By: Lucio  S.B. No. 2288
         (In the Senate - Filed March 13, 2009; March 31, 2009, read
  first time and referred to Committee on International Relations and
  Trade; April 14, 2009, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 6, Nays 0;
  April 14, 2009, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 2288 By:  Lucio
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the provision of affordable housing in this state.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter I, Chapter 487, Government Code, is
  amended by adding Sections 487.355 and 487.356 to read as follows:
         Sec. 487.355.  SMALL MUNICIPALITY AND RURAL AREA HOUSING
  DEVELOPMENT FUND. (a)  In this section, "colonia" means a
  geographic area that:
               (1)  is located in a county or municipality that is
  eligible, as identified by office rule, to receive financial
  assistance from the community development block grant colonia fund
  under this subchapter;
               (2)  consists of 11 or more dwellings that are located
  in close proximity to each other in an area that may be described as
  a community or neighborhood; and
               (3)  either:
                     (A)  has a majority population composed of
  individuals and families of low income, based on the federal Office
  of Management and Budget poverty index, and meets the
  qualifications of an economically distressed area under Section
  17.921, Water Code; or
                     (B)  has the physical and economic
  characteristics of a colonia, as determined by the Texas Department
  of Housing and Community Affairs.
         (b)  The small municipality and rural area housing
  development fund is an account in the general revenue fund.
         (c)  In each state fiscal year, the office shall set aside
  for the purposes of this section an amount of money, not to exceed
  $7.5 million each year, that is equal to any amount provided to the
  community development block grant colonia fund under this
  subchapter that exceeds the amount provided to that colonia fund
  for the state fiscal year ending August 31, 2008.
         (d)  Except as provided by Subsection (e), amounts deposited
  to the account may be appropriated to the office only for the
  benefit of counties and municipalities identified by office rule as
  eligible to receive community development block grant money under
  this subchapter for:
               (1)  housing initiatives for colonias located in those
  counties and municipalities, including infrastructure associated
  with new construction, rehabilitation, or improvements; and
               (2)  the improvement of the housing conditions in those
  colonias.
         (e)  Amounts deposited to the account may not be appropriated
  to the office for financial assistance to political subdivisions
  for the construction, acquisition, or improvement of water supply
  and sewer services, as described by Section 17.922, Water Code.
         (f)  Sections 403.095 and 404.071 do not apply to the
  account.
         Sec. 487.356.  COORDINATION WITH TEXAS DEPARTMENT OF HOUSING
  AND COMMUNITY AFFAIRS.  The office shall work with the Texas
  Department of Housing and Community Affairs to:
               (1)  identify available sources of funding for housing
  initiatives in a county or municipality that is eligible, as
  identified by office rule, to receive financial assistance from the
  community development block grant colonia fund under this
  subchapter;
               (2)  coordinate housing initiatives that receive funds
  under Section 487.355(d); and
               (3)  make available on or before August 1 of each year a
  plan that addresses the housing and infrastructure needs for the
  following state fiscal year for at least one colonia, as defined by
  Section 2306.083.
         SECTION 2.  Subchapter E, Chapter 2306, Government Code, is
  amended by adding Sections 2306.098 and 2306.099 to read as
  follows:
         Sec. 2306.098.  COORDINATION WITH OFFICE OF RURAL COMMUNITY
  AFFAIRS. The department shall work with the Office of Rural
  Community Affairs to:
               (1)  identify available sources of funding for housing
  initiatives in a county or municipality that is eligible, as
  identified by office rule, to receive financial assistance from the
  community development block grant colonia fund under Subchapter I,
  Chapter 487;
               (2)  coordinate housing initiatives that receive funds
  under Section 487.355(d); and
               (3)  make available on or before August 1 of each year a
  plan that addresses the housing and infrastructure needs for the
  following state fiscal year for at least one colonia, as defined by
  Section 2306.083.
         Sec. 2306.099.  RURAL HOUSING FIELD OFFICES.  (a)  The board
  by rule shall:
               (1)  establish field offices in rural areas of each
  uniform state service region to assist political subdivisions and
  nonprofit entities in developing or administering affordable
  housing programs in those areas; and
               (2)  specify the duties for each field office.
         (b)  The rules under Subsection (a) must include the
  following duties for each field office:
               (1)  identifying affordable housing needs for rural
  areas of the uniform state service region in which the field office
  is located;
               (2)  identifying state and federal programs that may
  address the needs identified under Subdivision (1);
               (3)  facilitating the development of relationships
  that will assist in building local capacity to address the needs
  identified under Subdivision (1); and
               (4)  providing information regarding state programs to
  assist in the development of affordable housing for rural areas of
  the uniform state service region in which the field office is
  located.
         SECTION 3.  Chapter 2306, Government Code, is amended by
  adding Subchapter N to read as follows:
  SUBCHAPTER N. OFFICE OF RURAL COMMUNITY AND SMALL MUNICIPALITY
  HOUSING INITIATIVES
         Sec. 2306.301.  DEFINITION. In this subchapter, "office"
  means the office established by Section 2306.302 to support rural
  community and small municipality housing initiatives.
         Sec. 2306.302.  ESTABLISHMENT OF OFFICE. (a)  The
  department shall establish an office to support rural community and
  small municipality housing initiatives.
         (b)  The department by rule shall define for purposes of this
  subchapter:
               (1)  a rural community; and
               (2)  a small municipality.
         (c)  Subject to available funding, the department by rule may
  establish not more than seven field offices as part of the office.
         (d)  The office shall work with each regional council of
  government to:
               (1)  match housing sponsors to the housing needs of
  rural communities and small municipalities; and
               (2)  identify available sources of funds for those
  housing needs.
         (e)  The office shall use funds available from the housing
  trust fund established under Section 2306.201 to administer
  capacity building programs for rural communities and small
  municipalities.
         (f)  The office shall coordinate a meeting at least two times
  each year between department program directors and representatives
  of rural communities and small municipalities to discuss best
  practices for rural community and small municipality housing
  initiatives.
         (g)  The office shall establish an online clearinghouse of
  information relating to best practices for rural community and
  small municipality housing initiatives.
         (h)  The director may assign additional duties to the office.
         Sec. 2306.303.  REGIONAL HOUSING DEVELOPMENT ORGANIZATIONS.
  (a)  The office shall establish regional nonprofit housing
  development organizations that serve rural communities and small
  municipalities in accordance with the purposes of this subchapter.
         (b)  To implement this section, the department may use any
  money available to the department for the purpose, including gifts,
  grants, and donations and funds allocated to the state under the
  federal HOME Investment Partnerships program established under
  Title II of the Cranston-Gonzalez National Affordable Housing Act
  (42 U.S.C. Section 12701 et seq.).
         Sec. 2306.304.  TRAINING. (a)  The office annually shall
  provide to elected officials, community organizations, nonprofit
  organizations, and private developers a training course that
  addresses housing programs and techniques that increase housing
  opportunities in rural communities and small municipalities.  The
  office shall provide the course at an appropriate location selected
  by the office and shall make the course available online in real
  time.
         (b)  The department periodically shall also provide to
  elected officials a training course regarding housing programs and
  sources of funding for these programs.
         Sec. 2306.305.  HOUSING DEVELOPMENT PLANNING ASSISTANCE. On
  the request of the governing body of a municipality or county, the
  office shall assign an employee or independent contractor to assist
  the municipality or county in:
               (1)  developing comprehensive housing plans for rural
  communities and small municipalities in that county;
               (2)  supporting housing development initiatives in
  those communities and municipalities; and
               (3)  identifying financial resources available for
  those plans and initiatives.
         Sec. 2306.306.  RURAL COMMUNITY AND SMALL MUNICIPALITY
  HOUSING DEVELOPMENT PILOT PROJECTS. Notwithstanding other program
  rules and procedures of the department, the department may
  establish pilot projects to test and develop new approaches to
  providing housing in rural communities and small municipalities
  for:
               (1)  individuals and families of low income; and
               (2)  individuals and families of very low income.
         Sec. 2306.307.  AGRICULTURAL WORKER HOUSING INITIATIVE.
  (a)  The office shall fund housing initiatives that serve
  agricultural workers, including:
               (1)  new housing initiatives;
               (2)  housing rehabilitation initiatives; or
               (3)  tenant-based rental assistance.
         (b)  The office may designate a housing initiative for
  agricultural workers as a pilot project.
         (c)  The office shall coordinate with appropriate divisions
  of the department to:
               (1)  document agricultural worker housing needs;
               (2)  determine whether a housing need documented by the
  department is critical; and
               (3)  develop initiatives to address those housing
  needs.
         (d)  The department may use any available funds to implement
  this section, including gifts, grants, and donations and funds
  allocated to the department under the federal HOME Investment
  Partnerships program established under Title II of the
  Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
  Section 12701 et seq.).
         Sec. 2306.308.  COMMUNITY DEVELOPMENT CORPORATION FOR
  AGRICULTURAL WORKER HOUSING FACILITIES. (a)  In this section,
  "community development corporation" means a private, nonprofit
  corporation organized to foster economic growth and
  revitalization, create small businesses, or develop affordable
  housing in a defined neighborhood or for a targeted population.
         (b)  Using existing resources, the department shall create a
  statewide community development corporation charged with
  developing, acquiring, and rehabilitating agricultural worker
  housing facilities in appropriate areas in the state.
         (c)  The department shall work with the community
  development corporation to implement the findings and
  recommendations of the department in the report submitted under
  Section 2(f), Chapter 60 (H.B. 1099), Acts of the 79th Legislature,
  Regular Session, 2005.
         (d)  The department may use any available funds to implement
  this section, including gifts, grants, and donations and funds
  allocated to the department under the federal HOME Investment
  Partnerships program established under Title II of the
  Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
  Section 12701 et seq.).
         SECTION 4.  Chapter 2306, Government Code, is amended by
  adding Subchapter EE to read as follows:
  SUBCHAPTER EE. RURAL HOUSING LAND ASSEMBLAGE PROGRAM
         Sec. 2306.701.  SHORT TITLE. This subchapter may be cited as
  the Rural Housing Land Assemblage Program Act.
         Sec. 2306.702.  DEFINITIONS. In this subchapter:
               (1)  "Affordable" means that the monthly mortgage
  payment or contract rent does not exceed 30 percent of the
  applicable median income for that unit size, in accordance with the
  income and rent limit rules adopted by the department.
               (2)  "Low-income household" means:
                     (A)  for rental housing, a household with a gross
  income not to exceed 80 percent of the greater of the area median
  income or national nonmetropolitan median income, adjusted for
  household size, as determined annually by the United States
  Department of Housing and Urban Development; or
                     (B)  for purchased housing, a household with a
  gross income not to exceed 80 percent of the greater of the area
  median income or the state median income, adjusted for household
  size, as determined annually by the United States Department of
  Housing and Urban Development or by the department based on data
  from the United States Department of Housing and Urban Development,
  as appropriate.
               (3)  "Office" means the Office of Rural Community
  Affairs.
               (4)  "Rural county" means, notwithstanding Section
  2306.004, a county classified as a rural county by the United States
  Department of Agriculture for purposes of the rural housing loan
  programs authorized by the Housing Act of 1949 (42 U.S.C. Section
  1471 et seq.).
               (5)  "Rural housing land assemblage entity" means an
  entity established or designated by the governing bodies of one or
  more rural municipalities or rural counties for the purpose of
  participating in the rural housing land assemblage program.
               (6)  "Rural housing land assemblage program" means a
  program established by the department to acquire, hold, and
  transfer real property under this subchapter for the purpose of
  providing affordable housing for low-income households.
               (7)  "Rural municipality" means a municipality
  classified as a rural municipality by the United States Department
  of Agriculture for purposes of the rural housing loan programs
  authorized by the Housing Act of 1949 (42 U.S.C. Section 1471 et
  seq.).
         Sec. 2306.703.  RURAL HOUSING LAND ASSEMBLAGE PROGRAM.
  (a)  The department, in consultation with the office, shall
  establish the rural housing land assemblage program.
         (b)  The governing bodies of one or more rural municipalities
  or rural counties may agree to establish a rural housing land
  assemblage entity and for that purpose may apply to participate in
  the rural housing land assemblage program.
         (c)  The department and the office shall:
               (1)  jointly select not more than five applications for
  participation in the program; and
               (2)  enter into a memorandum of understanding to
  establish a selection procedure and address performance of other
  duties imposed on the department and the office under this
  subchapter.
         (d)  If selected to participate in the program, a
  municipality or county shall:
               (1)  enter into interlocal agreements with any other
  municipalities or counties selected to participate in the program
  with that municipality or county, subject to the provisions of this
  subchapter; and
               (2)  establish or designate a rural housing land
  assemblage entity to exercise powers as described by this
  subchapter.
         Sec. 2306.704.  RURAL HOUSING LAND ASSEMBLAGE ENTITY. For
  the purpose of providing affordable housing for low-income
  households, a rural housing land assemblage entity may acquire,
  hold, and transfer real property that is not improved with a
  habitable building or buildings and is otherwise unoccupied.
         Sec. 2306.705.  PRIVATE SALE TO LAND ASSEMBLAGE ENTITY.
  (a)  Notwithstanding any other law and except as provided by
  Subsection (f), real property that is ordered sold pursuant to
  foreclosure of a tax lien may be sold in a private sale to a rural
  housing land assemblage entity by the officer charged with the sale
  of the property, without first offering the property for sale as
  otherwise provided by Section 34.01, Tax Code, if:
               (1)  the property is used for the purpose of providing
  affordable housing as described by Section 2306.704;
               (2)  the market value of the property as appraised by
  the local appraisal district and as specified in the judgment of
  foreclosure is less than the total amount due under the judgment,
  including all taxes, penalties, and interest, plus the value of
  nontax liens held by a taxing unit and awarded by the judgment,
  court costs, and the cost of the sale;
               (3)  the property is not improved with a habitable
  building or buildings and is otherwise unoccupied;
               (4)  there are delinquent taxes on the property for a
  total of at least five years; and
               (5)  each municipality or county that established or
  designated the rural housing land assemblage entity has executed
  with the other taxing units that are parties to the tax suit an
  interlocal agreement that enables those units to retain the right
  to withhold consent to the sale of specific properties to the rural
  housing land assemblage entity.
         (b)  A sale of property for use in connection with the rural
  housing land assemblage program is a sale for a public purpose.
         (c)  If the person being sued in a suit for foreclosure of a
  tax lien does not contest the market value of the property in the
  suit, the person waives the right to challenge the amount of the
  market value determined by the court for purposes of the sale of the
  property under Section 33.50, Tax Code.
         (d)  For any sale of property under this section, each person
  who was a defendant to the judgment, or that person's attorney,
  shall be given, not later than the 60th day before the date of sale,
  written notice of the proposed method of sale of the property by the
  officer charged with the sale of the property. Notice shall be
  given in the manner prescribed by Rule 21a, Texas Rules of Civil
  Procedure.
         (e)  After receipt of the notice required by Subsection (d)
  and before the date of the proposed sale, the owner of the property
  subject to sale may file with the officer charged with the sale a
  written request that the property not be sold in the manner provided
  by this section.
         (f)  If the officer charged with the sale receives a written
  request as provided by Subsection (e), the officer shall sell the
  property as otherwise provided in Section 34.01, Tax Code.
         (g)  The owner of the property subject to sale may not
  receive any proceeds of a sale under this section. However, the
  owner does not have any personal liability for a deficiency of the
  judgment as a result of a sale under this section.
         (h)  Notwithstanding any other law, if consent is given by
  the taxing units that are a party to the judgment, property may be
  sold to the rural housing land assemblage entity for less than the
  market value of the property as specified in the judgment or less
  than the total of all taxes, penalties, and interest, plus the value
  of nontax liens held by a taxing unit and awarded by the judgment,
  court costs, and the cost of the sale.
         (i)  The deed of conveyance of the property sold to a rural
  housing land assemblage entity under this section conveys to the
  entity the right, title, and interest acquired or held by each
  taxing unit that was a party to the judgment, subject to the right
  of redemption.
         Sec. 2306.706.  EXEMPTION FROM AD VALOREM TAXATION.
  Property sold to and held by a rural housing land assemblage entity
  for subsequent resale is entitled to an exemption from ad valorem
  taxation for a period not to exceed three years from the date of
  acquisition.  The exemption period may be renewed for a property for
  an additional period, not to exceed three years, on approval of the
  governing body of each participating municipality or county and any
  other taxing unit in which the property is located. Property is
  entitled to an exemption under this section only during the period
  the property is held by the rural housing land assemblage entity.
         Sec. 2306.707.  REGIONAL WORKSHOPS. (a)  The department and
  the office shall conduct regional workshops for rural housing land
  assemblage entities. A workshop must include information regarding
  the operation of the rural housing land assemblage program, such as
  reporting and audit requirements for rural housing land assemblage
  entities, affordability terms, additional income targeting, and
  the imposition of deed and resale restrictions on real property
  sold under the program to achieve the purpose of providing
  affordable housing for low-income households.
         (b)  The department and the office shall contract for
  technical assistance in conducting the workshops, if necessary.
         Sec. 2306.708.  FUNDING; REPORT.  (a)  The department shall
  allocate $1 million to the rural housing land assemblage program
  from funds allocated to the department under the federal HOME
  Investment Partnerships program established under Title II of the
  Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
  Section 12701 et seq.).
         (b)  The office shall allocate $1 million to the rural
  housing land assemblage program from funds allocated to the office
  under the federal community development block grant nonentitlement
  program authorized by Title I of the Housing and Community
  Development Act of 1974 (42 U.S.C. Section 5301 et seq.).
         (c)  Not later than December 1, 2012, the department and the
  office jointly shall submit a report to the legislature on the
  establishment and implementation of the rural housing land
  assemblage program.
         (d)  This section expires September 1, 2013.
         Sec. 2306.709.   OPEN RECORDS AND MEETINGS. A rural housing
  land assemblage entity is subject to Chapters 551 and 552.
         Sec. 2306.710.  RECORDS; AUDIT. (a)  A rural housing land
  assemblage entity shall keep accurate minutes of its meetings and
  shall keep accurate records and books of account that conform with
  generally accepted principles of accounting and that clearly
  reflect the income and expenses of the rural housing land
  assemblage entity and all transactions in relation to its property.
         (b)  A rural housing land assemblage entity shall file with
  the department and each participating municipality or county, not
  later than the 120th day after the close of the entity's fiscal
  year, annual audited financial statements prepared by a certified
  public accountant. The financial transactions of the rural housing
  land assemblage entity are subject to audit by a participating
  municipality or county and by the department.
         SECTION 5.  Chapter 2306, Government Code, is amended by
  adding Subchapter NN to read as follows:
  SUBCHAPTER NN. TEXAS SECURE LOAN PILOT PROGRAM
         Sec. 2306.1081.  DEFINITION. In this subchapter, "program"
  means the Texas secure loan pilot program.
         Sec. 2306.1082.  TEXAS SECURE LOAN PILOT PROGRAM. (a)  The
  department shall establish the Texas secure loan pilot program to
  provide to individuals and families of low income mortgage loans
  that allow modifications to the terms of the loans, such as
  adjustments to the period of the loans and to interest rates, to
  assist program participants in avoiding foreclosure of those loans.
         (b)  The program may include the provision of down payment
  and closing cost assistance.
         (c)  The department may work with mortgage brokers, lenders,
  and nonprofit organizations to design mortgage loan products
  available under the program.
         Sec. 2306.1083.  ADMINISTRATION OF PROGRAM; RULES.  (a)  The
  department shall administer the program.
         (b)  The board shall adopt rules governing:
               (1)  the administration of the program, including the
  origination of loans under the program;
               (2)  the criteria for approving another entity to
  service loans originated under the program;
               (3)  the use of insurance on the loans and the homes
  financed under the program, as considered appropriate by the board
  to provide additional security for the loans;
               (4)  the verification of occupancy of the home by the
  homebuyer as the homebuyer's principal residence;
               (5)  the terms of any memorandum of understanding or
  contract with another entity for processing, servicing, or
  administering the loans;
               (6)  the types of loan modifications that would assist
  a homebuyer in avoiding foreclosure of a loan under this
  subchapter; and
               (7)  criteria for authorizing loan modifications for
  homebuyers whose income is adversely affected by circumstances such
  as unemployment, a reduction of wages or hours of employment,
  illness, or the death of a spouse or other person contributing to
  the income of a homebuyer.
         Sec. 2306.1084.  ELIGIBILITY.  (a)  To be eligible for a
  mortgage loan issued by the department under this subchapter, a
  homebuyer must:
               (1)  earn an income, adjusted for family size, of not
  more than:
                     (A)  80 percent of the area median income if the
  homebuyer lives in a rural area; or
                     (B)  60 percent of the area median income if the
  homebuyer lives in an urban area;
               (2)  intend to occupy, as the homebuyer's principal
  residence, the home for which the mortgage loan is issued; and
               (3)  meet any additional eligibility requirements or
  limitations prescribed by the department.
         (b)  The department may enter into memoranda of
  understanding with other agencies of the state or may contract with
  private entities to process, service, or administer all or a
  portion of the loans issued under this subchapter.
         SECTION 6.  The Texas Department of Housing and Community
  Affairs shall create the community development corporations
  required by Section 2306.308, Government Code, as added by this
  Act, as soon as practicable after the effective date of this Act,
  but not later than October 1, 2009.
         SECTION 7.  Not later than October 1, 2009, the Texas
  Department of Housing and Community Affairs shall adopt the rules
  required by Subchapter N, Chapter 2306, Government Code, as added
  by this Act.
         SECTION 8.  Not later than January 1, 2010, the Texas
  Department of Housing and Community Affairs and the Office of Rural
  Community Affairs shall allocate the funds required by Section
  2306.708, Government Code, as added by this Act, to the rural
  housing land assemblage program established under Subchapter EE,
  Chapter 2306, Government Code, as added by this Act.
         SECTION 9.  The board of directors of the Texas Department of
  Housing and Community Affairs shall adopt the rules required by
  Subchapter NN, Chapter 2306, Government Code, as added by this Act,
  not later than October 1, 2009, and the Texas Department of Housing
  and Community Affairs shall begin issuing loans under the Texas
  secure loan pilot program not later than January 1, 2010.
         SECTION 10.  This Act takes effect September 1, 2009.
 
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