By Gallego                                            H.B. No. 3449
         77R1074 KEL/QS-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the continuation and functions of the Texas Department
 1-3     of Housing and Community Affairs and to other matters relating to
 1-4     housing or community development, including the creation of the
 1-5     Manufactured Housing Board and the Office of Rural Community
 1-6     Affairs.
 1-7           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-8           SECTION 1. Section 2306.001, Government Code, is amended to
 1-9     read as follows:
1-10           Sec. 2306.001.  PURPOSES. The purposes of the department are
1-11     to:
1-12                 (1)  assist local governments in:
1-13                       (A)  providing essential public services for
1-14     their residents; and
1-15                       (B)  overcoming financial, social, and
1-16     environmental problems;
1-17                 (2)  provide for the housing needs of individuals and
1-18     families of low and very low income and families of moderate
1-19     income;
1-20                 (3)  contribute to the preservation, development, and
1-21     redevelopment of neighborhoods and communities, including
1-22     cooperation in the preservation of government-assisted housing
1-23     occupied by individuals and families of very low and extremely low
1-24     income;
 2-1                 (4)  assist the governor and the legislature in
 2-2     coordinating federal and state programs affecting local government;
 2-3     [and]
 2-4                 (5)  inform state officials and the public of the needs
 2-5     of local government; and
 2-6                 (6)  serve as a source of information to the public
 2-7     regarding all affordable housing resources and community support
 2-8     services in the state.
 2-9           SECTION 2. Section 2306.021(b), Government Code, is amended
2-10     to read as follows:
2-11           (b)  The department is composed of:
2-12                 (1)  the community affairs division;
2-13                 (2)  the housing finance division;
2-14                 (3)  the manufactured housing division; and
2-15                 (4)  [the community development division; and]
2-16                 [(5)]  any other division created by the director under
2-17     Section 2306.0521.
2-18           SECTION 3. Subchapter B, Chapter 2306, Government Code, is
2-19     amended by amending Sections 2306.022, 2306.024, 2306.025,
2-20     2306.027, and 2306.033-2306.035 and adding Section 2306.028 to read
2-21     as follows:
2-22           Sec. 2306.022.  APPLICATION OF SUNSET ACT. The Texas
2-23     Department of Housing and Community Affairs is subject to Chapter
2-24     325 (Texas Sunset Act).  Unless continued in existence as provided
2-25     by that chapter, the department is abolished and this chapter
2-26     expires September 1, 2003 [2001].
2-27           Sec. 2306.024.  BOARD MEMBERS:  APPOINTMENT AND COMPOSITION.
 3-1     The board consists of seven public [nine] members appointed by the
 3-2     governor.
 3-3           Sec. 2306.025.  TERMS OF BOARD MEMBERS. Members of the board
 3-4     hold office for staggered terms of six years, with the terms of two
 3-5     or three members expiring on January 31 of each odd-numbered year.
 3-6           Sec. 2306.027.  ELIGIBILITY. (a)  The governor shall appoint
 3-7     [make appointments] to the board public members who have a
 3-8     demonstrated interest in issues related to housing and community
 3-9     support services.  A person appointed to the board must be a
3-10     registered voter in the state and may not hold another public
3-11     office [as follows:]
3-12                 [(1)  Place 1:  an individual representing lending
3-13     institutions;]
3-14                 [(2)  Place 2:  an individual representing local
3-15     government;]
3-16                 [(3)  Place 3:  an individual representing housing
3-17     construction;]
3-18                 [(4)  Place 4:  an individual representing
3-19     community-based nonprofit housing organizations;]
3-20                 [(5)  Place 5:  an individual representing realtors or
3-21     housing developers;]
3-22                 [(6)  Place 6:  an individual representing individuals
3-23     and families of low or very low income; and]
3-24                 [(7)  Places 7 through 9:  public members].
3-25           (b)  Appointments [Except as necessary to comply with the
3-26     requirements of Section 2306.026 regarding diversity, appointments]
3-27     to the board shall be made without regard to the race, color,
 4-1     disability [handicap], sex, religion, age, or national origin of
 4-2     the appointees and shall be made in a manner that produces
 4-3     representation on the board of the different geographical regions
 4-4     of this state.  Appointments to the board must broadly reflect the
 4-5     economic, cultural, and social diversity of the state, including
 4-6     ethnic minorities and women.
 4-7           (c)  A person may not be a member of the board if the person
 4-8     or the person's spouse:
 4-9                 (1)  is registered, certified, or licensed by a
4-10     regulatory agency in the field of banking, real estate, housing
4-11     development, or housing construction;
4-12                 (2)  is employed by or participates in the management
4-13     of a business entity or other organization regulated by or
4-14     receiving money from the department;
4-15                 (3)  owns or controls, directly or indirectly, more
4-16     than a 10 percent interest in a business entity or other
4-17     organization regulated by or receiving money from the department;
4-18     or
4-19                 (4)  uses or receives a substantial amount of tangible
4-20     goods, services, or money from the department other than
4-21     compensation or reimbursement authorized by law for board
4-22     membership, attendance, or expenses [An elected or appointed
4-23     official of a political subdivision appointed to Place 2 on the
4-24     board is a member of the board as an additional or ex officio duty
4-25     required by the member's other official capacity, and the member's
4-26     service on the board is not dual office holding].
4-27           Sec. 2306.028.  TRAINING. (a)  A person who is appointed to
 5-1     and qualifies for office as a member of the board may not vote,
 5-2     deliberate, or be counted as a member in attendance at a meeting of
 5-3     the board until the person completes a training program that
 5-4     complies with this section.
 5-5           (b)  The training program must provide the person with
 5-6     information regarding:
 5-7                 (1)  the legislation that created the department and
 5-8     the board;
 5-9                 (2)  the programs operated by the department;
5-10                 (3)  the role and functions of the department;
5-11                 (4)  the rules of the department, with an emphasis on
5-12     the rules that relate to disciplinary and investigatory authority;
5-13                 (5)  the current budget for the department;
5-14                 (6)  the results of the most recent formal audit of the
5-15     department;
5-16                 (7)  the requirements of:
5-17                       (A)  the open meetings law, Chapter 551;
5-18                       (B)  the public information law, Chapter 552;
5-19                       (C)  the administrative procedure law, Chapter
5-20     2001; and
5-21                       (D)  other laws relating to public officials,
5-22     including conflict-of-interest laws; and
5-23                 (8)  any applicable ethics policies adopted by the
5-24     department or the Texas Ethics Commission.
5-25           (c)  A person appointed to the board is entitled to
5-26     reimbursement, as provided by the General Appropriations Act, for
5-27     the travel expenses incurred in attending the training program
 6-1     regardless of whether the attendance at the program occurs before
 6-2     or after the person qualifies for office.
 6-3           Sec. 2306.033.  REMOVAL OF MEMBERS. (a)  It is a ground for
 6-4     removal from the board that a member:
 6-5                 (1)  does not have at the time of taking office
 6-6     [appointment] the qualifications required by Section [2306.026,]
 6-7     2306.027[, or 2306.028 for appointment to the board];
 6-8                 (2)  does not maintain during [the] service on the
 6-9     board the qualifications required by Section [2306.026,] 2306.027[,
6-10     or 2306.028 for appointment to the board];
6-11                 (3)  is ineligible for membership under [violates a
6-12     prohibition established by] Section 2306.027(c), 2306.034, or
6-13     2306.035;
6-14                 (4)  cannot, because of illness or disability,
6-15     discharge the member's duties for a substantial part of the
6-16     member's term [for which the member is appointed because of illness
6-17     or disability];
6-18                 (5)  is absent from more than half of the regularly
6-19     scheduled board meetings [of the board] that the member is eligible
6-20     to attend during a calendar year without an excuse approved [unless
6-21     the absence is excused] by a majority vote of the board; or
6-22                 (6)  engages in misconduct or unethical or criminal
6-23     behavior.
6-24           (b)  The validity of an action of the board is not affected
6-25     by the fact that it is taken when a ground for removal of a board
6-26     member exists.
6-27           (c)  If the director has knowledge that a potential ground
 7-1     for removal exists, the director shall notify the presiding officer
 7-2     of the board of the potential ground.  The presiding officer shall
 7-3     then notify the governor and the attorney general that a potential
 7-4     ground for removal exists.  If the potential ground for removal
 7-5     involves the presiding officer, the director shall notify the next
 7-6     highest ranking officer of the board, who shall then notify the
 7-7     governor and the attorney general that a potential ground for
 7-8     removal exists.
 7-9           Sec. 2306.034.  DISQUALIFICATION OF MEMBERS AND CERTAIN
7-10     EMPLOYEES. (a)  In [An employee or paid consultant of a Texas trade
7-11     association in the field of banking, real estate, housing
7-12     development, or housing construction may not be a member of the
7-13     board or an employee of the department who is exempt from the
7-14     state's position classification plan or is compensated at or above
7-15     the amount prescribed by the General Appropriations Act for step 1,
7-16     salary group 17, of the position classification salary schedule.]
7-17           [(b)  For the purposes of] this section, [a] "Texas trade
7-18     association" means [is] a [nonprofit,] cooperative[,] and
7-19     voluntarily joined association of business or professional
7-20     competitors in this state designed to assist its members and its
7-21     industry or profession in dealing with mutual business or
7-22     professional problems and in promoting their common interest.
7-23           (b)  A person may not be a member of the board and may not be
7-24     a department employee employed in a "bona fide executive,
7-25     administrative, or professional capacity," as that phrase is used
7-26     for purposes of establishing an exemption to the overtime
7-27     provisions of the federal Fair Labor Standards Act of 1938 (29
 8-1     U.S.C. Section 201 et seq.), and its subsequent amendments, if:
 8-2                 (1)  the person is an officer, employee, or paid
 8-3     consultant of a Texas trade association in the field of banking,
 8-4     real estate, housing development, or housing construction; or
 8-5                 (2)  the person's spouse is an officer, manager, or
 8-6     paid consultant of a Texas trade association in the field of
 8-7     banking, real estate, housing development, or housing construction.
 8-8           Sec. 2306.035.  LOBBYIST RESTRICTION. A person may not be
 8-9     [serve as] a member of the board or act as the director of the
8-10     department or the general counsel to the board or the department if
8-11     the person is required to register as a lobbyist under Chapter 305
8-12     because of the person's activities for compensation [in or] on
8-13     behalf of a profession related to the operation of the department.
8-14           SECTION 4. Section 2306.030(a), Government Code, is amended
8-15     to read as follows:
8-16           (a)  The governor shall designate a member of [appoint a
8-17     presiding officer from] the board as the presiding officer of the
8-18     board to serve in that capacity at the will of the governor
8-19     [members].  The presiding officer presides at meetings of the board
8-20     and performs other duties required by this chapter.
8-21           SECTION 5. Section 2306.032, Government Code, is amended by
8-22     adding Subsections (c)-(g) to read as follows:
8-23           (c)  All materials in the possession of the department that
8-24     are relevant to a matter proposed for discussion at a board meeting
8-25     must be sent to interested parties, posted on the department's
8-26     website, made available in hard-copy format at the department,
8-27     filed with the secretary of state for publication by reference in
 9-1     the Texas Register, and disseminated by any other means required by
 9-2     this chapter or by Chapter 551.
 9-3           (d)  The materials described by Subsection (c) must be made
 9-4     available to the public as required by Subsection (c) not later
 9-5     than the seventh day before the date of the meeting.  The board may
 9-6     not consider at the meeting any material that is not made available
 9-7     to the public by the date required by this subsection.
 9-8           (e)  The agenda for a board meeting must state each project
 9-9     the staff is recommending for assistance by the department.
9-10           (f)  For each item on the board's agenda at the meeting, the
9-11     board shall provide for public comment after the staff presentation
9-12     on that topic.
9-13           (g)  The board shall adopt rules that give the public a
9-14     reasonable amount of time for testimony at meetings.
9-15           SECTION 6.  Subchapter B, Chapter 2306, Government Code, is
9-16     amended by adding Section 2306.0321 to read as follows:
9-17           Sec. 2306.0321.  APPEAL OF BOARD DECISIONS. (a)  The board
9-18     shall adopt rules outlining a formal process for appealing board
9-19     decisions.
9-20           (b)  The rules must specify the requirements for appealing a
9-21     board decision, including:
9-22                 (1)  the persons eligible to appeal;
9-23                 (2)  the grounds for an appeal;
9-24                 (3)  the process for filing an appeal, including the
9-25     information that must be submitted with an appeal;
9-26                 (4)  a reasonable period in which an appeal must be
9-27     filed, heard, and decided;
 10-1                (5)  the process by which an appeal is heard and a
 10-2    decision is made;
 10-3                (6)  the possible outcomes of an appeal; and
 10-4                (7)  the process by which notification of a decision
 10-5    and the basis for a decision is given.
 10-6          SECTION 7. Subchapter C, Chapter 2306, Government Code, is
 10-7    amended by adding Sections 2306.051, 2306.0521, and 2306.057 to
 10-8    read as follows:
 10-9          Sec. 2306.051.  SEPARATION OF RESPONSIBILITIES. The board
10-10    shall develop and implement policies that clearly separate the
10-11    policy-making responsibilities of the board and the management
10-12    responsibilities of the director and staff of the department.
10-13          Sec. 2306.0521.  ORGANIZATIONAL FLEXIBILITY OF DEPARTMENT.
10-14    (a)  Notwithstanding Section 2306.021(b) or any other provision of
10-15    this chapter, the director, with the approval of the board, may:
10-16                (1)  create divisions in addition to those listed in
10-17    Section 2306.021(b) and assign to the newly created divisions any
10-18    duties and powers imposed on or granted to an existing division or
10-19    the department generally;
10-20                (2)  eliminate any division listed in Section
10-21    2306.021(b) or created under this section and assign any duties or
10-22    powers previously assigned to the eliminated division to another
10-23    division listed in Section 2306.021(b) or created under this
10-24    section; or
10-25                (3)  eliminate all divisions listed in Section
10-26    2306.021(b) or created under this section and reorganize the
10-27    distribution of powers and duties granted to or imposed on a
 11-1    division in any manner the director determines appropriate for the
 11-2    proper administration of the department.
 11-3          (b)  This section does not apply to the manufactured housing
 11-4    division.
 11-5          Sec. 2306.057.  COMPLIANCE ASSESSMENT REQUIRED FOR PROJECT
 11-6    APPROVAL BY BOARD. (a)  Before the board approves any project
 11-7    application submitted under this chapter, the department, through
 11-8    the division with responsibility for compliance matters, shall:
 11-9                (1)  assess the history of the applicant's compliance
11-10    with all applicable requirements and the compliance issues
11-11    associated with the proposed project; and
11-12                (2)  report the results of the assessment in writing to
11-13    the board.
11-14          (b)  The written report described by Subsection (a)(2) must
11-15    be included in the applicable project file for board and department
11-16    review.
11-17          (c)  The board shall fully document and disclose any
11-18    instances in which the board approves a project application despite
11-19    an adverse compliance history associated with the project or the
11-20    applicant.
11-21          SECTION 8. Section 2306.052, Government Code, is amended by
11-22    amending Subsection (c) and adding Subsection (e) to read as
11-23    follows:
11-24          (c)  The director shall develop and implement the policies
11-25    established by the board that define the responsibilities of each[:]
11-26                [(1)  the director, board, and staff of the department;
11-27    and]
 12-1                [(2)  the community affairs division, the housing
 12-2    finance division, and any other] division in the department.
 12-3          (e)  The director shall develop and implement a program to
 12-4    train employees on the public information requirements of Chapter
 12-5    552 and shall monitor the compliance of employees with those
 12-6    requirements.
 12-7          SECTION 9. Subchapter D, Chapter 2306, Government Code, is
 12-8    amended by amending Section 2306.061 and adding Sections 2306.0631
 12-9    and 2306.078 to read as follows:
12-10          Sec. 2306.061.  STANDARDS OF [INFORMATION ON QUALIFICATIONS
12-11    AND] CONDUCT. The director or the director's designee shall become
12-12    aware of and provide to members of the board [members] and to [the]
12-13    department employees, as often as necessary, information regarding
12-14    the requirements [about the director's, members', and employees':]
12-15                [(1)  qualifications] for office or employment under
12-16    this chapter, including information regarding a person's[; and]
12-17                [(2)]  responsibilities under applicable laws relating
12-18    to standards of conduct for state officers or employees.
12-19          Sec. 2306.0631.  STATE EMPLOYEE INCENTIVE PROGRAM. The
12-20    director or the director's designee shall provide to department
12-21    employees information and training on the benefits and methods of
12-22    participation in the state employee incentive program under
12-23    Subchapter B, Chapter 2108.
12-24          Sec. 2306.078.  PROJECT COMPLIANCE; DATABASE. (a)  The
12-25    department, through the division responsible for compliance
12-26    matters, shall monitor for compliance with all applicable
12-27    requirements the entire construction phase associated with any
 13-1    project under this chapter.  The monitoring level for each project
 13-2    must be based on the amount of risk associated with the project.
 13-3          (b)  After completion of a project's construction phase, the
 13-4    department shall periodically review the performance of the project
 13-5    to confirm the accuracy of the department's initial compliance
 13-6    evaluation during the construction phase.
 13-7          (c)  The department shall use the division responsible for
 13-8    credit underwriting matters and the division responsible for
 13-9    compliance matters to determine the amount of risk associated with
13-10    each project.
13-11          (d)  The department shall create an easily accessible
13-12    database that contains all project compliance information developed
13-13    under this chapter.
13-14          SECTION 10. Sections 2306.066(b) and (c), Government Code,
13-15    are amended to read as follows:
13-16          (b)  The department shall maintain a [keep an information]
13-17    file on [about] each written complaint filed with the department
13-18    [that the department has authority to resolve].  The file must
13-19    include:
13-20                (1)  the name of the person who filed the complaint;
13-21                (2)  the date the complaint is received by the
13-22    department;
13-23                (3)  the subject matter of the complaint;
13-24                (4)  the name of each person contacted in relation to
13-25    the complaint;
13-26                (5)  a summary of the results of the review or
13-27    investigation of the complaint; and
 14-1                (6)  an explanation of the reason the file was closed,
 14-2    if the department closed the file without taking action other than
 14-3    to investigate the complaint.
 14-4          (c)  The department shall provide to the person filing the
 14-5    complaint and to each person who is a subject of the complaint a
 14-6    copy of the department's policies and procedures relating to
 14-7    complaint investigation and resolution.  The [If a written
 14-8    complaint is filed with the department that the department has
 14-9    authority to resolve, the] department, at least quarterly [and]
14-10    until final disposition of the complaint, shall notify the person
14-11    filing the complaint and each person who is a subject of [parties
14-12    to] the complaint of the status of the investigation [complaint]
14-13    unless the notice would jeopardize an undercover investigation.
14-14          SECTION 11.  Section 2306.0661, Government Code, is amended
14-15    to read as follows:
14-16          Sec. 2306.0661.  PUBLIC HEARINGS. (a)  Except as provided by
14-17    Subsection (b), this [This] section applies only to state-funded
14-18    housing programs, programs funded with bond proceeds, the low
14-19    income housing tax credit program, and the state low income housing
14-20    plan.  Federally funded programs shall comply with the federal
14-21    public participation requirements and Chapter 2105, if applicable.
14-22          (b)  The department shall encourage informed and effective
14-23    public participation in the department's programs and plans by
14-24    [through] holding, on an annual basis in each uniform service
14-25    region of the state, a consolidated public hearing in which the
14-26    board solicits and accepts public comments regarding the following
14-27    programs:
 15-1                (1)  the housing trust fund program;
 15-2                (2)  the HOME investment partnerships program;
 15-3                (3)  the single-family housing mortgage revenue bond
 15-4    program;
 15-5                (4)  the multifamily housing mortgage revenue bond
 15-6    program;
 15-7                (5)  the low income housing tax credit program;
 15-8                (6)  the low income energy assistance program;
 15-9                (7)  any other program in the consolidated plan
15-10    submitted to the United States Department of Housing and Urban
15-11    Development; and
15-12                (8)  any other program in the state low income housing
15-13    plan [hearings and soliciting and accepting public comments during
15-14    those hearings].
15-15          (c)  In holding a public hearing, the department shall ensure
15-16    that:
15-17                (1)  the location of the hearing is:
15-18                      (A)  in a public building or facility accessible
15-19    to the public;
15-20                      (B)  accessible to persons with disabilities; and
15-21                      (C)  reasonably accessible by public
15-22    transportation, if available;
15-23                (2)  hearings are scheduled at times when working and
15-24    nonworking people can attend; and
15-25                (3)  child care is provided where practical.
15-26          (d) [(c)]  In scheduling a public hearing, the department
15-27    shall:
 16-1                (1)  publish notice of the time, place, and subject of
 16-2    the hearing in the Texas Register and a newspaper of general
 16-3    circulation in the community in which the hearing is to be held at
 16-4    least seven days before the date of the hearing.  Whenever
 16-5    practical, the department shall publish notice of the time, place,
 16-6    and subject of the hearing in the Texas Register and a newspaper of
 16-7    general circulation in the community in which the hearing is to be
 16-8    held at least thirty days before the date of the hearing;
 16-9                (2)  provide notice of the hearing to each public
16-10    library, in the community in which the hearing is to be held, for
16-11    posting in a public area of the library;
16-12                (3)  provide notice of the hearing to:
16-13                      (A)  each member of the board;
16-14                      (B)  each member of the advisory committee
16-15    consulted by the department during preparation of the state low
16-16    income housing plan; and
16-17                      (C)  each member of the legislature;
16-18                (4)  [make a reasonable effort to inform interested
16-19    persons and organizations of the hearing;]
16-20                [(5)]  make information about the hearing, including,
16-21    if appropriate, the qualified allocation plan, application forms
16-22    for a low income housing tax credit, and the state low income
16-23    housing plan, available on the Internet in accordance with
16-24    Subsection (e) and with Section 2306.077; and
16-25                (5) [(6)]  provide an opportunity for persons to
16-26    transmit on the Internet written testimony or comments on a subject
16-27    of a hearing in accordance with rules adopted by the board.
 17-1          (e)  At least six weeks before the date of the hearing, all
 17-2    materials in the possession of the department that are relevant to
 17-3    a matter proposed for discussion at a consolidated public hearing
 17-4    under this section must be sent to interested persons and
 17-5    organizations, posted on the department's website, made available
 17-6    in hard-copy format at the department, filed with the secretary of
 17-7    state for publication by reference in the Texas Register, and
 17-8    disseminated by any other means required by this chapter or by
 17-9    Chapter 551.
17-10          SECTION 12. Section 2306.067, Government Code, is amended by
17-11    adding Subsection (d) to read as follows:
17-12          (d)  The director may enter into an agreement with the
17-13    manufactured housing division to loan or assign department
17-14    employees, equipment, and facilities to that division.
17-15          SECTION 13.  Section 2306.0721, Government Code, is amended
17-16    by amending Subsection (c) and adding Subsection (f) to read as
17-17    follows:
17-18          (c)  The plan must include:
17-19                (1)  an estimate and analysis of the housing needs of
17-20    the following populations in each uniform [the] state service
17-21    region:
17-22                      (A)  individuals and families of moderate, low,
17-23    and very low income;
17-24                      (B)  individuals with special needs; and
17-25                      (C)  homeless individuals;
17-26                (2)  a proposal to use all available housing resources
17-27    to address the housing needs of the populations described by
 18-1    Subdivision (1) by establishing funding levels for all
 18-2    housing-related programs;
 18-3                (3)  an estimate of the number of federally assisted
 18-4    housing units available for individuals and families of low and
 18-5    very low income and individuals with special needs in each uniform
 18-6    state service region [county];
 18-7                (4)  a description of state programs that govern the
 18-8    use of all available housing resources;
 18-9                (5)  a resource allocation plan that targets all
18-10    available housing resources to individuals and families of low and
18-11    very low income and individuals with special needs in each uniform
18-12    state service region;
18-13                (6)  a description of the department's efforts to
18-14    monitor and analyze the unused or underused federal resources of
18-15    other state agencies for housing-related services and services for
18-16    homeless individuals and the department's recommendations to ensure
18-17    the full use by the state of all available federal resources for
18-18    those services in each uniform state service region;
18-19                (7)  strategies to provide housing for individuals and
18-20    families with special needs in each uniform state service region;
18-21                (8)  a description of the department's efforts to
18-22    encourage in each uniform state service region the construction of
18-23    housing units that incorporate energy efficient construction and
18-24    appliances; [and]
18-25                (9)  an estimate and analysis of the housing supply in
18-26    each uniform state service region;
18-27                (10)  an inventory of all publicly and, where possible,
 19-1    privately funded housing resources, including public housing
 19-2    authorities, housing finance corporations, community housing
 19-3    development organizations, and community action agencies;
 19-4                (11)  strategies for meeting rural housing needs;
 19-5                (12)  information on the demand for contract-for-deed
 19-6    conversions, services from self-help centers, consumer education,
 19-7    and other colonia resident services in counties some part of which
 19-8    is within 100 miles of the international border of this state;
 19-9                (13)  a summary of public comments received at a
19-10    hearing under this chapter or from another source that concern the
19-11    demand for colonia resident services described by Subdivision (12);
19-12    and
19-13                (14)  any other housing-related information that the
19-14    state is required to include in the one-year action plan of the
19-15    consolidated plan submitted annually to the United States
19-16    Department of Housing and Urban Development.
19-17          (f)  The director may subdivide the uniform state service
19-18    regions as necessary for purposes of the state low income housing
19-19    plan.
19-20          SECTION 14.  Section 2306.0722, Government Code, is amended
19-21    to read as follows:
19-22          Sec. 2306.0722.  PREPARATION OF PLAN AND REPORT. (a)  Before
19-23    preparing the annual low income housing report under Section
19-24    2306.072 and the state low income housing plan under Section
19-25    2306.0721, the department shall meet with regional planning
19-26    commissions created under Chapter 391, Local Government Code,
19-27    representatives of groups with an interest in low income housing,
 20-1    nonprofit housing organizations, managers, owners, and developers
 20-2    of affordable housing, local government officials, and residents of
 20-3    low income housing.  The department shall obtain the comments and
 20-4    suggestions of the representatives, officials, and residents about
 20-5    the prioritization and allocation of the department's resources in
 20-6    regard to housing.
 20-7          (b)  In preparing the annual report under Section 2306.072
 20-8    and the state low income housing plan under Section 2306.0721, the
 20-9    director shall:
20-10                (1)  coordinate local, state, and federal housing
20-11    resources, including tax exempt housing bond financing and low
20-12    income housing tax credits;
20-13                (2)  set priorities for the available housing resources
20-14    to help the neediest individuals;
20-15                (3)  evaluate the success of publicly supported housing
20-16    programs;
20-17                (4)  survey and identify the unmet housing needs of
20-18    individuals the department is required to assist;
20-19                (5)  ensure that housing programs benefit an individual
20-20    without regard to the individual's race, ethnicity, sex, or
20-21    national origin;
20-22                (6)  develop housing opportunities for individuals and
20-23    families of low and very low income and individuals with special
20-24    housing needs;
20-25                (7)  develop housing programs through an open, fair,
20-26    and public process;
20-27                (8)  set priorities for assistance in a manner that is
 21-1    appropriate and consistent with the housing needs of the
 21-2    populations described by Section 2306.0721(c)(1);
 21-3                (9)  incorporate recommendations that are consistent
 21-4    with the consolidated plan submitted annually by the state to the
 21-5    United States Department of Housing and Urban Development;
 21-6                (10)  identify the organizations and individuals
 21-7    consulted by the department in preparing the annual report and
 21-8    state low income housing plan and summarize and incorporate
 21-9    comments and suggestions provided under Subsection (a)  as the
21-10    board determines to be appropriate;
21-11                (11)  develop a plan to respond to changes in federal
21-12    funding and programs for the provision of affordable housing; [and]
21-13                (12)  use the following standardized categories to
21-14    describe the income of program applicants and beneficiaries:
21-15                      (A)  0 to 30 percent of area median income
21-16    adjusted for family size;
21-17                      (B)  more than 30 to 60 percent of area median
21-18    income adjusted for family size;
21-19                      (C)  more than 60 to 80 percent of area median
21-20    income adjusted for family size;
21-21                      (D)  more than 80 to 115 percent of area median
21-22    income adjusted for family size; or
21-23                      (E)  more than 115 percent of area median income
21-24    adjusted for family size; and
21-25                (13)  use the most recent census data combined with
21-26    existing data from local housing and community service providers in
21-27    the state, including public housing authorities, housing finance
 22-1    corporations, community housing development organizations, and
 22-2    community action agencies.
 22-3          SECTION 15. Section 2306.0723(a), Government Code, is amended
 22-4    to read as follows:
 22-5          (a)  The department shall hold public hearings on the annual
 22-6    state low income housing plan and report before the director
 22-7    submits the report and the plan to the board.  [Public hearings
 22-8    shall be held in Dallas or Fort Worth, El Paso, Houston, San
 22-9    Antonio, the Lower Rio Grande Valley, and at least two additional
22-10    municipalities selected by the department to represent
22-11    geographically diverse communities.]  The department shall provide
22-12    notice of the public hearings as required by Section 2306.0661. The
22-13    published notice must include a summary of the report and plan. The
22-14    department shall accept comments on the report and plan at the
22-15    public hearings and for at least 30 days after the date of the
22-16    publication of the notice of the hearings.
22-17          SECTION 16.  Section 2306.111, Government Code, is amended by
22-18    amending Subsection (d) and adding Subsection (g) to read as
22-19    follows:
22-20          (d)  The department shall allocate housing funds provided to
22-21    the state under the Cranston-Gonzalez National Affordable Housing
22-22    Act (42 U.S.C. Section 12701 et seq.), housing trust funds
22-23    administered by the department under Sections 2306.201-2306.206,
22-24    and commitments issued under the federal low income housing tax
22-25    credit program administered by the department under Sections
22-26    2306.671-2306.678 to each uniform state service region based on a
22-27    formula developed by the department that is based on the need for
 23-1    housing assistance and the availability of housing resources,
 23-2    provided that the allocations are consistent with applicable
 23-3    federal and state requirements and limitations.  The department
 23-4    shall use the information contained in its annual state low income
 23-5    housing plan to develop the formula.  If the department determines
 23-6    under the formula that an insufficient number of eligible
 23-7    applications for assistance out of funds or credits allocable under
 23-8    this subsection are submitted to the department from a particular
 23-9    uniform state service region, the department shall use the unused
23-10    funds or credits allocated to that region for all other regions
23-11    based on identified need and financial feasibility.
23-12          (g)  For each uniform state service region, the department
23-13    shall establish funding priorities to ensure that:
23-14                (1)  funds are awarded to project applicants who are
23-15    best able to meet recognized needs for affordable housing, as
23-16    determined by the department;
23-17                (2)  when practicable, the least restrictive funding
23-18    sources are used to serve the lowest income residents; and
23-19                (3)  funds are awarded based on a project applicant's
23-20    ability to:
23-21                      (A)  provide the greatest number of residential
23-22    units;
23-23                      (B)  serve persons with the lowest percent area
23-24    median family income;
23-25                      (C)  extend the duration of the project to serve
23-26    a continuing public need; and
23-27                      (D)  use other funding sources to minimize the
 24-1    amount of subsidy needed to complete the project.
 24-2          SECTION 17. Subchapter F, Chapter 2306, Government Code, is
 24-3    amended by adding Sections 2306.1111 and 2306.1112 to read as
 24-4    follows:
 24-5          Sec. 2306.1111.  UNIFORM APPLICATION AND FUNDING CYCLE. (a)
 24-6    Notwithstanding any other state law and to the extent consistent
 24-7    with federal law, the department shall establish a uniform
 24-8    application and funding cycle for multifamily housing programs
 24-9    administered by the department under this chapter.
24-10          (b)  Wherever possible, the department shall use uniform
24-11    threshold requirements for multifamily housing program
24-12    applications, including uniform threshold requirements relating to
24-13    market studies and environmental reports.
24-14          Sec. 2306.1112.  EXECUTIVE AWARD AND REVIEW ADVISORY
24-15    COMMITTEE. (a)  The department shall establish an executive award
24-16    and review advisory committee to make recommendations to the board
24-17    regarding funding and allocation decisions.
24-18          (b)  The advisory committee is composed of the administrator
24-19    of each of the department's programs and one representative from
24-20    each of the department's planning, underwriting, and compliance
24-21    functions.
24-22          (c)  The advisory committee shall develop the funding
24-23    priorities required by Section 2306.111(g) and shall make funding
24-24    and allocation recommendations to the board based on the ability of
24-25    applicants to meet those priorities.
24-26          (d)  The advisory committee is not subject to Chapter 2110.
24-27          SECTION 18. Subchapter H, Chapter 2306, Government Code, is
 25-1    amended by adding Section 2306.1711 to read as follows:
 25-2          Sec. 2306.1711.  RULEMAKING PROCEDURES FOR CERTAIN PROGRAMS.
 25-3    (a)  The department shall adopt rules outlining formal rulemaking
 25-4    procedures for the low income housing tax credit program and the
 25-5    multifamily housing mortgage revenue bond program in accordance
 25-6    with Chapter 2001.
 25-7          (b)  The rules adopted under Subsection (a) must include:
 25-8                (1)  procedures for allowing interested parties to
 25-9    petition the department to request the adoption of a new rule or
25-10    the amendment of an existing rule;
25-11                (2)  notice requirements and deadlines for taking
25-12    certain actions; and
25-13                (3)  a provision for a public hearing.
25-14          (c)  The department shall provide for public input before
25-15    adopting rules for programs with requests for proposals and notices
25-16    of funding availability.
25-17          SECTION 19. Subchapter H, Chapter 2306, Government Code, is
25-18    amended by adding Section 2306.185 to read as follows:
25-19          Sec. 2306.185.  PRESERVATION OF AFFORDABILITY THROUGH
25-20    ALLOCATION OF CERTAIN TAX CREDITS AND BONDS. (a)  The department
25-21    shall dedicate not less than 10 percent of the total amount of
25-22    department allocations of low income housing tax credits, private
25-23    activity bonds, and qualified 501(c)(3) bonds to preserving
25-24    affordable multifamily housing developments.  Any additional amount
25-25    set aside by the department for preservation of those developments
25-26    must be determined through the department's public hearing process
25-27    under Subchapter D.
 26-1          (b)  The department shall modify existing scoring systems or
 26-2    develop new scoring systems to reward low income housing tax credit
 26-3    or bond applications that propose for multifamily housing
 26-4    developments an affordability period that extends beyond any
 26-5    minimum required affordability period.
 26-6          SECTION 20. Section 2306.252, Government Code, is amended by
 26-7    amending Subsection (b) and adding Subsections (d)-(g) to read as
 26-8    follows:
 26-9          (b)  The center shall:
26-10                (1)  provide educational material prepared in plain
26-11    language to housing advocates, housing sponsors, borrowers, and
26-12    tenants;
26-13                (2)  provide technical assistance to nonprofit housing
26-14    sponsors; and
26-15                (3)  assist in the development of housing policy,
26-16    including the annual state low income housing plan and report and
26-17    the consolidated plan.
26-18          (d)  The center shall serve as a housing and community
26-19    services clearinghouse to provide information to the public, local
26-20    communities, housing providers, and other interested parties
26-21    regarding:
26-22                (1)  the performance of each department program;
26-23                (2)  the number of people served;
26-24                (3)  the income of people served;
26-25                (4)  the funding amounts distributed;
26-26                (5)  allocation decisions;
26-27                (6)  regional impact of department programs; and
 27-1                (7)  any other relevant information.
 27-2          (e)  The center shall compile the department's reports into
 27-3    an integrated format and shall compile and maintain a list of all
 27-4    affordable housing resources in the state, organized by community.
 27-5          (f)  The information required under Subsections (d) and (e)
 27-6    must be readily available in:
 27-7                (1)  a hard-copy format; and
 27-8                (2)  a user-friendly format on the department's
 27-9    website.
27-10          (g)  The center shall provide information regarding the
27-11    department's housing and community affairs programs to the Texas
27-12    Information and Referral Network for inclusion in the statewide
27-13    information and referral network as required by Section 531.0312.
27-14          SECTION 21. Subchapter K, Chapter 2306, Government Code, is
27-15    amended by adding Sections 2306.256 and 2306.257 to read as
27-16    follows:
27-17          Sec. 2306.256.  AFFORDABLE HOUSING PRESERVATION PROGRAM. (a)
27-18    The department shall develop and implement a program to preserve
27-19    affordable housing in this state.
27-20          (b)  Through the program, the department shall:
27-21                (1)  maintain data on housing projected to lose its
27-22    affordable status;
27-23                (2)  develop policies necessary to ensure the
27-24    preservation of affordable housing in this state;
27-25                (3)  advise other program areas with respect to the
27-26    policies; and
27-27                (4)  assist those other program areas in implementing
 28-1    the policies.
 28-2          Sec. 2306.257.  APPLICANT COMPLIANCE WITH STATE AND FEDERAL
 28-3    LAWS PROHIBITING DISCRIMINATION:  CERTIFICATION AND MONITORING. (a)
 28-4    The department may provide assistance through a housing program
 28-5    under this chapter only to an applicant who certifies the
 28-6    applicant's compliance with:
 28-7                (1)  state and federal fair housing laws, including
 28-8    Title VIII of the Civil Rights Act of 1968 (42 U.S.C. Section 3601
 28-9    et seq.), the Fair Housing Amendments Act of 1988 (42 U.S.C.
28-10    Section 3610 et seq.), and Chapter 301, Property Code;
28-11                (2)  the Civil Rights Act of 1964 (42 U.S.C. Section
28-12    2000a et seq.);
28-13                (3)  the Americans with Disabilities Act of 1990 (42
28-14    U.S.C. Section 12101 et seq.); and
28-15                (4)  the Rehabilitation Act of 1973 (29 U.S.C. Section
28-16    701 et seq.).
28-17          (b)  In conjunction with the state Commission on Human
28-18    Rights, the department shall adopt rules governing the
28-19    certification process described by this section, including rules
28-20    establishing:
28-21                (1)  procedures for certifying compliance;
28-22                (2)  methods for measuring continued compliance; and
28-23                (3)  different degrees of sanctions for noncompliance
28-24    and reasonable periods for correcting noncompliance.
28-25          (c)  Sanctions imposed under Subsection (b)(3) may:
28-26                (1)  include a public reprimand, termination of
28-27    assistance, and a bar on future eligibility for assistance through
 29-1    a housing program under this chapter; and
 29-2                (2)  be imposed in addition to any action taken by the
 29-3    state Commission on Human Rights.
 29-4          (d)  The department shall promptly notify the state
 29-5    Commission on Human Rights if the department determines that a
 29-6    program participant may have failed to comply with the laws listed
 29-7    by Subsection (a).
 29-8          SECTION 22. Sections 2306.358(a), (a-1), and (b), Government
 29-9    Code, are amended to read as follows:
29-10          (a)  Of the total qualified 501(c)(3) bonds issued under
29-11    Section 145 of the Internal Revenue Code of 1986 (26 U.S.C. Section
29-12    145) in each fiscal year, it is the express intent of the
29-13    legislature that the department shall allocate qualified 501(c)(3)
29-14    bonding authority as follows:
29-15                (1)  [at least 50 percent of the total annual issuance
29-16    amount authorized through the memorandum of understanding provided
29-17    for in Subsection (b) of this section is reserved for the purposes
29-18    of new construction or acquisition with substantial rehabilitation;]
29-19                [(2)]  not more than 25 percent of the total annual
29-20    issuance amount authorized through the memorandum of understanding
29-21    provided for in Subsection (b) [of this section] may be used for
29-22    projects in any one metropolitan area; and
29-23                (2) [(3)]  at least 15 percent of the annual issuance
29-24    amount authorized through the memorandum of understanding provided
29-25    for in Subsection (b) [of this section] is reserved for projects in
29-26    rural areas.
29-27          (a-1)  For the purposes of Subsection (a), "rural[:]
 30-1                [(1)  "Rural] area" and "metropolitan area" shall be
 30-2    defined through the memorandum of understanding provided for in
 30-3    Subsection (b) [of this section.]
 30-4                [(2)  "Substantial rehabilitation" means rehabilitation
 30-5    of a project with a minimum of $5,000 of rehabilitation cost per
 30-6    unit].
 30-7          (b)  A qualified 501(c)(3) bond may not be issued unless
 30-8    approved by the Bond Review Board.  In addition, the Bond Review
 30-9    Board shall enter into a memorandum of understanding with the
30-10    department specifying the amount of bonds to be issued in each
30-11    fiscal year.  The department and the Bond Review Board shall review
30-12    the memorandum of understanding annually to determine the specific
30-13    amount of bonds to be issued in each fiscal year.  The Bond Review
30-14    Board may not approve a proposal to issue qualified 501(c)(3) bonds
30-15    unless they meet the requirements of this section, including the
30-16    memorandum of understanding, and all other laws that may apply.
30-17          SECTION 23. The heading to Subchapter Z, Chapter 2306,
30-18    Government Code, is amended to read as follows:
30-19            SUBCHAPTER Z.  COLONIAS [COLONIA SELF-HELP CENTERS]
30-20          SECTION 24. Subchapter Z, Chapter 2306, Government Code, is
30-21    amended by amending Sections 2306.584 and 2306.585 and adding
30-22    Sections 2306.590 and 2306.591 to read as follows:
30-23          Sec. 2306.584.  COLONIA RESIDENT ADVISORY COMMITTEE. (a)  The
30-24    department shall appoint not fewer than five persons who are
30-25    residents of colonias to serve on a colonia resident [an] advisory
30-26    committee.  The members of the colonia resident advisory committee
30-27    shall be selected from lists of candidates submitted to the
 31-1    department by local nonprofit organizations and the commissioners
 31-2    court of a county in which a self-help center is located.
 31-3          (b)  The department shall appoint one committee member to
 31-4    represent each of the counties in which self-help centers are
 31-5    located.  Each committee member:
 31-6                (1)  must be a resident of a colonia in the county the
 31-7    member represents; and
 31-8                (2)  may not be a board member, contractor, or employee
 31-9    of or have any ownership interest in an entity that is awarded a
31-10    contract under this subchapter.
31-11          Sec. 2306.585.  DUTIES OF ADVISORY COMMITTEE. (a)  The
31-12    colonia resident advisory committee shall advise the department
31-13    regarding:
31-14                (1)  the needs of colonia residents;
31-15                (2)  appropriate and effective programs that are
31-16    proposed or are operated through the self-help centers; and
31-17                (3)  activities that may be undertaken through the
31-18    self-help centers to better serve the needs of colonia residents.
31-19          (b)  The colonia resident advisory committee shall meet
31-20    before the 30th day preceding the date on which a contract is
31-21    scheduled to be awarded for the operation of a self-help center and
31-22    may meet at other times.
31-23          Sec. 2306.590.  COLONIA INITIATIVES ADVISORY COMMITTEE. (a)
31-24    The department shall establish a colonia initiatives advisory
31-25    committee that is composed of the following members appointed by
31-26    the department:
31-27                (1)  one member who resides in a colonia;
 32-1                (2)  one member who represents a nonprofit organization
 32-2    that provides assistance to colonia residents;
 32-3                (3)  one member who represents a local political
 32-4    subdivision containing all or part of a colonia;
 32-5                (4)  one member who represents private interests in
 32-6    banking or land development; and
 32-7                (5)  one member who represents the public.
 32-8          (b)  Each member of the colonia initiatives advisory
 32-9    committee other than the public member must reside within 100 miles
32-10    of the international border of this state.
32-11          (c)  The colonia initiatives advisory committee shall:
32-12                (1)  review public comments regarding the colonia needs
32-13    assessment incorporated into the state low income housing plan
32-14    under Section 2306.0721; and
32-15                (2)  based on those public comments, recommend to the
32-16    department new colonia programs or improvements to existing colonia
32-17    programs.
32-18          Sec. 2306.591.  BIENNIAL ACTION PLAN. (a)  The office
32-19    established by the department to promote initiatives for colonias
32-20    shall prepare a biennial action plan addressing policy goals for
32-21    colonia programs, strategies to meet the policy goals, and the
32-22    projected outcomes with respect to those policy goals.
32-23          (b)  The office shall solicit public comments regarding the
32-24    plan at a public hearing.  At least six weeks before the public
32-25    hearing, the office shall prepare and publish an initial draft of
32-26    the plan. The office must publish a final plan that lists any
32-27    changes made to the draft based on public comments regarding the
 33-1    initial draft of the plan and that directly addresses those
 33-2    comments.
 33-3          (c)  The office shall send the final plan to the colonia
 33-4    initiatives advisory committee for review and comment.  After
 33-5    receiving comments, the office shall send the plan to the board for
 33-6    final approval, with the comments of the colonia initiatives
 33-7    advisory committee attached to the plan.
 33-8          SECTION 25. Section 2306.589(c), Government Code, is amended
 33-9    to read as follows:
33-10          (c)  The department may use money in the colonia set-aside
33-11    fund for specific activities that assist colonias, including:
33-12                (1)  the operation and activities of the self-help
33-13    centers established under this subchapter;
33-14                (2)  reimbursement of colonia resident advisory
33-15    committee members and colonia initiatives advisory committee
33-16    members for their reasonable expenses in the manner provided by
33-17    Chapter 2110 [Article 6252-33, Revised Statutes,] or the General
33-18    Appropriations Act; and
33-19                (3)  funding for the provision of water and sewer
33-20    service connections in accordance with Subsection (b).
33-21          SECTION 26. Subchapter AA, Chapter 2306, Government Code, is
33-22    amended to read as follows:
33-23               SUBCHAPTER AA.  MANUFACTURED HOUSING DIVISION
33-24          Sec. 2306.6001 [2306.601].  DEFINITIONS. In this subchapter:
33-25                (1)  "Division" means the manufactured housing
33-26    division.
33-27                (2)  "Division director" means the executive director
 34-1    of the division.
 34-2                (3)  "Manufactured Housing Board" means the governing
 34-3    board of the division.
 34-4          Sec. 2306.6002.  REGULATION AND ENFORCEMENT. The department
 34-5    shall administer and enforce the Texas Manufactured Housing
 34-6    Standards Act (Article 5221f, Vernon's Texas Civil Statutes)
 34-7    through the [manufactured housing] division.  The manufactured
 34-8    housing board and the division director shall exercise authority
 34-9    and responsibilities assigned to them under that Act.
34-10          Sec. 2306.6003.  MANUFACTURED HOUSING BOARD. (a)  The
34-11    Manufactured Housing Board is an independent entity within the
34-12    department, is administratively attached to the department, and is
34-13    not an advisory body to the department.
34-14          (b)  The Manufactured Housing Board shall carry out the
34-15    functions and duties conferred on the Manufactured Housing Board by
34-16    this subchapter and by other law.
34-17          Sec. 2306.6004.  MANUFACTURED HOUSING BOARD MEMBERSHIP. (a)
34-18    The Manufactured Housing Board consists of five public members
34-19    appointed by the governor.
34-20          (b)  A person is eligible to be appointed as a public member
34-21    of the Manufactured Housing Board if the person is a citizen of the
34-22    United States and a resident of this state.
34-23          (c)  A person may not be a member of the Manufactured Housing
34-24    Board if the person or the person's spouse:
34-25                (1)  is registered, certified, or licensed by a
34-26    regulatory agency in the field of manufactured housing;
34-27                (2)  is employed by or participates in the management
 35-1    of a business entity or other organization regulated by or
 35-2    receiving money from the division;
 35-3                (3)  owns or controls, directly or indirectly, more
 35-4    than a 10 percent interest in a business entity or other
 35-5    organization regulated by or receiving money from the division; or
 35-6                (4)  uses or receives a substantial amount of tangible
 35-7    goods, services, or money from the division other than compensation
 35-8    or reimbursement authorized by law for Manufactured Housing Board
 35-9    membership, attendance, or expenses.
35-10          (d)  Appointments to the Manufactured Housing Board shall be
35-11    made without regard to the race, color, disability, sex, religion,
35-12    age, or national origin of the appointees.
35-13          Sec. 2306.6005.  CONFLICT OF INTEREST. (a)  In this section,
35-14    "Texas trade association" means a cooperative and voluntarily
35-15    joined association of business or professional competitors in this
35-16    state designed to assist its members and its industry or profession
35-17    in dealing with mutual business or professional problems and in
35-18    promoting their common interest.
35-19          (b)  A person may not be a member of the Manufactured Housing
35-20    Board and may not be a division  employee employed in a "bona fide
35-21    executive, administrative, or professional capacity," as that
35-22    phrase is used for purposes of establishing an exemption to the
35-23    overtime provisions of the federal Fair Labor Standards Act of 1938
35-24    (29 U.S.C. Section 201 et seq.), and its subsequent amendments, if:
35-25                (1)  the person is an officer, employee, or paid
35-26    consultant of a Texas trade association in the field of
35-27    manufactured housing; or
 36-1                (2)  the person's spouse is an officer, manager, or
 36-2    paid consultant of a Texas trade association in the field of
 36-3    manufactured housing.
 36-4          (c)  A person may not be a member of the Manufactured Housing
 36-5    Board or act as the general counsel to the Manufactured Housing
 36-6    Board or the division if the person is required to register as a
 36-7    lobbyist under Chapter 305 because of the person's activities for
 36-8    compensation on behalf of a profession related to the operation of
 36-9    the division.
36-10          Sec. 2306.6006.  TERMS; VACANCY. (a)  The members of the
36-11    Manufactured Housing Board serve staggered six-year terms, with the
36-12    terms of one or two members expiring on January 31 of each
36-13    odd-numbered year.
36-14          (b)  A person may not serve two consecutive full six-year
36-15    terms as a member of the Manufactured Housing Board.
36-16          (c)  If a vacancy occurs during a member's term, the governor
36-17    shall appoint a new member to fill the unexpired term.
36-18          Sec. 2306.6007.  PRESIDING OFFICER. The governor shall
36-19    designate a member of the Manufactured Housing Board as the
36-20    presiding officer of the Manufactured Housing Board to serve in
36-21    that capacity at the will of the governor.
36-22          Sec. 2306.6008.  GROUNDS FOR REMOVAL. (a)  It is a ground for
36-23    removal from the Manufactured Housing Board that a member:
36-24                (1)  does not have at the time of taking office the
36-25    qualifications required by Section 2306.6004(b);
36-26                (2)  does not maintain during service on the
36-27    Manufactured Housing Board the qualifications required by Section
 37-1    2306.6004(b);
 37-2                (3)  is ineligible for membership under Section
 37-3    2306.6004(c) or 2306.6005;
 37-4                (4)  cannot, because of illness or disability,
 37-5    discharge the member's duties for a substantial part of the
 37-6    member's term; or
 37-7                (5)  is absent from more than half of the regularly
 37-8    scheduled Manufactured Housing Board meetings that the member is
 37-9    eligible to attend during a calendar year without an excuse
37-10    approved by a majority vote of the Manufactured Housing Board.
37-11          (b)  The validity of an action of the Manufactured Housing
37-12    Board is not affected by the fact that it is taken when a ground
37-13    for removal of a Manufactured Housing Board member exists.
37-14          (c)  If the division director has knowledge that a potential
37-15    ground for removal exists, the division director shall notify the
37-16    presiding officer of the Manufactured Housing Board of the
37-17    potential ground.  The presiding officer shall then notify the
37-18    governor and the attorney general that a potential ground for
37-19    removal exists.  If the potential ground for removal involves the
37-20    presiding officer, the division director shall notify the next
37-21    highest ranking officer of the Manufactured Housing Board, who
37-22    shall then notify the governor and the attorney general that a
37-23    potential ground for removal exists.
37-24          Sec. 2306.6009.  PER DIEM; REIMBURSEMENT. (a)  Each member of
37-25    the Manufactured Housing Board is entitled to a per diem as set by
37-26    legislative appropriation for each day that the member engages in
37-27    the business of the Manufactured Housing Board.
 38-1          (b)  A Manufactured Housing Board member may be reimbursed
 38-2    for actual travel expenses, including expenses for meals, lodging,
 38-3    and transportation.  A Manufactured Housing Board member is
 38-4    entitled to reimbursement for transportation expenses as provided
 38-5    by the General Appropriations Act.
 38-6          (c)  At the time a Manufactured Housing Board member applies
 38-7    for reimbursement under this section, the member shall make a sworn
 38-8    statement of the number of days the member engaged in the business
 38-9    of the Manufactured Housing Board and the amount of the member's
38-10    expenses.
38-11          Sec. 2306.6010.  MEETINGS. (a)  The Manufactured Housing
38-12    Board shall have regular meetings as the majority of the members
38-13    may specify and special meetings at the request of the presiding
38-14    officer, any two members, or the division director.
38-15          (b)  Reasonable notice of all meetings shall be given as
38-16    prescribed by Manufactured Housing Board rules.
38-17          (c)  The presiding officer shall preside at all meetings of
38-18    the Manufactured Housing Board.  In the absence of the presiding
38-19    officer, the members present shall select one of the members to
38-20    preside at the meeting.
38-21          Sec. 2306.6011.  TRAINING. (a)  A person who is appointed to
38-22    and qualifies for office as a member of the Manufactured Housing
38-23    Board may not vote, deliberate, or be counted as a member in
38-24    attendance at a meeting of the Manufactured Housing Board until the
38-25    person completes a training program that complies with this
38-26    section.
38-27          (b)  The training program must provide the person with
 39-1    information regarding:
 39-2                (1)  the legislation that created the division and the
 39-3    Manufactured Housing Board;
 39-4                (2)  the programs operated by the division;
 39-5                (3)  the role and functions of the division;
 39-6                (4)  the rules of the division, with an emphasis on the
 39-7    rules that relate to disciplinary and investigatory authority;
 39-8                (5)  the current budget for the division;
 39-9                (6)  the results of the most recent formal audit of the
39-10    division;
39-11                (7)  the requirements of:
39-12                      (A)  the open meetings law, Chapter 551;
39-13                      (B)  the public information law, Chapter 552;
39-14                      (C)  the administrative procedure law,  Chapter
39-15    2001; and
39-16                      (D)  other laws relating to public officials,
39-17    including conflict-of-interest laws; and
39-18                (8)  any applicable ethics policies adopted by the
39-19    division or the Texas Ethics Commission.
39-20          (c)  A person appointed to the Manufactured Housing Board is
39-21    entitled to reimbursement, as provided by the General
39-22    Appropriations Act, for the travel expenses incurred in attending
39-23    the training program regardless of whether the attendance at the
39-24    program occurs before or after the person qualifies for office.
39-25          Sec. 2306.6012.  APPROPRIATIONS; DONATIONS. (a)  The
39-26    legislature shall separately appropriate money to the Manufactured
39-27    Housing Board within the appropriations to the department for all
 40-1    matters relating to the operation of the division.
 40-2          (b)  The Manufactured Housing Board may accept gifts and
 40-3    grants of money or property under this subchapter and shall spend
 40-4    the money and use the property for the purpose for which the
 40-5    donation was made, except that the expenditure of money or use of
 40-6    property must promote the acceptance of HUD-Code manufactured homes
 40-7    as a viable source of housing for very low, low, and moderate
 40-8    income families.
 40-9          Sec. 2306.6013.  BUDGET; SHARING OF DEPARTMENT PERSONNEL,
40-10    EQUIPMENT, AND FACILITIES. (a)  The Manufactured Housing Board
40-11    shall develop a budget for the operations of the department
40-12    relating to the division.
40-13          (b)  The Manufactured Housing Board shall reduce
40-14    administrative costs by entering into an agreement with the
40-15    department to enable the sharing of department personnel,
40-16    equipment, and facilities.
40-17          Sec. 2306.6014.  DIVISION DIRECTOR. (a)  The Manufactured
40-18    Housing Board shall employ the division director.  The division
40-19    director is the Manufactured Housing Board's chief executive and
40-20    administrative officer.
40-21          (b)  The division director is charged with administering,
40-22    enforcing, and carrying out the functions and duties conferred on
40-23    the division director by this subchapter and by other law.
40-24          (c)  The division director serves at the pleasure of the
40-25    Manufactured Housing Board.
40-26          Sec. 2306.6015 [2306.602].  PERSONNEL. The division director
40-27    may employ staff as necessary to perform the work of the
 41-1    [manufactured housing] division and may prescribe their duties and
 41-2    compensation.  Subject to applicable personnel policies and
 41-3    regulations, the division director may remove any division
 41-4    employee.
 41-5          Sec. 2306.6016.  SEPARATION OF RESPONSIBILITIES. The
 41-6    Manufactured Housing Board shall develop and implement policies
 41-7    that clearly separate the policy-making responsibilities of the
 41-8    Manufactured Housing Board and the management responsibilities of
 41-9    the division director and staff of the division.
41-10          Sec. 2306.6017.  STANDARDS OF CONDUCT. The division director
41-11    or the division director's designee shall provide to members of the
41-12    Manufactured Housing Board and to division employees, as often as
41-13    necessary, information regarding the requirements for office or
41-14    employment under this subchapter, including information regarding a
41-15    person's responsibilities under applicable laws relating to
41-16    standards of conduct for state officers or employees.
41-17          Sec. 2306.6018.  EQUAL EMPLOYMENT OPPORTUNITY. (a)  The
41-18    division director or the division director's designee shall prepare
41-19    and maintain a written policy statement that implements a program
41-20    of equal employment opportunity to ensure that all personnel
41-21    decisions are made without regard to race, color, disability, sex,
41-22    religion, age, or national origin.
41-23          (b)  The policy statement must include:
41-24                (1)  personnel policies, including policies relating to
41-25    recruitment, evaluation, selection, training, and promotion of
41-26    personnel, that show the intent of the division to avoid the
41-27    unlawful employment practices described by Chapter 21, Labor Code;
 42-1    and
 42-2                (2)  an analysis of the extent to which the composition
 42-3    of the division's personnel is in accordance with state and federal
 42-4    law and a description of reasonable methods to achieve compliance
 42-5    with state and federal law.
 42-6          (c)  The policy statement must:
 42-7                (1)  be updated annually;
 42-8                (2)  be reviewed by the state Commission on Human
 42-9    Rights for compliance with Subsection (b)(1); and
42-10                (3)  be filed with the governor's office.
42-11          Sec. 2306.6019.  STATE EMPLOYEE INCENTIVE PROGRAM. The
42-12    division director or the division director's designee shall provide
42-13    to division employees information and training on the benefits and
42-14    methods of participation in the state employee incentive program
42-15    under Subchapter B, Chapter 2108.
42-16          Sec. 2306.6020 [2306.603].  RULES. (a)  The Manufactured
42-17    Housing Board [director] shall adopt rules as necessary to
42-18    implement this subchapter and to administer and enforce the
42-19    manufactured housing program through the [manufactured housing]
42-20    division.  Rules adopted by the Manufactured Housing Board
42-21    [director] are subject to Chapter 2001[, Government Code].
42-22          (b)  The Manufactured Housing Board [director] may not adopt
42-23    rules restricting competitive bidding or advertising by a person
42-24    regulated by the division except to prohibit false, misleading, or
42-25    deceptive practices by that person.
42-26          (c)  The Manufactured Housing Board [director] may not
42-27    include in the rules to prohibit false, misleading, or deceptive
 43-1    practices by a person regulated by the division a rule that:
 43-2                (1)  restricts the use of any advertising medium;
 43-3                (2)  restricts the person's personal appearance or the
 43-4    use of the person's voice in an advertisement;
 43-5                (3)  relates to the size or duration of an
 43-6    advertisement used by the person; or
 43-7                (4)  restricts the use of a trade name in advertising
 43-8    by the person.
 43-9          Sec. 2306.6021.  PUBLIC PARTICIPATION. The Manufactured
43-10    Housing Board shall develop and implement policies that provide the
43-11    public with a reasonable opportunity to appear before the
43-12    Manufactured Housing Board and to speak on any issue under the
43-13    jurisdiction of the division.
43-14          Sec. 2306.6022.  COMPLAINTS. (a)  The division shall maintain
43-15    a file on each written complaint filed with the division.  The file
43-16    must include:
43-17                (1)  the name of the person who filed the complaint;
43-18                (2)  the date the complaint is received by the
43-19    division;
43-20                (3)  the subject matter of the complaint;
43-21                (4)  the name of each person contacted in relation to
43-22    the complaint;
43-23                (5)  a summary of the results of the review or
43-24    investigation of the complaint; and
43-25                (6)  an explanation of the reason the file was closed,
43-26    if the division closed the file without taking action other than to
43-27    investigate the complaint.
 44-1          (b)  The division shall provide to the person filing the
 44-2    complaint and to each person who is a subject of the complaint a
 44-3    copy of the division's policies and procedures relating to
 44-4    complaint investigation and resolution.
 44-5          (c)  The division, at least quarterly until final disposition
 44-6    of the complaint, shall notify the person filing the complaint and
 44-7    each person who is a subject of the complaint of the status of the
 44-8    investigation unless the notice would jeopardize an undercover
 44-9    investigation.
44-10          Sec. 2306.6023 [2306.604].  SANCTIONS AND PENALTIES. (a)  The
44-11    Manufactured Housing Board [director] shall adopt rules relating to
44-12    the administrative sanctions that may be enforced against a person
44-13    regulated by the [manufactured housing] division.  If the person
44-14    violates a law relating to the regulation of manufactured housing
44-15    or a rule or order adopted or issued by the Manufactured Housing
44-16    Board [director] relating to the program, the division director
44-17    may:
44-18                (1)  issue a written reprimand to the person that
44-19    specifies the violation;
44-20                (2)  revoke or suspend the person's certificate of
44-21    registration; or
44-22                (3)  place on probation a person whose certificate of
44-23    registration has been suspended.
44-24          (b)  In addition to or in lieu of a sanction imposed under
44-25    Subsection (a)  of this section, the Manufactured Housing Board
44-26    [board] may assess an administrative penalty in an amount not to
44-27    exceed $1,000 for each violation.
 45-1          (c)  If a suspension is probated, the division director may
 45-2    require the person to report regularly to the division director on
 45-3    matters that are the basis of the probation.
 45-4          (d)  If the division director proposes to suspend or revoke a
 45-5    certificate of registration or the division director proposes to
 45-6    assess an administrative penalty against a person regulated by the
 45-7    division, the person is entitled to a hearing before a hearings
 45-8    officer appointed by the division director.  The Manufactured
 45-9    Housing Board [director] by rule shall prescribe the procedures by
45-10    which a decision to suspend or revoke a certificate of registration
45-11    or to assess an administrative penalty are made and are appealable.
45-12          (e)  In determining the amount of an administrative penalty
45-13    assessed under this section, the Manufactured Housing Board [board]
45-14    shall consider:
45-15                (1)  the seriousness of the violation;
45-16                (2)  the history of previous violations;
45-17                (3)  the amount necessary to deter future violations;
45-18                (4)  efforts made to correct the violation; and
45-19                (5)  any other matters that justice may require.
45-20          (f)  If, after investigation of a possible violation and the
45-21    facts surrounding that possible violation, the division director
45-22    determines that a violation has occurred, the division director
45-23    shall issue a preliminary report stating the facts on which the
45-24    conclusion that a violation occurred is based, recommending that an
45-25    administrative penalty under this section be imposed on the person
45-26    charged, and recommending the amount of that proposed penalty.  The
45-27    division director shall base the recommended amount of the proposed
 46-1    penalty on the seriousness of the violation determined by
 46-2    consideration of the factors set forth in Subsection (e) [of this
 46-3    section].
 46-4          (g)  Not later than the 14th day after the date on which the
 46-5    preliminary report is issued, the division director shall give
 46-6    written notice of the violation to the person charged.  The notice
 46-7    shall include:
 46-8                (1)  a brief summary of the charges;
 46-9                (2)  a statement of the amount of the penalty
46-10    recommended; and
46-11                (3)  a statement of the right of the person charged to
46-12    a hearing on the occurrence of the violation, the amount of the
46-13    penalty, or both the occurrence of the violation and the amount of
46-14    the penalty.
46-15          (h)  Not later than the 20th day after the date on which the
46-16    notice is received, the person charged may accept the determination
46-17    of the division director made under Subsection (f) [of this
46-18    section], including the recommended penalty, or make a written
46-19    request for a hearing on that determination.
46-20          (i)  If the person charged with the violation accepts the
46-21    determination of the division director, the division director shall
46-22    issue an order approving the determination and ordering that the
46-23    person pay the recommended penalty.
46-24          (j)  If the person charged fails to respond in a timely
46-25    manner to the notice or if the person requests a hearing, the
46-26    division director shall set a hearing, give written notice of the
46-27    hearing to the person, and designate a hearings examiner to conduct
 47-1    the hearing.  The hearings examiner shall make findings of fact and
 47-2    conclusions of law and shall promptly issue to the Manufactured
 47-3    Housing Board [board] a proposal for decision as to the occurrence
 47-4    of the violation and a recommendation as to the amount of the
 47-5    proposed penalty if a penalty is determined to be warranted.  Based
 47-6    on the findings of fact and conclusions of law and the
 47-7    recommendations of the hearings examiner, the Manufactured Housing
 47-8    Board [board] by order may find that a violation has occurred and
 47-9    may assess a penalty, or may find that no violation has occurred.
47-10          (k)  The division director shall give notice of the
47-11    Manufactured Housing Board's [board's] order to the person charged.
47-12    The notice must include:
47-13                (1)  separate statements of the findings of fact and
47-14    conclusions of law;
47-15                (2)  the amount of any penalty assessed;
47-16                (3)  a statement of the right of the person charged to
47-17    judicial review of the Manufactured Housing Board's [commission's]
47-18    order; and
47-19                (4)  any other information required by law.
47-20          (l)  Not later than the 30th day after the date on which the
47-21    decision is final, the person charged shall:
47-22                (1)  pay the penalty in full; or
47-23                (2)  if the person files a petition for judicial review
47-24    contesting the fact of the violation, the amount of the penalty, or
47-25    both the fact of the violation and the amount of the penalty:
47-26                      (A)  forward the amount assessed to the division
47-27    [department] for deposit in an escrow account;
 48-1                      (B)  in lieu of payment into escrow, post with
 48-2    the division [department] a supersedeas bond for the amount of the
 48-3    penalty, in a form approved by the division director and effective
 48-4    until judicial review of the decision is final; or
 48-5                      (C)  without paying the amount of the penalty or
 48-6    posting the supersedeas bond, pursue the judicial review.
 48-7          (m)  A person charged with a penalty who is financially
 48-8    unable to comply with Subsection (l)(2) [of this section] is
 48-9    entitled to judicial review if the person files with the court, as
48-10    part of the person's petition for judicial review, a sworn
48-11    statement that the person is unable to meet the requirements of
48-12    that subsection.
48-13          (n)  If the person charged does not pay the penalty and does
48-14    not pursue judicial review, the division [department] or the
48-15    attorney general may bring an action for the collection of the
48-16    penalty.
48-17          (o)  Judicial review of the order of the Manufactured Housing
48-18    Board [board] assessing the penalty is subject to the substantial
48-19    evidence rule and shall be instituted by filing a petition with a
48-20    Travis County district court.
48-21          (p)  If, after judicial review, the penalty is reduced or not
48-22    assessed, the division director shall remit to the person charged
48-23    the appropriate amount, plus accrued interest if the penalty has
48-24    been paid, or shall execute a release of the bond if a supersedeas
48-25    bond has been posted.  The accrued interest on amounts remitted by
48-26    the division director under this subsection shall be paid at a rate
48-27    equal to the rate charged on loans to depository institutions by
 49-1    the New York Federal Reserve Bank, and shall be paid for the period
 49-2    beginning on the date that the assessed penalty is paid to the
 49-3    division director and ending on the date the penalty is remitted.
 49-4          (q)  A penalty collected under this section shall be
 49-5    deposited in the state treasury to the credit of the general
 49-6    revenue fund.
 49-7          (r)  All proceedings conducted under this section and any
 49-8    review or appeal of those proceedings are subject to Chapter 2001[,
 49-9    Government Code].
49-10          (s)  If it appears that a person is in violation of, or is
49-11    threatening to violate, any provision of the Texas Manufactured
49-12    Housing Standards Act (Article 5221f, Vernon's Texas Civil
49-13    Statutes), or a rule or order related to the administration and
49-14    enforcement of the manufactured housing program, the attorney
49-15    general or the division director may institute an action for
49-16    injunctive relief to restrain the person from continuing the
49-17    violation and for civil penalties not to exceed $1,000 for each
49-18    violation and not exceeding $250,000 in the aggregate.  A civil
49-19    action filed under this subsection shall be filed in district court
49-20    in Travis County.  The attorney general and the division director
49-21    may recover reasonable expenses incurred in obtaining injunctive
49-22    relief under this subsection, including court costs, reasonable
49-23    attorney's fees, investigative costs, witness fees, and deposition
49-24    expenses.
49-25          [Sec. 2306.605.  ACCEPTANCE OF DONATIONS. The department may
49-26    accept gifts and grants of money or property under this chapter and
49-27    shall spend the money and use the property for the purpose for
 50-1    which the donation was made, except that the expenditure of money
 50-2    or use of property must promote the acceptance of HUD-Code
 50-3    manufactured homes as a viable source of housing for very low, low,
 50-4    and moderate income families.]
 50-5          SECTION 27. Subchapter DD, Chapter 2306, Government Code, is
 50-6    amended by amending Sections 2306.672 and 2306.675 and adding
 50-7    Sections 2306.6741, 2306.6751, and 2306.6761 to read as follows:
 50-8          Sec. 2306.672.  SCORING OF APPLICATIONS. (a)  The goal of the
 50-9    low income housing tax credit program is to provide permanent
50-10    affordable housing.  In allocating low income housing tax credits,
50-11    the department shall score each application using a point system
50-12    based on criteria adopted by the department that are consistent
50-13    with the department's housing goals, including criteria addressing:
50-14                (1)  an applicant's willingness to minimize profits
50-15    with respect to the proposed project; and
50-16                (2)  the ability of the proposed project to:
50-17                      (A)  provide quality social support services to
50-18    residents;
50-19                      (B)  demonstrate community and neighborhood
50-20    support;
50-21                      (C)  serve individuals and families of extremely
50-22    low income;
50-23                      (D)  serve traditionally underserved areas;
50-24                      (E)  leverage state and federal resources,
50-25    including federal HOPE VI grants received through the United States
50-26    Department of Housing and Urban Development; and
50-27                      (F)  provide for extended or perpetual
 51-1    affordability periods.
 51-2          (b)  The department shall publish in the qualified allocation
 51-3    plan any discretionary factor that the department will consider in
 51-4    scoring an application.
 51-5          (c) [(b)]  If an applicant meets the department's scoring and
 51-6    underwriting criteria, the department shall add:
 51-7                (1)  five bonus points to the applicant's score if the
 51-8    applicant agrees to provide to a qualified nonprofit organization
 51-9    or tenant organization a right of first refusal to purchase the
51-10    property to which the tax credit applies at the minimum price
51-11    provided in, and in accordance with the requirements of, Section
51-12    42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section
51-13    42(i)(7)); and
51-14                (2)  two bonus points to the applicant's score if the
51-15    application is received within the first 10 days of the application
51-16    acceptance period.
51-17          (d) [(c)]  The department shall provide the score of each
51-18    application on each criterion to the board and the governor.  The
51-19    results of the scoring shall be available to the public.
51-20          (e)  On [(d)  Upon] awarding tax credit allocations, the
51-21    board shall document the reasons for each project's selection,
51-22    including an explanation of:
51-23                (1)  all discretionary factors used in making its
51-24    determination; and
51-25                (2)  the reasons for any decision that conflicts with
51-26    the recommendations of department staff under Section 2306.675.
51-27          (f)  For each scoring criterion, the department shall use a
 52-1    range of points to evaluate the degree to which a proposed project
 52-2    satisfies the criterion.  The department may not award a number of
 52-3    points for a scoring criterion that is disproportionate to the
 52-4    degree to which a proposed project complies with that criterion.
 52-5          Sec. 2306.6741.  DEPARTMENT POLICY AND PROCEDURES REGARDING
 52-6    RECIPIENTS OF CERTAIN FEDERAL HOUSING ASSISTANCE. (a)  The
 52-7    department shall adopt a policy regarding the admittance to low
 52-8    income housing tax credit properties of income-eligible individuals
 52-9    and families receiving assistance under Section 8, United States
52-10    Housing Act of 1937 (42 U.S.C. Section 1437f).
52-11          (b)  The policy must provide a reasonable minimum income
52-12    standard to be used by recipients of low income housing tax credits
52-13    and shall place reasonable limits on the use of any other factors
52-14    that frequently impede the admittance of individuals and families
52-15    described by Subsection (a) to low income housing tax credit
52-16    properties, including credit histories, security deposits, and
52-17    employment histories.
52-18          (c)  The department shall establish procedures to monitor low
52-19    income housing tax credit properties that frequently refuse to
52-20    admit individuals and families described by Subsection (a).  The
52-21    department shall establish enforcement mechanisms with respect to
52-22    those properties, including a range of sanctions to be imposed
52-23    against the owners of those properties.
52-24          Sec. 2306.675.   ALLOCATION OF LOW INCOME HOUSING TAX CREDIT.
52-25    (a)  Department staff shall provide written, documented
52-26    recommendations to the board concerning the financial or
52-27    programmatic viability of each application for a low income housing
 53-1    tax credit before the board makes a decision relating to the
 53-2    allocation of tax credits.  The board may not make without good
 53-3    cause an allocation decision that conflicts with the
 53-4    recommendations of department staff.
 53-5          (b)  Not later than the deadline specified in Section
 53-6    2306.671(e), the board shall issue a commitment for tax credits
 53-7    available to the department.  Concurrently with the issuance of a
 53-8    commitment for initial tax credits, the board shall establish a
 53-9    waiting list of additional applications, ranked in descending order
53-10    of priority, to be issued a commitment for tax credits if
53-11    additional credits become available.
53-12          (c)  The board must reevaluate a project that undergoes a
53-13    substantial change between the time of initial board approval and
53-14    the time of issuance of a tax credit commitment for the project to
53-15    determine if approval should be withdrawn.
53-16          Sec. 2306.6751.  LIMITATION ON ALLOCATION. For any three-year
53-17    period, the department may not award more than $2.4 million in low
53-18    income housing tax credits to a single developer and other
53-19    principals associated with the developer's project.
53-20          Sec. 2306.6761.  QUALIFIED NONPROFIT ORGANIZATION. (a)  A
53-21    qualified nonprofit organization may compete in any low income
53-22    housing tax credit allocation pool, including:
53-23                (1)  the nonprofit allocation pool;
53-24                (2)  the rural projects/prison communities allocation
53-25    pool; and
53-26                (3)  the general projects allocation pool.
53-27          (b)  A qualified nonprofit organization submitting an
 54-1    application under this subchapter must have a controlling interest
 54-2    in the project proposed to be financed with a low income housing
 54-3    tax credit.
 54-4          SECTION 28. Sections 2306.673(a) and (c), Government Code,
 54-5    are amended to read as follows:
 54-6          (a)  Not later than two years before the expiration of the
 54-7    compliance period, a recipient of a low income housing tax credit
 54-8    who agreed to provide a right of first refusal under Section
 54-9    2306.672(c)(1) [2306.672(b)(1)] and who intends to sell the
54-10    property shall notify the department of the recipient's intent to
54-11    sell.  The recipient shall notify qualified nonprofit organizations
54-12    and tenant organizations of the opportunity to purchase the
54-13    property.
54-14          (c)  Notwithstanding an agreement under Section
54-15    2306.672(c)(1) [2306.672(b)(1)], a recipient of a low income
54-16    housing tax credit may sell property to which the tax credit
54-17    applies to any purchaser after the expiration of the compliance
54-18    period if a qualified nonprofit organization or tenant organization
54-19    does not offer to purchase the property at the minimum price
54-20    provided by Section 42(i)(7), Internal Revenue Code of 1986 (26
54-21    U.S.C. Section 42(i)(7)), and the department declines to purchase
54-22    the property.
54-23          SECTION 29. Subtitle F, Title 4, Government Code, is amended
54-24    by adding Chapter 487 to read as follows:
54-25              CHAPTER 487.  OFFICE OF RURAL COMMUNITY AFFAIRS
54-26                     SUBCHAPTER A.  GENERAL PROVISIONS
54-27          Sec. 487.001.  DEFINITIONS. In this chapter:
 55-1                (1)  "Executive committee" means the executive
 55-2    committee of the Office of Rural Community Affairs.
 55-3                (2)  "Office" means the Office of Rural Community
 55-4    Affairs.
 55-5             (Sections 487.002-487.020 reserved for expansion)
 55-6                 SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS
 55-7          Sec. 487.021.  EXECUTIVE COMMITTEE. (a)  The executive
 55-8    committee is the governing body of the office.
 55-9          (b)  The executive committee is composed of the following
55-10    nine members:
55-11                (1)  three members appointed by the governor;
55-12                (2)  three members appointed by the lieutenant
55-13    governor; and
55-14                (3)  three members appointed by the governor based on a
55-15    list of eligible candidates submitted to the governor by the
55-16    speaker of the house of representatives.
55-17          (c)  At least two persons appointed by the governor, by the
55-18    lieutenant governor, and by the governor based on the list
55-19    submitted by the speaker of the house of representatives must
55-20    possess a strong understanding of and commitment to rural interests
55-21    based on the individual's personal history, including residency,
55-22    occupation, and civic activities.
55-23          (d)  Appointments to the executive committee shall be made
55-24    without regard to the race, color, disability, sex, religion, age,
55-25    or national origin of the appointees.
55-26          (e)  The members of the executive committee serve for
55-27    staggered six-year terms, with the terms of three members expiring
 56-1    February 1 of each odd-numbered year.
 56-2          (f)  Executive committee members receive no compensation but
 56-3    are entitled to reimbursement of actual and necessary expenses
 56-4    incurred in the performance of their duties.
 56-5          (g)  The members of the executive committee annually shall
 56-6    elect a presiding officer from among the members of the executive
 56-7    committee.
 56-8          Sec. 487.022.  CONFLICTS OF INTEREST. (a)  In this section,
 56-9    "Texas trade association" means a cooperative and voluntarily
56-10    joined association of business or professional competitors in this
56-11    state designed to assist its members and its industry or profession
56-12    in dealing with mutual business or professional problems and in
56-13    promoting their common interest.
56-14          (b)  A person may not be a member of the executive committee
56-15    and may not be an office employee employed in a "bona fide
56-16    executive, administrative, or professional capacity," as that
56-17    phrase is used for purposes of establishing an exemption to the
56-18    overtime provisions of the federal Fair Labor Standards Act of 1938
56-19    (29 U.S.C. Section 201 et seq.), and its subsequent amendments, if:
56-20                (1)  the person is an officer, employee, or paid
56-21    consultant of a Texas trade association in the field of rural
56-22    affairs; or
56-23                (2)  the person's spouse is an officer, manager, or
56-24    paid consultant of a Texas trade association in the field of rural
56-25    affairs.
56-26          (c)  A person may not be a member of the executive committee
56-27    or act as the general counsel to the executive committee or the
 57-1    office if the person is required to register as a lobbyist under
 57-2    Chapter 305 because of the person's activities for compensation on
 57-3    behalf of a profession related to the operation of the office.
 57-4          Sec. 487.023.  TRAINING FOR MEMBERS OF EXECUTIVE COMMITTEE.
 57-5    (a)  A person who is appointed to and qualifies for office as a
 57-6    member of the executive committee may not vote, deliberate, or be
 57-7    counted as a member in attendance at a meeting of the executive
 57-8    committee until the person completes a training program that
 57-9    complies with this section.
57-10          (b)  The training program must provide the person with
57-11    information regarding:
57-12                (1)  the legislation that created the office and the
57-13    executive committee;
57-14                (2)  the programs operated by the office;
57-15                (3)  the role and functions of the office;
57-16                (4)  the rules of the office, with an emphasis on any
57-17    rules that relate to disciplinary and investigatory authority;
57-18                (5)  the current budget for the office;
57-19                (6)  the results of the most recent formal audit of the
57-20    office;
57-21                (7)  the requirements of:
57-22                      (A)  the open meetings law, Chapter 551;
57-23                      (B)  the public information law, Chapter 552;
57-24                      (C)  the administrative procedure law, Chapter
57-25    2001; and
57-26                      (D)  other laws relating to public officials,
57-27    including conflict-of-interest laws; and
 58-1                (8)  any applicable ethics policies adopted by the
 58-2    executive committee or the Texas Ethics Commission.
 58-3          (c)  A person appointed to the executive committee is
 58-4    entitled to reimbursement, as provided by general law and the
 58-5    General Appropriations Act, for the travel expenses incurred in
 58-6    attending the training program regardless of whether the attendance
 58-7    at the program occurs before or after the person qualifies for
 58-8    office.
 58-9          Sec. 487.024.  REMOVAL. (a)  It is a ground for removal from
58-10    the executive committee that a member:
58-11                (1)  does not have at the time of taking office the
58-12    qualifications required by Section 487.021;
58-13                (2)  does not maintain during service on the executive
58-14    committee the qualifications required by Section 487.021;
58-15                (3)  is ineligible for membership under Section
58-16    487.022;
58-17                (4)  cannot, because of illness or disability,
58-18    discharge the member's duties for a substantial part of the
58-19    member's term; or
58-20                (5)  is absent from more than half of the regularly
58-21    scheduled executive committee meetings that the member is eligible
58-22    to attend during a calendar year without an excuse approved by a
58-23    majority vote of the executive committee.
58-24          (b)  The validity of an action of the executive committee is
58-25    not affected by the fact that it is taken when a ground for removal
58-26    of an executive committee member exists.
58-27          (c)  If the executive director has knowledge that a potential
 59-1    ground for removal exists, the executive director shall notify the
 59-2    presiding officer of the executive committee of the potential
 59-3    ground.  The presiding officer shall then notify the governor and
 59-4    the attorney general that a potential ground for removal exists. If
 59-5    the potential ground for removal involves the presiding officer,
 59-6    the executive director shall notify the next highest ranking
 59-7    officer of the executive committee, who shall then notify the
 59-8    governor and the attorney general that a potential ground for
 59-9    removal exists.
59-10          Sec. 487.025.  DIVISION OF RESPONSIBILITY. The executive
59-11    committee shall develop and implement policies that clearly
59-12    separate the policy-making responsibilities of the executive
59-13    committee and the management responsibilities of the executive
59-14    director and staff of the office.
59-15          Sec. 487.026.  EXECUTIVE DIRECTOR. (a)  The executive
59-16    committee may hire an executive director to serve as the chief
59-17    executive officer of the office and to perform the administrative
59-18    duties of the office.
59-19          (b)  The executive director serves at the will of the
59-20    executive committee.
59-21          (c)  The executive director may hire staff within guidelines
59-22    established by the executive committee.
59-23          Sec. 487.027.  PUBLIC HEARINGS. The executive committee shall
59-24    develop and implement policies that provide the public with a
59-25    reasonable opportunity to appear before the executive committee and
59-26    to speak on any issue under the jurisdiction of the office.
59-27          Sec. 487.028.  EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT.
 60-1    (a)  The executive director or the executive director's designee
 60-2    shall prepare and maintain a written policy statement that
 60-3    implements a program of equal employment opportunity to ensure that
 60-4    all personnel decisions are made without regard to race, color,
 60-5    disability, sex, religion, age, or national origin.
 60-6          (b)  The policy statement must include:
 60-7                (1)  personnel policies, including policies relating to
 60-8    recruitment, evaluation, selection, training, and promotion of
 60-9    personnel, that show the intent of the office to avoid the unlawful
60-10    employment practices described by Chapter 21, Labor Code; and
60-11                (2)  an analysis of the extent to which the composition
60-12    of the office's personnel is in accordance with state and federal
60-13    law and a description of reasonable methods to achieve compliance
60-14    with state and federal law.
60-15          (c)  The policy statement must be:
60-16                (1)  updated annually;
60-17                (2)  reviewed by the state Commission on Human Rights
60-18    for compliance with Subsection (b)(1); and
60-19                (3)  filed with the governor's office.
60-20          Sec. 487.029.  STANDARDS OF CONDUCT. The executive director
60-21    or the executive director's designee shall provide to members of
60-22    the executive committee and to agency employees, as often as
60-23    necessary, information regarding the requirements for office or
60-24    employment under this chapter, including information regarding a
60-25    person's responsibilities under applicable laws relating to
60-26    standards of conduct for state officers or employees.
60-27          Sec. 487.030.  COMPLAINTS. (a)  The office shall maintain a
 61-1    file on each written complaint filed with the office. The file must
 61-2    include:
 61-3                (1)  the name of the person who filed the complaint;
 61-4                (2)  the date the complaint is received by the office;
 61-5                (3)  the subject matter of the complaint;
 61-6                (4)  the name of each person contacted in relation to
 61-7    the complaint;
 61-8                (5)  a summary of the results of the review or
 61-9    investigation of the complaint; and
61-10                (6)  an explanation of the reason the file was closed,
61-11    if the office closed the file without taking action other than to
61-12    investigate the complaint.
61-13          (b)  The office shall provide to the person filing the
61-14    complaint and to each person who is a subject of the complaint a
61-15    copy of the office's policies and procedures relating to complaint
61-16    investigation and resolution.
61-17          (c)  The office, at least quarterly until final disposition
61-18    of the complaint, shall notify the person filing the complaint and
61-19    each person who is a subject of the complaint of the status of the
61-20    investigation unless the notice would jeopardize an undercover
61-21    investigation.
61-22             (Sections 487.031-487.050 reserved for expansion)
61-23                 SUBCHAPTER C.  GENERAL POWERS AND DUTIES
61-24          Sec. 487.051.  POWERS AND DUTIES.  (a)  The office shall:
61-25                (1)  administer the federal community development block
61-26    grant nonentitlement program; and
61-27                (2)  promote the economic development and the general
 62-1    welfare of rural communities in this state.
 62-2          (b)  The office may contract with public and private entities
 62-3    in the performance of its responsibilities.
 62-4          Sec. 487.052.  RULES. The executive committee may adopt rules
 62-5    as necessary to implement this chapter.
 62-6          Sec. 487.053.  GIFTS AND GRANTS. (a)  The office may accept
 62-7    gifts, grants, and donations from any organization for the purpose
 62-8    of funding any activity under this chapter.
 62-9          (b)  All gifts, grants, and donations must be accepted in an
62-10    open meeting by a majority of the voting members of the executive
62-11    committee and reported in the public record of the meeting with the
62-12    name of the donor and purpose of the gift, grant, or donation.
62-13          Sec. 487.054.  REPORT TO LEGISLATURE. Not later than January
62-14    1 of each odd-numbered year, the office shall submit a biennial
62-15    report to the legislature regarding the activities of the office
62-16    and any findings and recommendations relating to rural issues.
62-17          SECTION 30. Sections 2306.098, 2306.099, and 2306.100,
62-18    Government Code, are transferred to Chapter 487, Government Code,
62-19    redesignated as Subchapter D, Chapter 487, Government Code, and
62-20    amended to read as follows:
62-21                SUBCHAPTER D.  COMMUNITY DEVELOPMENT BLOCK
62-22                       GRANT NONENTITLEMENT PROGRAM
62-23          Sec. 487.101 [2306.098].  ADMINISTRATION OF COMMUNITY
62-24    DEVELOPMENT BLOCK GRANT PROGRAM; ALLOCATION OF FUNDS. (a)  The
62-25    office [department] shall, under the Omnibus Budget Reconciliation
62-26    Act of 1981 (Pub.L. No. 97-35) and 24 CFR, Part 570, Subpart I,
62-27    administer the state's allocation of federal funds provided under
 63-1    the community development block grant nonentitlement program
 63-2    authorized by Title I of the Housing and Community Development Act
 63-3    of 1974 (42 U.S.C. Section 5301 et seq.).
 63-4          (b)  Community development block grant program funds shall be
 63-5    allocated to eligible counties and municipalities under office
 63-6    [department] rules.
 63-7          Sec. 487.102 [2306.099].  TRANSFER OF FEDERAL FUNDS. (a)  The
 63-8    office [department] may enter into an interagency agreement with
 63-9    the Texas Department of Economic Development [Commerce] to
63-10    reimburse the Texas Department of Economic Development [Commerce]
63-11    for providing on behalf of the office [department] marketing,
63-12    underwriting, and any other services on the portion of the federal
63-13    community development block grant funds allocated by the office
63-14    [department] for economic development activities.
63-15          (b)  The office [department] shall allocate not more than 20
63-16    percent of the federal funds received by the department to the
63-17    Texas Department of Economic Development [Commerce] to be used for
63-18    economic development activities.
63-19          (c)  The office shall monitor the activities undertaken by
63-20    the Texas Department of Economic Development [Commerce] under this
63-21    section [must be monitored by the department].
63-22          Sec. 487.103 [2306.100].  STATE COMMUNITY DEVELOPMENT REVIEW
63-23    COMMITTEE. (a)  The state community development review committee is
63-24    composed of 12 members appointed by the governor.
63-25          (b)  A committee member must be:
63-26                (1)  a member of the governing body of a county or
63-27    municipality eligible for funding under the community development
 64-1    block grant program; or
 64-2                (2)  a county or municipal employee who is a supervisor
 64-3    and whose regular duties include involvement in community
 64-4    development activities.
 64-5          (c)  The ratio of county officials serving as committee
 64-6    members to all committee members may not exceed the ratio of all
 64-7    counties eligible for funding under the community development block
 64-8    grant program to all eligible applicants.
 64-9          (d)  The governor shall designate the presiding officer of
64-10    the committee, who serves at the governor's pleasure.
64-11          (e)  Committee members serve two-year terms expiring February
64-12    1 of each odd-numbered year.
64-13          (f)  A committee member serves without compensation for
64-14    service on the committee, but is entitled to reimbursement for
64-15    reasonable and necessary expenses incurred in performing the
64-16    member's duties.
64-17          (g)  Service on the committee by an officer or employee of a
64-18    county or municipality is an additional duty of the individual's
64-19    office or employment and is not dual office holding.
64-20          (h)  The committee shall meet at least twice annually at the
64-21    executive director's call.
64-22          (i)  The committee shall:
64-23                (1)  consult with and advise the executive director on
64-24    the administration and enforcement of the community development
64-25    block grant program; and
64-26                (2)  review funding applications of eligible counties
64-27    and municipalities and advise and assist the executive director
 65-1    regarding the allocation of program funds to those applicants.
 65-2          (j)  The committee may annually recommend to the executive
 65-3    director a formula for allocating funds to each geographic state
 65-4    planning region established by the governor under Chapter 391,
 65-5    Local Government Code.  The formula must give preference to regions
 65-6    according to the regions' needs.
 65-7          SECTION 31.  Section 531.0312, Government Code, is amended by
 65-8    adding Subsection (d) to read as follows:
 65-9          (d)  The Texas Department of Housing and Community Affairs
65-10    shall provide the Texas Information and Referral Network with
65-11    information regarding the department's housing and community
65-12    affairs programs for inclusion in the statewide information and
65-13    referral network.  The department shall provide the information in
65-14    a form determined by the commissioner and shall update the
65-15    information at least quarterly.
65-16          SECTION 32. Section 1372.023, Government Code, is amended to
65-17    read as follows:
65-18          Sec. 1372.023.  DEDICATION OF PORTIONS [PORTION] OF STATE
65-19    CEILING TO TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS.  (a)
65-20    Until August 25, of that portion of the state ceiling that is
65-21    available exclusively for reservations by issuers of qualified
65-22    mortgage bonds, one-third is available exclusively to the Texas
65-23    Department of Housing and Community Affairs for the purpose of
65-24    issuing qualified mortgage bonds.
65-25          (b)  Until August 25, of that portion of the state ceiling
65-26    that is available exclusively for reservations by issuers of
65-27    qualified residential rental project bonds, an amount to be
 66-1    determined by the board is available exclusively to the Texas
 66-2    Department of Housing and Community Affairs for the purpose of
 66-3    issuing qualified residential rental project bonds.
 66-4          (c)  The Texas Department of Housing and Community Affairs
 66-5    may not reserve a portion of the state ceiling that is available
 66-6    exclusively for reservations by issuers of qualified residential
 66-7    rental project bonds other than the portion dedicated to the
 66-8    department under Subsection (b).
 66-9          SECTION 33. Section 1372.025(b), Government Code, is amended
66-10    to read as follows:
66-11          (b)  Subsection (a) does not apply to qualified mortgage
66-12    bonds or qualified residential rental project bonds made available
66-13    exclusively to the Texas Department of Housing and Community
66-14    Affairs under Section 1372.023.
66-15          SECTION 34. Sections 3(3), (7), and (8), Texas Manufactured
66-16    Housing Standards Act (Article 5221f, Vernon's Texas Civil
66-17    Statutes), are amended to read as follows:
66-18                (3)  "Board" means the Manufactured Housing Board
66-19    within the Texas Department of Housing and Community Affairs
66-20    [governing board of the department].
66-21                (7)  "Department" means the Texas Department of Housing
66-22    and Community Affairs operating through its manufactured housing
66-23    division.
66-24                (8)  "Director" means the executive director of the
66-25    manufactured housing division of the Texas Department of Housing
66-26    and Community Affairs [department].
66-27          SECTION 35. Section 7, Texas Manufactured Housing Standards
 67-1    Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
 67-2    amending Subsections (g) and (k) and adding Subsections (t)-(aa) to
 67-3    read as follows:
 67-4          (g)  All licenses are valid for one year and are renewable as
 67-5    provided by the director.  The board by rule may adopt a system
 67-6    under which licenses expire on various dates during the year.  For
 67-7    the year in which the license expiration date is changed, the
 67-8    department shall prorate license fees on a monthly basis so that
 67-9    each license holder pays only that portion of the license fee that
67-10    is allocable to the number of months during which the license is
67-11    valid.  On renewal of the license on the new expiration date, the
67-12    total license renewal fee is payable.
67-13          (k) The director shall conduct any hearing involving the
67-14    denial, renewal, revocation or suspension of a license in
67-15    accordance with Chapter 2001, Government Code.  The department may
67-16    place on probation a person whose license is suspended.  If a
67-17    license suspension is probated, the department may require the
67-18    person:
67-19                (1)  to report regularly to the department on matters
67-20    that are the basis of the probation;
67-21                (2)  to limit practice to the areas prescribed by the
67-22    department; or
67-23                (3)  to continue or review professional education until
67-24    the person attains a degree of skill satisfactory to the department
67-25    in those areas that are the basis of the probation.
67-26          (t)  A person whose license has expired may not engage in
67-27    activities that require a license until the license has been
 68-1    renewed.
 68-2          (u)  A person whose license has been expired for 90 days or
 68-3    less may renew the license by paying to the department a renewal
 68-4    fee that is equal to 1-1/2 times the normally required renewal fee.
 68-5          (v)  A person whose license has been expired for more than 90
 68-6    days but less than one year may renew the license by paying to the
 68-7    department a renewal fee that is equal to two times the normally
 68-8    required renewal fee.
 68-9          (w)  A person whose license has been expired for one year or
68-10    more may not renew the license.  The person may obtain a new
68-11    license by complying with the requirements and procedures for
68-12    obtaining an original license.
68-13          (x)  A person who was licensed in this state, moved to
68-14    another state, and is currently licensed and has been in practice
68-15    in the other state for the two years preceding the date of
68-16    application may obtain a new license without fulfilling the
68-17    instruction requirements of Subsection (o).  The person must pay to
68-18    the department a fee that is equal to two times the normally
68-19    required renewal fee for the license.
68-20          (y)  Not later than the 30th day before the date a person's
68-21    license is scheduled to expire, the department shall send written
68-22    notice of the impending expiration to the person at the person's
68-23    last known address according to the records of the department.
68-24          (z)  The board may waive any prerequisite to obtaining a
68-25    license for an applicant after reviewing the applicant's
68-26    credentials and determining that the applicant holds a license
68-27    issued by another jurisdiction that has licensing requirements
 69-1    substantially equivalent to those of this state.
 69-2          (aa)  The board may waive any prerequisite to obtaining a
 69-3    license for an applicant who holds a license issued by another
 69-4    jurisdiction with which this state has a reciprocity agreement. The
 69-5    board may make an agreement, subject to the approval of the
 69-6    governor, with another state to allow for licensing by reciprocity.
 69-7          SECTION 36. The Texas Manufactured Housing Standards Act
 69-8    (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
 69-9    a new Section 7A and redesignating the existing Section 7A as
69-10    Section 7B and amending that section to read as follows:
69-11          Sec. 7A.  PROVISIONAL LICENSE.  (a)  The board may issue a
69-12    provisional license to an applicant currently licensed in another
69-13    jurisdiction who seeks a license in this state and who:
69-14                (1)  has been licensed in good standing as a
69-15    manufacturer, retailer, broker, salesperson, rebuilder, or
69-16    installer of manufactured housing for at least two years in another
69-17    jurisdiction, including a foreign country, that has licensing
69-18    requirements substantially equivalent to the requirements of this
69-19    Act;
69-20                (2)  has passed a national or other examination
69-21    recognized by the board relating to the manufactured housing
69-22    industry; and
69-23                (3)  is sponsored by a person licensed by the board
69-24    under this Act with whom the provisional license holder will
69-25    practice during the time the person holds a provisional license.
69-26          (b)  The board may waive the requirement of Subsection (a)(3)
69-27    for an applicant if the board determines that compliance with that
 70-1    subsection would be a hardship to the applicant.
 70-2          (c)  A provisional license is valid until the date the board
 70-3    approves or denies the provisional license holder's application for
 70-4    a license.
 70-5          (d)  The board shall issue a license under this Act to the
 70-6    provisional license holder if the provisional license holder is
 70-7    eligible to be licensed under Section 7(z) or (aa) or if:
 70-8                (1)  the board verifies that the provisional license
 70-9    holder meets the academic and experience requirements for a license
70-10    under this Act; and
70-11                (2)  the provisional license holder satisfies any other
70-12    licensing requirements under this Act.
70-13          (e)  The board must approve or deny a provisional license
70-14    holder's application for a license not later than the 180th day
70-15    after the date the provisional license is issued.
70-16          (f)  The board may establish a fee for provisional licenses
70-17    in an amount reasonable and necessary to cover the cost of issuing
70-18    the licenses.
70-19          Sec. 7B [7A].  EDUCATION PROGRAMS.  (a)  The department
70-20    [director] may recognize, prepare, or administer certification
70-21    programs [and continuing education programs] for persons regulated
70-22    under this Act.  Participation in the programs is voluntary.
70-23          (b)  The board shall recognize, prepare, or administer
70-24    continuing education programs for its license holders.  A license
70-25    holder must participate in the continuing education programs to the
70-26    extent required by the board to keep the person's license.
70-27          (c)  The department [director] shall issue appropriate
 71-1    certificates to those persons who complete a [the] certification
 71-2    program or who participate in a [the] continuing education program
 71-3    under this section.
 71-4          SECTION 37. (a)  The nine members of the governing board of
 71-5    the Texas Department of Housing and Community Affairs who are
 71-6    serving immediately before September 1, 2001, continue to serve as
 71-7    the governing board of the department on and after that date
 71-8    regardless of whether those members meet the membership
 71-9    requirements prescribed by Subchapter B, Chapter 2306, Government
71-10    Code, as amended by this Act.  However, the positions of those nine
71-11    members are abolished on the date on which a majority of the seven
71-12    board membership positions that are created under Subchapter B,
71-13    Chapter 2306, Government Code, as amended by this Act, are filled
71-14    by appointment by the governor and the appointees qualify for
71-15    office.
71-16          (b)  The governor shall make the seven appointments to the
71-17    board under Subchapter B, Chapter 2306, Government Code, as amended
71-18    by this Act, as soon as possible on or after September 1, 2001.  In
71-19    making the initial appointments, the governor shall designate two
71-20    members for terms expiring January 31, 2003, two members for terms
71-21    expiring January 31, 2005, and three members for terms expiring
71-22    January 31, 2007.
71-23          (c)  The changes in law made by this Act in amending
71-24    Subchapter B, Chapter 2306, Government Code, do not affect the
71-25    ability of the director of the Texas Department of Housing and
71-26    Community Affairs who is serving on the effective date of this Act
71-27    to continue to serve in that capacity until the governing board of
 72-1    the department appointed by the governor under Subchapter B,
 72-2    Chapter 2306, Government Code, as amended by this Act, employs a
 72-3    new director under Chapter 2306.
 72-4          SECTION 38. (a)  The governor shall make the appointments to
 72-5    the Manufactured Housing Board created by Subchapter AA, Chapter
 72-6    2306, Government Code, as amended by this Act, as soon as possible
 72-7    on or after September 1, 2001.  In making the initial appointments,
 72-8    the governor shall designate one member for a term expiring January
 72-9    31, 2003, two members for terms expiring January 31, 2005, and two
72-10    members for terms expiring January 31, 2007.
72-11          (b)  Until the Manufactured Housing Board employs a division
72-12    director for the manufactured housing division of the Texas
72-13    Department of Housing and Community Affairs, the director of the
72-14    department may continue to carry out the functions of the division
72-15    director for that division.
72-16          SECTION 39. As soon as practicable after the effective date
72-17    of this Act, the new governing board of the Texas Department of
72-18    Housing and Community Affairs appointed by the governor under
72-19    Subchapter B, Chapter 2306, Government Code, as amended by this
72-20    Act, shall develop a strategic action plan to implement the
72-21    requirements of this Act.  The board shall employ a new director to
72-22    provide and monitor the provision of administrative support to the
72-23    board to assist in implementing the plan.  The director shall
72-24    evaluate the organizational structure of the department, including
72-25    the evaluation of essential management positions, and shall make
72-26    any organizational changes necessary to implement the plan and the
72-27    other requirements of this Act.
 73-1          SECTION 40. (a)  Not later than December 31, 2002, the Sunset
 73-2    Advisory Commission shall evaluate the success of the Texas
 73-3    Department of Housing and Community Affairs in implementing the
 73-4    requirements of this Act before that date, including actions taken
 73-5    by the department with respect to the following:
 73-6                (1)  establishment of a functional governing board that
 73-7    values public input and enables board members to develop the
 73-8    expertise necessary to make informed decisions about and to ensure
 73-9    the accountability of the department and the programs of the
73-10    department;
73-11                (2)  establishment of an organizational structure to
73-12    develop and implement a statewide needs assessment and a
73-13    corresponding allocation process that:
73-14                      (A)  ensure that the state's objectives regarding
73-15    housing and community support services are fulfilled;
73-16                      (B)  ensure that the state's most critical needs
73-17    regarding housing and community support services are identified and
73-18    met;
73-19                      (C)  incorporate input from local entities;
73-20                      (D)  maximize the preservation of affordable
73-21    housing; and
73-22                      (E)  achieve the best use of state resources;
73-23                (3)  development of policies and procedures that
73-24    clearly define the appropriate roles of board members, the
73-25    director, and department staff;
73-26                (4)  implementation of rules outlining a formal process
73-27    to appeal board decisions; and
 74-1                (5)  establishment of project compliance procedures
 74-2    that ensure that the programs of the department provide fair access
 74-3    to housing and community support services in this state.
 74-4          (b)  Before January 1, 2003, the Sunset Advisory Commission
 74-5    shall report the results of evaluation to the presiding officer of
 74-6    each house of the legislature.
 74-7          SECTION 41. (a)  Not later than November 1, 2001, the
 74-8    governor and the lieutenant governor shall appoint the initial
 74-9    members of the executive committee of the Office of Rural Community
74-10    Affairs in accordance with Chapter 487, Government Code, as added
74-11    by this Act.  The governor shall appoint two members and the
74-12    lieutenant governor shall appoint one member for terms expiring
74-13    February 1, 2003, the governor shall appoint two members and the
74-14    lieutenant governor shall appoint one member for terms expiring
74-15    February 1, 2005, and the governor shall appoint two members and
74-16    the lieutenant governor shall appoint one member for terms expiring
74-17    February 1, 2007.  The executive committee may not take action
74-18    until a majority of the members have taken office.
74-19          (b)  The Office of Rural Community Affairs shall employ an
74-20    executive director in accordance with Chapter 487, Government Code,
74-21    as added by this Act, not later than December 1, 2001.
74-22          SECTION 42. (a)  On the date by which a majority of the
74-23    members of the executive committee of the Office of Rural Community
74-24    Affairs have taken office, all powers, duties, obligations, rights,
74-25    contracts, leases, records, personnel, property, and unspent and
74-26    unobligated appropriations and other funds of the Texas Department
74-27    of Housing and Community Affairs related to the federal community
 75-1    development block grant nonentitlement program are transferred to
 75-2    the Office of Rural Community Affairs.
 75-3          (b)  The transfer of the federal community development block
 75-4    grant nonentitlement program to the Office of Rural Community
 75-5    Affairs does not affect the validity of a right, privilege, or
 75-6    obligation accrued, a contract or acquisition made, any liability
 75-7    incurred, a permit or license issued, any penalty, forfeiture, or
 75-8    punishment assessed, a rule adopted, a proceeding, investigation,
 75-9    or remedy begun, a decision made, or other action taken by or in
75-10    connection with the program by the Texas Department of Housing and
75-11    Community Affairs.
75-12          (c)  All rules, policies, procedures, and decisions of the
75-13    Texas Department of Housing and Community Affairs related to the
75-14    federal community development block grant nonentitlement program
75-15    are continued in effect as rules, policies, procedures, and
75-16    decisions of the Office of Rural Community Affairs until superseded
75-17    by a rule or other appropriate action of the Office of Rural
75-18    Community Affairs.
75-19          (d)  Any action or proceeding before the Texas Department of
75-20    Housing and Community Affairs related to the federal community
75-21    development block grant nonentitlement program is transferred
75-22    without change in status to the Office of Rural Community Affairs,
75-23    and the Office of Rural Community Affairs assumes, without a change
75-24    in status, the position of the Texas Department of Housing and
75-25    Community Affairs in any action or proceeding related to the
75-26    program to which the Texas Department of Housing and Community
75-27    Affairs is a party.
 76-1          (e)  A fund or account administered by the Texas Department
 76-2    of Economic Development relating to the federal community
 76-3    development block grant nonentitlement program is not considered to
 76-4    be abolished and re-created by this Act but is considered to be
 76-5    transferred to the Office of Rural Community Affairs.
 76-6          (f)  Notwithstanding the changes in law made by this Act,
 76-7    until the date the federal community development block grant
 76-8    nonentitlement program is transferred to the Office of Rural
 76-9    Community Affairs as provided by this Act, the Texas Department of
76-10    Housing and Community Affairs and the Texas Department of Economic
76-11    Development shall continue to exercise the powers and duties
76-12    assigned to the Texas Department of Housing and Community Affairs
76-13    and the Texas Department of Economic Development, respectively,
76-14    under the law as it existed immediately before the effective date
76-15    of this Act or as modified by another Act of the 77th Legislature,
76-16    Regular Session, 2001, that becomes law, and the former law is
76-17    continued in effect for that purpose.
76-18          SECTION 43. Sections 2306.023, 2306.026, and 2306.052(d),
76-19    Government Code, are repealed.
76-20          SECTION 44. A member of the governing board of the Texas
76-21    Department of Housing and Community Affairs, of the Manufactured
76-22    Housing Board, or of the executive committee of the Office of Rural
76-23    Community Affairs is not subject to the prohibition imposed by
76-24    Section 2306.028, 2306.6011, or 487.023, Government Code, as
76-25    applicable, until September 1, 2002.
76-26          SECTION 45. This Act takes effect September 1, 2001.