1-1 AN ACT
1-2 relating to tax-exempt private activity bonds.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1, Chapter 1092, Acts of the 70th
1-5 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
1-6 Civil Statutes), is amended to read as follows:
1-7 Sec. 1. DEFINITIONS. For purposes of this Act:
1-8 (1) "Available" means any amount of the state ceiling
1-9 set aside for reservations by an issuer upon compliance with the
1-10 terms of this Act.
1-11 (2) "Board" means the bond review board created under
1-12 Chapter 1078, Acts of the 70th Legislature, Regular Session, 1987
1-13 (Article 717k-7, Vernon's Texas Civil Statutes).
1-14 (3) "Bonds" means and includes all bonds,
1-15 certificates, notes, and other obligations authorized to be issued
1-16 by any issuer by any statute, city home-rule charter, or the Texas
1-17 Constitution and which are subject to the limitations of Section
1-18 146 of the code.
1-19 (4) "Close" or "closing" means the issuance and
1-20 delivery of bonds by an issuer in exchange for the required payment
1-21 therefor, or in the case of mortgage credit certificates, the date
1-22 when an issuer elects not to issue qualified mortgage bonds and
1-23 establish a mortgage credit certificate program under Section 25 of
1-24 the code. The term does not include a delivery of bonds if the
2-1 expenditure of the proceeds of the bonds is conditioned on
2-2 obtaining credit enhancement in support of the bonds.
2-3 (5) "Code" means the Internal Revenue Code of 1986,
2-4 as the same from time to time may be amended.
2-5 (6) "Housing finance corporation" means a corporation
2-6 created under Chapter 394, Local Government Code (Texas Housing
2-7 Finance Corporations Act).
2-8 (7) "Issuer" means any department, board, authority,
2-9 agency, subdivision, municipal corporation, political subdivision,
2-10 body politic, or instrumentality of the State of Texas of every
2-11 kind or type whatsoever and any nonprofit corporation acting for or
2-12 on behalf of any of the foregoing.
2-13 (8) "Local population" means the population in the
2-14 local government [governmental] unit or units on whose behalf the
2-15 housing finance corporation is created as determined in the most
2-16 recent federal census. If two local government [governmental]
2-17 units which overlap have created housing finance corporations that
2-18 have the power to issue bonds to provide financing for home
2-19 mortgages, prior to the submission of the application for
2-20 reservation or carryforward by either corporation there shall be
2-21 excluded from the population of the larger local government
2-22 [governmental] unit that portion of the population of any smaller
2-23 local government [governmental] unit having a population as
2-24 determined in the most recent federal census of 20,000 or more
2-25 which is within the larger local government [governmental] unit,
2-26 unless the smaller local government [governmental] unit assigns its
2-27 authority to issue bonds, based upon its population, to the larger
3-1 local government [governmental] unit. For purposes of this Act,
3-2 the term "local government" has ["local governmental unit" shall
3-3 have] the same meaning as in Chapter 394, Local Government Code
3-4 (Texas Housing Finance Corporations Act).
3-5 (9) "Locally voted issue" means an issue of bonds
3-6 which has been authorized pursuant to a referendum approved by the
3-7 voters of a political subdivision of the State of Texas.
3-8 (10) "Mortgage credit certificate" means a certificate
3-9 of the nature described in Section 25 of the code.
3-10 (11) "Private activity bond" has the meaning given
3-11 that term under Section 141(a) of the code.
3-12 (12) "Project" means any eligible facility, as
3-13 described in the application for reservation or carryforward,
3-14 proposed to be financed, in whole or in part, by an issue of bonds.
3-15 With respect to qualified mortgage bonds or student loan bonds, the
3-16 board shall consider the project or purpose to be the provision of
3-17 financial assistance to qualifying mortgagors or students within
3-18 all or any portion of the jurisdiction of the issuer. For purposes
3-19 of this definition, jurisdiction of the issuer is determined on the
3-20 date the application for reservation is delivered to the board.
3-21 (13) "Qualified bond" has the meaning given that term
3-22 under Section 141(e) of the code.
3-23 (14) [(13)] "Qualified mortgage bond" has the meaning
3-24 given that term under Section 143(a) of the code; and for the
3-25 purposes of this Act, the term "qualified mortgage bond" shall
3-26 include mortgage credit certificates.
3-27 (15) [(14)] "Qualified small issue bond" has the
4-1 meaning given that term under Section 144(a) of the code.
4-2 (16) "Qualified student loan bond" has the meaning
4-3 given that term under Section 144(b) of the code.
4-4 (17) [(15)] "Related person" has the meaning given
4-5 that term under Section 144(a)(3) of the code.
4-6 (18) [(16)] "Reservation" means a reservation of a
4-7 portion of the state ceiling for a specific bond issue.
4-8 (19) [(17)] "State-voted issue" means an issue of
4-9 bonds which has been authorized pursuant to a statewide referendum
4-10 approved by the voters of the State of Texas.
4-11 (20) [(18)] "State ceiling" means the amount of
4-12 authority in the State of Texas to issue tax-exempt private
4-13 activity bonds during the calendar year, as determined under
4-14 Section 146(d) of the code.
4-15 (21) [(19)] "Qualified residential rental project
4-16 issue" means an issue of bonds for a qualified residential rental
4-17 project, as that term is defined under Section 142(d) of the code.
4-18 (22) [(20)] "Tax-exempt enterprise zone facility
4-19 bonds" has the meaning given that term under Section 1394 of the
4-20 code.
4-21 SECTION 2. Section 2, Chapter 1092, Acts of the 70th
4-22 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
4-23 Civil Statutes), is amended to read as follows:
4-24 Sec. 2. ALLOCATION AND RESERVATION SYSTEM. (a) The state
4-25 ceiling for each calendar year is allocated to issuers that issue
4-26 private activity bonds. Except as provided by Section 3 of this
4-27 Act, reservations are granted in the order of receipt by the board
5-1 of an application for a reservation, regardless of the amount of
5-2 the issue.
5-3 (b) Prior to September 1, (1) 31.5 [28] percent of the state
5-4 ceiling is available exclusively for reservations by issuers of
5-5 qualified mortgage bonds, (2) 13 [17.5] percent of the state
5-6 ceiling is available exclusively for reservations by issuers of
5-7 state-voted issues for the purpose of issuing a state-voted issue,
5-8 (3) 7.5 percent of the state ceiling is available exclusively for
5-9 reservations by issuers of qualified small issue bonds and
5-10 tax-exempt enterprise zone facility bonds, (4) 7.5 [five] percent
5-11 of the state ceiling is available exclusively for reservations by
5-12 issuers of qualified residential rental project issues; [and] (5)
5-13 11 percent of the state ceiling is available exclusively for
5-14 reservations by issuers of qualified student loan bonds authorized
5-15 by Section 53.47, Education Code; and (6) 29.5 [42] percent of the
5-16 state ceiling is available exclusively for reservations by all
5-17 other issuers of bonds requiring an allocation.
5-18 (c) If applications for state-voted issues received prior to
5-19 January 2, from issuers described in Subsection (b)(2) of this
5-20 section, total more than 13 percent of the available state ceiling
5-21 for that program year, the incremental amount of state-voted
5-22 ceiling requested in excess of 13 percent, up to 17.5 percent of
5-23 state ceiling, will be removed from the state ceiling available to
5-24 other issuers on January 2 and made available for those additional
5-25 state-voted applications. The remaining portion of state ceiling
5-26 will be made available according to Subsection (b) of this section.
5-27 (d) Of that portion of the state ceiling that is available
6-1 exclusively for reservations by issuers of qualified mortgage
6-2 bonds, one-third of said portion shall be made available
6-3 exclusively to the Texas Department of Housing and Community
6-4 Affairs for the purpose of issuing qualified mortgage bonds until
6-5 August 25.
6-6 (e) [(d)] On and after September 1, that portion of the
6-7 state ceiling available for reservations shall become available to
6-8 any issuer for any bonds requiring an allocation, subject to the
6-9 provisions of Section 3 of this Act.
6-10 (f) [(e)] If any particular type of bonds do not qualify on
6-11 January 2 of any year for treatment as tax-exempt obligations under
6-12 the provisions of the code, then the provisions of Subsection
6-13 (b)(1), (2), (3), (4), [or] (5), or (6) of this section, as
6-14 applicable, shall be of no effect for such year, and the portion of
6-15 the state ceiling that is available exclusively for reservations by
6-16 issuers of the type of applicable bonds shall be reallocated
6-17 proportionately by March 1 for reservations by each other category
6-18 of issuers under Subsection (b) of this section.
6-19 (g) [(f)] Subsection (f) [(e)] of this section does not
6-20 apply to qualified mortgage bonds made available exclusively to the
6-21 Texas Department of Housing and Community Affairs under Subsection
6-22 (d) [(c)] of this section.
6-23 (h) [(g)] In addition to the amount provided in Subsection
6-24 (d) [(c)] of this section, $20,000,000 in reservations for each
6-25 year for the years 1996 and 1997 is available to the Texas
6-26 Department of Housing and Community Affairs from that portion of
6-27 the state ceiling that is available exclusively for reservations by
7-1 issuers of qualified mortgage bonds for the purpose of issuing
7-2 qualified mortgage bonds until August 25.
7-3 (i) [(h)] A bond issued for the reservation made by
7-4 Subsection (h) [(g)] of this section must:
7-5 (1) be used to finance or refinance single-family home
7-6 construction, reconstruction, or acquisition or to finance or
7-7 refinance contracts for deed for single-family housing; and
7-8 (2) target families that earn 60 percent or less of
7-9 the median family income in a colonia, as defined by Section 916 of
7-10 Pub. L. No. 101-625.
7-11 SECTION 3. Section 3(c), 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 (c) The board shall not grant a reservation of a portion of
7-15 the state ceiling to any issuer prior to January 2 [10]. If two or
7-16 more issuers apply for a reservation of state ceiling for the
7-17 upcoming program year in a category described in Subsections
7-18 (b)(2), (b)(3), (b)(4), and (b)(6) [(b)(5)] of Section 2 of this
7-19 Act on or before October 20 [January 10], reservations within that
7-20 category shall be granted from the state ceiling available in that
7-21 category in an order determined by the board by lot. If two or
7-22 more housing finance corporations apply for a reservation of state
7-23 ceiling for the upcoming program year in the category described by
7-24 Section 2(b)(1) of this Act on or before October 20 [January 10],
7-25 reservations within that category shall be granted from the state
7-26 ceiling available in that category according to the following
7-27 categories of priority: (1) the first category of priority shall
8-1 include those applications for a reservation filed by housing
8-2 finance corporations which filed an application for a reservation
8-3 on behalf of the same local population prior to September 1 of the
8-4 previous calendar year, but which did not receive a reservation
8-5 during such year; (2) [the second category of priority shall
8-6 include those applications for a reservation filed by housing
8-7 finance corporations to which state ceiling could not be made
8-8 available by August 31 for that calendar year because of the
8-9 application of Section 4(b) of this Act; (3)] the second [third]
8-10 category of priority shall include those applications for a
8-11 reservation not included in the first category [and second
8-12 categories] of priority; (3) a priority under (1) of an issuer
8-13 composed of more than one jurisdiction is not affected by the
8-14 issuer's loss of a sponsoring governmental unit and that unit's
8-15 population base if the dollar amount of the application has not
8-16 increased; and (4) within each category or priority, reservations
8-17 shall be granted in reverse calendar year order of the most recent
8-18 closing of qualified mortgage bonds applicable to [by] each housing
8-19 finance corporation, with the most recent closing being the last to
8-20 receive a reservation and with those housing finance corporations
8-21 that have never received a reservation for mortgage revenue bonds
8-22 being the first to receive a reservation, and, in the case of
8-23 closings occurring on the same date, reservations shall be granted
8-24 in an order determined by the board by lot. The most recent
8-25 closing applicable to: (A) a newly created housing finance
8-26 corporation that was created by a local government or local
8-27 governments that had previously sponsored an existing housing
9-1 finance corporation or a disbanded housing finance corporation, is
9-2 the most recent closing of qualified mortgage bonds the proceeds of
9-3 which were available to the population of the housing finance
9-4 corporation; (B) a housing finance corporation sponsored by a
9-5 local government that has participated in the program of another
9-6 housing finance corporation, is the most recent closing of
9-7 qualified mortgage bonds the proceeds of which were available to
9-8 the population of the housing finance corporation; and (C) all
9-9 other housing finance corporations, is the most recent closing of
9-10 qualified mortgage bonds by the housing finance corporation. In no
9-11 event will a housing finance corporation or its sponsoring local
9-12 government be allowed to achieve an advantage in the determination
9-13 of its last closing date by creating or disbanding from a housing
9-14 finance corporation. If two or more higher education authorities
9-15 apply for a reservation of state ceiling for the upcoming year in
9-16 the category described by Section 2(b)(5) of this Act on or before
9-17 October 20, reservations within that category shall be granted from
9-18 the state ceiling available in that category in reverse calendar
9-19 year order of the most recent closing of qualified student loan
9-20 bonds by each higher education authority, with the most recent
9-21 closing being the last to receive a reservation, and, in the case
9-22 of closings occurring on the same date, reservations shall be
9-23 granted in an order determined by the board by lot. All
9-24 applications for a reservation filed after October 20 [January 10]
9-25 by any issuer for the issuance of bonds shall be accepted by the
9-26 board in their order of receipt. [A priority under (1) of an
9-27 issuer composed of more than one jurisdiction is not affected by
10-1 the issuer's loss of a sponsoring governmental unit and that unit's
10-2 population base if the dollar amount of the application has not
10-3 increased.]
10-4 SECTION 4. Section 3(a), Chapter 1092, Acts of the 70th
10-5 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
10-6 Civil Statutes), is amended to read as follows:
10-7 (a) For any one project, no issuer[:]
10-8 [(1)] prior to September 1, shall receive reservations
10-9 in excess of:
10-10 (1) [(A)] $25,000,000 for issuers described by Section
10-11 2(b)(1) of this Act other than the Texas Department of Housing and
10-12 Community Affairs;
10-13 (2) [(B)] $50,000,000 for issuers described by Section
10-14 2(b)(2) of this Act other than the Texas Higher Education
10-15 Coordinating Board and $75,000,000 for the Texas Higher Education
10-16 Coordinating Board;
10-17 (3) [(C)] an amount as limited by the code for issuers
10-18 described by Section 2(b)(3) of this Act;
10-19 (4) [(D)] $15,000,000 or 15 percent of the amount set
10-20 aside for this purpose, whichever is less, for issuers described by
10-21 Section 2(b)(4) of this Act;
10-22 (5) $35,000,000 for higher education authorities
10-23 authorized by Section 53.47, Education Code, and described by
10-24 Section 2(b)(5) of this Act; and
10-25 (6) [(E)] $25,000,000 for issuers described by Section
10-26 2(b)(6) [2(b)(5)] of this Act [except higher education authorities
10-27 authorized by Section 53.47, Education Code; and]
11-1 [(F) $35,000,000 for higher education
11-2 authorities authorized by Section 53.47, Education Code; and]
11-3 [(2) prior to November 1, shall receive reservations
11-4 in excess of $100,000,000].
11-5 SECTION 5. Sections 3(d) and (e), Chapter 1092, Acts of the
11-6 70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's
11-7 Texas Civil Statutes), are amended to read as follows:
11-8 (d) An application for a reservation may not be submitted
11-9 and a reservation may not be granted after December 1 of the
11-10 current program year.
11-11 (e) If any portion of state ceiling in any category
11-12 described in Section 2(b) of this Act from which issuers were
11-13 granted reservations becomes available in that category before June
11-14 1, those amounts shall be aggregated and reservations shall be
11-15 granted from that category on June 1. If any portion of state
11-16 ceiling from which issuers were granted reservations becomes
11-17 available in that category after June 1 and before August 25, those
11-18 amounts shall be aggregated and reservations shall be granted from
11-19 that category on August 25. The department may also grant a
11-20 reservation to an issuer at any time on or after January 2 [10] if
11-21 the amount of state ceiling available in any category exceeds the
11-22 amount of state ceiling applied for in that category.
11-23 SECTION 6. Section 4(a), Chapter 1092, Acts of the 70th
11-24 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
11-25 Civil Statutes), is amended to read as follows:
11-26 (a) An application for a reservation for a particular
11-27 program year may be filed by an issuer on or after October 10 of
12-1 the preceding year [January 2] and must be on a form prescribed by
12-2 the board and signed by a member or officer of the issuer and must
12-3 state:
12-4 (1) the maximum amount of the bonds in the issue
12-5 requiring an allocation pursuant to Section 146 of the code;
12-6 (2) the purpose of the bonds or a functional
12-7 description of the project, including the identification of the
12-8 user of the proceeds or project financed thereby;
12-9 (3) whether the bonds are qualified bonds;
12-10 (4) if the bonds are qualified bonds, the paragraph of
12-11 Section 141(e)(1) of the code that applies, and if Section
12-12 141(e)(1)(A) of the code applies, the paragraph of Section 142(a)
12-13 of the code that applies;
12-14 (5) if the bonds are not qualified bonds, that Section
12-15 141(b)(5) of the code applies, or in the case of transition rule
12-16 projects, the paragraph of the Tax Reform Act of 1986 that applies;
12-17 (6) a statement by the issuer, other than an issuer of
12-18 a state-voted issue or the Texas Department of Housing and
12-19 Community Affairs, that bonds are not being issued for the same
12-20 stated purpose for which the issuer has received sufficient
12-21 carryforward during a prior year or for which there exists
12-22 unexpended proceeds from a prior issue or issues of bonds issued by
12-23 the same issuer, or based on the issuer's population, unless such
12-24 issuer provides evidence that a binding contract or binding
12-25 contracts have been entered into to expend the unexpended proceeds
12-26 within 12 months after the date of receipt by the board of an
12-27 application for a reservation; and
13-1 (7) other information that the board may require.
13-2 SECTION 7. Section 4(c), Chapter 1092, Acts of the 70th
13-3 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
13-4 Civil Statutes), is amended to read as follows:
13-5 (c) The board may not accept applications for more than one
13-6 project located at, or related to, a business operation at a
13-7 particular site for [in] any one program [calendar] year.
13-8 SECTION 8. Section 6(c), Chapter 1092, Acts of the 70th
13-9 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
13-10 Civil Statutes), is amended to read as follows:
13-11 (c) If the issuer does not timely submit the documents and
13-12 fee required by this section, the issue's reservation is canceled
13-13 and during the [90 day] period described by Section 7(a) of this
13-14 Act beginning on the reservation date of the canceled reservation:
13-15 (1) the issuer or any other issuer may not submit an
13-16 application for a reservation for the same project; and
13-17 (2) the issuer is eligible for a carryforward
13-18 designation for the project only as provided by Section 9 of this
13-19 Act.
13-20 SECTION 9. Sections 7(a) and (c), Chapter 1092, Acts of the
13-21 70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's
13-22 Texas Civil Statutes), are amended to read as follows:
13-23 (a) Except as provided in Subsection (b) of this section,
13-24 the issuer, other than an issuer that received a reservation of
13-25 state ceiling from the category described by Section 2(b)(1) of
13-26 this Act, shall close on the bonds for which a reservation has been
13-27 granted not later than the 120th [90th] day after the reservation
14-1 date. An issuer of qualified mortgage revenue bonds shall close on
14-2 the bonds for which a reservation has been granted not later than
14-3 the 180th day after the reservation date.
14-4 (c) If the issuer does not timely close on the bonds, the
14-5 issue's reservation is canceled and during the 150-day [120-day]
14-6 period beginning on the reservation date of the canceled
14-7 reservation, or during the 210-day period beginning on the
14-8 reservation date of the canceled reservation for Section 2(b)(1)
14-9 issuers:
14-10 (1) the issuer or any other issuer may not submit an
14-11 application for a reservation for the same project; and
14-12 (2) the issuer is eligible for a carryforward
14-13 designation for the project only as provided by Section 9 of this
14-14 Act.
14-15 SECTION 10. Section 394.012(h), Local Government Code, is
14-16 amended to read as follows:
14-17 (h) For the purposes of determining the applicable
14-18 population for Section 3(b), Chapter 1092, Acts of the 70th
14-19 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
14-20 Civil Statutes), the [The] joint housing finance corporation may
14-21 only consider areas in its own [not operate in more than one] state
14-22 planning region.
14-23 SECTION 11. Section 394.032, Local Government Code, is
14-24 amended by adding Subsection (e) to read as follows:
14-25 (e) A housing finance corporation may delegate to the Texas
14-26 Department of Housing and Community Affairs the authority to act on
14-27 its behalf in the financing, refinancing, acquisition, leasing,
15-1 ownership, improvement, and disposal of home mortgages or
15-2 residential developments, within and outside the jurisdiction of
15-3 the housing finance corporation, including its authority to issue
15-4 bonds for those purposes.
15-5 SECTION 12. Section 394.037(a), Local Government Code, is
15-6 amended to read as follows:
15-7 (a) A housing finance corporation may issue bonds to defray,
15-8 in whole or in part:
15-9 (1) the development costs of a residential
15-10 development; or
15-11 (2) the costs of purchasing or funding the making of
15-12 home mortgages, either on a first-come, first-served basis or by
15-13 selling lender commitments, including the costs of studies and
15-14 surveys, insurance premiums, financial advisory services, mortgage
15-15 banking services, administrative services, underwriting fees, legal
15-16 services, accounting services, and marketing services incurred in
15-17 connection with the issuance and sale of the bonds, including bond
15-18 and interest reserve accounts, capitalized interest accounts, and
15-19 trustee, custodian, and rating agency fees.
15-20 SECTION 13. Section 394.040(a), Local Government Code, is
15-21 amended to read as follows:
15-22 (a) A housing finance corporation may make, contract to
15-23 make, but is not required to make, and enter into advance
15-24 commitments to make home mortgages originated, administered, and
15-25 serviced by lending institutions. It may pay the reasonable value
15-26 of services rendered under those contracts. It may acquire,
15-27 contract to acquire, and enter into advance commitments to acquire,
16-1 by assignment or other means, home mortgages owned by lending
16-2 institutions at purchase prices and on other terms determined by
16-3 the corporation or its agent.
16-4 SECTION 14. Section 394.051, Local Government Code, is
16-5 amended by adding Subsection (h) to read as follows:
16-6 (h) The housing finance corporation is not required to sell
16-7 commitments to lenders to originate home mortgages. A housing
16-8 financing corporation may establish a program so that lenders will
16-9 utilize the proceeds of the bonds to originate home mortgages on a
16-10 first-come, first-served basis.
16-11 SECTION 15. The importance of this legislation and the
16-12 crowded condition of the calendars in both houses create an
16-13 emergency and an imperative public necessity that the
16-14 constitutional rule requiring bills to be read on three several
16-15 days in each house be suspended, and this rule is hereby suspended,
16-16 and that this Act take effect and be in force from and after its
16-17 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2798 was passed by the House on May
10, 1997, by the following vote: Yeas 141, Nays 0, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 2798 on May 21, 1997, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 2798 on May 29, 1997, by the following vote: Yeas 141,
Nays 0, 1 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2798 was passed by the Senate, with
amendments, on May 18, 1997, by the following vote: Yeas 28, Nays
0, 1 present, not voting; at the request of the House, the Senate
appointed a conference committee to consider the differences
between the two houses; and that the Senate adopted the conference
committee report on H.B. No. 2798 on May 29, 1997, by the following
vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor