LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 28, 2001
TO: Honorable Bill G. Carter, Chair, House Committee on Urban
Affairs
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3294 by Wise (Relating to the provision of housing and
related forms of assistance to residents of colonias and
residents of other underserved regions of this state.),
As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3294, As Introduced: negative impact of $(4,150,000) through *
* the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(2,150,000) *
* 2003 (2,000,000) *
* 2004 (2,000,000) *
* 2005 (2,000,000) *
* 2006 (2,000,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year General Revenue Fund Housing Safekeeping Trust Fund *
* 0001 *
* 2002 $(2,150,000) $(200,000) *
* 2003 (2,000,000) 0 *
* 2004 (2,000,000) 0 *
* 2005 (2,000,000) 0 *
* 2006 (2,000,000) 0 *
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Technology Impact
There would be no impact on technology.
Fiscal Analysis
The bill would establish a colonia model subdivision program whereby the
department would make loans to colonia self-help centers and community
development subdivisions in certain counties to fund the provision of
infrastructure and other activities related to the creation of housing
options for extremely low and very low income individuals or families who
would otherwise reside in a colonia. The provisions of the bill would
also establish the Colonia Model Subdivision Revolving Loan Fund.
The bill would add 2306.359 to the Government Code, Tax-Exempt Single
Family Mortgage Revenue Bonds. The new section would authorize the Texas
Department of Housing and Community Affairs (TDHCA) to issue tax exempt
single family mortgage revenue bonds to make home mortgage loans to
economic and geographic submarkets of borrowers who are individuals and
families of extremely low and very low income and are not served or are
substantially underserved by other lenders. The bill would amend
11.184 of the Tax Code to authorize property tax exemptions for five
years for unimproved real property that is being developed under the
Colonia Model Subdivision Program.
The bill would amend the Owner-Builder Loan Program established under
Subchapter FF, removing the requirement that the owner-builder must
reside with two other family members, and would increase the cost of the
land and housing that triggers the need for an additional loan from
$25,000 to $30,000. Section 2306.755 would be amended to add origination
of loans as an agent of TDHCA to the list of activities for which TDHCA
may certify nonprofit owner builder housing programs. Section 2306.7581
would establish the Owner-Builder Revolving Loan Fund. The bill would
require TDHCA to establish this program and a corresponding Revolving
Loan Fund by transferring $6 million from any available source of revenue
to the Owner-Builder Revolving Loan Fund each fiscal year until August
31, 2010. The bill would require TDHCA to enter directly into four-year
contracts with non-profits and local housing authorities to operate
self-help centers and would require that the agency be solely responsible
for oversight and administration of the self-help centers.
The bill would allow TDHCA to utilize loan repayments from the Texas
Bootstrap Owner-Builder Program to make loans through the program and to
transfer at least $6 million each state fiscal year until August 31, 2010
to the Owner-Builder Revolving Loan Fund.
The bill would go into effect September 1, 2001.
Methodology
According to TDHCA, the fiscal impact in fiscal year 2002 would be a
$2,150,000 cost to General Revenue and $200,000 in cost to funds outside
the state treasury (bond proceeds deposited in the Safekeeping Trust) and
a $2 million cost to General Revenue in each subsequent year. The cost
of engaging a third-party professional market study to identify the unmet
or substantially underserved home mortgage credit submarkets in Texas
would be $350,000. According to TDHCA, the agency does not currently have
an available funding source and would require $2 million in General
Revenue appropriations per year to implement the provisions of the bill.
Provisions of the bill could cause a reduction in a school district's
taxable values reported to the Commissioner of Education by the
Comptroller. The Texas Education Agency has estimated that as a general
rule, a difference of $1 billion in property valuation would change
state aid requirements by about $14 million each year.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, DB, ER