By: Bivins, et al. S.B. No. 1798 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, funding, and operation of the Teachers' 1-3 Home Loan Program. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter B, Chapter 1372, Government Code, is 1-6 amended by adding Section 1372.0221 to read as follows: 1-7 Sec. 1372.0221. DEDICATION OF PORTION OF STATE CEILING FOR 1-8 TEACHERS HOME LOAN PROGRAM. Out of that portion of the state 1-9 ceiling that is available exclusively for reservations by issuers 1-10 of qualified mortgage bonds under Section 1372.022, $25 million 1-11 shall be allotted each year and made available exclusively to the 1-12 Texas State Affordable Housing Corporation for the purpose of 1-13 issuing qualified mortgage bonds in connection with the teachers 1-14 home loan program established under Section 2306.562. 1-15 SECTION 2. Subsections (a) and (b), Section 2306.553, 1-16 Government Code, are amended to read as follows: 1-17 (a) The public purpose of the corporation is to perform 1-18 activities and services that the corporation's board of directors 1-19 determines will promote the public health, safety, and welfare 1-20 through the provision of adequate, safe, and sanitary housing 1-21 primarily for individuals and families of low, very low, and 1-22 extremely low income, and for teachers under the teachers home loan 1-23 program as provided by Section 2306.562. The activities and 1-24 services shall include engaging in mortgage banking activities and 1-25 lending transactions and acquiring, holding, selling, or leasing 2-1 real or personal property. 2-2 (b) The corporation's primary public purpose is to 2-3 facilitate the provision of housing and the making of affordable 2-4 loans to individuals and families of low, very low, and extremely 2-5 low income, and to teachers under the teachers home loan program. 2-6 The corporation may make first lien, single family purchase money 2-7 mortgage loans for single family homes only to individuals and 2-8 families of low, very low, and extremely low income if the 2-9 individual's or family's household income is not more than the 2-10 greater of 60 percent of the median income for the state, as 2-11 defined by the United States Department of Housing and Urban 2-12 Development, or 60 percent of the area median family income, 2-13 adjusted for family size, as defined by that department. The 2-14 corporation may make loans for multifamily developments if: 2-15 (1) at least 40 percent of the units in a multifamily 2-16 development are affordable to individuals and families with incomes 2-17 at or below 60 percent of the median family income, adjusted for 2-18 family size; or 2-19 (2) at least 20 percent of the units in a multifamily 2-20 development are affordable to individuals and families with incomes 2-21 at or below 50 percent of the median family income, adjusted for 2-22 family size. 2-23 SECTION 3. Subchapter Y, Chapter 2306, Government Code, is 2-24 amended by adding Section 2306.562 to read as follows: 2-25 Sec. 2306.562. TEACHERS HOME LOAN PROGRAM. (a) In this 2-26 section: 3-1 (1) "Home" means a dwelling in this state in which a 3-2 teacher intends to reside as the teacher's principal residence. 3-3 (2) "Mortgage lender" has the meaning assigned by 3-4 Section 2306.004. 3-5 (3) "Program" means the teachers home loan program. 3-6 (4) "Teacher" means a person who is a classroom 3-7 teacher as defined by Section 5.001, Education Code. 3-8 (b) The corporation shall establish a program to provide 3-9 eligible teachers with low-interest home mortgage loans. 3-10 (c) To be eligible for a loan under this section, a teacher 3-11 must: 3-12 (1) have been residing in this state for the five-year 3-13 period preceding the date the teacher files an application for a 3-14 loan under this section; 3-15 (2) have been working as a teacher for the three-year 3-16 period preceding the application date; and 3-17 (3) reside in this state on the application date. 3-18 (d) The corporation may contract with other agencies of the 3-19 state or with private entities to determine whether applicants 3-20 qualify as teachers under this section or otherwise to administer 3-21 all or part of this section. 3-22 (e) The board of directors of the corporation may set and 3-23 collect from each applicant any fees the board considers reasonable 3-24 and necessary to cover the expenses of administering the program. 3-25 (f) The board of directors of the corporation shall adopt 3-26 rules governing: 4-1 (1) the administration of the program; 4-2 (2) the making of loans under the program; 4-3 (3) the criteria for approving mortgage lenders; 4-4 (4) the use of insurance on the loans and the homes 4-5 financed under the program, as considered appropriate by the board 4-6 to provide additional security for the loans; 4-7 (5) the verification of occupancy of the home by the 4-8 teacher as the teacher's principal residence; and 4-9 (6) the terms of any contract made with any mortgage 4-10 lender for processing, originating, servicing, or administering the 4-11 loans. 4-12 (g) The corporation shall ensure that a loan under this 4-13 section is structured in a way that complies with any requirements 4-14 associated with the source of the funds used for the loan. 4-15 (h) In addition to funds set aside for the program under 4-16 Section 1372.0221, the corporation may solicit and accept funding 4-17 for the program from the following sources: 4-18 (1) gifts and grants for the purposes of this section; 4-19 (2) available money in the housing trust fund 4-20 established under Section 2306.201, to the extent available to the 4-21 corporation; 4-22 (3) federal block grants that may be used for the 4-23 purposes of this section, to the extent available to the 4-24 corporation; 4-25 (4) other state or federal programs that provide money 4-26 that may be used for the purposes of this section; and 5-1 (5) amounts received by the corporation in repayment 5-2 of loans made under this section. 5-3 (i) This section expires September 1, 2012. 5-4 SECTION 4. The Texas State Affordable Housing Corporation 5-5 shall: 5-6 (1) give priority to a teacher who resides or teaches 5-7 in an area of the state with a teacher shortage, as determined by 5-8 the commissioner of education; 5-9 (2) aggressively pursue funding for the teachers home 5-10 loan program required by Section 2306.562, Government Code, as 5-11 added by this Act; and 5-12 (3) implement the teachers home loan program required 5-13 by that section not later than September 1, 2002. 5-14 SECTION 5. (a) If the legislature finds in a scheduled 5-15 review of the Texas State Affordable Housing Corporation by the 5-16 Sunset Advisory Commission under Section 2306.5521, Government 5-17 Code, that the teachers home loan program under Section 2306.562, 5-18 Government Code, as added by this Act, is not being managed to 5-19 accomplish the goal of providing low-interest home mortgage loans 5-20 to teachers, the legislature shall make specific recommendations to 5-21 remedy any problems. 5-22 (b) If the legislature finds in a scheduled review of the 5-23 Texas State Affordable Housing Corporation by the Sunset Advisory 5-24 Commission under Section 2306.5521, Government Code, that the 5-25 corporation should be abolished, the teachers home loan program 5-26 under Section 2306.562, Government Code, as added by this Act, 6-1 shall be transferred to another appropriate state agency. 6-2 SECTION 6. This Act takes effect immediately if it receives 6-3 a vote of two-thirds of all the members elected to each house, as 6-4 provided by Section 39, Article III, Texas Constitution. If this 6-5 Act does not receive the vote necessary for immediate effect, this 6-6 Act takes effect September 1, 2001.