By Lucio S.B. No. 1500
77R5697 KEL-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the provision of housing and related forms of
1-3 assistance to residents of colonias and residents of other
1-4 underserved regions of this state.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter P, Chapter 2306, Government Code, is
1-7 amended by adding Section 2306.359 to read as follows:
1-8 Sec. 2306.359. TAX-EXEMPT SINGLE-FAMILY MORTGAGE REVENUE
1-9 BONDS. (a) In this section, "housing finance corporation" means a
1-10 corporation created under Chapter 394, Local Government Code.
1-11 (b) In addition to issuing other bonds under this chapter,
1-12 the department may issue tax-exempt single-family mortgage revenue
1-13 bonds to make home mortgage loans to economic and geographic
1-14 submarkets of borrowers who:
1-15 (1) are individuals and families of extremely low and
1-16 very low income; and
1-17 (2) are not served or who are substantially
1-18 underserved by the private home mortgage lending industry or by
1-19 housing finance corporations.
1-20 (c) The department by rule shall adopt a process for
1-21 identifying the unmet or substantially underserved home mortgage
1-22 credit submarkets in this state. In identifying the submarkets,
1-23 the department shall consider grants of reservations of the state
1-24 ceiling under Chapter 1372 to housing finance corporations and
2-1 shall consider:
2-2 (1) for each region of this state, the volume of home
2-3 mortgage loans made by private lenders to individuals and families
2-4 of extremely low and very low income, as reported by federal
2-5 regulatory institutions; and
2-6 (2) the interest rates and terms of those loans.
2-7 (d) In approving any issuance of single-family mortgage
2-8 revenue bonds undertaken by the department under this section, the
2-9 board shall:
2-10 (1) consider specific set-asides or reservations of
2-11 bond proceeds for the unmet or substantially underserved economic
2-12 and geographic submarkets of borrowers who are individuals and
2-13 families of extremely low and very low income; and
2-14 (2) certify that the issuance of bonds is necessary to
2-15 provide home mortgage loans to borrowers in those submarkets.
2-16 (e) The board shall base its certification under Subsection
2-17 (d)(2) on the results of the department survey under Subsection
2-18 (c).
2-19 (f) The board shall maximize the use of any loan incentive,
2-20 loan guarantee, down payment assistance, or other form of subsidy
2-21 to meet the credit needs of the unmet or substantially underserved
2-22 economic and geographic submarkets of borrowers who are individuals
2-23 and families of extremely low and very low income.
2-24 (g) The department shall adopt by rule a process to allow
2-25 colonia self-help centers established under Subchapter Z, community
2-26 housing development organizations certified by the department, and
2-27 any other institutions considered appropriate by the board to
3-1 originate home mortgage loans under this section on behalf of the
3-2 department.
3-3 (h) In conjunction with its identification of the unmet or
3-4 substantially underserved home mortgage credit needs of this state,
3-5 the department shall determine the adequacy of private home
3-6 mortgage credit in:
3-7 (1) predominately rural counties;
3-8 (2) census tracts in which the median family income is
3-9 less than 80 percent of the median family income for the county in
3-10 which the census tract is situated; and
3-11 (3) counties adjacent to the international border of
3-12 this state.
3-13 (i) The department shall adopt a policy for serving, in a
3-14 manner proportionate to their home mortgage credit needs determined
3-15 under Subsection (h), the rural counties, census tracts, and border
3-16 counties described by that subsection.
3-17 SECTION 2. Section 2306.583, Government Code, is amended to
3-18 read as follows:
3-19 Sec. 2306.583. SELF-HELP CENTERS: DESIGNATION. (a) The
3-20 department shall designate[:]
3-21 [(1)] a geographic area for the services provided by
3-22 each self-help center.
3-23 (b) In consultation with the colonia advisory committee and
3-24 the appropriate self-help center, the department shall designate[;
3-25 and]
3-26 [(2)] five colonias in each service area to receive
3-27 concentrated attention from that center.
4-1 (c) In consultation with the colonia advisory committee and
4-2 the appropriate self-help center, the [(b) The] department may
4-3 change the designation of colonias made under Subsection (b)
4-4 [(a)(2)].
4-5 SECTION 3. Section 2306.585, Government Code, is amended to
4-6 read as follows:
4-7 Sec. 2306.585. ROLE [DUTIES] OF COMMITTEE; MEETINGS. (a)
4-8 The committee shall report directly to [advise] the board
4-9 [department] regarding:
4-10 (1) the housing and community development needs of
4-11 colonias and colonia residents, the initiation of department
4-12 programs to meet those needs, and the effectiveness of department
4-13 programs in meeting those needs;
4-14 (2) appropriate and effective programs that are
4-15 proposed or are operated through the self-help centers; and
4-16 (3) activities that may be undertaken through the
4-17 self-help centers to better serve the needs of colonia residents.
4-18 (b) The committee shall meet before the 30th day preceding
4-19 the date on which a contract is scheduled to be awarded for the
4-20 operation of a self-help center and may meet at other times. The
4-21 board shall designate a member of the board to attend the meetings
4-22 of the committee.
4-23 (c) At least annually, the committee shall meet jointly with
4-24 the board.
4-25 SECTION 4. Section 2306.586, Government Code, is amended by
4-26 adding Subsection (e) to read as follows:
4-27 (e) Through a self-help center, a colonia resident may apply
5-1 for any direct loan or grant program operated by the department.
5-2 SECTION 5. Section 2306.587, Government Code, is amended to
5-3 read as follows:
5-4 Sec. 2306.587. OPERATION OF SELF-HELP CENTER; MONITORING.
5-5 (a) To operate a self-help center, the [The] department shall
5-6 enter into a four-year contract directly [for the operation of a
5-7 self-help center] with a local nonprofit organization, including a
5-8 local community action agency that qualifies as an eligible entity
5-9 under 42 U.S.C. Section 9902, or a local housing authority that has
5-10 demonstrated the ability to carry out the functions of a self-help
5-11 center under this subchapter.
5-12 (b) The department is solely responsible for contract
5-13 oversight and for the monitoring of self-help centers under this
5-14 subchapter.
5-15 (c) The department and the self-help centers may apply for
5-16 and receive public or private gifts or grants to enable the centers
5-17 to achieve their purpose.
5-18 SECTION 6. Section 2306.589(a), Government Code, is amended
5-19 to read as follows:
5-20 (a) The department shall establish a fund in the department
5-21 designated as the colonia set-aside fund. The department may
5-22 contribute money to the fund from any available source of revenue
5-23 that the department considers appropriate to implement the purposes
5-24 of this subchapter.
5-25 SECTION 7. Sections 2306.753(a) and (b), Government Code, are
5-26 amended to read as follows:
5-27 (a) Subject to this section, the department shall establish
6-1 eligibility requirements for an owner-builder to receive a loan
6-2 under this subchapter. The eligibility requirements must establish
6-3 a priority for loans made under this subchapter to owner-builders
6-4 with an annual income, as determined under Subsection (b)(1)
6-5 [(b)(2)], of less than $17,500.
6-6 (b) To be eligible for a loan under this subchapter, an
6-7 owner-builder:
6-8 (1) [must reside with at least two other persons
6-9 related to the owner-builder in the first degree by consanguinity
6-10 or affinity, as determined under Subchapter B, Chapter 573;]
6-11 [(2)] may not have an annual income that exceeds 60
6-12 percent, as determined by the department, of the greater of the
6-13 state or local median family income, when combined with the income
6-14 of any person who resides with the owner-builder;
6-15 (2) [(3)] must have resided in this state for the
6-16 preceding six months;
6-17 (3) [(4)] must have successfully completed an
6-18 owner-builder education class under Section 2306.756; and
6-19 (4) [(5)] must agree to:
6-20 (A) provide at least 60 percent of the labor
6-21 necessary to build the proposed housing by working through a
6-22 state-certified owner-builder housing program; or
6-23 (B) provide an amount of labor equivalent to the
6-24 amount required under Paragraph (A) in connection with building
6-25 housing for others through a state-certified nonprofit
6-26 owner-builder housing program.
6-27 SECTION 8. Sections 2306.754(a) and (b), Government Code, are
7-1 amended to read as follows:
7-2 (a) The department may establish the minimum amount of a
7-3 loan under this subchapter, but a loan may not exceed $30,000
7-4 [$25,000].
7-5 (b) If it is not possible for an owner-builder to purchase
7-6 necessary real property and build adequate housing for $30,000
7-7 [$25,000], the owner-builder must obtain the amount necessary that
7-8 exceeds $30,000 [$25,000] from one or more local governmental
7-9 entities, nonprofit organizations, or private lenders. The total
7-10 amount of loans made by the department and other entities to an
7-11 owner-builder under this subchapter may not exceed $60,000.
7-12 SECTION 9. Section 2306.755, Government Code, is amended to
7-13 read as follows:
7-14 Sec. 2306.755. NONPROFIT OWNER-BUILDER HOUSING PROGRAMS. (a)
7-15 The department may certify nonprofit owner-builder housing programs
7-16 operated by a tax-exempt organization listed under Section
7-17 501(c)(3), Internal Revenue Code of 1986, to:
7-18 (1) qualify potential owner-builders for loans under
7-19 this subchapter;
7-20 (2) provide owner-builder education classes under
7-21 Section 2306.756;
7-22 (3) assist owner-builders in building housing; [and]
7-23 (4) administer loans made by the department under this
7-24 subchapter; or
7-25 (5) originate or service loans under this subchapter
7-26 as an agent of the department.
7-27 (b) The department by rule shall adopt procedures for the
8-1 certification of nonprofit owner-builder housing programs under
8-2 this section.
8-3 SECTION 10. Section 2306.758(b), Government Code, is amended
8-4 to read as follows:
8-5 (b) The department may also make loans under this subchapter
8-6 from:
8-7 (1) available funds in the housing trust fund
8-8 established under Section 2306.201;
8-9 (2) federal block grants that may be used for the
8-10 purposes of this subchapter; and
8-11 (3) the owner-builder revolving loan fund established
8-12 under Section 2306.7581 [amounts received by the department in
8-13 repayment of loans made under this subchapter].
8-14 SECTION 11. Subchapter FF, Chapter 2306, Government Code, is
8-15 amended by adding Section 2306.7581 to read as follows:
8-16 Sec. 2306.7581. OWNER-BUILDER REVOLVING LOAN FUND. (a) The
8-17 department shall establish an owner-builder revolving loan fund in
8-18 the department for the sole purpose of funding loans under this
8-19 subchapter.
8-20 (a-1) Using any available source of revenue, the department
8-21 shall transfer to the fund at least $6 million each state fiscal
8-22 year. This subsection expires August 31, 2010.
8-23 (b) The department shall deposit money received in repayment
8-24 of a loan under this subchapter to the owner-builder revolving loan
8-25 fund.
8-26 SECTION 12. Chapter 2306, Government Code, is amended by
8-27 adding Subchapter GG to read as follows:
9-1 SUBCHAPTER GG. COLONIA MODEL SUBDIVISION PROGRAM
9-2 Sec. 2306.781. DEFINITION. In this subchapter, "program"
9-3 means the colonia model subdivision program established under this
9-4 subchapter.
9-5 Sec. 2306.782. ESTABLISHMENT OF PROGRAM. The department
9-6 shall establish the colonia model subdivision program to promote
9-7 the development of new, high-quality, residential subdivisions that
9-8 provide:
9-9 (1) alternatives to substandard colonias; and
9-10 (2) housing options affordable to individuals and
9-11 families of extremely low and very low income who would otherwise
9-12 move into substandard colonias.
9-13 Sec. 2306.783. ELIGIBLE COUNTIES. The department shall
9-14 operate the program only in counties eligible to receive financial
9-15 assistance under Subchapter K, Chapter 17, Water Code.
9-16 Sec. 2306.784. COLONIA MODEL SUBDIVISION REVOLVING LOAN
9-17 FUND. (a) The department shall establish a colonia model
9-18 subdivision revolving loan fund in the department. Money in the
9-19 fund may be used only for purposes of the program.
9-20 (a-1) Using any available source of revenue, the department
9-21 shall transfer to the fund at least $2 million each state fiscal
9-22 year. This subsection expires August 31, 2010.
9-23 (b) The department shall deposit money received in repayment
9-24 of loans under this subchapter to the colonia model subdivision
9-25 revolving loan fund.
9-26 Sec. 2306.785. SUBDIVISION COMPLIANCE. Any subdivision
9-27 created with assistance from the fund must fully comply with all
10-1 state and local laws, including any process established under state
10-2 or local law for subdividing real property.
10-3 Sec. 2306.786. PROGRAM LOANS. (a) The department may make
10-4 loans under the program only to:
10-5 (1) colonia self-help centers established under
10-6 Subchapter Z; and
10-7 (2) community housing development organizations
10-8 certified by the department.
10-9 (b) A loan made under the program may be used only for the
10-10 payment of:
10-11 (1) costs associated with the purchase of real
10-12 property;
10-13 (2) costs of surveying, platting, and subdividing or
10-14 resubdividing real property;
10-15 (3) fees, insurance costs, or recording costs
10-16 associated with the development of the subdivision;
10-17 (4) costs of providing proper infrastructure necessary
10-18 to support residential uses;
10-19 (5) real estate commissions and marketing fees; and
10-20 (6) any other costs as the department by rule
10-21 determines to be reasonable and prudent to advance the purposes of
10-22 this subchapter.
10-23 (c) A loan made by the department under the program may not
10-24 bear interest and may not exceed a term of 36 months.
10-25 (d) The department may offer a borrower under the program
10-26 one loan renewal for each subdivision.
10-27 Sec. 2306.787. ADMINISTRATION OF PROGRAM; RULES. (a) In
11-1 administering the program, the department by rule shall adopt:
11-2 (1) any subdivision standards in excess of local
11-3 standards the department considers necessary;
11-4 (2) loan application procedures;
11-5 (3) program guidelines; and
11-6 (4) contract award procedures.
11-7 (b) The department shall adopt rules to:
11-8 (1) ensure that a borrower under the program sells
11-9 real property under the program only to an individual borrower,
11-10 nonprofit housing developer, or for-profit housing developer for
11-11 the purposes of constructing residential dwelling units; and
11-12 (2) require a borrower under the program to convey
11-13 real property under the program at a cost that is affordable to:
11-14 (A) individuals and families of extremely low
11-15 income; or
11-16 (B) individuals and families of very low income.
11-17 SECTION 13. Subchapter B, Chapter 11, Tax Code, is amended by
11-18 adding Section 11.184 to read as follows:
11-19 Sec. 11.184. COLONIA MODEL SUBDIVISION PROGRAM. (a) An
11-20 organization is entitled to an exemption from taxation of
11-21 unimproved real property it owns if the organization:
11-22 (1) meets the requirements of a charitable
11-23 organization provided by Sections 11.18(e) and (f);
11-24 (2) purchased the property or is developing the
11-25 property with proceeds of a loan made by the Texas Department of
11-26 Housing and Community Affairs under the colonia model subdivision
11-27 program under Subchapter GG, Chapter 2306, Government Code; and
12-1 (3) owns the property for the purpose of developing a
12-2 model colonia subdivision.
12-3 (b) Property may not be exempted under Subsection (a) after
12-4 the fifth anniversary of the date the organization acquires the
12-5 property.
12-6 (c) An organization entitled to an exemption under
12-7 Subsection (a) is also entitled to an exemption from taxation of
12-8 any building or tangible personal property the organization owns
12-9 and uses in the administration of its acquisition, building,
12-10 repair, or sale of property. To qualify for an exemption under
12-11 this subsection, property must be used exclusively by the
12-12 charitable organization, except that another individual or
12-13 organization may use the property for activities incidental to the
12-14 charitable organization's use that benefit the beneficiaries of the
12-15 charitable organization.
12-16 (d) For the purposes of Subsection (e), the chief appraiser
12-17 shall determine the market value of property exempted under
12-18 Subsection (a) and shall record the market value in the appraisal
12-19 records.
12-20 (e) If the organization that owns improved or unimproved
12-21 real property that has been exempted under Subsection (a) sells
12-22 the property to a person other than a person described by Section
12-23 2306.787(b)(1), Government Code, a penalty is imposed on the
12-24 property equal to the amount of the taxes that would have been
12-25 imposed on the property in each tax year that the property was
12-26 exempted from taxation under Subsection (a), plus interest at an
12-27 annual rate of 12 percent computed from the dates on which the
13-1 taxes would have become due.
13-2 SECTION 14. Section 2306.760, Government Code, is repealed.
13-3 SECTION 15. This Act takes effect September 1, 2001.