By: J. Davis of Harris, Dutton H.B. No. 2660

A BILL TO BE ENTITLED

AN ACT

relating to the functions of the Texas Department of Housing and Community Affairs and transferring certain department functions to the Texas State Affordable Housing Corporation.

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

SECTION 1. Subchapter K, Chapter 2306, Government Code, is amended by adding Section 2306.2585 to read as follows:

Sec. 2306.2585. HOMELESS HOUSING AND SERVICES PROGRAM. (a) The department may administer a homeless housing and services program in each municipality in this state with a population of 285,500 or more to:

(1) provide for the construction, development, or procurement of housing for homeless persons; and

(2) provide local programs to prevent and eliminate homelessness.

(b) If the department implements the homeless housing and services program under Subsection (a), the department shall adopt rules to govern the program, including rules that:

(1) provide for the allocation of any available funding; and

(2) provide detailed guidelines as to the scope of the local programs in the municipalities described by Subsection (a).

(c) The department may use any available revenue, including legislative appropriations, and shall solicit and accept gifts and grants for the purposes of this section. The department shall use gifts and grants received for the purposes of this section before using any other revenue.

SECTION 2. Section 1372.0221, Government Code, is amended to read as follows:

Sec. 1372.0221. DEDICATION OF PORTION OF STATE CEILING FOR PROFESSIONAL EDUCATORS HOME LOAN PROGRAM. Until August 7, out of that portion of the state ceiling that is available exclusively for reservations by the Texas State Affordable Housing Corporation under Section 1372.0223, 20 [54.5] percent shall be allotted each year and made available to the corporation for the purpose of issuing qualified mortgage bonds in connection with the professional educators home loan program established under Section 2306.562.

SECTION 3. Section 1372.0222, Government Code, is amended to read as follows:

Sec. 1372.0222. DEDICATION OF PORTION OF STATE CEILING FOR FIRE FIGHTER, LAW ENFORCEMENT OR SECURITY OFFICER, AND EMERGENCY MEDICAL SERVICES PERSONNEL HOME LOAN PROGRAM. Until August 7, out of that portion of the state ceiling that is available exclusively for reservations by the Texas State Affordable Housing Corporation under Section 1372.0223, 10 [45.5] percent shall be allotted each year and made available to the corporation for the purpose of issuing qualified mortgage bonds in connection with the fire fighter, law enforcement or security officer, and emergency medical services personnel home loan program established under Section 2306.5621.

SECTION 4. Subchapter B, Chapter 1372, Government Code, is amended by adding Section 1372.02221 to read as follows:

Sec. 1372.02221. DEDICATION OF PORTION OF STATE CEILING FOR PROGRAMS ADMINISTERED BY TEXAS STATE AFFORDABLE HOUSING CORPORATION. Until August 7, out of that portion of the state ceiling that is available exclusively for reservations by the Texas State Affordable Housing Corporation under Section 1372.0223, 70 percent shall be allotted each year and made available to the corporation for the purpose of issuing qualified mortgage bonds in connection with the programs established under Sections 2306.562 and 2306.5621 or any other home loan program administered by the corporation.

SECTION 5. Section 1372.0223, Government Code, is amended to read as follows:

Sec. 1372.0223. DEDICATION OF PORTION OF STATE CEILING TO [CERTAIN] ISSUERS OF QUALIFIED MORTGAGE BONDS. Until August 7, out of that portion of the state ceiling that is available exclusively for reservations by issuers of qualified mortgage bonds under Section 1372.022:

(1) 40 [10] percent is available exclusively to the Texas State Affordable Housing Corporation for the purpose of issuing qualified mortgage bonds; and

(2) 60 [56.66] percent is available exclusively to housing finance corporations for the purpose of issuing qualified mortgage bonds.

SECTION 6. Section 1372.023, Government Code, is amended by adding Subsection (d) to read as follows:

(d) The Texas Department of Housing and Community Affairs may not issue qualified mortgage bonds after September 1, 2011, except as necessary to complete its activity under the New Issue Bond Program.

SECTION 7. Section 1372.025(b), Government Code, is amended to read as follows:

(b) Subsection (a) does not apply to:

(1) [qualified mortgage bonds or] qualified residential rental project bonds made available exclusively to the Texas Department of Housing and Community Affairs under Section 1372.023; or

(2) qualified mortgage bonds made available exclusively to the Texas State Affordable Housing Corporation under Sections 1372.0221, [and] 1372.0222, and 1372.02221.

SECTION 8. Section 1372.037(a), Government Code, is amended to read as follows:

(a) Except as provided by Subsection (b), before August 15 the board may not grant for any single project a reservation for that year that is greater than:

(1) $40 million, if the issuer is an issuer of qualified mortgage bonds, other than the [Texas Department of Housing and Community Affairs or the] Texas State Affordable Housing Corporation;

(2) $50 million, if the issuer is an issuer of a state-voted issue, other than the Texas Higher Education Coordinating Board, or $75 million, if the issuer is the Texas Higher Education Coordinating Board;

(3) the amount to which the Internal Revenue Code limits issuers of qualified small issue bonds and enterprise zone facility bonds, if the issuer is an issuer of those bonds;

(4) the lesser of $20 million or 15 percent of the amount set aside for reservation by issuers of qualified residential rental project bonds, if the issuer is an issuer of those bonds;

(5) the amount as prescribed in Sections 1372.033(d), (e), and (f), if the issuer is an issuer authorized by Section 53B.47, Education Code, to issue qualified student loan bonds; or

(6) $50 million, if the issuer is any other issuer of bonds that require an allocation.

SECTION 9. Section 1372.040, Government Code, is amended to read as follows:

Sec. 1372.040. RESERVATION BY CERTAIN ISSUERS OF QUALIFIED MORTGAGE BONDS OF MONEY FOR MORTGAGES FOR CERTAIN PERSONS. An issuer of qualified mortgage bonds, other than the [Texas Department of Housing and Community Affairs or the] Texas State Affordable Housing Corporation, shall reserve for six months 50 percent of the funds available for loans outside the federally designated target areas to provide mortgages to individuals and families with incomes below 80 percent of the applicable median family income, as defined by Section 143(f)(4), Internal Revenue Code (26 U.S.C. Section 143(f)(4)).

SECTION 10. Subchapter Y, Chapter 2306, Government Code, is amended by adding Section 2306.5622 to read as follows:

Sec. 2306.5622. TEXAS FIRST-TIME HOMEBUYER PROGRAM. (a) In this section:

(1) "First-time homebuyer" means a person who has not owned a home during the three years preceding the date on which an application under this section is filed.

(2) "Home" means a dwelling in this state in which a first-time homebuyer intends to reside as the homebuyer's principal residence.

(3) "Program" means the Texas First-Time Homebuyer Program.

(b) The Texas First-Time Homebuyer Program shall facilitate the origination of single-family mortgage loans for eligible first-time homebuyers.

(c) The program may include down payment and closing cost assistance.

(d) The corporation shall administer the program.

(e) The board of directors of the corporation shall adopt rules governing:

(1) the administration of the program;

(2) the making of loans under the program;

(3) the criteria for approving participating mortgage lenders;

(4) the use of insurance on the loans and the homes financed under the program, as considered appropriate by the corporation's board to provide additional security for the loans;

(5) the verification of occupancy of the home by the homebuyer as the homebuyer's principal residence; and

(6) the terms of any contract made with any mortgage lender for processing, originating, servicing, or administering the loans.

(f) To be eligible for a mortgage loan under this section, a homebuyer must:

(1) qualify as a first-time homebuyer under this section;

(2) have an income of not more than 115 percent of area median family income or 140 percent of area median family income in targeted areas; and

(3) meet any additional requirements or limitations prescribed by the corporation.

(g) To be eligible for a loan under this section to assist a homebuyer with down payment and closing costs, a homebuyer must:

(1) qualify as a first-time homebuyer under this section;

(2) have an income of not more than 80 percent of area median family income; and

(3) meet any additional requirements or limitations prescribed by the corporation.

(h) The corporation may contract with other agencies of the state or with private entities to determine whether applicants qualify as first-time homebuyers under this section or otherwise to administer all or part of this section.

(i) The board of directors of the corporation may set and collect from each applicant any fees that board considers reasonable and necessary to cover the expenses of administering the program.

(j) The corporation shall ensure that a loan under this section is structured in a way that complies with any requirements associated with the source of the funds used for the loan.

(k) In addition to funds set aside for the program under Section 1372.0223(1), the corporation may solicit and accept funding for the program from gifts and grants for the purposes of this section.

SECTION 11. Section 2306.253, Government Code, is transferred to Subchapter Y, Chapter 2306, Government Code, redesignated as Section 2306.570, Government Code, and amended to read as follows:

Sec. 2306.570 [2306.253]. HOMEBUYER EDUCATION PROGRAM. (a) The corporation [department] shall develop and implement a statewide homebuyer education program designed to provide information and counseling to prospective homebuyers about the home buying process.

(b) The corporation [department] shall develop the program in cooperation with the Texas AgriLife [Agricultural] Extension Service, the Health and [Texas Department of] Human Services Commission, the Real Estate [Research] Center at Texas A&M University, the Texas Workforce Commission, experienced homebuyer education providers, community-based organizations, and advocates of affordable housing. When feasible, the corporation [The department] shall implement the program through the self-help centers established under Subchapter Z [when feasible].

(c) The corporation [department] shall make full use of existing training and informational materials available from sources such as the United States Department of Housing and Urban Development, the cooperative extension system, the Neighborhood Reinvestment Corporation, and existing homebuyer education providers.

(d) In order to implement this section, the corporation [department] may use money available to the corporation [department] for housing purposes that the corporation [department] is not prohibited from spending on the homebuyer education program, including:

(1) the amount of administrative or service fees the corporation [department] receives from the issuance or refunding of bonds that exceeds the amount the corporation [department] needs to pay its overhead costs in administering its bond programs; and

(2) money the corporation [department] receives from other entities by gift or grant under a contract.

SECTION 12. Section 2306.591(b), Government Code, is amended to read as follows:

(b) An owner of a manufactured home is not eligible to participate in a grant loan program offered by the department[, including the single-family mortgage revenue bond program under Section 2306.142,] unless the owner complies with Subsection (a).

SECTION 13. The following provisions of the Government Code are repealed:

(1) Section 1372.023(a);

(2) Sections 2306.142 and 2306.143; and

(3) Subchapter MM, Chapter 2306.

SECTION 14. The change in law made by this Act in amending Chapter 1372, Government Code, applies only to a reservation of state ceiling granted on or after January 1, 2012.

SECTION 15. (a) As soon as practicable after the effective date of this Act, the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation shall develop a transition plan for transferring the functions performed by the department under Subchapter MM, Chapter 2306, Government Code, to the corporation. The transition plan must include a timetable with specific steps and deadlines needed to complete the transfer.

(b) In accordance with the transition plan developed by the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation under Subsection (a) of this section, on November 1, 2011:

(1) all functions and activities relating to Subchapter MM, Chapter 2306, Government Code, performed by the Texas Department of Housing and Community Affairs immediately before that date are transferred to the Texas State Affordable Housing Corporation under Section 2306.5622, Government Code, as added by this Act;

(2) a rule or form adopted by the executive director of the Texas Department of Housing and Community Affairs that relates to Subchapter MM, Chapter 2306, Government Code, is a rule or form of the Texas State Affordable Housing Corporation and remains in effect until amended or replaced by the corporation;

(3) a reference in law to or an administrative rule of the Texas Department of Housing and Community Affairs that relates to Subchapter MM, Chapter 2306, Government Code, means the Texas State Affordable Housing Corporation;

(4) a loan issued by the Texas Department of Housing and Community Affairs under Subchapter MM, Chapter 2306, Government Code, or an application for a loan under that subchapter pending before the department on the effective date of this Act is transferred without change in status to the Texas State Affordable Housing Corporation, and the corporation assumes, as appropriate and without a change in status, the position of the department in relation to that loan or application;

(5) any employee of the Texas Department of Housing and Community Affairs who is primarily involved in administering Subchapter MM, Chapter 2306, Government Code, becomes an employee of the Texas State Affordable Housing Corporation;

(6) all money, contracts, leases, property, and obligations of the Texas Department of Housing and Community Affairs that are related to Subchapter MM, Chapter 2306, Government Code, are transferred to the Texas State Affordable Housing Corporation;

(7) all property that is in the custody of the Texas Department of Housing and Community Affairs and related to Subchapter MM, Chapter 2306, Government Code, is transferred to the Texas State Affordable Housing Corporation; and

(8) the unexpended and unobligated balance of any money that is appropriated by the legislature for the Texas Department of Housing and Community Affairs and related to Subchapter MM, Chapter 2306, Government Code, is transferred to the Texas State Affordable Housing Corporation.

(c) Before November 1, 2011, the Texas Department of Housing and Community Affairs may agree with the Texas State Affordable Housing Corporation to transfer any property of the department to the corporation to implement the transfer required by this Act.

(d) In the period beginning on the effective date of this Act and ending on November 1, 2011, the Texas Department of Housing and Community Affairs shall continue to perform functions and activities under Subchapter MM, Chapter 2306, Government Code, as if that subchapter had not been repealed by this Act, and the former law is continued in effect for that purpose.

SECTION 16. This Act takes effect September 1, 2011.