1-1 By: Romo (Senate Sponsor - Montford) H.B. No. 2726
1-2 (In the Senate - Received from the House May 1, 1995;
1-3 May 2, 1995, read first time and referred to Committee on Finance;
1-4 May 17, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; May 17, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 2726 By: Montford
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to tax-exempt private activity bonds and housing finance
1-11 corporations.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 1, Chapter 1092, Acts of the 70th
1-14 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
1-15 Civil Statutes), is amended by amending Subdivision (14) and adding
1-16 Subdivision (20) to read as follows:
1-17 (14) "Qualified small issue bond" has the meaning
1-18 given that term under Section 144(a) of the code<, and,
1-19 additionally, shall mean any bond authorized under the code
1-20 subsequent to March 1, 1993, for economic development purposes,
1-21 which requires an allocation of state ceiling>.
1-22 (20) "Tax-exempt enterprise zone facility bonds" has
1-23 the meaning given that term under Section 1394 of the code.
1-24 SECTION 2. Section 2, Chapter 1092, Acts of the 70th
1-25 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
1-26 Civil Statutes), is amended by amending Subsections (b), (c), (e),
1-27 and (f) and adding Subsections (g) and (h) to read as follows:
1-28 (b) Prior to September 1, (1) 28 percent of the state
1-29 ceiling is available exclusively for reservations by issuers of
1-30 qualified mortgage bonds, (2) 17.5 percent of the state ceiling is
1-31 available exclusively for reservations by issuers of state-voted
1-32 issues for the purpose of issuing a state-voted issue, (3) 7.5
1-33 percent of the state ceiling is available exclusively for
1-34 reservations by issuers of qualified small issue bonds and
1-35 tax-exempt enterprise zone facility bonds, (4) five percent of the
1-36 state ceiling is available exclusively for reservations by issuers
1-37 of qualified residential rental project issues; and (5) 42 percent
1-38 of the state ceiling is available exclusively for reservations by
1-39 all other issuers of bonds requiring an allocation.
1-40 (c) Of that portion of the state ceiling that is available
1-41 exclusively for reservations by issuers of qualified mortgage
1-42 bonds, one-third of said portion shall be made available
1-43 exclusively to the <housing finance division of the> Texas
1-44 Department of Housing and Community Affairs for the purpose of
1-45 issuing qualified mortgage bonds until August 25.
1-46 (e) If any particular type of <Notwithstanding the
1-47 provisions of Subsection (f) of this section, if qualified mortgage
1-48 bonds or qualified small issue> bonds do not qualify on January 2
1-49 of any year for treatment as tax-exempt obligations under the
1-50 provisions of the code, then the provisions of Subsection (b)(1),
1-51 (2), <or> (3), (4), or (5) of this section, <or both,> as
1-52 applicable, shall be of no effect for such year, and the portion of
1-53 the state ceiling that is available exclusively for reservations by
1-54 issuers of the type of applicable <qualified mortgage bonds or
1-55 qualified small issue> bonds<, or both, as applicable,> shall be
1-56 reallocated proportionately by March 1 for reservations by each
1-57 other category of issuers under Subsection (b) of this section.
1-58 (f) Subsection (e) of this section does not apply to
1-59 qualified mortgage bonds made available exclusively to the <housing
1-60 finance division of the> Texas Department of Housing and Community
1-61 Affairs under Subsection (c) of this section.
1-62 (g) In addition to the amount provided in Subsection (c) of
1-63 this section, $20,000,000 in reservations for each year for the
1-64 years 1996 and 1997 is available to the Texas Department of Housing
1-65 and Community Affairs from that portion of the state ceiling that
1-66 is available exclusively for reservations by issuers of qualified
1-67 mortgage bonds for the purpose of issuing qualified mortgage bonds
1-68 until August 25.
2-1 (h) A bond issued for the reservation made by Subsection (g)
2-2 of this section must:
2-3 (1) be used to finance or refinance single-family home
2-4 construction, reconstruction, or acquisition or to finance or
2-5 refinance contracts for deed for single-family housing; and
2-6 (2) target families that earn 60 percent or less of
2-7 the median family income in a colonia, as defined by Section 916 of
2-8 Pub. L. No. 101-625.
2-9 SECTION 3. Section 3, Chapter 1092, Acts of the 70th
2-10 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
2-11 Civil Statutes), is amended by amending Subsections (a), (b), (c),
2-12 (d), and (f) and adding Subsection (g) to read as follows:
2-13 (a) For any one project, no issuer:
2-14 (1) prior to September 1, shall receive reservations
2-15 in excess of:
2-16 (A) $25,000,000 for issuers described by Section
2-17 2(b)(1) of this Act other than the Texas Department of Housing and
2-18 Community Affairs;
2-19 (B) $50,000,000 for issuers described by Section
2-20 2(b)(2) of this Act other than the Texas Higher Education
2-21 Coordinating Board;
2-22 (C) an amount as limited by the code for issuers
2-23 described by Section 2(b)(3) of this Act;
2-24 (D) $15,000,000 for issuers described by Section
2-25 2(b)(4) of this Act;
2-26 (E) $25,000,000 for issuers described by Section
2-27 2(b)(5) of this Act except higher education authorities authorized
2-28 by Section 53.47, Education Code; <$50,000,000, except for the
2-29 housing finance division of the Texas Department of Housing and
2-30 Community Affairs and the Texas Higher Education Coordinating
2-31 Board;> and
2-32 (F) $35,000,000 for higher education authorities
2-33 authorized by Section 53.47, Education Code; and
2-34 (2) prior to November 1, shall receive reservations in
2-35 excess of $100,000,000.
2-36 (b) The maximum amount of the state ceiling which may be
2-37 reserved by a housing finance corporation for the issuance of
2-38 qualified mortgage bonds may not exceed $50 times the local
2-39 population of such housing finance corporation, except (1) if the
2-40 local population is 200,000 or more but less than 300,000, the
2-41 maximum amount of the state ceiling which may be reserved may not
2-42 exceed $75 times that local population, (2) if the local population
2-43 is 100,000 or more but less than 200,000, the maximum amount of the
2-44 state ceiling which may be reserved may not exceed $100 times the
2-45 local population, and (3) if the local population is less than
2-46 100,000, the maximum amount of the state ceiling which may be
2-47 reserved prior to the foregoing dates may not exceed $150 times the
2-48 local population. Anything to the contrary notwithstanding, no
2-49 housing finance corporation shall receive an allocation for the
2-50 issuance of qualified mortgage bonds in excess of $25,000,000
2-51 <$30,000,000>.
2-52 (c) The board shall not grant a reservation of a portion of
2-53 the state ceiling to any issuer prior to January 10. If two or
2-54 more issuers apply for a reservation of state ceiling in a category
2-55 described in Subsections (b)(2), (b)(3), (b)(4), and (b)(5) of
2-56 Section 2 of this Act on or before January 10, reservations within
2-57 that category shall be granted from the state ceiling available in
2-58 that category in an order determined by the board by lot. If two
2-59 or more housing finance corporations apply for a reservation of
2-60 state ceiling in the category described by Section 2(b)(1) of this
2-61 Act on or before January 10, reservations within that category
2-62 shall be granted from the state ceiling available in that category
2-63 according to the following categories of priority: (1) the first
2-64 category of priority shall include those applications for a
2-65 reservation filed by housing finance corporations which filed an
2-66 application for a reservation on behalf of the same local
2-67 population prior to September 1 of the previous calendar year, but
2-68 which did not receive a reservation during such year; (2) the
2-69 second category of priority shall include those applications for a
2-70 reservation filed by housing finance corporations to which state
3-1 ceiling could not be made available by August 31 for that calendar
3-2 year because of the application of Section 4(b) of this Act; (3)
3-3 the third category of priority shall include those applications for
3-4 a reservation not included in the first and second categories of
3-5 priority; and (4) within each category or priority, reservations
3-6 shall be granted in reverse calendar year order of the most recent
3-7 closing of qualified mortgage bonds by each housing finance
3-8 corporation, with the most recent closing being the last to receive
3-9 a reservation and with those housing finance corporations that have
3-10 never received a reservation for mortgage revenue bonds being the
3-11 first to receive a reservation, and, in the case of closings
3-12 occurring on the same date, reservations shall be granted in an
3-13 order determined by the board by lot. All applications for a
3-14 reservation filed after January 10 by any issuer for the issuance
3-15 of bonds shall be accepted by the board in their order of receipt.
3-16 A priority under (1) of an issuer composed of more than one
3-17 jurisdiction is not affected by the issuer's loss of a sponsoring
3-18 governmental unit and that unit's population base if the dollar
3-19 amount of the application has not increased.
3-20 (d) An application for a reservation may not be submitted
3-21 and a reservation may not be granted after December 1 <14>.
3-22 (f) An issuer may refuse to accept a reservation if the
3-23 amount of state ceiling available is less than the amount for which
3-24 the issuer applied under Section 4 of this Act. An issuer may
3-25 refuse to accept a reservation for any amount if the reservation is
3-26 granted after September 23. The amount of available state ceiling
3-27 is subject to the grant of a reservation to each succeeding issuer
3-28 eligible to receive a reservation of that available state ceiling
3-29 in the order of priority determined in accordance with this Act.
3-30 An issuer's refusal to accept a reservation does not affect the
3-31 issuer's order of priority determined in accordance with this Act
3-32 for a subsequent receipt of a reservation.
3-33 (g) An issuer described by Section 2(b)(1) of this Act other
3-34 than the Texas Department of Housing and Community Affairs shall
3-35 reserve for six months 50 percent of the funds available for loans
3-36 outside the federally designated target areas to provide mortgages
3-37 to individuals and families with incomes below 80 percent of the
3-38 applicable median family income, as defined by Section 143(f)(4) of
3-39 the code.
3-40 SECTION 4. Section 4, Chapter 1092, Acts of the 70th
3-41 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
3-42 Civil Statutes), is amended to read as follows:
3-43 Sec. 4. Application for Reservation. (a) An application
3-44 for a reservation may be filed by an issuer on or after January 2
3-45 and must be on a form prescribed by the board and signed by a
3-46 member or officer of the issuer and must state:
3-47 (1) the maximum amount of the bonds in the issue
3-48 requiring an allocation pursuant to Section 146 of the code;
3-49 (2) the purpose of the bonds or a functional
3-50 description of the project, including the identification of the
3-51 user of the proceeds or project financed thereby;
3-52 (3) whether the bonds are qualified bonds;
3-53 (4) if the bonds are qualified bonds, the paragraph of
3-54 Section 141(e)(1) of the code that applies, and if Section
3-55 141(e)(1)(A) of the code applies, the paragraph of Section 142(a)
3-56 of the code that applies;
3-57 (5) if the bonds are not qualified bonds, that Section
3-58 141(b)(5) of the code applies, or in the case of transition rule
3-59 projects, the paragraph of the Tax Reform Act of 1986 that applies;
3-60 (6) a statement by the issuer, other than an issuer of
3-61 a state-voted issue or the Texas Department of Housing and
3-62 Community Affairs, that bonds are not being issued for the same
3-63 stated purpose for which the issuer has received sufficient
3-64 carryforward during a prior year or for which there exists
3-65 unexpended proceeds from a prior issue or issues of bonds issued by
3-66 the same issuer, unless such issuer provides evidence that a
3-67 binding contract or binding contracts have been entered into to
3-68 expend the unexpended proceeds within 12 months after the date of
3-69 receipt by the board of an application for a reservation; and
3-70 (7) other information that the board may require.
4-1 (b) The board shall not reserve a portion of the state
4-2 ceiling for an issuer, other than an issuer of a state-voted issue
4-3 or the Texas Department of Housing and Community Affairs, to whom
4-4 proceeds are available from other bonds issued by or on behalf of
4-5 such issuer for the same stated purpose for which such issuer is
4-6 applying for reservation, except as otherwise provided for in
4-7 Subsection (a)(6) of this section.
4-8 (c) The board may not accept applications for more than one
4-9 project located at, or related to, a business operation at a
4-10 particular site in any one calendar year.
4-11 SECTION 5. Section 7(d), Chapter 1092, Acts of the 70th
4-12 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
4-13 Civil Statutes), is amended to read as follows:
4-14 (d) Not later than the fifth business day after the day on
4-15 which the bonds are closed, the issuer shall submit to the board:
4-16 (1) a written notice stating the delivery date of the
4-17 bonds and the principal amount of the bonds issued; and
4-18 (2) a certified copy of the document authorizing the
4-19 bonds and other documents relating to the issuance of the bonds,
4-20 including a statement of the bonds:
4-21 (A) principal amount;
4-22 (B) interest rate or formula by which the
4-23 interest rate is calculated;
4-24 (C) maturity schedule; and
4-25 (D) purchaser or purchasers.
4-26 SECTION 6. Section 12, Chapter 1092, Acts of the 70th
4-27 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
4-28 Civil Statutes), is amended to read as follows:
4-29 Sec. 12. Fee. An application for a reservation or
4-30 carryforward designation must be accompanied by a nonrefundable fee
4-31 in the amount of $500. The issuer shall submit to the board a
4-32 closing fee in the amount of $1,000 or 0.025 percent of the
4-33 principal amount of the bonds certified as provided by Section
4-34 6(a)(2) of this Act, whichever is greater. One-third of the fee
4-35 shall be submitted not later than the 35th day after an issue's
4-36 reservation date, and the remaining portion of the fee at the time
4-37 of closing. An issuer exchanging a portion of the state ceiling
4-38 for mortgage credit certificates shall submit to the board a
4-39 closing fee in the amount of $1,000 or 0.0125 percent of the amount
4-40 of the state ceiling reserved, whichever is greater. One-third of
4-41 the fee shall be submitted not later than the 35th day after an
4-42 issue's reservation date, and the remaining portion of the fee at
4-43 the time of closing. The board shall deposit the proceeds of the
4-44 fees in the General Revenue Fund. <The legislature shall
4-45 appropriate to the board the amount equal to the amount collected
4-46 as fees under this Act to be used by the board in administering
4-47 this Act.>
4-48 SECTION 7. Section 394.023(b), Local Government Code, is
4-49 amended to read as follows:
4-50 (b) If the board of directors determines that sufficient
4-51 provision has been made for full payment of the expenses, bonds,
4-52 and other obligations of the corporation, any net corporate
4-53 earnings accruing after the determination shall be paid to the
4-54 local government. The local government shall use amounts received
4-55 under this subsection only to provide for the housing needs of
4-56 individuals and families with incomes of less than 60 percent of
4-57 the applicable median family income, as defined by Section
4-58 143(f)(4) of the Internal Revenue Code of 1986.
4-59 SECTION 8. Section 394.026(b), Local Government Code, is
4-60 amended to read as follows:
4-61 (b) On the filing of the certificate of dissolution, the
4-62 corporation is dissolved. The title to all funds and property
4-63 owned by the corporation at the time of dissolution vests in the
4-64 local government to be used exclusively by the local government to
4-65 provide for the housing needs of individuals and families with
4-66 incomes of less than 60 percent of the applicable median family
4-67 income, as defined by Section 143(f)(4) of the Internal Revenue
4-68 Code of 1986. The funds and property shall be promptly delivered
4-69 to the local government.
4-70 SECTION 9. Subchapter C, Chapter 394, Local Government Code,
5-1 is amended by adding Section 394.027 to read as follows:
5-2 Sec. 394.027. ANNUAL REPORT. (a) Before January 31 of each
5-3 year, a housing finance corporation shall file with the Texas
5-4 Department of Housing and Community Affairs a report in accordance
5-5 with this section. The department by rule shall prescribe the form
5-6 of the report.
5-7 (b) The report must include for all single-family home
5-8 mortgage loans made by the housing finance corporation or made as a
5-9 result of the activities of the corporation during the preceding
5-10 calendar year:
5-11 (1) the number and total face value of the loans;
5-12 (2) the location by census tracts of the homes for
5-13 which the loans were made;
5-14 (3) the race or ethnicity and family size of the
5-15 borrowers of the loans; and
5-16 (4) the income of the borrowers of the loans.
5-17 (c) The report must include for persons residing in
5-18 multifamily housing units financed by the housing finance
5-19 corporation:
5-20 (1) the incomes and family sizes of the renters;
5-21 (2) the amounts of rent charged; and
5-22 (3) the number of persons, by race or ethnicity,
5-23 residing in the units.
5-24 SECTION 10. The changes in law made by this Act:
5-25 (1) to Sections 394.023 and 394.026, Local Government
5-26 Code, apply only to earnings that are received by and to funds and
5-27 property that vest in a local government on or after the effective
5-28 date of this Act;
5-29 (2) by the addition of Section 394.027, Local
5-30 Government Code, apply only to issues that close on or after the
5-31 effective date of this Act;
5-32 (3) to Sections 3(a), (b), and (c), Chapter 1092, Acts
5-33 of the 70th Legislature, Regular Session, 1987 (Article 5190.9a,
5-34 Vernon's Texas Civil Statutes), apply only to allocations or
5-35 reservations made on or after January 1, 1996; and
5-36 (4) by the addition of Section 4(c), Chapter 1092,
5-37 Acts of the 70th Legislature, Regular Session, 1987 (Article
5-38 5190.9a, Vernon's Texas Civil Statutes), apply only to project
5-39 applications made on or after January 1, 1996.
5-40 SECTION 11. This Act takes effect immediately.
5-41 SECTION 12. The importance of this legislation and the
5-42 crowded condition of the calendars in both houses create an
5-43 emergency and an imperative public necessity that the
5-44 constitutional rule requiring bills to be read on three several
5-45 days in each house be suspended, and this rule is hereby suspended,
5-46 and that this Act take effect and be in force from and after its
5-47 passage, and it is so enacted.
5-48 * * * * *