H.B. No. 2608

	AN ACT
	relating to the continuation and functions of the Texas Department
	of Housing and Community Affairs.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1. GENERAL OPERATIONS AND ADMINISTRATION OF THE TEXAS
	DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
	SECTION 1.01.  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, 2023 [2011].
	SECTION 1.02.  Section 2306.043(c), Government Code, is
	amended to read as follows:
	(c)  The notice must:
	(1)  include a brief summary of the alleged violation;
	(2)  state the amount of the recommended penalty; and
	(3)  inform the person of the person's right to a
	hearing before the State Office of Administrative Hearings [board]
	on the occurrence of the violation, the amount of the penalty, or
	both.
	SECTION 1.03.  Section 2306.044(a), Government Code, is
	amended to read as follows:
	(a)  Not later than the 20th day after the date the person
	receives the notice, the person in writing may:
	(1)  accept the determination and recommended penalty
	of the director; or
	(2)  make a request for a hearing before the State
	Office of Administrative Hearings [board] on the occurrence of the
	violation, the amount of the penalty, or both.
	SECTION 1.04.  Section 2306.045, Government Code, is amended
	to read as follows:
	Sec. 2306.045.  HEARING. (a) If the person requests a
	hearing before the State Office of Administrative Hearings [board]
	or fails to respond in a timely manner to the notice, the director
	shall set a hearing and give written notice of the hearing to the
	person.
	(b)  The State Office of Administrative Hearings [board]
	shall:
	(1)  hold the hearing;
	(2)  [and] make findings of fact and conclusions of law
	about the occurrence of the violation and the amount of a proposed
	penalty; and
	(3)  issue a proposal for decision regarding the
	penalty and provide notice of the proposal to the board.
	(c)  Any administrative proceedings relating to the
	imposition of a penalty under Section 2306.041 is a contested case
	under Chapter 2001.
	SECTION 1.05.  Section 2306.046(a), Government Code, is
	amended to read as follows:
	(a)  The board shall issue an order after receiving a
	proposal for decision from the State Office of Administrative
	Hearings under Section 2306.045.  [Based on the findings of fact and
	conclusions of law, the board by order may:
	[(1)     find that a violation occurred and impose a
	penalty; or
	[(2)  find that a violation did not occur.]
	SECTION 1.06.  Section 2306.049(a), Government Code, is
	amended to read as follows:
	(a)  Judicial review of a board order imposing an
	administrative penalty is under the substantial evidence rule [by
	trial de novo].
	SECTION 1.07.  Section 2306.072(c), Government Code, is
	amended to read as follows:
	(c)  The report must include:
	(1)  a complete operating and financial statement of
	the department;
	(2)  a comprehensive statement of the activities of the
	department during the preceding year to address the needs
	identified in the state low income housing plan prepared as
	required by Section 2306.0721, including:
	(A)  a statistical and narrative analysis of the
	department's performance in addressing the housing needs of
	individuals and families of low and very low income;
	(B)  the ethnic and racial composition of
	individuals and families applying for and receiving assistance from
	each housing-related program operated by the department; [and]
	(C)  the department's progress in meeting the
	goals established in the previous housing plan, including efforts
	to address the populations described by Section 2306.0721(c)(1);
	and
	(D)  recommendations on how to improve the
	coordination of department services to the populations described by
	Section 2306.0721(c)(1);
	(3)  an explanation of the efforts made by the
	department to ensure the participation of individuals of low income
	and their community-based institutions in department programs that
	affect them;
	(4)  a statement of the evidence that the department
	has made an affirmative effort to ensure the involvement of
	individuals of low income and their community-based institutions in
	the allocation of funds and the planning process;
	(5)  a statistical analysis, delineated according to
	each ethnic and racial group served by the department, that
	indicates the progress made by the department in implementing the
	state low income housing plan in each of the uniform state service
	regions;
	(6)  an analysis, based on information provided by the
	fair housing sponsor reports required under Section 2306.0724 and
	other available data, of fair housing opportunities in each housing
	development that receives financial assistance from the department
	that includes the following information for each housing
	development that contains 20 or more living units:
	(A)  the street address and municipality or county
	in which the property is located;
	(B)  the telephone number of the property
	management or leasing agent;
	(C)  the total number of units, reported by
	bedroom size;
	(D)  the total number of units, reported by
	bedroom size, designed for individuals who are physically
	challenged or who have special needs and the number of these
	individuals served annually;
	(E)  the rent for each type of rental unit,
	reported by bedroom size;
	(F)  the race or ethnic makeup of each project;
	(G)  the number of units occupied by individuals
	receiving government-supported housing assistance and the type of
	assistance received;
	(H)  the number of units occupied by individuals
	and families of extremely low income, very low income, low income,
	moderate income, and other levels of income;
	(I)  a statement as to whether the department has
	been notified of a violation of the fair housing law that has been
	filed with the United States Department of Housing and Urban
	Development, the Commission on Human Rights, or the United States
	Department of Justice; and
	(J)  a statement as to whether the development has
	any instances of material noncompliance with bond indentures or
	deed restrictions discovered through the normal monitoring
	activities and procedures that include meeting occupancy
	requirements or rent restrictions imposed by deed restriction or
	financing agreements;
	(7)  a report on the geographic distribution of low
	income housing tax credits, the amount of unused low income housing
	tax credits, and the amount of low income housing tax credits
	received from the federal pool of unused funds from other states;
	and
	(8)  a statistical analysis, based on information
	provided by the fair housing sponsor reports required by Section
	2306.0724 and other available data, of average rents reported by
	county.
	SECTION 1.08.  Section 2306.0721(c), Government Code, is
	amended to read as follows:
	(c)  The plan must include:
	(1)  an estimate and analysis of the size and the
	different 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; [and]
	(C)  homeless individuals;
	(D)  veterans; and
	(E)  youth who are aging out of foster care;
	(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)  a biennial action plan for colonias that:
	(A)  addresses current policy goals for colonia
	programs, strategies to meet the policy goals, and the projected
	outcomes with respect to the policy goals; and
	(B)  includes information on the demand for
	contract-for-deed conversions, services from self-help centers,
	consumer education, and other colonia resident services in counties
	some part of which is within 150 miles of the international border
	of this state;
	(13)  a summary of public comments received at a
	hearing under this chapter or from another source that concern the
	demand for colonia resident services described by Subdivision (12);
	and
	(14)  any other housing-related information that the
	state is required to include in the one-year action plan of the
	consolidated plan submitted annually to the United States
	Department of Housing and Urban Development.
	SECTION 1.09.  Section 2306.6721, Government Code, is
	transferred to Subchapter B, Chapter 2306, Government Code,
	redesignated as Section 2306.0504, Government Code, and amended to
	read as follows:
	Sec. 2306.0504 [2306.6721].  DEBARMENT FROM PROGRAM
	PARTICIPATION. (a) The board by rule shall adopt a policy
	providing for the debarment of a person from participation in
	programs administered by the department [the low income housing tax
	credit program as described by this section].
	(b)  The department may debar a person from participation in
	a department [the] program on the basis of the person's past failure
	to comply with any condition imposed by the department in the
	administration of its programs [connection with the allocation of
	housing tax credits].
	(c)  The department shall debar a person from participation
	in a department [the] program if the person:
	(1)  materially or repeatedly violates any condition
	imposed by the department in connection with the administration of
	a department program, including a material or repeated violation of
	a land use restriction agreement regarding a development supported
	with a [allocation of] housing tax credit allocation [credits]; or
	(2)  is debarred from participation in federal housing
	programs by the United States Department of Housing and Urban
	Development[; or
	[(3)     is in material noncompliance with or has
	repeatedly violated a land use restriction agreement regarding a
	development supported with a housing tax credit allocation].
	(d)  A person debarred by the department from participation
	in a department [the] program may appeal the person's debarment to
	the board.
	ARTICLE 2.  DISASTER MANAGEMENT PLANNING
	SECTION 2.01.  Section 418.106, Government Code, is amended
	by adding Subsection (b-1) to read as follows:
	(b-1)  The plan must identify:
	(1)  any requirements or procedures that local agencies
	and officials must satisfy or implement to:
	(A)  qualify for long-term federal disaster
	recovery funding; and
	(B)  prepare for long-term disaster recovery; and
	(2)  any appropriate state or local resources available
	to assist the local agencies and officials in satisfying or
	implementing those requirements or procedures.
	SECTION 2.02.  Chapter 2306, Government Code, is amended by
	adding Subchapter X-1 to read as follows:
	SUBCHAPTER X-1.  LONG-TERM DISASTER RECOVERY PLAN
	Sec. 2306.531.  LONG-TERM DISASTER RECOVERY PLAN.  (a)  In
	consultation with the office of the governor, the department or
	another agency or office designated under Subsection (f) shall
	develop a long-term disaster recovery plan to administer money
	received for disaster recovery from the federal government or any
	other source.
	(b)  The department and the Texas Department of Rural Affairs
	each must be consulted in developing and administering the plan, if
	those agencies are not designated under Subsection (f).  The
	following entities must also be consulted:
	(1)  existing disaster recovery entities established
	by law or local, state, or federal agreements;
	(2)  local government officials, contractors,
	community advocates, businesses, nonprofit organizations, and
	other stakeholders; and
	(3)  the United States Department of Housing and Urban
	Development to ensure that the plan complies with federal law.
	(c)  The plan developed under this section must establish or
	identify:
	(1)  a method of distribution of disaster relief
	funding to local areas, subject to modification by the governor
	based on the nature of the disaster;
	(2)  guidelines for outreach to program applicants and
	for eligible housing and infrastructure activities;
	(3)  eligibility criteria for program applicants;
	(4)  housing quality and energy efficiency standards;
	(5)  priorities for serving local populations;
	(6)  procedures for establishing compliance with
	federal requirements;
	(7)  procedures for coordination and communication
	among federal, state, and local entities;
	(8)  pre-disaster and post-disaster training programs;
	(9)  a procedure for each appropriate state agency or
	office to compile, update, and post on that agency's or office's
	Internet website in advance of hurricane season all relevant forms
	and information for program applicants;
	(10)  federal and state monitoring and reporting
	requirements, including a list of the types of data that local
	government officials may be required to collect, analyze, and
	report;
	(11)  the state information technology systems and
	processes that will be used to administer funds from the federal
	government or any other source;
	(12)  a process for identifying elements of disaster
	recovery where coordination between or among state agencies will be
	required; and
	(13)  a process for implementing memoranda of
	understanding in areas of disaster recovery where interagency
	coordination will be required.
	(d)  In developing the plan under this section, the agency or
	office designated under Subsection (f) shall seek from county
	judges and mayors in areas impacted by large-scale natural
	disasters input regarding the development of future methods of
	distributing federal funding for long-term disaster recovery.
	(e)  The plan established under this section must be updated
	biennially and approved by the governor.
	(f)  Biennially, the governor shall designate a state agency
	or office to be the primary agency or office in charge of
	coordinating the distribution of long-term disaster recovery
	funding.
	(g)  This subchapter does not create a public or private
	cause of action.
	SECTION 2.03.  Section 2306.542, Government Code, is amended
	by amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(a)  Using the natural disaster housing reconstruction plan
	developed under this subchapter, the director and advisory
	committee shall develop, for implementation under Subsections (b)
	and (c), housing reconstruction demonstration pilot programs for
	three areas, each of which was affected by one of the three most
	recent federally declared natural disasters. Except as provided by
	Subsection (d), the [The] pilot programs must provide for the
	replacement of at least 20 houses in each area to test the
	feasibility of implementing the plan in the large-scale production
	of replacement housing for victims of federally declared natural
	disasters.
	(d)  If the local requirements, regulations, or
	environmental factors of an area require elevation of houses, the
	department may deviate from the 20-house requirement under
	Subsection (a) and determine the number of houses needed to test the
	feasibility of implementing the plan.
	ARTICLE 3.  HOUSING TRUST FUND PROGRAM; LOW INCOME HOUSING TAX
	CREDIT PROGRAM
	SECTION 3.01.  Sections 2306.111(d-1) and (d-2), Government
	Code, are 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 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 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 for each programmed activity during each
	application cycle.
	(d-2)  In allocating low income housing tax credit
	commitments under Subchapter DD, the department shall allocate five
	percent of the housing tax credits in each application cycle to
	developments that receive federal financial assistance through the
	Texas Rural Development Office of the United States Department of
	Agriculture.  Any funds allocated to developments under this
	subsection that involve rehabilitation must come from the funds set
	aside for at-risk developments under Section 2306.6714 and any
	additional funds set aside for those developments under Subsection
	(d-1).  This subsection does not apply to a development financed
	wholly or partly under Section 538 of the Housing Act of 1949 (42
	U.S.C. Section 1490p-2) unless the development involves the
	rehabilitation of an existing property that has received and will
	continue to receive as part of the financing of the development
	federal financial assistance provided under Section 515 of the
	Housing Act of 1949 (42 U.S.C. Section 1485).
	SECTION 3.02.  Section 2306.6702(a)(5), Government Code, is
	amended to read as follows:
	(5)  "At-risk development" means:
	(A)  a development that:
	(i) [(A)]  has received the benefit of a
	subsidy in the form of a below-market interest rate loan, interest
	rate reduction, rental subsidy, Section 8 housing assistance
	payment, rental supplement payment, rental assistance payment, or
	equity incentive under the following federal laws, as applicable:
	(a) [(i)]  Sections 221(d)(3) and (5),
	National Housing Act (12 U.S.C. Section 1715l);
	(b) [(ii)]  Section 236, National
	Housing Act (12 U.S.C. Section 1715z-1);
	(c) [(iii)]  Section 202, Housing Act
	of 1959 (12 U.S.C. Section 1701q);
	(d) [(iv)]  Section 101, Housing and
	Urban Development Act of 1965 (12 U.S.C. Section 1701s);
	(e) [(v)]  the Section 8 Additional
	Assistance Program for housing developments with HUD-Insured and
	HUD-Held Mortgages administered by the United States Department of
	Housing and Urban Development;
	(f) [(vi)]  the Section 8 Housing
	Assistance Program for the Disposition of HUD-Owned Projects
	administered by the United States Department of Housing and Urban
	Development;
	(g) [(vii)]  Sections 514, 515, and
	516, Housing Act of 1949 (42 U.S.C. Sections 1484, 1485, and 1486);
	or
	(h) [(viii)]  Section 42, Internal
	Revenue Code of 1986 (26 U.S.C. Section 42); and
	(ii) [(B)]  is subject to the following
	conditions:
	(a) [(i)]  the stipulation to maintain
	affordability in the contract granting the subsidy is nearing
	expiration; or
	(b) [(ii)]  the federally insured
	mortgage on the development is eligible for prepayment or is
	nearing the end of its term; or
	(B)  a development that proposes to rehabilitate
	or reconstruct housing units that:
	(i)  are owned by a public housing authority
	and receive assistance under Section 9 of the National Housing Act
	(12 U.S.C. Section 1706d); or
	(ii)  received assistance under Section 9 of
	the National Housing Act (12 U.S.C. Section 1706d) and:
	(a)  are proposed to be disposed of or
	demolished by a public housing authority; or
	(b)  have been disposed of or
	demolished by a public housing authority in the two-year period
	preceding the application for housing tax credits.
	SECTION 3.03.  Section 2306.67022, Government Code, is
	amended to read as follows:
	Sec. 2306.67022.  QUALIFIED ALLOCATION PLAN; MANUAL. At
	least biennially, the [The] board [annually] shall adopt a
	qualified allocation plan and a corresponding manual to provide
	information regarding the administration of and eligibility for the
	low income housing tax credit program. The board may adopt the plan
	and manual annually, as considered appropriate by the board.
	SECTION 3.04.  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 a resolution
	concerning the development that is voted on and adopted by the
	governing body of a municipality [written statements from any
	neighborhood organizations on record with the state or county in
	which the development is to be located and] whose boundaries
	contain the proposed development site or by the commissioners court
	of a county 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 for the
	application, evaluated on the basis of a written statement
	[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 for an
	application under Subsection (b)(1)(F), the department shall
	award:
	(1)  positive points for a positive written statement
	[statements] received;
	(2)  negative points for a negative written statement
	[statements] received; and
	(3)  zero points for a neutral statement [statements]
	received.
	SECTION 3.05.  Sections 2306.6711(b) and (f), Government
	Code, are amended 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 allocate to the applicant housing tax
	credits in an amount greater than $3 [$2] million in a single
	application round or to an individual development more than $2
	million in a single application round.
	(f)  The board may allocate housing tax credits to more than
	one development in a single community, as defined by department
	rule, in the same calendar year only if the developments are or will
	be located more than two [one] linear miles [mile] apart. This
	subsection applies only to communities contained within counties
	with populations exceeding one million.
	SECTION 3.06.  Section 2306.6718(b), Government Code, is
	amended to read as follows:
	(b)  The department shall provide the elected officials with
	an opportunity to comment on the application during the application
	evaluation process [provided by Section 2306.6710] and shall
	consider those comments in evaluating applications [under that
	section].
	SECTION 3.07.  Sections 2306.6724(a), (b), and (c),
	Government Code, are amended to read as follows:
	(a)  Regardless of whether the board will adopt the plan
	annually or biennially [Not later than September 30 of each year],
	the department, not later than September 30 of the year preceding
	the year in which the new plan is proposed for use, shall prepare
	and submit to the board for adoption any proposed [the] qualified
	allocation plan required by federal law for use by the department in
	setting criteria and priorities for the allocation of tax credits
	under the low income housing tax credit program.
	(b)  Regardless of whether the board has adopted the plan
	annually or biennially, the [The] board shall [adopt and] submit to
	the governor any proposed [the] qualified allocation plan not later
	than November 15 of the year preceding the year in which the new
	plan is proposed for use.
	[(c)]  The governor shall approve, reject, or modify and
	approve the proposed qualified allocation plan not later than
	December 1.
	SECTION 3.08.  Subchapter DD, Chapter 2306, Government Code,
	is amended by adding Section 2306.6739 to read as follows:
	Sec. 2306.6739.  HOUSING TAX CREDITS FINANCED USING FEDERAL
	EMERGENCY FUNDS. (a) To the extent the department receives federal
	emergency funds that must be awarded by the department in the same
	manner as and that are subject to the same limitations as awards of
	housing tax credits, any reference in this chapter to the
	administration of the housing tax credit program applies equally to
	the administration of the federal funds, subject to Subsection (b).
	(b)  Notwithstanding any other law, the department may
	establish a separate application procedure for the federal
	emergency funds that does not follow the uniform application cycle
	required by Section 2306.1111 or the deadlines established by
	Section 2306.6724, and any reference in this chapter to an
	application period occurring in relation to those federal emergency
	funds refers to the period beginning on the date the department
	begins accepting applications for the federal funds and continuing
	until all of the available federal funds are awarded.
	ARTICLE 4. MANUFACTURED HOUSING
	SECTION 4.01.  Section 2306.6022, Government Code, is
	amended by adding Subsections (e) and (f) to read as follows:
	(e)  The division director may allow an authorized employee
	of the division to dismiss a complaint if an investigation
	demonstrates that:
	(1)  a violation did not occur; or
	(2)  the subject of the complaint is outside the
	division's jurisdiction under this subchapter.
	(f)  An employee who dismisses a complaint under Subsection
	(e) shall report the dismissal to the division director and the
	board.  The report must include a sufficient explanation of the
	reason the complaint was dismissed.
	SECTION 4.02.  Subchapter AA, Chapter 2306, Government Code,
	is amended by adding Section 2306.6023 to read as follows:
	Sec. 2306.6023.  NEGOTIATED RULEMAKING AND ALTERNATIVE
	DISPUTE RESOLUTION. (a)  The division shall develop and implement a
	policy to encourage the use of:
	(1)  negotiated rulemaking procedures under Chapter
	2008 for the adoption of division rules; and
	(2)  appropriate alternative dispute resolution
	procedures under Chapter 2009 to assist in the resolution of
	internal and external disputes under the division's jurisdiction.
	(b)  The division's procedures relating to alternative
	dispute resolution must conform, to the extent possible, to any
	model guidelines issued by the State Office of Administrative
	Hearings for the use of alternative dispute resolution by state
	agencies.
	(c)  The division shall:
	(1)  coordinate the implementation of the policy
	adopted under Subsection (a);
	(2)  provide training as needed to implement the
	procedures for negotiated rulemaking or alternative dispute
	resolution; and
	(3)  collect data concerning the effectiveness of those
	procedures.
	SECTION 4.03.  Section 1201.003, Occupations Code, is
	amended by amending Subdivision (17) and adding Subdivision (17-a)
	to read as follows:
	(17)  "License holder" or "licensee" means a person who
	holds a department-issued license as a manufacturer, retailer,
	broker, [rebuilder,] salesperson, or installer.
	(17-a)  "Management official" means an individual with
	authority over employees involved in the sale of manufactured homes
	at a retail location.
	SECTION 4.04.  Sections 1201.055(a) and (b), Occupations
	Code, are amended to read as follows:
	(a)  With guidance from the federal Housing and Community
	Development Act of 1974 (42 U.S.C. Section 5301 et seq.) and from
	the rules and regulations adopted under the National Manufactured
	Housing Construction and Safety Standards Act of 1974 (42 U.S.C.
	Section 5401 et seq.), the board shall establish fees as follows:
	(1)  if the department acts as a design approval
	primary inspection agency, a schedule of fees for the review of
	HUD-code manufactured home blueprints and supporting information,
	to be paid by the manufacturer seeking approval of the blueprints
	and supporting information;
	(2)  except as provided by Subsection (e), a fee for the
	inspection of each HUD-code manufactured home manufactured or
	assembled in this state, to be paid by the manufacturer of the home;
	(3)  a fee for the inspection of an alteration made to
	the structure or plumbing, heating, or electrical system of a
	HUD-code manufactured home, to be charged on an hourly basis and to
	be paid by the person making the alteration;
	(4)  a fee for the inspection of the rebuilding of a
	salvaged manufactured home, to be paid by the retailer [rebuilder];
	(5)  a fee for the inspection of a used manufactured
	home to determine whether the home is habitable for the issuance of
	a new statement of ownership and location; and
	(6)  a fee for the issuance of a seal for a used mobile
	or HUD-code manufactured home.
	(b)  In addition to the fees imposed under Subsections
	(a)(2), (3), and (4), a manufacturer or [,] a person making an
	alteration, [or a rebuilder,] as appropriate, shall be charged for
	the actual cost of travel of a department representative to and
	from:
	(1)  the manufacturing facility, for an inspection
	described by Subsection (a)(2); or
	(2)  the place of inspection, for an inspection
	described by Subsection (a)(3) or (4).
	SECTION 4.05.  Section 1201.056, Occupations Code, is
	amended to read as follows:
	Sec. 1201.056.  LICENSE FEES. (a)  The board shall establish
	fees for the issuance and renewal of licenses for:
	(1)  manufacturers;
	(2)  retailers;
	(3)  brokers;
	(4)  salespersons; and
	(5)  [rebuilders; and
	[(6)]  installers.
	(b)  The board by rule may establish a fee for reprinting a
	license issued under this chapter.
	SECTION 4.06.  Sections 1201.101(e) and (f-1), Occupations
	Code, are amended to read as follows:
	(e)  A person may not repair, rebuild, or otherwise alter a
	salvaged manufactured home unless the person holds a [rebuilder's
	or] retailer's license.
	(f-1)  A retailer may not be licensed to operate more than
	[at a principal location and] one location [or more branch
	locations] under a single license[; provided, however, that a
	separate application must be made for each branch, and each branch
	must be separately bonded].
	SECTION 4.07.  Sections 1201.103(a) and (b), Occupations
	Code, are amended to read as follows:
	(a)  An applicant for a license as a manufacturer, retailer,
	broker, [rebuilder,] or installer must file with the director a
	license application containing:
	(1)  the legal name, address, and telephone number of
	the applicant and each person who will be a related person at the
	time the requested license is issued;
	(2)  all trade names, and the names of all other
	business organizations, under which the applicant does business
	subject to this chapter, the name of each such business
	organization registered with the secretary of state, and the
	address of such business organization;
	(3)  the dates on which the applicant became the owner
	and operator of the business; and
	(4)  the location to which the license will apply.
	(b)  A license application must be accompanied by:
	(1)  proof of the security required by this subchapter;
	[and]
	(2)  payment of the fee required for issuance of the
	license; and
	(3)  the information and the cost required under
	Section 1201.1031.
	SECTION 4.08.  Subchapter C, Chapter 1201, Occupations Code,
	is amended by adding Section 1201.1031 to read as follows:
	Sec. 1201.1031.  CRIMINAL HISTORY RECORD INFORMATION
	REQUIREMENT FOR LICENSE. (a) The department shall require that an
	applicant for a license or renewal of an unexpired license submit a
	complete and legible set of fingerprints, on a form prescribed by
	the board, to the department or to the Department of Public Safety
	for the purpose of obtaining criminal history record information
	from the Department of Public Safety and the Federal Bureau of
	Investigation.  The applicant is required to submit a set of
	fingerprints only once under this section unless a replacement set
	is otherwise needed to complete the criminal history check required
	by this section.
	(b)  The department shall refuse to issue a license to or
	renew the license of a person who does not comply with the
	requirement of Subsection (a).
	(c)  The department shall conduct a criminal history check of
	each applicant for a license or renewal of a license using
	information:
	(1)  provided by the individual under this section; and
	(2)  made available to the department by the Department
	of Public Safety, the Federal Bureau of Investigation, and any
	other criminal justice agency under Chapter 411, Government Code.
	(d)  The department may enter into an agreement with the
	Department of Public Safety to administer a criminal history check
	required under this section.
	(e)  The applicant shall pay the cost of a criminal history
	check under this section.
	SECTION 4.09.  Section 1201.104, Occupations Code, is
	amended by amending Subsections (a), (g), and (h) and adding
	Subsections (a-1), (a-2), (a-3), and (a-4) to read as follows:
	(a)  Except as provided by Subsection (g) [(e)], as a
	requirement for a manufacturer's, retailer's, broker's,
	installer's, [salvage rebuilder's,] or salesperson's license, a
	person who was not licensed or registered with the department or a
	predecessor agency on September 1, 1987, must, not more than 12
	months before applying for the person's first license under this
	chapter, attend and successfully complete eight [20] hours of
	instruction in the law, including instruction in consumer
	protection regulations.
	(a-1)  If the applicant is not an individual, the applicant
	must have at least one related person who satisfies the
	requirements of Subsection (a) [meets this requirement]. If that
	applicant is applying for a retailer's license, the related person
	must be a management official who satisfies the requirements of
	Subsections (a) and (a-2) at each retail location operated by the
	applicant.
	(a-2)  An applicant for a retailer's license must complete
	four hours of specialized instruction relevant to the sale,
	exchange, and lease-purchase of manufactured homes. The
	instruction under this subsection is in addition to the instruction
	required under Subsection (a).
	(a-3)  An applicant for an installer's license must complete
	four hours of specialized instruction relevant to the installation
	of manufactured homes. The instruction under this subsection is in
	addition to the instruction required under Subsection (a).
	(a-4)  An applicant for a joint installer-retailer license
	must comply with Subsections (a-2) and (a-3), for a total of eight
	hours of specialized instruction. The instruction under this
	subsection is in addition to the instruction required under
	Subsection (a).
	(g)  Subsections [Subsection] (a), (a-2), (a-3), and (a-4)
	do [does] not apply to a license holder who applies:
	(1)  for a license for an additional business location;
	or
	(2)  to renew or reinstate a license.
	(h)  An examination must be a requirement of successful
	completion of any initial required course of instruction under this
	section. The period needed to complete an examination under this
	subsection may not be used to satisfy the minimum education
	requirements under Subsection (a), (a-2), (a-3), or (a-4).
	SECTION 4.10.  Section 1201.106(a), Occupations Code, is
	amended to read as follows:
	(a)  An applicant for a license or a license holder shall
	file a bond or other security under Section 1201.105 for the
	issuance or renewal of a license in the following amount:
	(1)  $100,000 for a manufacturer;
	(2)  $50,000 for a retailer [retailer's principal
	location];
	(3)  [$50,000 for each retailer's branch location;
	[(4)  $50,000 for a rebuilder;
	[(5)]  $50,000 for a broker; or
	(4) [(6)]  $25,000 for an installer.
	SECTION 4.11.  Section 1201.110, Occupations Code, is
	amended to read as follows:
	Sec. 1201.110.  SECURITY: DURATION. The department shall
	maintain on file a security other than a bond canceled as provided
	by Section 1201.109(a) until the later of:
	(1)  the second anniversary of the date the
	manufacturer, retailer, broker, or installer[, or rebuilder]
	ceases doing business; or
	(2)  the date the director determines that a claim does
	not exist against the security.
	SECTION 4.12.  Section 1201.116(a), Occupations Code, is
	amended to read as follows:
	(a)  The department shall renew a license if, before the
	expiration date of the license, the department receives the renewal
	application and payment of the required fee as well as the cost
	required under Section 1201.1031 [before the expiration date of the
	license].
	SECTION 4.13.  Section 1201.303, Occupations Code, is
	amended by amending Subsection (b) and adding Subsections (c), (d),
	(e), (f), and (g) to read as follows:
	(b)  The department shall establish an installation
	inspection program in which at least 75 [25] percent of installed
	manufactured homes are inspected on a sample basis for compliance
	with the standards and rules adopted and orders issued by the
	director. The program must place priority on inspecting
	multisection homes and homes installed in Wind Zone II counties.
	(c)  On or after January 1, 2015, the director by rule shall
	establish a third-party installation inspection program to
	supplement the inspections of the department if the department is
	not able to inspect at least 75 percent of manufactured homes
	installed in each of the calendar years 2012, 2013, and 2014.
	(d)  The third-party installation inspection program
	established under Subsection (c) must:
	(1)  establish qualifications for third-party
	inspectors to participate in the program;
	(2)  require third-party inspectors to register with
	the department before participating in the program;
	(3)  establish a biennial registration and renewal
	process for third-party inspectors;
	(4)  require the list of registered third-party
	inspectors to be posted on the department's Internet website;
	(5)  establish clear processes governing inspection
	fees and payment to third-party inspectors;
	(6)  establish the maximum inspection fee that may be
	charged to a consumer;
	(7)  require a third-party inspection to occur not
	later than the 14th day after the date of installation of the
	manufactured home;
	(8)  establish a process for a retailer or broker to
	contract, as part of the sale of a new or used manufactured home,
	with an independent third-party inspector to inspect the
	installation of the home;
	(9)  establish a process for an installer to schedule
	an inspection for each consumer-to-consumer sale where a home is
	reinstalled;
	(10)  if a violation is noted in an inspection, require
	the installer to:
	(A)  remedy the violations noted;
	(B)  have the home reinspected at the installer's
	expense; and
	(C)  certify to the department that all violations
	have been corrected;
	(11)  require an inspector to report inspection results
	to the retailer, installer, and the department;
	(12)  require all persons receiving inspection results
	under Subdivision (11) to maintain a record of the results at least
	until the end of the installation warranty period;
	(13)  authorize the department to charge a filing fee
	and an inspection fee for third-party inspections;
	(14)  authorize the department to continue to conduct
	no-charge complaint inspections under Section 1201.355 on request,
	but only after an initial installation inspection is completed;
	(15)  establish procedures to revoke the registration
	of inspectors who fail to comply with rules adopted under this
	section; and
	(16)  require the department to notify the relevant
	state agency if the department revokes an inspector registration
	based on a violation that is relevant to a license issued to the
	applicable person by another state agency.
	(e)  Not later than January 1, 2015, the department shall
	submit to the Legislative Budget Board, the Governor's Office of
	Budget, Planning, and Policy, and the standing committee of each
	house of the legislature having primary jurisdiction over housing a
	report concerning whether the department inspected at least 75
	percent of manufactured homes installed in each of the calendar
	years 2012, 2013, and 2014.
	(f)  Not later than December 1, 2015, the director shall
	adopt rules as necessary to implement Subsections (c) and (d) if the
	department did not inspect at least 75 percent of manufactured
	homes installed in each of the calendar years 2012, 2013, and 2014.
	Not later than January 1, 2016, the department shall begin
	registering third-party inspectors under Subsections (c) and (d) if
	the department inspections did not occur as described by this
	subsection.
	(g)  If the department is not required to establish a
	third-party installation inspection program as provided by
	Subsection (c), Subsections (c), (d), (e), and (f) and this
	subsection expire September 1, 2016.
	SECTION 4.14.  Section 1201.357, Occupations Code, is
	amended by adding Subsection (b-1) to read as follows:
	(b-1)  As authorized by Section 1201.6041, the director may
	order a manufacturer, retailer, or installer, as applicable, to pay
	a refund directly to a consumer as part of an agreed order described
	by Subsection (b) instead of or in addition to instituting an
	administrative action under this chapter.
	SECTION 4.15.  Section 1201.461(d), Occupations Code, is
	amended to read as follows:
	(d)  A person may not sell, convey, or otherwise transfer to
	a consumer in this state a manufactured home that is salvaged. A
	salvaged manufactured home may be sold only to a licensed retailer
	[or licensed rebuilder].
	SECTION 4.16.  Subchapter M, Chapter 1201, Occupations Code,
	is amended by adding Section 1201.6041 to read as follows:
	Sec. 1201.6041.  DIRECT CONSUMER COMPENSATION. (a)  Instead
	of requiring a consumer to apply for compensation from the trust
	fund under Subchapter I, the director may order a manufacturer,
	retailer, broker, or installer, as applicable, to pay a refund
	directly to a consumer who sustains actual damages resulting from
	an unsatisfied claim against a licensed manufacturer, retailer,
	broker, or installer if the unsatisfied claim results from a
	violation of:
	(1)  this chapter;
	(2)  a rule adopted by the director;
	(3)  the National Manufactured Housing Construction
	and Safety Standards Act of 1974 (42 U.S.C. Section 5401 et seq.);
	(4)  a rule or regulation of the United States
	Department of Housing and Urban Development; or
	(5)  Subchapter E, Chapter 17, Business & Commerce
	Code.
	(b)  For purposes of this section, the refund of a consumer's
	actual damages is determined according to Section 1201.405.
	(c)  The director shall prepare information for notifying
	consumers of the director's option to order a direct refund under
	this section, shall post the information on the department's
	Internet website, and shall make printed copies available on
	request.
	SECTION 4.17.  Sections 1201.610(a), (b), and (f),
	Occupations Code, are amended to read as follows:
	(a)  The [If the director has reasonable cause to believe
	that a person licensed under this chapter has violated or is about
	to violate any provision of this chapter or rules adopted by the
	department under this chapter, the] director may issue without
	notice and hearing an order to cease and desist from continuing a
	particular action or an order to take affirmative action, or both,
	to enforce compliance with this chapter if the director has
	reasonable cause to believe that a person has violated or is about
	to violate any provision of this chapter or a rule adopted under
	this chapter.
	(b)  The director may issue an order to any person [licensee]
	to cease and desist from violating any law, rule, or written
	agreement or to take corrective action with respect to any such
	violations if the violations in any way are related to the sale,
	financing, or installation of a manufactured home or the providing
	of goods or services in connection with the sale, financing, or
	installation of a manufactured home unless the matter that is the
	basis of such violation is expressly subject to inspection and
	regulation by another state agency; provided, however, that if any
	matter involves a law that is subject to any other administration or
	interpretation by another agency, the director shall consult with
	the person in charge of the day-to-day administration of that
	agency before issuing an order.
	(f)  If a person licensed under this chapter fails to pay an
	administrative penalty that has become final or fails to comply
	with an order of the director that has become final, in addition to
	any other remedy provided by law, the director, after not less than
	10 days' notice to the person, may without a prior hearing suspend
	the person's license.  The suspension shall continue until the
	person has complied with the cease and desist order or paid the
	administrative penalty.  During the period of suspension, the
	person may not perform any act requiring a license under this
	chapter, and all compensation received by the person during the
	period of suspension is subject to forfeiture to the person from
	whom it was received.
	SECTION 4.18.  Section 1302.061, Occupations Code, is
	amended to read as follows:
	Sec. 1302.061.  MANUFACTURED HOMES. This chapter does not
	apply to a person or entity licensed as a manufacturer, retailer,
	[rebuilder,] or installer under Chapter 1201 and engaged
	exclusively in air conditioning and refrigeration contracting for
	manufactured homes if the installation of air conditioning
	components at the site where the home will be occupied is performed
	by a person licensed under this chapter.
	ARTICLE 5.  TRANSITION PROVISIONS
	SECTION 5.01.  (a)  Not later than October 1, 2011, the
	governor shall designate a state agency or office to be the primary
	agency or office in charge of coordinating the distribution of
	long-term disaster recovery funding as required under Section
	2306.531, Government Code, as added by this Act.
	(b)  Not later than March 1, 2012, the designated agency or
	office shall develop the plan required under Section 2306.531,
	Government Code, as added by this Act.
	(c)  Not later than May 1, 2012, the designated agency or
	office shall obtain the governor's approval of the plan developed
	under Section 2306.531, Government Code, as added by this Act.
	SECTION 5.02.  The change in law made by this Act to Sections
	2306.043, 2306.044, 2306.045, 2306.046, and 2306.049, Government
	Code, applies only to a violation committed on or after the
	effective date of this Act. A violation committed before the
	effective date of this Act is governed by the law in effect when the
	violation was committed, and the former law is continued in effect
	for that purpose.
	SECTION 5.03.  The change in law made by this Act to Section
	2306.6022, Government Code, applies only to a complaint filed on or
	after the effective date of this Act.  A complaint filed before the
	effective date of this Act is governed by the law in effect at the
	time the complaint was filed, and the former law is continued in
	effect for that purpose.
	SECTION 5.04.  The changes in law made by this Act to
	Sections 2306.6702, 2306.6710, 2306.6711, and 2306.6718,
	Government Code, apply only to an application for low income
	housing tax credits that is submitted to the Texas Department of
	Housing and Community Affairs during an application cycle that
	begins on or after the effective date of this Act. An application
	that is submitted during an application cycle that began before the
	effective date of this Act is governed by the law in effect at the
	time the application cycle began, and the former law is continued in
	effect for that purpose.
	SECTION 5.05.  Notwithstanding Sections 1201.101(f-1) and
	1201.106(a), Occupations Code, as amended by this Act, a retailer
	licensed to operate one or more branch locations on or before the
	effective date of this Act is not required to comply with the
	changes in law made by those sections until March 1, 2012.
	SECTION 5.06.  (a)  The change in law made by this Act in
	amending Sections 1201.103 and 1201.104, Occupations Code, applies
	only to an application for a license filed with the executive
	director of the manufactured housing division of the Texas
	Department of Housing and Community Affairs on or after the
	effective date of this Act. An application for a license filed
	before that date 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.
	(b)  The change in law made by this Act in adding Section
	1201.1031, Occupations Code, applies only to an application for a
	license or license renewal filed with the executive director of the
	manufactured housing division of the Texas Department of Housing
	and Community Affairs on or after the effective date of this Act.
	An application for a license or license renewal filed before that
	date 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.
	(c)  The change in law made by this Act in amending Section
	1201.116, Occupations Code, applies only to an application for a
	license renewal filed with the executive director of the
	manufactured housing division of the Texas Department of Housing
	and Community Affairs on or after the effective date of this Act.
	An application for a license renewal filed before that date 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.
	ARTICLE 6.  EFFECTIVE DATE
	SECTION 6.01.  This Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2608 was passed by the House on May 3,
	2011, by the following vote:  Yeas 144, Nays 5, 1 present, not
	voting; that the House refused to concur in Senate amendments to
	H.B. No. 2608 on May 25, 2011, and requested the appointment of a
	conference committee to consider the differences between the two
	houses; and that the House adopted the conference committee report
	on H.B. No. 2608 on May 29, 2011, by the following vote:  Yeas 144,
	Nays 3, 1 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2608 was passed by the Senate, with
	amendments, on May 23, 2011, by the following vote:  Yeas 30, Nays
	0; at the request of the House, the Senate appointed a conference
	committee to consider the differences between the two houses; and
	that the Senate adopted the conference committee report on H.B. No.
	2608 on May 29, 2011, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor