H.B. No. 2726
1-1 AN ACT
1-2 relating to tax-exempt private activity bonds and housing finance
1-3 corporations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1, Chapter 1092, Acts of the 70th
1-6 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
1-7 Civil Statutes), is amended by amending Subdivision (14) and adding
1-8 Subdivision (20) to read as follows:
1-9 (14) "Qualified small issue bond" has the meaning
1-10 given that term under Section 144(a) of the code<, and,
1-11 additionally, shall mean any bond authorized under the code
1-12 subsequent to March 1, 1993, for economic development purposes,
1-13 which requires an allocation of state ceiling>.
1-14 (20) "Tax-exempt enterprise zone facility bonds" has
1-15 the meaning given that term under Section 1394 of the code.
1-16 SECTION 2. Section 2, Chapter 1092, Acts of the 70th
1-17 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
1-18 Civil Statutes), is amended by amending Subsections (b), (c), (e),
1-19 and (f) and adding Subsections (g) and (h) to read as follows:
1-20 (b) Prior to September 1, (1) 28 percent of the state
1-21 ceiling is available exclusively for reservations by issuers of
1-22 qualified mortgage bonds, (2) 17.5 percent of the state ceiling is
1-23 available exclusively for reservations by issuers of state-voted
1-24 issues for the purpose of issuing a state-voted issue, (3) 7.5
2-1 percent of the state ceiling is available exclusively for
2-2 reservations by issuers of qualified small issue bonds and
2-3 tax-exempt enterprise zone facility bonds, (4) five percent of the
2-4 state ceiling is available exclusively for reservations by issuers
2-5 of qualified residential rental project issues; and (5) 42 percent
2-6 of the state ceiling is available exclusively for reservations by
2-7 all other issuers of bonds requiring an allocation.
2-8 (c) Of that portion of the state ceiling that is available
2-9 exclusively for reservations by issuers of qualified mortgage
2-10 bonds, one-third of said portion shall be made available
2-11 exclusively to the <housing finance division of the> Texas
2-12 Department of Housing and Community Affairs for the purpose of
2-13 issuing qualified mortgage bonds until August 25.
2-14 (e) If any particular type of <Notwithstanding the
2-15 provisions of Subsection (f) of this section, if qualified mortgage
2-16 bonds or qualified small issue> bonds do not qualify on January 2
2-17 of any year for treatment as tax-exempt obligations under the
2-18 provisions of the code, then the provisions of Subsection (b)(1),
2-19 (2), <or> (3), (4), or (5) of this section, <or both,> as
2-20 applicable, shall be of no effect for such year, and the portion of
2-21 the state ceiling that is available exclusively for reservations by
2-22 issuers of the type of applicable <qualified mortgage bonds or
2-23 qualified small issue> bonds<, or both, as applicable,> shall be
2-24 reallocated proportionately by March 1 for reservations by each
2-25 other category of issuers under Subsection (b) of this section.
2-26 (f) Subsection (e) of this section does not apply to
2-27 qualified mortgage bonds made available exclusively to the <housing
3-1 finance division of the> Texas Department of Housing and Community
3-2 Affairs under Subsection (c) of this section.
3-3 (g) In addition to the amount provided in Subsection (c) of
3-4 this section, $20,000,000 in reservations for each year for the
3-5 years 1996 and 1997 is available to the Texas Department of Housing
3-6 and Community Affairs from that portion of the state ceiling that
3-7 is available exclusively for reservations by issuers of qualified
3-8 mortgage bonds for the purpose of issuing qualified mortgage bonds
3-9 until August 25.
3-10 (h) A bond issued for the reservation made by Subsection (g)
3-11 of this section must:
3-12 (1) be used to finance or refinance single-family home
3-13 construction, reconstruction, or acquisition or to finance or
3-14 refinance contracts for deed for single-family housing; and
3-15 (2) target families that earn 60 percent or less of
3-16 the median family income in a colonia, as defined by Section 916 of
3-17 Pub. L. No. 101-625.
3-18 SECTION 3. Section 3, Chapter 1092, Acts of the 70th
3-19 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
3-20 Civil Statutes), is amended by amending Subsections (a), (b), (c),
3-21 (d), and (f) and adding Subsection (g) to read as follows:
3-22 (a) For any one project, no issuer:
3-23 (1) prior to September 1, shall receive reservations
3-24 in excess of:
3-25 (A) $25,000,000 for issuers described by Section
3-26 2(b)(1) of this Act other than the Texas Department of Housing and
3-27 Community Affairs;
4-1 (B) $50,000,000 for issuers described by Section
4-2 2(b)(2) of this Act other than the Texas Higher Education
4-3 Coordinating Board;
4-4 (C) an amount as limited by the code for issuers
4-5 described by Section 2(b)(3) of this Act;
4-6 (D) $15,000,000 for issuers described by Section
4-7 2(b)(4) of this Act;
4-8 (E) $25,000,000 for issuers described by Section
4-9 2(b)(5) of this Act except higher education authorities authorized
4-10 by Section 53.47, Education Code; <$50,000,000, except for the
4-11 housing finance division of the Texas Department of Housing and
4-12 Community Affairs and the Texas Higher Education Coordinating
4-13 Board;> and
4-14 (F) $35,000,000 for higher education authorities
4-15 authorized by Section 53.47, Education Code; and
4-16 (2) prior to November 1, shall receive reservations in
4-17 excess of $100,000,000.
4-18 (b) The maximum amount of the state ceiling which may be
4-19 reserved by a housing finance corporation for the issuance of
4-20 qualified mortgage bonds may not exceed $50 times the local
4-21 population of such housing finance corporation, except (1) if the
4-22 local population is 200,000 or more but less than 300,000, the
4-23 maximum amount of the state ceiling which may be reserved may not
4-24 exceed $75 times that local population, (2) if the local population
4-25 is 100,000 or more but less than 200,000, the maximum amount of the
4-26 state ceiling which may be reserved may not exceed $100 times the
4-27 local population, and (3) if the local population is less than
5-1 100,000, the maximum amount of the state ceiling which may be
5-2 reserved prior to the foregoing dates may not exceed $150 times the
5-3 local population. Anything to the contrary notwithstanding, no
5-4 housing finance corporation shall receive an allocation for the
5-5 issuance of qualified mortgage bonds in excess of $25,000,000
5-6 <$30,000,000>.
5-7 (c) The board shall not grant a reservation of a portion of
5-8 the state ceiling to any issuer prior to January 10. If two or
5-9 more issuers apply for a reservation of state ceiling in a category
5-10 described in Subsections (b)(2), (b)(3), (b)(4), and (b)(5) of
5-11 Section 2 of this Act on or before January 10, reservations within
5-12 that category shall be granted from the state ceiling available in
5-13 that category in an order determined by the board by lot. If two
5-14 or more housing finance corporations apply for a reservation of
5-15 state ceiling in the category described by Section 2(b)(1) of this
5-16 Act on or before January 10, reservations within that category
5-17 shall be granted from the state ceiling available in that category
5-18 according to the following categories of priority: (1) the first
5-19 category of priority shall include those applications for a
5-20 reservation filed by housing finance corporations which filed an
5-21 application for a reservation on behalf of the same local
5-22 population prior to September 1 of the previous calendar year, but
5-23 which did not receive a reservation during such year; (2) the
5-24 second category of priority shall include those applications for a
5-25 reservation filed by housing finance corporations to which state
5-26 ceiling could not be made available by August 31 for that calendar
5-27 year because of the application of Section 4(b) of this Act; (3)
6-1 the third category of priority shall include those applications for
6-2 a reservation not included in the first and second categories of
6-3 priority; and (4) within each category or priority, reservations
6-4 shall be granted in reverse calendar year order of the most recent
6-5 closing of qualified mortgage bonds by each housing finance
6-6 corporation, with the most recent closing being the last to receive
6-7 a reservation and with those housing finance corporations that have
6-8 never received a reservation for mortgage revenue bonds being the
6-9 first to receive a reservation, and, in the case of closings
6-10 occurring on the same date, reservations shall be granted in an
6-11 order determined by the board by lot. All applications for a
6-12 reservation filed after January 10 by any issuer for the issuance
6-13 of bonds shall be accepted by the board in their order of receipt.
6-14 A priority under (1) of an issuer composed of more than one
6-15 jurisdiction is not affected by the issuer's loss of a sponsoring
6-16 governmental unit and that unit's population base if the dollar
6-17 amount of the application has not increased.
6-18 (d) An application for a reservation may not be submitted
6-19 and a reservation may not be granted after December 1 <14>.
6-20 (f) An issuer may refuse to accept a reservation if the
6-21 amount of state ceiling available is less than the amount for which
6-22 the issuer applied under Section 4 of this Act. An issuer may
6-23 refuse to accept a reservation for any amount if the reservation is
6-24 granted after September 23. The amount of available state ceiling
6-25 is subject to the grant of a reservation to each succeeding issuer
6-26 eligible to receive a reservation of that available state ceiling
6-27 in the order of priority determined in accordance with this Act.
7-1 An issuer's refusal to accept a reservation does not affect the
7-2 issuer's order of priority determined in accordance with this Act
7-3 for a subsequent receipt of a reservation.
7-4 (g) An issuer described by Section 2(b)(1) of this Act other
7-5 than the Texas Department of Housing and Community Affairs shall
7-6 reserve for six months 50 percent of the funds available for loans
7-7 outside the federally designated target areas to provide mortgages
7-8 to individuals and families with incomes below 80 percent of the
7-9 applicable median family income, as defined by Section 143(f)(4) of
7-10 the code.
7-11 SECTION 4. Section 4, Chapter 1092, Acts of the 70th
7-12 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
7-13 Civil Statutes), is amended to read as follows:
7-14 Sec. 4. Application for Reservation. (a) An application
7-15 for a reservation may be filed by an issuer on or after January 2
7-16 and must be on a form prescribed by the board and signed by a
7-17 member or officer of the issuer and must state:
7-18 (1) the maximum amount of the bonds in the issue
7-19 requiring an allocation pursuant to Section 146 of the code;
7-20 (2) the purpose of the bonds or a functional
7-21 description of the project, including the identification of the
7-22 user of the proceeds or project financed thereby;
7-23 (3) whether the bonds are qualified bonds;
7-24 (4) if the bonds are qualified bonds, the paragraph of
7-25 Section 141(e)(1) of the code that applies, and if Section
7-26 141(e)(1)(A) of the code applies, the paragraph of Section 142(a)
7-27 of the code that applies;
8-1 (5) if the bonds are not qualified bonds, that Section
8-2 141(b)(5) of the code applies, or in the case of transition rule
8-3 projects, the paragraph of the Tax Reform Act of 1986 that applies;
8-4 (6) a statement by the issuer, other than an issuer of
8-5 a state-voted issue or the Texas Department of Housing and
8-6 Community Affairs, that bonds are not being issued for the same
8-7 stated purpose for which the issuer has received sufficient
8-8 carryforward during a prior year or for which there exists
8-9 unexpended proceeds from a prior issue or issues of bonds issued by
8-10 the same issuer, unless such issuer provides evidence that a
8-11 binding contract or binding contracts have been entered into to
8-12 expend the unexpended proceeds within 12 months after the date of
8-13 receipt by the board of an application for a reservation; and
8-14 (7) other information that the board may require.
8-15 (b) The board shall not reserve a portion of the state
8-16 ceiling for an issuer, other than an issuer of a state-voted issue
8-17 or the Texas Department of Housing and Community Affairs, to whom
8-18 proceeds are available from other bonds issued by or on behalf of
8-19 such issuer for the same stated purpose for which such issuer is
8-20 applying for reservation, except as otherwise provided for in
8-21 Subsection (a)(6) of this section.
8-22 (c) The board may not accept applications for more than one
8-23 project located at, or related to, a business operation at a
8-24 particular site in any one calendar year.
8-25 SECTION 5. Section 7(d), Chapter 1092, Acts of the 70th
8-26 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
8-27 Civil Statutes), is amended to read as follows:
9-1 (d) Not later than the fifth business day after the day on
9-2 which the bonds are closed, the issuer shall submit to the board:
9-3 (1) a written notice stating the delivery date of the
9-4 bonds and the principal amount of the bonds issued; and
9-5 (2) a certified copy of the document authorizing the
9-6 bonds and other documents relating to the issuance of the bonds,
9-7 including a statement of the bonds:
9-8 (A) principal amount;
9-9 (B) interest rate or formula by which the
9-10 interest rate is calculated;
9-11 (C) maturity schedule; and
9-12 (D) purchaser or purchasers.
9-13 SECTION 6. Section 12, Chapter 1092, Acts of the 70th
9-14 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
9-15 Civil Statutes), is amended to read as follows:
9-16 Sec. 12. Fee. An application for a reservation or
9-17 carryforward designation must be accompanied by a nonrefundable fee
9-18 in the amount of $500. The issuer shall submit to the board a
9-19 closing fee in the amount of $1,000 or 0.025 percent of the
9-20 principal amount of the bonds certified as provided by Section
9-21 6(a)(2) of this Act, whichever is greater. One-third of the fee
9-22 shall be submitted not later than the 35th day after an issue's
9-23 reservation date, and the remaining portion of the fee at the time
9-24 of closing. An issuer exchanging a portion of the state ceiling
9-25 for mortgage credit certificates shall submit to the board a
9-26 closing fee in the amount of $1,000 or 0.0125 percent of the amount
9-27 of the state ceiling reserved, whichever is greater. One-third of
10-1 the fee shall be submitted not later than the 35th day after an
10-2 issue's reservation date, and the remaining portion of the fee at
10-3 the time of closing. The board shall deposit the proceeds of the
10-4 fees in the General Revenue Fund. <The legislature shall
10-5 appropriate to the board the amount equal to the amount collected
10-6 as fees under this Act to be used by the board in administering
10-7 this Act.>
10-8 SECTION 7. Section 394.023(b), Local Government Code, is
10-9 amended to read as follows:
10-10 (b) If the board of directors determines that sufficient
10-11 provision has been made for full payment of the expenses, bonds,
10-12 and other obligations of the corporation, any net corporate
10-13 earnings accruing after the determination shall be paid to the
10-14 local government. The local government shall use amounts received
10-15 under this subsection only to provide for the housing needs of
10-16 individuals and families of low and moderate incomes, including
10-17 single-family units and mixed income multifamily projects found by
10-18 the local government to serve the interests of low and moderate
10-19 income individuals and families if the single-family and
10-20 multifamily projects have as a major purpose the provision of safe,
10-21 sanitary, and decent housing for individuals and families of low
10-22 income.
10-23 SECTION 8. Section 394.026(b), Local Government Code, is
10-24 amended to read as follows:
10-25 (b) On the filing of the certificate of dissolution, the
10-26 corporation is dissolved. The title to all funds and property
10-27 owned by the corporation at the time of dissolution vests in the
11-1 local government to be used exclusively by the local government to
11-2 provide for the housing needs of individuals and families of low
11-3 and moderate incomes, including single-family units and mixed
11-4 income multifamily projects found by the local government to serve
11-5 the interests of low and moderate income individuals and families
11-6 if the single-family and multifamily projects have as a major
11-7 purpose the provision of safe, sanitary, and decent housing for
11-8 individuals and families of low income. The funds and property
11-9 shall be promptly delivered to the local government.
11-10 SECTION 9. Subchapter C, Chapter 394, Local Government Code,
11-11 is amended by adding Section 394.027 to read as follows:
11-12 Sec. 394.027. ANNUAL REPORT. (a) Before August 31 of each
11-13 year, a housing finance corporation shall file with the Texas
11-14 Department of Housing and Community Affairs a report in accordance
11-15 with this section. The department by rule shall prescribe the form
11-16 of the report.
11-17 (b) The report must include for each single-family home
11-18 mortgage loan made by the housing finance corporation during the
11-19 preceding 12 months ending June 30 of the year the report is filed,
11-20 the data reported by originating lenders under the Federal Home
11-21 Mortgage Disclosure Act.
11-22 (c) The report must include for persons residing in
11-23 multifamily housing units financed by the housing finance
11-24 corporation information similar to the geographic and demographic
11-25 information contained in the Texas Department of Housing and
11-26 Community Affairs compliance monitoring form and tenant income
11-27 certification, including household size, total household income,
12-1 and project location.
12-2 SECTION 10. The changes in law made by this Act:
12-3 (1) to Sections 394.023 and 394.026, Local Government
12-4 Code, apply only to earnings that are received by and to funds and
12-5 property that vest in a local government on or after the effective
12-6 date of this Act;
12-7 (2) by the addition of Section 394.027, Local
12-8 Government Code, apply only to issues that close on or after the
12-9 effective date of this Act;
12-10 (3) to Sections 3(a), (b), and (c), Chapter 1092, Acts
12-11 of the 70th Legislature, Regular Session, 1987 (Article 5190.9a,
12-12 Vernon's Texas Civil Statutes), apply only to allocations or
12-13 reservations made on or after January 1, 1996; and
12-14 (4) by the addition of Section 4(c), Chapter 1092,
12-15 Acts of the 70th Legislature, Regular Session, 1987 (Article
12-16 5190.9a, Vernon's Texas Civil Statutes), apply only to project
12-17 applications made on or after January 1, 1996.
12-18 SECTION 11. This Act takes effect immediately.
12-19 SECTION 12. The importance of this legislation and the
12-20 crowded condition of the calendars in both houses create an
12-21 emergency and an imperative public necessity that the
12-22 constitutional rule requiring bills to be read on three several
12-23 days in each house be suspended, and this rule is hereby suspended,
12-24 and that this Act take effect and be in force from and after its
12-25 passage, and it is so enacted.