C.S.S.B. 284 78(R)    BILL ANALYSIS


C.S.S.B. 284
By: Lucio
Urban Affairs
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

In 1995, the 74th Texas Legislature established the Texas State Affordable
Housing Corporation 
(TSAHC) as a self-sustaining non-profit entity to facilitate the provision
of affordable housing for low income Texans. Since April 2001, the
Corporation has issued $487 million in tax-exempt mortgage revenue bonds
to finance more than 7,700 multifamily affordable housing units.  The
bonds are payable solely from the rental income of the property, without
any obligation on behalf of the State to repay the bonds.  In addition,
the Corporation offers grants for down payment and closing cost assistance
to eligible Texas educators. 
TSAHC underwent a Sunset review in 2001.  The 77th Legislature continued
TSAHC for two years, rather than the standard 12 years, and required  the
Sunset Commission to evaluate TSAHC's new business focus. As proposed,
S.B. 284 continues  TSAHC until September 1, 2009, and requires TSAHC to
adopt a minimum dollar-for-dollar public benefit requirement for
recipients of 501(c)(3) bonds. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.Amends Government Code, Section 2306.057 to add a requirement
that the Texas Department of Housing and Community Affairs ("the
Department") board consider relevant compliance information in the
department's database created in Government Code, Section 2306.081,
including information provided by the Texas State Affordable Housing
Corporation ("the Corporation").  This Section corresponds to Sunset
Commission Recommendation 2.6. 

SECTION 2.Amends Government Code, Section 2306.0721 to add a requirement
that the Department include the Corporation's plan (created under the new
Government Code, Section 2306.565, below) to meet the state's most
pressing housing needs in the Department's resource allocation plan
portion of the State Low Income Housing Plan ("SLIHP").   It also adds a
requirement that the Department include the  Corporation's projects in the
estimate and analysis of the housing supply in each uniform state service
region under the SLIHP.    This Section corresponds to Sunset Commission
Recommendation 2.5. 

SECTION 3.Amends Government Code, Section 2306.0722(b) to add a
requirement that the Department to share the latest needs assessment
information with the Corporation. This Section corresponds to Sunset
Commission Recommendation 2.5. 

SECTION 4. Amends Government Code, Section 2306.081 to require the
Department to include project compliance information provided by the
Corporation in its project compliance database, and to allow the
Corporation to access database information. This Section corresponds to
Sunset Commission Recommendation 2.6. 

SECTION 5.Amends Government Code, Section 2306.5521 to extend the
Corporation until September 1, 2009.  Sunset provision; corresponds to
Sunset Commission  Recommendation 2.1. 

SECTION 6.Amends Government Code, Section 2306.554 to allow for
Corporation board member reimbursement of travel expenses to the same
extent provided by the General Appropriations Act for a member of a state
board.  Also requires that appointment to the Corporation's board of
directors be made without regard to the appointee's race, color,
disability, sex, religion, age, or national origin.  This Section
corresponds to Sunset Commission Across-the-Board Recommendation 3. 

SECTION 7.Amends Government Code, Subchapter Y, Chapter 2306, by adding
Sections 2306.5541, 2306.5542, and 2306.5543.   
Section 2306.5541 establishes staggered six-year terms for Corporation
board members, with the terms of one or two members expiring on February 1
of each odd-numbered year.  This Section corresponds to Sunset Commission
Recommendation 2.2. 
Section 2306.5542  specifies grounds for removal of Corporation board
members. Provides that validity of a board action is not affected by the
fact that it is taken when a ground for removal of a board member exists.
In addition, it provides a procedure for notification of the governor and
attorney general when a potential ground for removal exists.  This Section
corresponds to Sunset Commission Across-the-Board Recommendation 5. 
Section 2306.5543 requires a Corporation board member to complete a
specified training program before taking office as a board member, and
provides for reimbursement of travel expenses for such program.  This
Section corresponds to Sunset Commission Across-the-Board Recommendation
7. 

SECTION 8.Amends Government Code, Section 2306.5545, to add a conflict of
interest provision.  Provides that a person may not be a member of the
Corporation's board  of directors, nor serve as a Corporation executive,
administrative or professional employee if they or their spouse are an
officer, employee, or paid consultant of a Texas trade association in the
field of banking, real estate, housing development , or housing
construction. Defines the phrase "Texas trade association."  This Section
corresponds to Sunset Commission Across-the-Board Recommendation 2. 

SECTION 9.Amends Government Code, Subchapter Y, Chapter 2306, by adding
Sections 2306.5546, 2306.5547, and 2306.5548. 
Section 2306.5546 requires that information on standards of conduct be
provided by the Corporation president or designee to members of the board
and Corporation's employees.  This Section corresponds to Sunset
Commission Across-the-Board Recommendation 6. 
Section 2306.5547 requires the Corporation's board to develop and
implement policies that clearly separate the functions of the board and
Corporation staff. This Section corresponds to Sunset Commission
Across-the-Board Recommendation 8. 
Section 2306.5548 requires the Corporation president or designee to
develop and maintain an equal employment opportunity policy including, at
a minimum, personnel policies and an analysis of the extent to which the
Corporation's personnel is in accordance with state and federal law and a
description of reasonable methods to achieve compliance.  Provides that
the statement must be updated annually and filed with the governor's
office.  This Section corresponds to Sunset Commission Across-the-Board
Recommendation 11. 

SECTION 10.Amends Government Code, Subchapter Y, Chapter 2306, by adding
Sections 2306.563, 2306.564, 2306.565, 2306.566, 2306.567, and 2306.568. 
Section 2306.563 requires the Corporation to implement a  minimum
dollar-fordollar public benefit requirement for recipients of 501(c)(3)
bonds. This requires borrowers to invest at least one dollar in rent
reduction, capital improvement projects, or social, educational, or
economic development services benefitting  income-eligible persons for
every dollar of abated property tax revenue that they receive.  These
investments must be made in the county in which the property is located,
and the Corporation and the organization may determine on a case-bycase
basis specific projects to be invested in.  Provides that Payments In Lieu
Of Taxes (PILOTs) reduce dollar-for-dollar the public benefit requirement.
Requires the Corporation to adopt guidelines for public benefit projects
and services.    This Section corresponds to Sunset Commission
Recommendation 2.3. 
Section 2306.564 requires the Corporation to annually review 501(c)(3)
bond issuance policies, including the public benefit requirement in
Section 2306.563 above.  Provides for publication and comment in the Texas
Register of proposed revisions, as well as board approval of changes.
This Section corresponds to Sunset Commission Recommendation 2.4. 
Section 2306.565 requires coordination between the Department and the
Corporation in the development of the SLIHP.  The Corporation is required
to review needs assessment information provided by the Department, develop
a plan to meet the state's most pressing housing needs, and provide this
plan to the Department for incorporation into the SLIHP. This plan must
specifically address rural and underserved areas, as well as not duplicate
other organizations' efforts. This Section corresponds to Sunset
Commission Recommendation 2.5. 
Section 2306.566 requires the Corporation to provide to the Department
electronic copies of all compliance information it compiles, as well as
consider any relevant compliance information in the Department's
compliance database created under Section 2306.081 above.  This Section
corresponds to Sunset Commission Recommendation 2.6. 
Section 2306.567 requires the Corporation to maintain a file on any
written complaint filed with it and specifies the content of the file.  It
requires the Corporation to provide parties to a complaint with a copy of
the Corporation's complaint investigation and resolution policies and
procedures.  Additionally, it requires the Corporation to notify parties
to a complaint quarterly until final disposition, the status of the
investigation unless notice would jeopardize an undercover investigation.
This Section corresponds to Sunset Commission Across-the-Board
Recommendation 10.  
Section 2306.568 requires the Corporation's board to develop and implement
a technology policy which ensures easy public access to Corporation
information and services as well as interaction with the Corporation on
the Internet.  It requires the policy to be cost effective and developed
through the corporation's planning processes.  This Section corresponds to
Sunset Commission Across-the-Board Recommendation 13.  

SECTION 11.Requires the governor to make five appointments to the
Corporation's board of directors as soon as possible on or after September
1, 2003.  One of these appointments will have a term expiring February 1,
2005; two appointments will have terms expiring February 1, 2007; and two
appointment will have terms expiring February 1, 2009.  Abolishes, at the
time that three or more of the new directors qualifies for office, all of
the offices of the board of directors of the Corporation serving on
September 1, 2003.  Gives the newly appointed directors until September 1,
2004 to comply with the training requirement added by Section 7 of the
bill.  

SECTION 12.Specifies that Government Code, Section 2306.567, Record of
Complaints, added by Section 10 of the bill, applies only to a complaint
filed with the Corporation's board of directors after September 1, 2003. 

SECTION 13.Effective date.

EFFECTIVE DATE:  September 1, 2003.



 



COMPARISON OF ORIGINAL TO SUBSTITUTE