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78R7471 KEL-D
By: Menendez H.B. No. 2541
A BILL TO BE ENTITLED
AN ACT
relating to a program to meet the need for affordable housing in
this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2306, Government Code, is amended by
adding Subchapter LL to read as follows:
SUBCHAPTER LL. TEXAS AFFORDABLE HOUSING PARTNERSHIP PROGRAM
Sec. 2306.951. DEFINITIONS. (a) In this subchapter:
(1) "Affordable housing advisory committee" means the
committee appointed by the commissioners court of a county or the
governing body of an eligible municipality for the purpose of
recommending specific initiatives to encourage or facilitate
affordable housing.
(2) "Award" means a loan, grant, or subsidy funded
wholly or partially by a local housing assistance trust fund.
(3) "Eligible municipality" means:
(A) a municipality that is eligible for federal
community development block grant entitlement funds as an
entitlement community under that program; or
(B) a nonentitlement municipality that is
receiving a local housing distribution under an interlocal
agreement described by this subchapter.
(4) "Eligible person" or "eligible household" means
one or more individuals or a family determined by a county or
eligible municipality to be of very low income, low income, or
moderate income according to the income limits published annually
by the United States Department of Housing and Urban Development,
adjusted for family size and based on the annual gross income of the
household.
(5) "Eligible sponsor" means a person or private or
public for-profit or nonprofit entity that applies for an award
under a local housing assistance plan to provide housing for
eligible persons.
(6) "Grant" means an award that:
(A) is made from a local housing assistance trust
fund to an eligible sponsor or eligible person to:
(i) assist in the construction,
rehabilitation, or financing of eligible housing; or
(ii) assist with the costs of meeting
tenant or ownership qualifications; and
(B) does not require repayment if the conditions
of the award are met.
(7) "Loan" means an award that:
(A) is made from a local housing assistance trust
fund to an eligible sponsor or eligible person to assist in
financing the acquisition, construction, or rehabilitation of
housing; and
(B) requires repayment or, if the conditions of
the award are met, allows for forgiveness of repayment.
(8) "Local housing assistance plan" means a
description of local housing assistance programs and local housing
incentive programs adopted by a commissioners court or a governing
body of an eligible municipality with an explanation of the way in
which the programs meet the requirements of this subchapter.
(9) "Local housing assistance program" means a housing
construction, rehabilitation, repair, or finance program
implemented by a county or eligible municipality with a local
housing distribution or other funds deposited into a local housing
assistance trust fund.
(10) "Local housing incentive program" means a local
regulatory scheme or incentive program that:
(A) is designed to encourage or facilitate
affordable housing production, including an ongoing process for
pre-adoption review of local policies, ordinances, regulations,
and plan provisions that increase housing costs; and
(B) includes a schedule for implementing the
incentive program.
(11) "Local housing partnership" means the
implementation of the local housing assistance plan in a manner
that involves the applicable county or eligible municipal lending
institutions, housing builders and developers, real estate
professionals, advocates for low-income persons, and providers of
professional services related to affordable housing.
(12) "Plan amendment" means any addition to or
deletion of a local housing assistance program or local housing
incentive program that is consistent with program requirements and
is reviewed by the department.
(13) "Population" means the latest official state
estimate of population certified by the Texas State Data Center
before the beginning of the state fiscal year.
(14) "Program" means the Texas Affordable Housing
Partnership Program established under this subchapter.
(15) "Program income" means:
(A) proceeds derived from interest earned on or
investment of a local housing distribution and other funds
deposited into a local housing assistance trust fund;
(B) proceeds from loan payments;
(C) recycled funds; and
(D) all other income derived from use of funds
deposited in a local housing assistance trust fund.
(b) Deferred participation by an eligible municipality in
the federal community development block grant program does not
affect the eligibility of the municipality to participate in the
program established under this subchapter.
Sec. 2306.952. PROGRAM PURPOSES. The purposes of the
program are to:
(1) provide funds to counties and eligible
municipalities as an incentive for the creation of local housing
partnerships;
(2) expand production and preservation of affordable
housing;
(3) further any component of a local government
comprehensive plan relating to affordable housing;
(4) increase housing-related employment; and
(5) encourage local governments to combine available
resources by encouraging active partnerships between government
lenders, builders and developers, real estate professionals,
advocates for persons of very low, low, and medium income, and
community groups to produce affordable housing and provide related
services.
Sec. 2306.953. PROGRAM ADMINISTRATION. (a) The program is
under the direction of the commissioners court of a county or the
governing body of an eligible municipality, as applicable.
(b) The commissioners court or the governing body of an
eligible municipality may appoint by resolution a local affordable
housing advisory committee to recommend monetary and nonmonetary
incentives for affordable housing. The resolution must provide for
the appointment and terms of nine advisory committee members
consisting of the following:
(1) one member who is actively engaged in the
residential home building industry in connection with affordable
housing;
(2) one member who is actively engaged in the banking
or mortgage banking industry in connection with affordable housing;
(3) one member who is a representative of building
contractors and subcontractors actively engaged in home building in
connection with affordable housing;
(4) one member who is actively engaged as an advocate
for low-income persons in connection with affordable housing;
(5) one member who is actively engaged as a for-profit
provider of affordable housing;
(6) one member who is actively engaged as a nonprofit
provider of affordable housing;
(7) one member who is actively engaged as a real estate
professional in connection with affordable housing;
(8) one member who actively serves on the local
planning agency; and
(9) one member who resides within the jurisdiction of
the commissioners court or governing body making the appointments.
(c) All meetings conducted for purposes of county or
municipal participation in the program are public, and all records
maintained in connection with the program are public information.
(d) A commissioners court, the governing body of an eligible
municipality, or, if applicable, an affordable housing advisory
committee shall:
(1) review the established policies and procedures,
ordinances, real property development regulations, and adopted
local government comprehensive plan; and
(2) recommend specific initiatives to encourage or
facilitate affordable housing while protecting the ability of the
property to appreciate in value.
(e) Recommendations under Subsection (d)(2) may include:
(1) modification or repeal of existing policies,
procedures, ordinances, regulations, or plan provisions;
(2) creation of exceptions applicable to affordable
housing; and
(3) adoption of new policies, procedures, ordinances,
regulations, or plan provisions.
(f) To receive program funds, a commissioners court, the
governing body of an eligible municipality, or, if applicable, an
affordable housing advisory committee must submit to the department
a plan describing local housing assistance programs.
(g) Not later than the first anniversary of the date of
adoption of the local housing assistance plan, the commissioners
court or governing body of an eligible municipality must amend its
plan to incorporate its local housing incentive programs. An
affordable housing advisory committee may make recommendations to
the commissioners court or governing body of an eligible
municipality relating to the housing programs enumerated in the
plan.
(h) Not later than the first anniversary of the date of
adoption of the local housing assistance plan, the commissioners
court or governing body must amend its real property development
regulations or establish local policies and procedures as necessary
to implement its local housing incentive programs. The
commissioners court or governing body of an eligible municipality
may receive recommendations from an affordable housing advisory
committee to accomplish the required amendment.
(i) To receive its share of local housing distributions, a
commissioners court or governing body of an eligible municipality
must adopt an order or ordinance containing the following
provisions:
(1) the creation of a local housing assistance trust
fund;
(2) the adoption by resolution of a local housing
assistance plan to be implemented through a local housing
partnership;
(3) the designation of the responsibility for the
administration of the local housing assistance plan; and
(4) if applicable, the appointment by resolution of an
affordable housing advisory committee.
(j) The order or ordinance may also provide for the
contracting of all or part of the administrative or other functions
of the program to a third party.
(k) The commissioners court or governing body of an eligible
municipality shall submit to the department one copy of its local
housing assistance plan.
(l) The transmittal of the local housing assistance plan
must include a copy of the order or ordinance, the resolution
adopting the plan, and any other information required by the
department that does not place an undue burden on the county or
eligible municipality. Not later than the 30th day after the date
of receipt of the plan, the department shall review the plan and
either certify the plan or identify inconsistencies with the
requirements of the program. The department shall assist the local
government in revising the plan if it initially proves to be
inconsistent with program requirements.
(m) The approval of local housing assistance plans shall be
expedited to ensure that the production of needed housing occurs as
quickly as possible. After being approved for funding, the
commissioners court or governing body of an eligible municipality
may amend by resolution its local housing assistance plan if the
plan as amended complies with program requirements. A local
government must submit its amended plan for review according to the
process established under this subchapter.
Sec. 2306.954. TEXAS AFFORDABLE HOUSING ASSISTANCE TRUST
FUND. (a) The Texas affordable housing assistance trust fund is a
state trust fund with the comptroller for the purpose of making
distributions under this subchapter. All money collected under
this subchapter shall be deposited to the credit of the state trust
fund.
(b) The comptroller annually shall distribute the money in
the state trust fund as follows:
(1) 80 percent to local housing assistance trust
funds, to be disbursed as follows:
(A) 75 percent or $15,000, whichever is greater,
shall be transferred to counties with a population that is less than
150,001 or with an average median income of less than $52,100, as
determined annually by the secretary of the United States
Department of Housing and Urban Development; and
(B) the remaining amount of the money shall be
transferred to counties with a population that is equal to or
greater than 150,001 or with an average median income of $52,100 or
more, as determined annually by the secretary of the United States
Department of Housing and Urban Development; and
(2) 20 percent to the housing trust fund established
under Section 2306.201 for use in accordance with the purposes of
that fund.
Sec. 2306.955. LOCAL HOUSING DISTRIBUTIONS. (a) The
comptroller shall make a local housing distribution from the Texas
affordable housing assistance trust fund to a local housing
assistance trust fund annually beginning the first day of the state
fiscal year following the date the program is approved.
(b) The portion for each county is computed by multiplying
the total funds for the group of counties described by Section
2306.954(b)(1)(A) or (B) by a fraction, the numerator of which is
the population of the county and the denominator of which is the
total population of the group of counties described by Section
2306.954(b)(1)(A) or (B).
(c) The portion for each eligible municipality is computed
by multiplying the total funds for a county by a fraction, the
numerator of which is the population of the eligible municipality
and the denominator of which is the population of the county. The
remaining revenues shall be distributed to the appropriate
commissioners court.
(d) A local housing distribution must be administered in
compliance with an interlocal agreement providing for a joint local
housing assistance plan.
(e) Distributions from a local government trust fund must be
made according to an interlocal agreement between a commissioners
court and the governing body of an eligible municipality.
(f) If a county or eligible municipality enters into an
interlocal agreement with a municipality that becomes eligible as a
result of entering into that interlocal agreement, the county or
eligible municipality that has agreed to transfer the control of
funds to a municipality that was not originally eligible must
ensure through its local housing assistance plan and through the
interlocal agreement that all program funds are used in a manner
consistent with the program.
(g) The funds that otherwise would be distributed under this
subchapter to a local government that does not meet the program's
requirements for receipt of the distributions must remain in the
Texas affordable housing assistance trust fund for a period of 18
months. If the local government does not achieve compliance with
the program within that 18-month period, the funds will be
distributed to the housing trust fund established under Section
2306.201 for use in accordance with the purposes of that fund.
(h) A county or eligible municipality may expend its portion
of local housing distributions only to implement a local housing
assistance plan. Except as otherwise provided by this subsection,
the county or eligible municipality may not expend its portion of
local housing distributions to provide rent subsidies, and funds
distributed under this subchapter may not be pledged to pay the debt
service on any bonds. This subsection does not prohibit the use of
funds for security and utility deposit assistance.
Sec. 2306.956. LOCAL HOUSING ASSISTANCE PLAN:
PARTNERSHIPS. (a) Each county or eligible municipality
participating in the program shall develop and implement a local
housing assistance plan created to make affordable residential
units available to persons of medium, low, and very low income and
to persons who have special housing needs, including homeless
persons, the elderly, and migrant farmworkers.
(b) The plan must seek to increase the availability of
affordable residential units by:
(1) combining local resources and cost-saving
measures into a local housing partnership; and
(2) using private and public funds to reduce housing
costs.
(c) A local housing assistance plan may allocate funds to:
(1) implement local housing assistance programs for
the provision of affordable housing;
(2) supplement funds available to the department to
provide enhanced funding of state housing programs in the county or
the eligible municipality;
(3) provide the local matching share of federal
affordable housing grants or programs;
(4) fund emergency repairs, including repairs
performed by existing service providers under weatherization
assistance programs;
(5) further an affordable housing component of a local
government comprehensive plan;
(6) fund program operation costs and overhead at the
local level in an amount not to exceed five percent of funds
distributed into the local government trust fund, or not to exceed
10 percent if the actual cost can be justified in an approved plan;
and
(7) fund single-family home buyer assistance programs
and finance, acquire, rehabilitate, and construct safe, decent,
affordable housing.
(d) Each county and each eligible municipality
participating in the program shall encourage the involvement of
appropriate public sector and private sector entities as partners
in order to combine resources to reduce housing costs for the
targeted population. The partnership process must involve:
(1) lending institutions;
(2) housing builders and developers;
(3) nonprofit and other community-based housing and
service organizations;
(4) providers of professional services relating to
affordable housing;
(5) advocates for low-income persons;
(6) real estate professionals; and
(7) other persons or entities that can assist in
providing housing or related support services.
(e) A county or eligible municipality participating in the
program shall:
(1) develop a qualification system and selection
criteria for applications for awards by eligible sponsors;
(2) adopt criteria for the selection of eligible
persons; and
(3) adopt a maximum award schedule or system of
amounts consistent with the intent and budget of its local housing
assistance plan.
(f) A county or eligible municipality shall advertise the
notice of funding availability in a newspaper of general
circulation and periodicals serving ethnic and diverse
neighborhoods not later than the 30th day before the date the
application period begins. If funding is not available because of a
waiting list, notice of funding availability is not required.
(g) A county or eligible municipality may not discriminate
on the basis of race, creed, religion, color, age, sex, marital
status, familial status, national origin, or disability in the
award application process for eligible housing.
(h) As a condition of receipt of an award under the program,
an eligible sponsor or eligible person must contractually agree to
comply with the affordable housing criteria applicable to the
affordable housing objective of the award. The criteria must
encourage single-family mortgages, down payment assistance, and
other forms of payment assistance.
(i) The department shall provide technical assistance to
counties and eligible municipalities regarding:
(1) the creation of partnerships;
(2) the design of local housing assistance programs;
(3) the implementation of local housing incentive
programs; and
(4) the provision of support services.
Sec. 2306.957. REPORT SUBMITTED TO DEPARTMENT. (a) The
department shall monitor the activities of counties and eligible
municipalities to determine compliance with program requirements
and shall collect data on the operation and achievements of housing
partnerships.
(b) A county or eligible municipality shall submit to the
department not later than April 30 of each year a report of its
affordable housing programs and related accomplishments through
December 31 of the preceding year. The report must be certified as
accurate and complete by the local government's chief elected
official or that official's designee. Transmittal of the report
certifies that the local housing incentive programs and, if
applicable, the local housing incentive plan have been implemented
or are in the process of being implemented in accordance with the
adopted schedule for implementation.
(c) The report must include:
(1) the number of households served by income
category, age, family size, and race;
(2) data regarding any special needs populations,
including farmworkers, homeless persons, and the elderly;
(3) the number of units and the average cost of
producing units under each local housing assistance program;
(4) the average sales price or value of a
single-family unit and the amount of rent charged for a rental unit
based on unit size;
(5) by income category, the number of mortgages made,
the average mortgage amount, and the rate of default;
(6) a description of the status of implementation of
each local housing incentive program and, if applicable, the local
housing incentive plan contained in the local government's adopted
schedule for implementation;
(7) a concise description of the support services that
are available to the residents of affordable housing provided by
local programs;
(8) sales price or value of housing produced under the
program and an account of what percentage was refinanced by a local
housing distribution, other public funds, and private resources;
and
(9) any other data or affordable housing
accomplishments considered significant by the reporting county or
eligible municipality.
(d) A county or eligible municipality shall make the report
available for public inspection and comment before certifying the
report and transmitting it to the department.
(e) If the department reviews the annual report and
determines that a county or eligible municipality has failed to
implement a local housing incentive program or, if applicable, a
local housing incentive plan, the department shall send a notice of
termination of the county's or eligible municipality's share of
local housing distributions by certified mail to the comptroller
and the affected county or eligible municipality.
SECTION 2. This Act takes effect September 1, 2003.