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A BILL TO BE ENTITLED
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AN ACT
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relating to a right of first refusal applicable to the sale of |
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housing developments that have received certain financial |
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assistance administered by the Texas Department of Housing and |
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Community Affairs. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2306.6710, Government Code, is amended |
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by adding Subsection (h) to read as follows: |
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(h) In scoring applications for purposes of housing tax |
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credit allocations, the department shall award preference points to |
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a development that agrees to provide to a qualified entity, in a |
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land use restriction agreement in accordance with Section |
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2306.6726, a right of first refusal to purchase the development at |
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the minimum price provided in, and in accordance with the |
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requirements of, Section 42(i)(7), Internal Revenue Code of 1986. |
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SECTION 2. Section 2306.6725(b), Government Code, is |
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amended to read as follows: |
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(b) The department shall provide appropriate incentives as |
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determined through the qualified allocation plan to reward |
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applicants who agree to: |
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(1) equip the development that is the basis of the |
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application with energy saving devices that meet the standards |
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established by the state energy conservation office [or provide to |
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a qualified entity, in a land use restriction agreement in |
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accordance with Section 2306.6726, a right of first refusal to |
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purchase the development at the minimum price provided in, and in |
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accordance with the requirements of, Section 42(i)(7), Internal |
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Revenue Code of 1986 (26 U.S.C. Section 42(i)(7))]; and |
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(2) locate the development in a census tract in which |
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there are no other existing developments supported by housing tax |
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credits. |
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SECTION 3. Section 2306.6726, Government Code, is amended |
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by amending Subsections (a), (b), and (c) and adding Subsection |
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(c-3) to read as follows: |
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(a) An owner of a development subject to a right of first |
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refusal described by [under] Section 2306.6710(h) [2306.6725] who |
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intends to sell the development at any time after the expiration of |
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the compliance period shall notify the department and the tenants |
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of the development of the owner's intent to sell and, if applicable, |
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shall specifically identify to the department any qualified entity |
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that is the owner's intended recipient of the right of first refusal |
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in the land use restriction agreement. |
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(b) The owner of a development subject to a right of first |
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refusal described by [under] Section 2306.6710(h) [2306.6725] may: |
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(1) during the first 120-day [60-day] period after |
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notice is provided under Subsection (a-1), negotiate or enter into |
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a purchase agreement only with a qualified entity that is: |
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(A) a community housing development organization |
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as defined by the federal HOME investment partnership program; or |
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(B) controlled by an entity described by |
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Paragraph (A); |
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(2) during the second 120-day [60-day] period after |
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notice is provided under Subsection (a-1), negotiate or enter into |
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a purchase agreement with a qualified entity that: |
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(A) is described by Section 2306.6706; |
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(B) is controlled by an entity described by |
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Paragraph (A); or |
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(C) is a tenant organization; and |
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(3) during the last 120-day [60-day] period after |
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notice is provided under Subsection (a-1), negotiate or enter into |
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a purchase agreement with any other qualified entity. |
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(c) Beginning on the 361st [181st] day after the date the |
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department posts notice under Subsection (a-1), an owner of a |
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development subject to a right of first refusal described by |
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[under] Section 2306.6710(h) [2306.6725] may sell to any purchaser |
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a development to which the right of first refusal applies only if a |
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qualified entity does not offer to purchase the development for the |
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minimum price provided in, and in accordance with the requirements |
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of, Section 42(i)(7), Internal Revenue Code of 1986 [a price that |
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the department determines to be reasonable]. |
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(c-3) A development subject to a right of first refusal |
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described by Section 2306.6710(h) may only be offered for sale at |
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the minimum price provided in, and in accordance with the |
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requirements of, Section 42(i)(7), Internal Revenue Code of 1986. |
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SECTION 4. The change in law made by this Act applies only |
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to an application for low income housing tax credits that is |
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submitted to the Texas Department of Housing and Community Affairs |
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during an application cycle that is based on the 2022 qualified |
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allocation plan or a subsequent plan adopted by the governing board |
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of the department. An application that is submitted during an |
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application cycle that is based on an earlier qualified allocation |
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plan is governed by the law in effect on the date the application |
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cycle began, and the former law is continued in effect for that |
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purpose. |
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SECTION 5. This Act takes effect September 1, 2021. |