By: Lucio S.B. No. 1520
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Housing Finance Corporations Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 394.011, Local
Government Code, is amended to read as follows:
(a) The governing body of a local government shall consider
a written application for the incorporation of a housing finance
corporation filed with the governing body by one or more [at least
three] residents of the local government who are citizens of this
state and at least 18 years of age.
SECTION 2. Subsection (a), Section 394.012, Local
Government Code, is amended to read as follows:
(a) The governing bodies of more than one local government
may consider a written application for the incorporation of a joint
housing finance corporation to act on behalf of the local
governments filed by one or more [at least three] residents of each
sponsoring local government who are citizens of this state and at
least 18 years of age.
SECTION 3. Section 394.013, Local Government Code, is
amended to read as follows:
Sec. 394.013. INCORPORATORS. One [Three] or more residents
of the local government who are at least 18 years of age may act as
incorporators of the housing finance corporation by signing,
verifying, and delivering in duplicate to the secretary of state
the articles of incorporation for the corporation. An incorporator
may be a member of the governing body, an officer, or an employee of
the local government.
SECTION 4. Section 394.032, Local Government Code, is
amended by amending Subsection (a) and adding Subsection (f) to
read as follows:
(a) A housing finance corporation may:
(1) make contracts and other instruments as necessary
or convenient to the exercise of powers under this chapter
including entering partnership agreements;
(2) incur liabilities;
(3) borrow money at rates determined by the
corporation;
(4) issue notes, bonds, and other obligations; and
(5) secure any of its obligations by the mortgage or
pledge of all or part of the corporation's property, franchises,
and income.
(f) A housing finance corporation may be a partner in a
general or limited partnership.
SECTION 5. Subsection (b), Section 394.033, Local
Government Code, is amended to read as follows:
(b) A housing finance corporation may but is not required to
have a corporate seal, which may be altered at will, and may but is
not required to use the seal by causing it, or a facsimile of it, to
be impressed on, affixed to, or otherwise reproduced on any
instrument required to be executed by the corporation's officers
including, but not limited to, its bonds.
SECTION 6. Section 394.051, Local Government Code, is
amended to read as follows:
Sec. 394.051. BONDS; INVESTMENT. (a) A housing finance
corporation may issue its bonds by resolution of the board of
directors for the purposes prescribed by this chapter. The
resolution takes effect immediately on adoption. The bonds bear
interest at a rate authorized by Chapter 1204, Government Code, and
are subject to the following terms provided by the resolution:
(1) the time at which the bonds are payable;
(2) the number of series in which the bonds are issued;
(3) the dates that the bonds bear;
(4) the time of maturity of the bonds;
(5) the medium of payment and the place of payment of
the bonds;
(6) any registration privileges;
(7) terms of redemption at certain premiums;
(8) manner of execution of the bonds;
(9) covenants and other terms of the bonds; and
(10) the form of the bonds, either coupon or
registered.
(b) The bonds may be sold at public or private sale in the
manner and on the terms provided by the resolution. Pending the
preparation of definitive bonds, any interim receipts or
certificates in the form and with the provisions provided by the
resolution may be issued to the purchasers of bonds sold under this
chapter.
(c) [The aggregate principal amount of bonds that a housing
finance corporation may issue in a calendar year to defray costs
described by Section 394.037(a)(2) may not exceed the total of:
[(1) the cost of issuance of the bonds, any reserves or
capitalized interest required by the resolutions authorizing the
bonds, plus any bond discounts; and
[(2) the largest of:
[(A) $20 million;
[(B) the product of $150 and the population of
the local government as determined by the corporation's rules,
resolutions relating to the issuance of bonds, or financing
documents relating to the issuance of the bonds; or
[(C) an amount equal to 25 percent of the total
dollar amount of the market demand for home mortgages during that
calendar year as determined by the corporation's rules, resolutions
relating to the issuance of bonds, or financing documents relating
to the issuance of the bonds.
[(d) A determination made under Subsection (c)(2)(B) or
(c)(2)(C) is conclusive.
[(e)] The housing finance corporation shall notify the
Texas Department on Aging of each bond issuance for multifamily
projects and shall deliver to the department a copy of each
certificate of resolution authorizing the issuance and any other
information required by the department.
(d) [(f)] The housing finance corporation, or any trustee
or custodian on behalf of the corporation, may invest any funds held
by it as provided by the resolution authorizing the issuance of the
bonds.
(e) [(g)] The housing finance corporation is not required
to acquire or hold title to a residential development, a home
mortgage, or any interest in the development or mortgage.
(f) [(h)] The housing finance corporation is not required
to sell commitments to lenders to originate home mortgages. A
housing financing corporation may establish a program so that
lenders will utilize the proceeds of the bonds to originate home
mortgages on a first-come, first-served basis.
SECTION 7. Subsection (a), Section 394.053, Local
Government Code, is amended to read as follows:
(a) Bonds issued under this chapter must bear the actual or
facsimile signature of the housing finance corporation's officers
designated in the resolution authorizing the bonds. The validity
of a signature of an officer of the corporation is not affected by
the fact that before the delivery of the bond or its payment, a
person whose signature appears on the bond ceases to be an officer.
The corporation's seal need not be impressed on, applied to, or
otherwise reproduced on the bonds for the bonds to be valid
obligations of the corporation.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.