BILL ANALYSIS

C.S.H.B. 3591

By: Shaheen

Urban Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The Texas population is growing rapidly, and while the low income housing tax credit program administered by the Texas Department of Housing and Community Affairs is working to fill the gap, many in the industry have expressed concerns with the program's functionality. The length of the current affordability period in which the developer or landowner does not have control of their property risks developments falling into disrepair, becoming undesirable and, eventually, resulting in substandard housing for low-income residents. Additionally, the cap on developer tax credits has not been raised since 2011, but market forces have since driven up the cost of construction. Increasing that cap would ensure that more units could be built per awarded application and go a long way to increase both the financial feasibility of each development and the opportunities available to low income families. C.S.H.B. 3591 seeks to address these issues by providing for revised affordability periods, increased maximum tax credits, and deadlines by which certain paperwork for the allocation of low income housing tax credits must be completed.   

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3591 amends the Government Code to prohibit the Texas Department of Housing and Community Affairs (TDHCA) from adopting a qualified allocation plan for the low income housing tax credit program that does the following, in a land use agreement or otherwise:

· requires as part of the threshold criteria that an applicant agree to an affordability period for a proposed development that is greater than the federal minimum affordability period; or

· uses a scoring system that awards points to an application based on whether an applicant agrees to an affordability period for a proposed development that is greater than the federal minimum affordability period.

The bill defines "federal minimum affordability period" as the period beginning on the first day of the compliance period under federal law and ending 15 years from the date on which the compliance period ends.

C.S.H.B. 3591 increases from $3 million to $6 million the maximum amount of tax credits that the governing board of TDHCA may allocate to a low income housing tax credit applicant in a single application round. The bill requires TDHCA to issue a final commitment for an allocation of housing tax credits not later than the 120th day following the date on which TDHCA first receives from an applicant the appropriate federal tax form, for the purpose of obtaining a low income housing credit allocation and certification.

C.S.H.B. 3591 repeals provisions requiring TDHCA to establish an executive award and review advisory committee to make recommendations to the TDHCA governing board regarding funding and allocation decisions and providing for the committee's membership and administration.

C.S.H.B. 3591 applies only to an application for low income housing tax credits that is submitted to TDHCA during an application cycle that is based on the 2024 qualified allocation plan or a subsequent plan adopted by the governing board of TDHCA.

C.S.H.B. 3591 repeals Section 2306.1112, Government Code.

EFFECTIVE DATE

September 1, 2023.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 3591 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute changes the date by which TDHCA is required to issue a final commitment for an allocation of housing tax credits from the 90th day following the date on which TDHCA first receives from an applicant the appropriate federal tax form, as in the introduced, to the 120th day following that date.