89R22359 JG-F     By: Bell of Montgomery, Buckley, Cole, H.B. No. 4505       et al.     Substitute the following for H.B. No. 4505:     By:  Bell of Montgomery C.S.H.B. No. 4505       A BILL TO BE ENTITLED   AN ACT   relating to the establishment of the workforce housing capital   investment fund program to fund the development of workforce   housing in this state; authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The legislature finds that:                (1)  the creation of the workforce housing capital   investment fund and use of the fund under Subchapter EE, Chapter   2306, Government Code, as added by this Act, will substantially   increase the development of workforce housing for households that   earn between 30 and 80 percent of the area median income;                (2)  the workforce housing capital investment fund will   enable loan recipients to access needed capital to plan for future   growth;                (3)  the creation of more housing options in this state   will:                      (A)  help stabilize the state economy and local   economies across this state; and                      (B)  reduce the need for other services provided   by this state and political subdivisions of this state;                (4)  skilled construction and trade labor shortages   impact the cost of housing at all income levels; and                (5)  the use of the workforce housing capital   investment fund for the purposes of and in the manner described by   Subchapter EE, Chapter 2306, Government Code, as added by this Act,   is:                      (A)  in furtherance of the public purposes of   mitigating housing deficits and providing housing to a critical   segment of this state's population that is not often served by   for-profit housing; and                      (B)  for the benefit of both this state and   political subdivisions of this state that are impacted by a lack of   workforce housing to provide to qualified homebuyers.          SECTION 2.  Chapter 2306, Government Code, is amended by   adding Subchapter EE to read as follows:   SUBCHAPTER EE. WORKFORCE HOUSING CAPITAL INVESTMENT FUND PROGRAM          Sec. 2306.701.  DEFINITIONS. In this subchapter:                (1)  "Fund" means the workforce housing capital   investment fund established under this subchapter.                (2)  "Program" means the workforce housing capital   investment fund program established under this subchapter.                (3)  "Program administrator" means the nonprofit   housing organization with which the department contracts to   administer the program under Section 2306.703.                (4)  "Program recipient" means a loan recipient under   the program.          Sec. 2306.702.  WORKFORCE HOUSING CAPITAL INVESTMENT FUND.   (a) The workforce housing capital investment fund is a special fund   in the state treasury outside the general revenue fund.          (b)  The fund consists of:                (1)  gifts, grants, and donations received by this   state for the purposes of the fund;                (2)  legislative appropriations for the purposes of   this subchapter;                (3)  any fees or other sources of revenue that the   legislature dedicates for deposit to the fund;                (4)  repayments of loans made from the fund; and                (5)  interest earned on money deposited to the fund.          Sec. 2306.703.  PROGRAM ADMINISTRATION. (a) The department   shall contract with a nonprofit housing organization through a   one-time competitive procurement process to administer the program   in accordance with this subchapter.          (b)  The nonprofit housing organization with which the   department contracts under this section must be a nonprofit   organization designated as a Section 501(c)(3) organization by the   Internal Revenue Service that:                (1)  has a statewide service area with organizational   affiliates;                (2)  provides to organizations designated as Section   501(c)(3) organizations training and technical support, resource   development, mortgage services, and disaster preparedness and   response resources;                (3)  provides financial literacy education to   low-income homebuyers;                (4)  builds single-family residential homes; and                (5)  works with homebuyers who contribute to the   construction of their home or the rehabilitation of another   individual's home, including as a certified nonprofit   owner-builder housing program provider under Subchapter FF with not   less than 15 years of experience.          Sec. 2306.704.  USE OF FUND. (a) The department shall   provide money from the fund to the program administrator to make and   disburse zero-interest loans to program recipients in accordance   with this subchapter.          (b)  Money provided from the fund to program recipients may   be used only to pay the costs associated with the development and   construction of workforce, single-family housing projects   primarily for households that earn between 30 and 80 percent of the   area median income, including:                (1)  planning and design costs;                (2)  land acquisition costs;                (3)  impact fees and permitting costs;                (4)  costs associated with flood mitigation, water   quality, and environmental controls;                (5)  costs associated with infrastructure, including   roads, sidewalks, and utilities; and                (6)  costs associated with broadband services for   single-family housing in a project area that is part of an unserved   or underserved broadband serviceable location under Section   490I.0105.          (c)  Money provided from the fund under Subsection (b)(6) may   only be used to pay costs associated with the construction of   broadband infrastructure that is completed by a broadband service   provider selected after a competitive proposal solicitation   process.          (d)  Interest earned on money deposited to the fund may be   used by the program administrator for:                (1)  program staffing and other related costs   associated with administering the program; and                (2)  training programs associated with the purposes of   this subchapter.          Sec. 2306.705.  APPLICATION REQUIREMENTS; PROGRAM RECIPIENT   SELECTION. (a) The department shall prescribe the form and manner   for an applicant to apply for a loan under the program.          (b)  An application must satisfy the requirements prescribed   by the department and demonstrate that the applicant:                (1)  is incorporated under this state's laws as a   nonprofit organization;                (2)  is organized for the purpose of building   owner-occupied residential homes for households that earn between   30 and 80 percent of the area median income and has carried out that   purpose for not less than 15 years; and                (3)  has experience in providing training and technical   support, resource development, mortgage services, and disaster   preparedness and response resources that expand the applicant's   capacity to serve communities in this state.          (c)  The program administrator shall review applications and   select applicants to provide loans to under the program. In   selecting applicants, the program administrator:                (1)  shall consider the quality of the application and   the applicant's ability to carry out the purposes of this   subchapter; and                (2)  may give priority to applicants that partner with   organizations that provide training opportunities to construction   trade workforce members.          (d)  The program administrator may require an applicant to   pay an origination fee on a loan application.          Sec. 2306.706.  ANNUAL REPORT; INTERNET POSTING. (a) The   program administrator shall prepare and submit to the department an   annual report on the program. The report must include:                (1)  information on the program recipients that   received a loan under the program during the preceding year;                (2)  a description of each workforce housing project   funded by a loan under the program, including:                      (A)  the project's expected completion date and   information on the progress made during the preceding year toward   completing the project;                      (B)  the number of families the project is   expected to serve; and                      (C)  the total amount and repayment status of the   loan; and                (3)  other information the department requires.          (b)  The department shall post on the department's Internet   website the information submitted to the department under this   section.          Sec. 2306.707.  INDEPENDENT FINANCIAL AUDIT. (a) The   program administrator shall annually commission from a certified   public accounting firm an independent financial audit of the   program administrator's financial activities in relation to the   program and the use of money in the fund. The program administrator   shall provide the results of the audit to the department for the   department's review and evaluation.          (b)  In the event the department determines from the results   of the audit that money from the fund has not been used in   accordance with the purposes of this subchapter, the department may   require repayment of the money over a period and in the manner the   department requires.          Sec. 2306.708.  RULES. The department shall adopt rules to   implement the program and carry out this subchapter, including   rules on:                (1)  application procedures and requirements for an   applicant to receive a loan under the program;                (2)  the investment of money in the fund; and                (3)  the administration of the fund.          SECTION 3.  As soon as practicable after the effective date   of this Act, the Texas Department of Housing and Community Affairs   shall adopt rules to implement Subchapter EE, Chapter 2306,   Government Code, as added by this Act.          SECTION 4.  This Act takes effect September 1, 2025.