HBA-KMH C.S.H.B. 3340 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3340 By: Naishtat Human Services 4/23/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE There are few affordable housing options for the elderly outside of nursing homes. Many older citizens live on small, fixed incomes and are often unable to afford the expenses of maintaining their own homes or of keeping up with increasing rents. C.S.H.B. 3340 creates a rental housing pilot program to expand long-term care options for elderly persons. This program provides for the coordination of and transportation for the services needed by elderly persons. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. DEFINITION. Defines "department" to mean the Texas Department of Housing and Community Affairs (TDHCA). SECTION 2. ESTABLISHMENT OF PILOT PROGRAM. (a) Requires the Texas Department of Housing and Community Affairs in coordination with the Texas Department of Human Services (DHS), nonprofit organizations, public housing authorities, and any other entity with an interest in housing issues to develop and implement a rental housing pilot program (pilot program) to expand long-term care options for elderly residents of this state. Requires the pilot program to provide subsidized multifamily rental housing for elderly residents with low, very low, or extremely low income and to coordinate services need by those residents. (b) Requires TDHCA, to the greatest extent possible, to coordinate the program with the funding sources of DHS and other interested entities. SECTION 3. ELIGIBILITY REQUIREMENTS. Specifies qualifications necessary to qualify for a subsidized multifamily rental housing under the pilot program. Provides that in order to participate in the pilot program, an entity must demonstrate that it uses sources of low-income housing funds, such as tax credits and tax-exempt bonds, to offer multifamily housing at rental rates that are at or below the applicable fair market rent prescribed by the United States Department of Housing and Urban Development. SECTION 4. AFFORDABLE PARTICIPANT CONTRIBUTIONS. Requires TDHCA to require a participating elderly resident of this state to pay from the participant's financial resources as rent an amount that is not more than 30 percent of the participant's gross income or the amount specified by HUD for the Section 8 rental assistance program. (The Section 8 Program was authorized by the U.S. Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families, including single persons, residing in newly constructed, rehabilitated, and existing rental and cooperative apartment projects.) SECTION 5. EVALUATION AND REPORT. Requires TDHCA, no later than December 15, 2000, to submit a report to the governor, lieutenant governor, and speaker of the house of representatives evaluating the effectiveness of the pilot program. Provides that the report must include TDHCA's recommendations with respect to providing subsidized multifamily rental housing for and coordinating services needed by low, very low, and extremely low income elderly residents of this state. SECTION 6. TERMINATION; EXPIRATION. Sets forth that the pilot program ends and this Act expires September 1, 2001. SECTION 7.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3340 modifies the original in SECTION 1 by redefining "department" to mean the Texas Department of Housing and Community Affairs (TDHCA), rather than the Texas Department of Human Services (DHS). The substitute removes the definition of "facility." C.S.H.B. 3340 modifies the original in SECTION 2 by requiring TDHCA, rather than DHS, to coordinate with other entities including DHS to provide a subsidized housing program, rather than a subsidized rental program, for low, very low, and extremely low income elderly residents and to coordinate services for the residents. The substitute requires TDHCA to coordinate funding with these and other interested entities. The substitute deletes the provision requiring TDHCA to process applications and determine eligibility for an elderly's participation in the program. C.S.H.B. 3340 modifies the original in SECTION 3 by adding the satisfaction of predetermined needs criteria established by DHS to the eligibility requirements. The substitute adopts the applicable fair market rent prescribed by the United States Department of Housing and Urban Development as the standard for the rental rate charged under the pilot program. C.S.H.B. 3340 modifies the original in SECTION 4 by changing the proposed section's title from "Rent Subsidies" to "Affordable Participant Contributions." Provides the method of determining the rental rate for each participant as the lesser of the 30 percent of the participant's gross income or an amount specified by the United States Department of Housing and Urban Development for the Section 8 rental assistance program, rather than solely on the participant's income and needs. The substitute also deletes the provision requiring a minimum contribution in the amount equal to the amount the person would be required to contribute if the person resided in a nursing home and received Medicaid benefits. Furthermore, the substitute makes conforming and nonsubstantive changes. C.S.H.B. 3340 modifies the original in SECTION 5 to delete the requirement that the report to be subsidized by TDHCA evaluate the cost-effectiveness of the program.