78R7467 KEL-D

By:  Shapleigh                                                    S.B. No. 1077


A BILL TO BE ENTITLED
AN ACT
relating to the provision of assistance to colonias and colonia residents in certain areas of the state. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. The heading to Subchapter GG, Chapter 2306, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows:
SUBCHAPTER GG. COLONIA MODEL SUBDIVISION AND DOWN PAYMENT ASSISTANCE PROGRAMS [PROGRAM]
SECTION 2. Section 2306.781, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2306.781. DEFINITIONS [DEFINITION]. In this subchapter: (1) "Down payment assistance program" means the colonia down payment program established under this subchapter. (2) [,] "Model subdivision program" means the colonia model subdivision program established under this subchapter. SECTION 3. The heading to Section 2306.782, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2306.782. ESTABLISHMENT OF MODEL SUBDIVISION PROGRAM. SECTION 4. Section 2306.783(a), Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (a) The department shall establish a colonia model subdivision revolving loan fund in the department. Money in the fund may be used only for purposes of the model subdivision program. SECTION 5. Section 2306.785, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2306.785. MODEL SUBDIVISION PROGRAM LOANS. (a) The department may make loans under the model subdivision program only to: (1) colonia self-help centers established under Subchapter Z; and (2) community housing development organizations certified by the department. (b) A loan made under the model subdivision program may be used only for the payment of: (1) costs associated with the purchase of real property; (2) costs of surveying, platting, and subdividing or resubdividing real property; (3) fees, insurance costs, or recording costs associated with the development of the subdivision; (4) costs of providing proper infrastructure necessary to support residential uses; (5) real estate commissions and marketing fees; and (6) any other costs as the department by rule determines to be reasonable and prudent to advance the purposes of this subchapter. (c) A loan made by the department under the model subdivision program may not bear interest and may not exceed a term of 36 months. (d) The department may offer a borrower under the model subdivision program one loan renewal for each subdivision. SECTION 6. Section 2306.786, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: Sec. 2306.786. ADMINISTRATION OF MODEL SUBDIVISION PROGRAM; RULES. (a) In administering the model subdivision program, the department by rule shall adopt: (1) any subdivision standards in excess of local standards the department considers necessary; (2) loan application procedures; (3) program guidelines; and (4) contract award procedures. (b) The department shall adopt rules to: (1) ensure that a borrower under the model subdivision program sells real property under the program only to an individual borrower, nonprofit housing developer, or for-profit housing developer for the purposes of constructing residential dwelling units; and (2) require a borrower under the model subdivision program to convey real property under the program at a cost that is affordable to: (A) individuals and families of extremely low income; or (B) individuals and families of very low income. SECTION 7. Subchapter GG, Chapter 2306, Government Code, as added by Chapter 1367, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Section 2306.787 to read as follows: Sec. 2306.787. COLONIA DOWN PAYMENT ASSISTANCE PROGRAM. (a) In this section: (1) "Colonia" means a geographic area that: (A) is an economically distressed area as defined by Section 17.921, Water Code; and (B) is located in a county any part of which is within 50 miles of an international border. (2) "Eligible individuals and families" means individuals and families of extremely low and very low income who reside in a colonia. (b) The department shall establish the colonia down payment assistance program to provide down payment assistance to individuals and families of extremely low and very low income who would otherwise remain in substandard colonias. (c) On application, the department may provide a loan to eligible individuals and families under this section by using money from the portion of community development block grants that is set aside under federal law to provide financial assistance to colonias. In a state fiscal year, the department may not provide loans under this section using more than $2 million from the set-aside for colonias. (d) A loan made by the department under the down payment assistance program may bear interest at a reasonable rate set by the department and may not exceed a term of 30 years. (e) In administering the down payment assistance program, the department by rule shall adopt program guidelines and loan application procedures. SECTION 8. Section 2306.586(b), Government Code, is amended to read as follows: (b) A self-help center shall set a goal to improve the living conditions of residents in the colonias designated under Section 2306.583(b) [2306.583(a)(2)] within a one-year [two-year] period after a contract is awarded under this subchapter. SECTION 9. Section 15.951(2), Water Code, as added by Chapter 1234, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (2) "Colonia" means a geographic area that: (A) has a majority population composed of individuals and families of low income and very low income, based on the federal Office of Management and Budget poverty index, and meets the qualifications of [is] an economically distressed area under [as defined by] Section 17.921; or [and] (B) has the physical and economic characteristics of a colonia, as determined by the department [is located in a county any part of which is within 50 miles of an international border]. SECTION 10. Section 2306.255(g), Government Code, is repealed. SECTION 11. (a) The Texas Department of Housing and Community Affairs shall adopt the rules required by Section 2306.787, Government Code, as added by this Act, not later than December 1, 2003. (b) The changes in law made by Sections 8 and 9 of this Act apply only to an application for assistance that is filed or a contract that is awarded on or after the effective date of this Act. SECTION 12. This Act takes effect September 1, 2003.