81R34757 ACP/JAM-F

By: Ellis S.B. No. 1861

Substitute the following for S.B. No. 1861:

By: Alvarado C.S.S.B. No. 1861

A BILL TO BE ENTITLED

AN ACT

relating to the transfer of powers, duties, and programs to, and the continuation of, the Texas Department of Housing and Community Affairs, to the establishment and administration of certain other programs and divisions within the department, and to other provisions relating to fair or affordable housing.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2306.001, Government Code, is amended to read as follows:

Sec. 2306.001. PURPOSES. The purposes of the department are to:

(1) assist local governments in:

(A) providing essential public services for their residents; and

(B) overcoming financial, social, and environmental problems;

(2) provide for the housing needs of individuals and families of low, very low, and extremely low income and families of moderate income;

(3) contribute to the preservation, development, and redevelopment of neighborhoods and communities, including cooperation in the preservation of government-assisted housing occupied by individuals and families of very low and extremely low income;

(4) assist the governor and the legislature in coordinating federal and state programs affecting local government;

(5) inform state officials and the public of the needs of local government;

(6) serve as the lead agency for:

(A) addressing at the state level the problem of homelessness in this state;

(B) coordinating interagency efforts to address homelessness; and

(C) addressing at the state level and coordinating interagency efforts to address any problem associated with homelessness, including hunger; [and]

(7) serve as a source of information to the public regarding all affordable housing resources and community support services in the state; and

(8) administer programs to achieve the purposes described by this section and implement procedures to improve the efficiency of those programs and to maximize federal funding.

SECTION 2. Section 2306.022, Government Code, is amended to read as follows:

Sec. 2306.022. APPLICATION OF SUNSET ACT. The Texas Department of Housing and Community Affairs is subject to Chapter 325 (Texas Sunset Act). Unless continued in existence as provided by that chapter, the department is abolished and this chapter expires September 1, 2013 [2011].

SECTION 3. Section 2306.041, Government Code, is amended to read as follows:

Sec. 2306.041. IMPOSITION OF PENALTY. The board shall [may] impose an administrative penalty on a person who violates this chapter or a rule or order adopted under this chapter.

SECTION 4. Subchapter C, Chapter 2306, Government Code, is amended by adding Section 2306.058 to read as follows:

Sec. 2306.058. TRANSITION PLAN FOR CERTAIN POWERS, DUTIES, AND PROGRAMS; RULES. (a) The director by rule shall adopt a transition plan for the department's assumption of the former powers and duties of the Texas State Affordable Housing Corporation under Section 2306.551. The transition plan must:

(1) include a timetable with specific steps and deadlines needed to fully complete the transfer; and

(2) ensure that the transfer is fully implemented not later than January 1, 2010.

(b) The director may adopt rules necessary to improve the efficiency or effectiveness of any program that is transferred to the department as a result of the department's assumption of the former powers and duties of the Texas State Affordable Housing Corporation under Section 2306.551, including rules that provide for consolidating the operation of programs already administered by the department and a program or programs that are transferred to the department from the Texas State Affordable Housing Corporation.

(c) Notwithstanding Subsection (b), the director may not consolidate or eliminate the programs administered under Sections 2306.562 and 2306.5621.

SECTION 5. Subchapter D, Chapter 2306, Government Code, is amended by adding Sections 2306.0725 and 2306.084 to read as follows:

Sec. 2306.0725. LONG-RANGE LOW INCOME HOUSING PLAN. (a) The director shall prepare and submit to the board an integrated long-range state low income housing plan covering at least six years.

(b) Not later than the 30th day after the date the board receives and approves the plan, the board shall submit the plan to the governor, the lieutenant governor, and the speaker of the house of representatives.

(c) The plan must establish policy goals for meeting low income housing needs on a statewide and regional basis and prescribe strategies to meet those goals. The plan must include:

(1) an estimate and analysis of the housing needs of the following populations in each uniform state service region:

(A) individuals and families of moderate, low, very low, and extremely low income;

(B) individuals with special needs, with specific emphasis on the needs of elderly individuals and individuals with disabilities; and

(C) homeless individuals;

(2) a proposal to use all available housing resources to address the housing needs of the populations described by Subdivision (1) by establishing funding levels for all housing-related programs;

(3) an estimate of the number of federally assisted housing units available for individuals and families of low and very low income and individuals with special needs in each uniform state service region;

(4) a description of state programs that govern the use of all available housing resources;

(5) a resource allocation plan that targets all available housing resources to individuals and families of low and very low income and individuals with special needs in each uniform state service region;

(6) a description of the department's efforts to monitor and analyze the unused or underused federal resources of other state agencies for housing-related services and services for homeless individuals and the department's recommendations to ensure the full use by the state of all available federal resources for those services in each uniform state service region;

(7) strategies to provide housing for individuals and families with special needs in each uniform state service region;

(8) a description of the department's efforts to encourage in each uniform state service region the construction of housing units that incorporate energy efficient construction and appliances;

(9) an estimate and analysis of the housing supply in each uniform state service region;

(10) an inventory of all publicly and, where possible, privately funded housing resources, including public housing authorities, housing finance corporations, community housing development organizations, and community action agencies;

(11) strategies for meeting rural housing needs;

(12) an action plan for colonias that addresses current policy goals for colonia programs, strategies to meet the policy goals, and the projected outcomes with respect to the policy goals; and

(13) strategies for eliminating redundant and inefficient practices.

(d) The priorities and policies in each housing plan adopted by the department must be consistent to the extent practical with the priorities and policies established in the long-range state low income housing plan.

(e) The director may subdivide the uniform state service regions as necessary for purposes of the long-range state low income housing plan.

Sec. 2306.084. GENERAL ENFORCEMENT AUTHORITY; STUDY. (a) The department shall develop and implement procedures to ensure that all programs administered by the department comply with the requirements of this chapter and applicable federal laws.

(b) The department shall conduct a study to determine whether the creation of new programs or expansion of existing services would improve the department's ability to perform the duties assigned by this chapter.

SECTION 6. Subchapter E, Chapter 2306, Government Code, is amended by adding Sections 2306.095, 2306.096, 2306.0971, and 2306.0972 to read as follows:

Sec. 2306.095. FINANCIAL ASSISTANCE FOR LOCAL INITIATIVES REGARDING THE HOMELESS. (a) The department shall provide financial assistance to political subdivisions, housing finance corporations, for-profit corporations, and nonprofit organizations that provide services for individuals and families who are homeless.

(b) Assistance provided under this section must be used only to support local initiatives regarding homeless individuals and families.

(c) The department shall seek any federal funding available for the purposes of the program.

(d) The department may adopt rules to administer this section.

Sec. 2306.096. HOMELESS GRANT PROGRAM. (a) The department shall provide grants, supportive housing services, and housing retention services to support services offered to homeless persons by political subdivisions, housing finance corporations, for-profit corporations, and nonprofit organizations.

(b) Grants made under this section must be used only for support services for homeless persons, including:

(1) case management;

(2) job training, placement, and retention;

(3) housing placement and retention; and

(4) mental health services.

(c) The department may adopt rules to administer this section.

Sec. 2306.0971. SUPPLEMENTAL ASSISTANCE PROGRAM FOR CERTAIN WEATHERIZATION-RELATED MEASURES. (a) In addition to the Energy Services Program for Low-Income Individuals established under Section 2306.097, the department shall establish a program that provides financial assistance for residential weatherization-related measures that do not qualify for federal funds under the weatherization assistance program for low-income persons but that, if performed, would allow a person to receive that federal assistance.

(b) The department by rule shall establish eligibility criteria for a person to receive financial assistance for residential weatherization-related measures described by Subsection (a). The criteria must ensure that any weatherization-related measures performed will allow a person to receive federal assistance under the weatherization assistance program. The income criteria must be equivalent to the income criteria for a person to receive federal assistance under the weatherization assistance program.

Sec. 2306.0972. WEATHERIZATION PILOT PROGRAM. (a) The department may establish a pilot program to study the effectiveness of weatherization measures in increasing residential energy efficiency for individuals and families of low income.

(b) If the department establishes a pilot program under this section, not later than December 1, 2010, the department shall submit a report to the legislature regarding its findings and recommendations under the pilot program.

(c) This section expires September 1, 2011.

SECTION 7. Section 2306.111(d-1), Government Code, is amended to read as follows:

(d-1) In allocating low income housing tax credit commitments under Subchapter DD, the department shall, before applying the regional allocation formula prescribed by Section 2306.1115, set aside for at-risk developments, as defined by Section 2306.6702, not less than the minimum amount of housing tax credits required under Section 2306.6714. Funds or credits are also not required to be allocated according to the regional allocation formula under Subsection (d) if:

(1) the funds or credits are reserved for contract-for-deed conversions or for set-asides mandated by state or federal law, including the nonprofit set-aside mandated by Section 42(h)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 42(h)(5)), and each contract-for-deed allocation or set-aside allocation equals not more than 10 percent of the total allocation of funds or credits for the applicable program;

(2) the funds or credits are allocated by the department primarily to serve persons with disabilities; or

(3) the funds are housing trust funds administered by the department under Sections 2306.201-2306.206 that are not otherwise required to be set aside under state or federal law and do not exceed $3 million during each application cycle.

SECTION 8. Section 2306.1114(a), Government Code, is amended to read as follows:

(a) Not later than the 14th day after the date an application or a proposed application for housing funds described by Section 2306.111 has been filed, the department shall provide written notice of the filing of the application or proposed application to the following persons:

(1) the United States representative who represents the community containing the development described in the application;

(2) members of the legislature who represent the community containing the development described in the application;

(3) the presiding officer of the governing body of the political subdivision containing the development described in the application;

(4) any member of the governing body of a political subdivision who represents the area containing the development described in the application;

(5) the superintendent and the presiding officer of the board of trustees of the school district containing the development described in the application; and

(6) any neighborhood organizations on record with the state, municipality, or county in which the development described in the application is to be located and whose boundaries contain the proposed development site.

SECTION 9. Subchapter F, Chapter 2306, Government Code, is amended by adding Section 2306.122 to read as follows:

Sec. 2306.122. ASSISTANCE FROM AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009. (a) To the extent permitted by federal law, in administering money provided to the department under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), the department shall secure the interests of the state through bonds, retention of ownership interests in the affected properties, or restrictive covenants or liens filed in real property records for the affected properties.

(b) The interests of the state must be secured with respect to the use of federal money described by Subsection (a) until the department and the state do not have any specified liability to repay or recapture that money.

SECTION 10. Subchapter K, Chapter 2306, Government Code, is amended by adding Section 2306.260 to read as follows:

Sec. 2306.260. USE OF CERTAIN FEDERAL ASSISTANCE TO FUND PILOT PROGRAMS. The department may fund existing pilot programs or create new pilot programs as appropriate using federal supplemental appropriations under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5) or any other similar federal legislation that is enacted on or after January 1, 2009. This section expires December 31, 2011.

SECTION 11. Subchapter Y, Chapter 2306, Government Code, is amended by amending Section 2306.551 and adding Section 2306.5511 to read as follows:

Sec. 2306.551. TRANSFER OF CORPORATION POWERS AND DUTIES AND ASSETS. (a) The powers and duties of the corporation under this chapter or other law are transferred to the Texas Department of Housing and Community Affairs.

(b) The corporation shall transfer to the Texas Department of Housing and Community Affairs:

(1) all assets owned or distributed by the corporation, including any real or personal property owned by the corporation and any bond revenue distributed by the corporation;

(2) all records related to the operation of any home loan programs under this chapter; and

(3) any applications pending with the corporation on the date the corporation is dissolved by the board of the corporation.

(c) The board of the corporation shall:

(1) take all necessary actions to dissolve the corporation; and

(2) at the request of the director, assist the director in formulating the transition plan under Section 2306.058.

Sec. 2306.5511. DEFINITION; CONSTRUCTION OF OTHER LAW. (a) In this subchapter, "corporation" means the Texas State Affordable Housing Corporation.

(b) A reference in law to the corporation is a reference to the Texas Department of Housing and Community Affairs.

SECTION 12. Section 2306.557, Government Code, is amended to read as follows:

Sec. 2306.557. DISTRIBUTION OF EARNINGS. (a) Any part of earnings remaining after payment of expenses and any establishment of reserves by the corporation's board of directors may not inure to any person except that the corporation shall use these excess earnings to further the corporation's new or existing affordable housing initiatives if the corporation's board of directors determines that sufficient provision has been made for the full payment of the expenses, bonds, and other obligations of the corporation and for any establishment of reserves by the corporation's board of directors.

(b) Notwithstanding any provision to the contrary, all earnings from bonds issued under Section 2306.5551, 2306.562, 2306.5621, or 2306.565 shall be allocated to the homeless grant program under Section 2306.095.

SECTION 13. Section 2306.6703(a), Government Code, is amended to read as follows:

(a) An application is ineligible for consideration under the low income housing tax credit program if:

(1) at the time of application or at any time during the two-year period preceding the date the application round begins, the applicant or a related party is or has been:

(A) a member of the board; or

(B) the director, a deputy director, the director of housing programs, the director of compliance, the director of underwriting, or the low income housing tax credit program manager employed by the department;

(2) the applicant proposes to replace in less than 15 years any private activity bond financing of the development described by the application, unless:

(A) at least one-third of all the units in the development are public housing units or Section 8 project-based units and the applicant proposes to maintain for a period of 30 years or more 100 percent of the [development] units supported by housing tax credits as rent-restricted and exclusively for occupancy by individuals and families earning not more than 50 percent of the area median income, adjusted for family size[; and

[(B) at least one-third of all the units in the development are public housing units or Section 8 project-based units];

(B) the applicable private activity bonds will be redeemed only in an amount consistent with their proportionate amortization; or

(C) if the redemption of the applicable private activity bonds will occur in the first five years of the operation of the development and will reduce the amount of bonds outstanding to less than 50 percent of the cost of the real property plus depreciable basis:

(i) the Bond Review Board determines that there will be money available to fund all other multifamily developments financed by the bonds without requiring any reduction in the financing for those developments;

(ii) the applicable private activity bonds will be redeemed according to underwriting criteria established by the department; and

(iii) the applicable private activity bonds will be redeemed only in an amount necessary to ensure the financial feasibility of the development described by the application;

(3) the applicant proposes to construct a new development that is located one linear mile or less from a development that:

(A) serves the same type of household as the new development, regardless of whether the developments serve families, elderly individuals, or another type of household;

(B) has received an allocation of housing tax credits for new construction at any time during the three-year period preceding the date the application round begins; and

(C) has not been withdrawn or terminated from the low income housing tax credit program; or

(4) the development is located in a municipality or, if located outside a municipality, a county that has more than twice the state average of units per capita supported by housing tax credits or private activity bonds, unless the applicant:

(A) has obtained prior approval of the development from the governing body of the appropriate municipality or county containing the development; and

(B) has included in the application a written statement of support from that governing body referencing this section and authorizing an allocation of housing tax credits for the development.

SECTION 14. Section 2306.6704(b-1), Government Code, is amended to read as follows:

(b-1) The preapplication process must require the applicant to provide the department with evidence that the applicant has notified the following entities with respect to the filing of the application:

(1) any neighborhood organizations on record with the state, municipality, or county in which the development is to be located and whose boundaries contain the proposed development site;

(2) the superintendent and the presiding officer of the board of trustees of the school district containing the development;

(3) the presiding officer of the governing body of any municipality containing the development and all elected members of that body;

(4) the presiding officer of the governing body of the county containing the development and all elected members of that body; and

(5) the state senator and state representative of the district containing the development.

SECTION 15. Section 2306.6705, Government Code, is amended to read as follows:

Sec. 2306.6705. GENERAL APPLICATION REQUIREMENTS. An application must contain at a minimum the following written, detailed information in a form prescribed by the board:

(1) a description of:

(A) the financing plan for the development, including any nontraditional financing arrangements;

(B) the use of funds with respect to the development;

(C) the funding sources for the development, including:

(i) construction, permanent, and bridge loans; and

(ii) rents, operating subsidies, and replacement reserves; and

(D) the commitment status of the funding sources for the development;

(2) if syndication costs are included in the eligible basis, a justification of the syndication costs for each cost category by an attorney or accountant specializing in tax matters;

(3) from a syndicator or a financial consultant of the applicant, an estimate of the amount of equity dollars expected to be raised for the development in conjunction with the amount of housing tax credits requested for allocation to the applicant, including:

(A) pay-in schedules; and

(B) syndicator consulting fees and other syndication costs;

(4) if rental assistance, an operating subsidy, or an annuity is proposed for the development, any related contract or other agreement securing those funds and an identification of:

(A) the source and annual amount of the funds;

(B) the number of units receiving the funds; and

(C) the term and expiration date of the contract or other agreement;

(5) if the development is located within the boundaries of a political subdivision with a zoning ordinance, evidence in the form of a letter from the chief executive officer of the political subdivision or from another local official with jurisdiction over zoning matters that states that:

(A) the development is permitted under the provisions of the ordinance that apply to the location of the development; or

(B) the applicant is in the process of seeking the appropriate zoning and has signed and provided to the political subdivision a release agreeing to hold the political subdivision and all other parties harmless in the event that the appropriate zoning is denied;

(6) if an occupied development is proposed for rehabilitation:

(A) an explanation of the process used to notify and consult with the tenants in preparing the application;

(B) a relocation plan outlining:

(i) relocation requirements; and

(ii) a budget with an identified funding source; and

(C) if applicable, evidence that the relocation plan has been submitted to the appropriate local agency;

(7) a certification of the applicant's compliance with appropriate state and federal laws, as required by other state law or by the board;

(8) any other information required by the board in the qualified allocation plan; and

(9) evidence that the applicant has notified the following entities with respect to the filing of the application:

(A) any neighborhood organizations on record with the state, municipality, or county in which the development is to be located and whose boundaries contain the proposed development site;

(B) the superintendent and the presiding officer of the board of trustees of the school district containing the development;

(C) the presiding officer of the governing body of any municipality containing the development and all elected members of that body;

(D) the presiding officer of the governing body of the county containing the development and all elected members of that body; and

(E) the state senator and state representative of the district containing the development.

SECTION 16. Sections 2306.6710(b) and (f), Government Code, are amended to read as follows:

(b) If an application satisfies the threshold criteria, the department shall score and rank the application using a point system that:

(1) prioritizes in descending order criteria regarding:

(A) financial feasibility of the development based on the supporting financial data required in the application that will include a project underwriting pro forma from the permanent or construction lender;

(B) quantifiable community participation with respect to the development, evaluated on the basis of written statements from any neighborhood organizations on record with the state, municipality, or county in which the development is to be located and whose boundaries contain the proposed development site;

(C) the income levels of tenants of the development;

(D) the size and quality of the units;

(E) the commitment of development funding by local political subdivisions;

(F) the level of community support in connection with [for] the application, evaluated on the basis of written statements from the state representative or the state senator that represents the district containing the proposed development site;

(G) the rent levels of the units;

(H) the cost of the development by square foot;

(I) the services to be provided to tenants of the development; and

(J) whether, at the time the complete application is submitted or at any time within the two-year period preceding the date of submission, the proposed development site is located in an area declared to be a disaster under Section 418.014;

(2) uses criteria imposing penalties on applicants or affiliates who have requested extensions of department deadlines relating to developments supported by housing tax credit allocations made in the application round preceding the current round or a developer or principal of the applicant that has been removed by the lender, equity provider, or limited partners for its failure to perform its obligations under the loan documents or limited partnership agreement; and

(3) encourages applicants to provide free notary public service to the residents of the developments for which the allocation of housing tax credits is requested.

(f) In evaluating the level of community support in connection with [for] an application under Subsection (b)(1)(F), the department shall award:

(1) positive points for positive written statements received in support of the application;

(2) negative points for negative written statements received in opposition to the application; [and]

(3) one-half of one positive point for each written statement received that generally supports affordable housing in the district containing the proposed development site, except that the total number of positive points awarded under this subdivision may not exceed the total number of positive points awarded under Subdivision (1); and

(4) one-half of one negative point for each written statement received that expresses no additional need for affordable housing in the district containing the proposed development site, except that the total number of negative points awarded under this subdivision may not exceed the total number of negative points awarded under Subdivision (2) [zero points for neutral statements received].

SECTION 17. Section 2306.6711, Government Code, is amended by amending Subsection (b) and adding Subsection (g) to read as follows:

(b) Not later than the deadline specified in the qualified allocation plan, the board shall issue commitments for available housing tax credits based on the application evaluation process provided by Section 2306.6710. The board may not allocate to an applicant housing tax credits in any unnecessary amount, as determined by the department's underwriting policy and by federal law, and in any event may not, except as permitted by Subsection (g), allocate to the applicant housing tax credits in an amount greater than $3 [$2] million in a single application round.

(g) Beginning in 2012, on January 1 of each even-numbered year, the department may adjust the maximum amount of the allocation prescribed by Subsection (b) by an amount equal to the amount prescribed by that subsection multiplied by the percentage change during the preceding state fiscal biennium in the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, published monthly by the United States Bureau of Labor Statistics, or its successor in function. The department shall publish the new amount in the qualified allocation plan.

SECTION 18. Subchapter DD, Chapter 2306, Government Code, is amended by adding Sections 2306.6736 and 2306.6737 to read as follows:

Sec. 2306.6736. LOW INCOME HOUSING TAX CREDITS FINANCED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009. (a) Except as provided by Subsection (b), a reference in this chapter to the administration of the low income housing tax credit program applies to federally administered money:

(1) received by the department under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), or any similar federal legislation that is enacted on or after January 1, 2009; and

(2) that is required to be allocated by the department in the same manner and subject to the same limitations as allocations of housing tax credits.

(b) Notwithstanding any other provision of this chapter, including Sections 2306.1111 and 2306.6724, the department may establish a separate application procedure for money described by Subsection (a), the application period of which must begin on the date the department begins accepting applications for the money and must continue until all the available money is allocated.

(c) This section expires August 31, 2011.

Sec. 2306.6737. PROHIBITED PRACTICES. (a) Notwithstanding any other law, a development owner of a development supported with a housing tax credit allocation may not:

(1) lock out or threaten to lock out any person residing in the development except by judicial process unless the exclusion results from:

(A) a necessity to perform bona fide repairs or construction work; or

(B) an emergency; or

(2) seize or threaten to seize the personal property of any person residing in the development except by judicial process unless the resident has abandoned the premises.

(b) Each development owner shall:

(1) include a conspicuous provision in the lease agreement prohibiting the owner from engaging in a practice described by Subsection (a); and

(2) remove in the manner specified by department rule any provisions in the lease agreement that are contrary to Subsection (a).

SECTION 19. Chapter 2306, Government Code, is amended by adding Subchapter NN to read as follows:

SUBCHAPTER NN. TEXAS AFFORDABLE HOUSING INITIATIVE

Sec. 2306.1081. PURPOSE. The purpose of this subchapter is to promote housing independence and prevent unnecessary and expensive institutionalization of the state's extremely low income elderly and homeless populations and persons with disabilities.

Sec. 2306.1082. DEFINITIONS. In this subchapter:

(1) "Elderly person" means a person 62 years of age or older or of an age specified by the applicable federal program.

(2) "Extremely low income" means a household with a combined income that is not more than 30 percent of the area median income or applicable federal poverty line, as determined under Section 2306.123 or 2306.1231.

(3) "Initiative plan" means the single unified plan developed by the task force under Section 2306.1087.

(4) "Noninstitutionalized housing" means a privately owned home, apartment, or group home.

(5) "Participating agency" means the Texas Department of Housing and Community Affairs, the Health and Human Services Commission, the Department of State Health Services, the Department of Aging and Disability Services, the Public Utility Commission of Texas, the Department of Assistive and Rehabilitative Services, or the Office of Rural Community Affairs.

(6) "Service-enriched housing" means a living arrangement that provides health services or social services, or both, in an accessible, supportive environment.

(7) "Task force" means the Texas Affordable Housing Initiative Task Force.

Sec. 2306.1083. ADMINISTRATIVE AND RULEMAKING AUTHORITY. (a) A regulatory official has broad authority to administer, interpret, and enforce this subchapter.

(b) A rulemaking authority has broad authority to adopt rules to implement this subchapter to carry out the legislature's intent.

Sec. 2306.1084. COMPOSITION OF TASK FORCE. (a) The Texas Affordable Housing Initiative Task Force is composed of:

(1) one representative from each of the following agencies, appointed by the head of that agency:

(A) the Health and Human Services Commission;

(B) the Department of State Health Services;

(C) the Department of Aging and Disability Services;

(D) the Department of Assistive and Rehabilitative Services;

(E) the Public Utility Commission of Texas; and

(F) the Office of Rural Community Affairs;

(2) two representatives from the department, including the director and a person appointed by the director;

(3) one member representing advocacy organizations and service providers to homeless persons, appointed by the governor;

(4) one member representing advocacy organizations and service providers to elderly persons, appointed by the governor; and

(5) one member representing advocacy organizations and service providers to persons with disabilities, appointed by the governor.

(b) A member of the task force serves at the pleasure of the appointing official or until termination of the member's employment or association, as applicable, with the entity the member represents.

(c) A member of the task force representing a state agency must have:

(1) administrative responsibility for programs for homeless or elderly persons or persons with disabilities or related services provided by the agency that the member represents; and

(2) authority to make decisions for and commit resources of the agency, subject to the approval of the head of the agency or the board of directors of the agency.

Sec. 2306.1085. OPERATION OF TASK FORCE. (a) The director serves as the presiding officer of the task force.

(b) The task force shall meet at least quarterly.

(c) The task force shall keep minutes and records of attendance with respect to the meetings of the task force.

(d) An action taken by the task force must be approved by a majority vote of the members present.

(e) The task force may select and use advisors.

(f) The department shall provide clerical and advisory support staff to the task force.

(g) Chapter 2110 does not apply to the task force.

Sec. 2306.1086. GIFTS AND GRANTS. The task force may solicit and accept gifts, grants, and donations from a public or private source for use in carrying out the task force's duties under this subchapter.

Sec. 2306.1087. DUTIES OF TASK FORCE. The task force shall:

(1) coordinate interdepartmental and interagency plans and develop and annually update a unified initiative plan to:

(A) not later than January 1, 2020, reduce by at least 20 percent the number of persons desiring and capable of living independently who are compelled to reside in Medicaid-supported nursing homes, state institutions, and publicly supported homeless shelters by making it possible for those persons to remain and live independently in noninstitutionalized housing, especially their own homes;

(B) ensure that the numbers of persons and households assisted under programs under this subchapter in each uniform state service region are in approximate proportion to the numbers of eligible persons and households residing in that uniform state service region;

(C) develop new, more cost-effective programs and strategies to use existing public and private resources to provide housing and reduce the residential energy cost burden on extremely low income homeless or elderly persons or persons with disabilities;

(D) affirmatively further fair housing opportunities by making available noninstitutionalized housing opportunities to extremely low income homeless or elderly persons or persons with disabilities; and

(E) coordinate housing and health services to meet the demands of extremely low income homeless or elderly persons or persons with disabilities by promoting service-enriched housing opportunities within a wide range of noninstitutionalized housing, including homes currently owned and rented by those persons to the extent possible;

(2) determine the programmatic approaches, levels of funding, and funding sources necessary to carry out the initiative plan;

(3) research housing needs and programs to achieve the goals of the initiative plan; and

(4) aggregate, analyze, and report the program initiatives and resource commitments of each participating agency with respect to activities under the Texas Affordable Housing Initiative and certify whether sufficient programs have been initiated and sufficient resources have been committed to meet the goals of the initiative plan.

Sec. 2306.1088. REPORT. (a) Not later than September 1, 2010, the task force shall submit a copy of the initiative plan, including an accounting of the funds allocated or expended and the number and geographic, demographic, and economic characteristics of persons served by each participating agency through the initiative plan, to:

(1) the governor;

(2) the lieutenant governor;

(3) the speaker of the house of representatives;

(4) the Legislative Budget Board;

(5) the legislative oversight committees for the department; and

(6) the legislative oversight committees for the Office of Rural Community Affairs.

(b) This section expires December 31, 2010.

Sec. 2306.1089. SERVICE-ENRICHED HOUSING INITIATIVE. (a) The task force shall plan and take necessary actions to improve coordination between housing and health services programs to increase state efforts to offer service-enriched housing, including:

(1) identifying barriers preventing or slowing service-enriched housing efforts, such as:

(A) regulatory, administrative, or funding barriers; or

(B) ineffective or limited coordination among state agencies;

(2) developing a system and plan to cross-educate selected staff in agencies represented on the task force and other state and local agencies to increase the number of staff with expertise in both housing and health services programs;

(3) identifying opportunities for state housing and health services agencies to provide technical assistance and training to local housing and health services entities regarding the cross-education of staff, agency and entity coordination, and opportunities to increase local efforts to create service-enriched housing;

(4) developing suggested performance measures to track progress in:

(A) reducing or eliminating barriers in creating service-enriched housing;

(B) increasing the coordination among housing and health services agencies;

(C) increasing the number of state housing and health services staff who have expertise in both housing and health services programs; and

(D) increasing the instances of state housing and health services staff providing technical assistance to local communities to increase the number of service-enriched housing projects; and

(5) implementing the related portions of the initiative plan and tracking the progress of implementation.

(b) In implementing program activities described by this section, the task force shall ensure that the provision of service-enriched housing is available to eligible persons on an equal basis whether they choose to move from their existing homes to noninstitutionalized housing developments with enriched services or whether they elect to receive the services in other noninstitutionalized housing. The task force shall act to ensure that no state action or policy forces an elderly person or a person with a disability to choose between living independently and obtaining services similar to those provided in an institutional setting.

SECTION 20. Chapter 301, Property Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. STATE AND MUNICIPAL ACTIONS FOR

FAIR HOUSING

Sec. 301.201. ADMINISTRATION OF STATE PROGRAMS AND ACTIVITIES RELATING TO HOUSING AND URBAN DEVELOPMENT. Each state agency shall administer state programs and activities relating to housing and urban development in a manner that affirmatively furthers the goals of fair housing under this chapter.

Sec. 301.202. ADMINISTRATION OF MUNICIPAL PROGRAMS AND ACTIVITIES RELATING TO HOUSING AND URBAN DEVELOPMENT. Each municipality shall administer municipal programs and activities relating to housing and urban development in a manner that affirmatively furthers the goals of fair housing under this chapter.

SECTION 21. Section 11.182, Tax Code, is amended by amending Subsections (b), (e), (h), (j), and (k) and adding Subsections (b-1) and (b-2) to read as follows:

(b) An organization is entitled to an exemption from taxation of improved or unimproved real property it owns if the organization:

(1) is organized as a community housing development organization;

(2) meets the requirements of a charitable organization provided by Sections 11.18(e) and (f);

(3) owns the property for the purpose of building or repairing housing on the property to sell without profit to a low-income or moderate-income individual or family satisfying the organization's eligibility requirements or to rent without profit to such an individual or family; and

(4) engages [exclusively] in the building, repair, and sale or rental of housing as described by Subdivision (3) and related activities.

(b-1) Notwithstanding Subsections (b)(1) and (2), an owner of improved or unimproved real property that is not an organization described by Subsections (b)(1) and (2) is entitled to an exemption from taxation of the property under Subsection (b) if the owner otherwise qualifies for the exemption and the owner is:

(1) a limited partnership of which 100 percent of the interest of the general partner is owned or controlled by an organization described by Subsections (b)(1) and (2); or

(2) an entity 100 percent of the interest in which is owned or controlled by an organization described by Subsections (b)(1) and (2).

(b-2) A reference in this section to an organization includes a limited partnership or other entity described by Subsection (b-1).

(e) In addition to meeting the applicable requirements of Subsections (b) and (c), to receive an exemption under Subsection (b) for improved real property that is [includes a housing project constructed after December 31, 2001, and] financed with qualified 501(c)(3) bonds issued under Section 145 of the Internal Revenue Code of 1986, tax-exempt private activity bonds subject to volume cap, or low-income housing tax credits, the organization must:

(1) [control 100 percent of the interest in the general partner if the project is owned by a limited partnership;

[(2)] comply with all rules of and laws administered by the Texas Department of Housing and Community Affairs applicable to community housing development organizations; and

(2) [(3)] submit annually to the Texas Department of Housing and Community Affairs and to the governing body of each taxing unit for which the project receives an exemption for the housing project evidence demonstrating that the organization spent an amount equal to at least 90 percent of the project's cash flow in the preceding fiscal year as determined by the audit required by Subsection (g), for eligible persons in the county in which the property is located, on social, educational, or economic development services, capital improvement projects, or rent reduction.

(h) Subsections (d) and (e)(2) [(e)(3)] do not apply to property owned by an organization if:

(1) the entity that provided the financing for the acquisition or construction of the property:

(A) requires the organization to make payments in lieu of taxes to the school district in which the property is located; or

(B) restricts the amount of rent the organization may charge for dwelling units on the property; or

(2) the organization has entered into an agreement with each taxing unit for which the property receives an exemption to spend in each tax year for the purposes provided by Subsection (d) or (e)(2) [(e)(3)] an amount equal to the total amount of taxes imposed on the property in the tax year preceding the year in which the organization acquired the property.

(j) An organization may not receive an exemption under Subsection (b) or (f) for property for a tax year unless the organization applied for or received an exemption under that subsection for the property for any part of the 2003 tax year.

(k) Notwithstanding Subsection (j) of this section and Sections 11.43(a) and (c), an exemption under Subsection (b) or (f) does not terminate because of a change in the ownership of the property if the property is sold at a foreclosure sale and, not later than the 30th day after the date of the sale, the owner of the property submits to the chief appraiser evidence that the property is owned by an organization that meets the requirements of Subsections (b)(1), (2), and (4) or is owned by a limited partnership described by Subsection (b-1)(1) or an entity described by Subsection (b-1)(2) that meets the requirements of Subsection (b)(4). If the owner of the property submits the evidence required by this subsection, the exemption continues to apply to the property for the remainder of the current tax year and for subsequent tax years until the owner ceases to qualify the property for the exemption. This subsection does not prohibit the chief appraiser from requiring the owner to file a new application to confirm the owner's current qualification for the exemption as provided by Section 11.43(c).

SECTION 22. Sections 11.1825(c) and (t), Tax Code, are amended to read as follows:

(c) Notwithstanding Subsection (b), an owner of real property that is not an organization described by that subsection is entitled to an exemption from taxation of property under this section if the property otherwise qualifies for the exemption and the owner is:

(1) a limited partnership of which an organization that meets the requirements of Subsection (b) controls 100 percent of the general partner interest; [or]

(2) an entity the parent of which is an organization that meets the requirements of Subsection (b); or

(3) an entity the parent of which is controlled by an organization that meets the requirements of Subsection (b).

(t) Notwithstanding Section 11.43(c), an exemption under this section does not terminate because of a change in ownership of the property if:

(1) the property is foreclosed on for any reason and, not later than the 30th day after the date of the foreclosure sale, the owner of the property submits to the chief appraiser evidence that the property is owned by:

(A) an organization that meets the requirements of Subsection (b); or

(B) an entity that meets the requirements of Subsections (c) and (d); or

(2) in the case of property owned by an entity described by Subsections (c) and (d), the organization meeting the requirements of Subsection (b) that controls the general partner interest of, [or] is the parent of, or controls the parent of the entity as described by Subsection (c) ceases to serve in that capacity and, not later than the 30th day after the date the cessation occurs, the owner of the property submits evidence to the chief appraiser that the organization has been succeeded in that capacity by another organization that meets the requirements of Subsection (b).

SECTION 23. Subchapter C, Chapter 487, Government Code, is amended by adding Section 487.062 to read as follows:

Sec. 487.062. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The office shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306.

SECTION 24. Subchapter B, Chapter 531, Government Code, is amended by adding Section 531.0973 to read as follows:

Sec. 531.0973. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The commission shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306.

SECTION 25. Subchapter C, Chapter 2306, Government Code, is amended by adding Section 2306.059 to read as follows:

Sec. 2306.059. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The department shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN.

SECTION 26. Subchapter D, Chapter 1001, Health and Safety Code, is amended by adding Section 1001.076 to read as follows:

Sec. 1001.076. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The department shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, Government Code, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306, Government Code.

SECTION 27. Subchapter D, Chapter 117, Human Resources Code, is amended by adding Section 117.075 to read as follows:

Sec. 117.075. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The department shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, Government Code, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306, Government Code.

SECTION 28. Subchapter D, Chapter 161, Human Resources Code, is amended by adding Section 161.076 to read as follows:

Sec. 161.076. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The department shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, Government Code, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306, Government Code.

SECTION 29. Subchapter A, Chapter 12, Utilities Code, is amended by adding Section 12.006 to read as follows:

Sec. 12.006. COMPLIANCE WITH TEXAS AFFORDABLE HOUSING INITIATIVE. The commission shall designate a representative to the Texas Affordable Housing Initiative Task Force under Section 2306.1084, Government Code, shall implement the plan enacted, and shall take all other actions required to achieve the goals of the Texas Affordable Housing Initiative under Subchapter NN, Chapter 2306, Government Code.

SECTION 30. Sections 2306.255(g) and 2306.552, Government Code, are repealed.

SECTION 31. (a) The Texas State Affordable Housing Corporation is abolished on January 1, 2010.

(b) All powers, duties, obligations, rights, contracts, funds, unspent appropriations, records, and real or personal property of the Texas State Affordable Housing Corporation shall be transferred to the Texas Department of Housing and Community Affairs not later than January 1, 2010.

(c) A policy, procedure, or decision of the Texas State Affordable Housing Corporation relating to a duty of that corporation that is transferred to the authority of the Texas Department of Housing and Community Affairs under Section 2306.551, Government Code, as amended by this Act, continues in effect as a policy, procedure, or decision of the Texas Department of Housing and Community Affairs until superseded by an act of the director of the Texas Department of Housing and Community Affairs.

(d) Except as otherwise provided by this Act, the validity of a plan or procedure adopted, contract or acquisition made, proceeding begun, grant or loan awarded, obligation incurred, right accrued, or other action taken by or in connection with the authority of the Texas State Affordable Housing Corporation before that corporation is abolished under Subsection (a) of this section is not affected by the abolishment.

(e) The director of the Texas Department of Housing and Community Affairs shall adopt rules relating to the transfer of the programs assigned to the Texas Department of Housing and Community Affairs under Section 2306.551, Government Code, as amended by this Act, not later than October 1, 2009.

SECTION 32. The executive director of the Texas Department of Housing and Community Affairs shall submit to the governing board of the department the first long-range state low income housing plan, as required by Section 2306.0725, Government Code, as added by this Act, not later than March 18, 2010.

SECTION 33. The Texas Department of Housing and Community Affairs shall adopt the rules required by Section 2306.0971, Government Code, as added by this Act, not later than December 1, 2009.

SECTION 34. The changes in law made by this Act relating to applications and evaluations of applications for financial assistance administered by the Texas Department of Housing and Community Affairs apply only to an application filed on or after the effective date of this Act. An application filed before the effective date of this Act is governed by the law in effect on the date the application was filed, and the former law is continued in effect for that purpose.

SECTION 35. The Texas Department of Housing and Community Affairs shall adopt rules as necessary to implement and enforce Section 2306.6737, Government Code, as added by this Act, not later than November 1, 2009.

SECTION 36. As soon as possible after the effective date of this Act, the governor and the heads of the applicable state agencies shall appoint members to the Texas Affordable Housing Initiative Task Force in accordance with Subchapter NN, Chapter 2306, Government Code, as added by this Act.

SECTION 37. Sections 11.182 and 11.1825, Tax Code, as amended by this Act, apply only to ad valorem taxes imposed for a tax year beginning on or after the effective date of this Act.

SECTION 38. This Act does not make an appropriation. A provision in this Act that creates a new governmental program, creates a new entitlement, or imposes a new duty on a governmental entity is not mandatory during a fiscal period for which the legislature has not made a specific appropriation to implement the provision.

SECTION 39. (a) Except as provided by Subsections (b) and (c) of this section, this Act takes effect September 1, 2009.

(b) Sections 2306.122 and 2306.6736, Government Code, as added by this Act, take effect immediately if this Act receives a vote of two-thirds of all the 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, Sections 2306.122 and 2306.6736, Government Code, as added by this Act, take effect September 1, 2009.

(c) Sections 11.182 and 11.1825, Tax Code, as amended by this Act, take effect January 1, 2010.