population of the group of counties described by Section
10-9 2306.804(b)(1)(A) or (B).
10-10 (c) The portion for each eligible municipality is computed
10-11 by multiplying the total funds for a county by a fraction, the
10-12 numerator of which is the population of the eligible municipality
10-13 and the denominator of which is the population of the county. The
10-14 remaining revenues shall be distributed to the appropriate
10-15 commissioners court.
10-16 (d) A local housing distribution must be administered in
10-17 compliance with an interlocal agreement providing for a joint local
10-18 housing assistance plan.
10-19 (e) Distributions from a local government trust fund must be
10-20 made according to an interlocal agreement between a commissioners
10-21 court and the governing body of an eligible municipality.
10-22 (f) If a county or eligible municipality enters into an
10-23 interlocal agreement with a municipality that becomes eligible as a
10-24 result of entering into that interlocal agreement, the county or
10-25 eligible municipality that has agreed to transfer the control of
10-26 funds to a municipality that was not originally eligible must
10-27 ensure through its local housing assistance plan and through the
11-1 interlocal agreement that all program funds are used in a manner
11-2 consistent with the program.
11-3 (g) The funds that otherwise would be distributed under this
11-4 subchapter to a local government that does not meet the program's
11-5 requirements for receipt of the distributions must remain in the
11-6 Texas affordable housing assistance trust fund for a period of 18
11-7 months. If the local government does not achieve compliance with
11-8 the program within that 18-month period, the funds will be
11-9 distributed to the housing trust fund established under Section
11-10 2306.201 for use in accordance with the purposes of that fund.
11-11 (h) A county or eligible municipality may expend its portion
11-12 of local housing distributions only to implement a local housing
11-13 assistance plan. Except as otherwise provided by this subsection,
11-14 the county or eligible municipality may not expend its portion of
11-15 local housing distributions to provide rent subsidies, and funds
11-16 distributed under this subchapter may not be pledged to pay the
11-17 debt service on any bonds. This subsection does not prohibit the
11-18 use of funds for security and utility deposit assistance.
11-19 Sec. 2306.806. LOCAL HOUSING ASSISTANCE PLAN: PARTNERSHIPS.
11-20 (a) Each county or eligible municipality participating in the
11-21 program shall develop and implement a local housing assistance plan
11-22 created to make affordable residential units available to persons
11-23 of medium, low, and very low income and to persons who have special
11-24 housing needs, including homeless persons, the elderly, and migrant
11-25 farmworkers.
11-26 (b) The plan must seek to increase the availability of
11-27 affordable residential units by:
12-1 (1) combining local resources and cost-saving measures
12-2 into a local housing partnership; and
12-3 (2) using private and public funds to reduce housing
12-4 costs.
12-5 (c) A local housing assistance plan may allocate funds to:
12-6 (1) implement local housing assistance programs for
12-7 the provision of affordable housing;
12-8 (2) supplement funds available to the department to
12-9 provide enhanced funding of state housing programs in the county or
12-10 the eligible municipality;
12-11 (3) provide the local matching share of federal
12-12 affordable housing grants or programs;
12-13 (4) fund emergency repairs, including repairs
12-14 performed by existing service providers under weatherization
12-15 assistance programs;
12-16 (5) further an affordable housing component of a local
12-17 government comprehensive plan;
12-18 (6) fund program operation costs and overhead at the
12-19 local level in an amount not to exceed five percent of funds
12-20 distributed into the local government trust fund, or not to exceed
12-21 10 percent if the actual cost can be justified in an approved plan;
12-22 and
12-23 (7) fund single-family home buyer assistance programs
12-24 and finance, acquire, rehabilitate, and construct safe, decent,
12-25 affordable housing.
12-26 (d) Each county and each eligible municipality participating
12-27 in the program shall encourage the involvement of appropriate
13-1 public sector and private sector entities as partners in order to
13-2 combine resources to reduce housing costs for the targeted
13-3 population. The partnership process must involve:
13-4 (1) lending institutions;
13-5 (2) housing builders and developers;
13-6 (3) nonprofit and other community-based housing and
13-7 service organizations;
13-8 (4) providers of professional services relating to
13-9 affordable housing;
13-10 (5) advocates for low-income persons;
13-11 (6) real estate professionals; and
13-12 (7) other persons or entities that can assist in
13-13 providing housing or related support services.
13-14 (e) A county or eligible municipality participating in the
13-15 program shall:
13-16 (1) develop a qualification system and selection
13-17 criteria for applications for awards by eligible sponsors;
13-18 (2) adopt criteria for the selection of eligible
13-19 persons; and
13-20 (3) adopt a maximum award schedule or system of
13-21 amounts consistent with the intent and budget of its local housing
13-22 assistance plan.
13-23 (f) A county or eligible municipality shall advertise the
13-24 notice of funding availability in a newspaper of general
13-25 circulation and periodicals serving ethnic and diverse
13-26 neighborhoods not later than the 30th day before the date the
13-27 application period begins. If funding is not available because of
14-1 a waiting list, notice of funding availability is not required.
14-2 (g) A county or eligible municipality may not discriminate
14-3 on the basis of race, creed, religion, color, age, sex, marital
14-4 status, familial status, national origin, or disability in the
14-5 award application process for eligible housing.
14-6 (h) As a condition of receipt of an award under the program,
14-7 an eligible sponsor or eligible person must contractually agree to
14-8 comply with the affordable housing criteria applicable to the
14-9 affordable housing objective of the award. The criteria must
14-10 encourage single-family mortgages, down payment assistance, and
14-11 other forms of payment assistance.
14-12 (i) The department shall provide technical assistance to
14-13 counties and eligible municipalities regarding:
14-14 (1) the creation of partnerships;
14-15 (2) the design of local housing assistance programs;
14-16 (3) the implementation of local housing incentive
14-17 programs; and
14-18 (4) the provision of support services.
14-19 Sec. 2306.807. REPORT SUBMITTED TO DEPARTMENT. (a) The
14-20 department shall monitor the activities of counties and eligible
14-21 municipalities to determine compliance with program requirements
14-22 and shall collect data on the operation and achievements of housing
14-23 partnerships.
14-24 (b) A county or eligible municipality shall submit to the
14-25 department not later than April 30 of each year a report of its
14-26 affordable housing programs and related accomplishments through
14-27 December 31 of the preceding year. The report must be certified as
15-1 accurate and complete by the local government's chief elected
15-2 official or that official's designee. Transmittal of the report
15-3 certifies that the local housing incentive programs and, if
15-4 applicable, the local housing incentive plan have been implemented
15-5 or are in the process of being implemented in accordance with the
15-6 adopted schedule for implementation.
15-7 (c) The report must include:
15-8 (1) the number of households served by income
15-9 category, age, family size, and race;
15-10 (2) data regarding any special needs populations,
15-11 including farmworkers, homeless persons, and the elderly;
15-12 (3) the number of units and the average cost of
15-13 producing units under each local housing assistance program;
15-14 (4) the average sales price or value of a
15-15 single-family unit and the amount of rent charged for a rental unit
15-16 based on unit size;
15-17 (5) by income category, the number of mortgages made,
15-18 the average mortgage amount, and the rate of default;
15-19 (6) a description of the status of implementation of
15-20 each local housing incentive program and, if applicable, the local
15-21 housing incentive plan contained in the local government's adopted
15-22 schedule for implementation;
15-23 (7) a concise description of the support services that
15-24 are available to the residents of affordable housing provided by
15-25 local programs;
15-26 (8) sales price or value of housing produced under the
15-27 program and an account of what percentage was refinanced by a local
16-1 housing distribution, other public funds, and private resources;
16-2 and
16-3 (9) any other data or affordable housing
16-4 accomplishments considered significant by the reporting county or
16-5 eligible municipality.
16-6 (d) A county or eligible municipality shall make the report
16-7 available for public inspection and comment before certifying the
16-8 report and transmitting it to the department.
16-9 (e) If the department reviews the annual report and
16-10 determines that a county or eligible municipality has failed to
16-11 implement a local housing incentive program or, if applicable, a
16-12 local housing incentive plan, the department shall send a notice of
16-13 termination of the county's or eligible municipality's share of
16-14 local housing distributions by certified mail to the comptroller
16-15 and the affected county or eligible municipality.
16-16 SECTION 2. This Act takes effect September 1, 2001.