By Marchant H.B. No. 2798
Substitute the following for H.B. No. 2798:
By Marchant C.S.H.B. No. 2798
A BILL TO BE ENTITLED
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. Effective January 1, 1998, Section 1, Chapter
1-5 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
1-6 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
1-7 follows:
1-8 Sec. 1. DEFINITIONS. For purposes of this Act:
1-9 (1) "Available" means any amount of the state ceiling
1-10 set aside for reservations by an issuer upon compliance with the
1-11 terms of this Act.
1-12 (2) "Board" means the bond review board created under
1-13 Chapter 1078, Acts of the 70th Legislature, Regular Session, 1987
1-14 (Article 717k-7, Vernon's Texas Civil Statutes).
1-15 (3) "Bonds" means and includes all bonds,
1-16 certificates, notes, and other obligations authorized to be issued
1-17 by any issuer by any statute, city home-rule charter, or the Texas
1-18 Constitution and which are subject to the limitations of Section
1-19 146 of the code.
1-20 (4) "Close" or "closing" means the issuance and
1-21 delivery of bonds by an issuer in exchange for the required payment
1-22 therefor, or in the case of mortgage credit certificates, the date
1-23 when an issuer elects not to issue qualified mortgage bonds and
1-24 establish a mortgage credit certificate program under Section 25 of
2-1 the code. The term does not include a delivery of bonds if the
2-2 expenditure of the proceeds of the bonds is conditioned on
2-3 obtaining credit enhancement in support of the bonds.
2-4 (5) "Code" means the Internal Revenue Code of 1986,
2-5 as the same from time to time may be amended.
2-6 (6) "Housing finance corporation" means a corporation
2-7 created under Chapter 394, Local Government Code (Texas Housing
2-8 Finance Corporations Act).
2-9 (7) "Issuer" means any department, board, authority,
2-10 agency, subdivision, municipal corporation, political subdivision,
2-11 body politic, or instrumentality of the State of Texas of every
2-12 kind or type whatsoever and any nonprofit corporation acting for or
2-13 on behalf of any of the foregoing.
2-14 (8) "Local population" means the population in the
2-15 local government [governmental] unit or units on whose behalf the
2-16 housing finance corporation is created as determined in the most
2-17 recent federal census. If two local government [governmental]
2-18 units which overlap have created housing finance corporations that
2-19 have the power to issue bonds to provide financing for home
2-20 mortgages, prior to the submission of the application for
2-21 reservation or carryforward by either corporation there shall be
2-22 excluded from the population of the larger local government
2-23 [governmental] unit that portion of the population of any smaller
2-24 local government [governmental] unit having a population as
2-25 determined in the most recent federal census of 20,000 or more
2-26 which is within the larger local government [governmental] unit,
2-27 unless the smaller local government [governmental] unit assigns its
3-1 authority to issue bonds, based upon its population, to the larger
3-2 local government [governmental] unit. For purposes of this Act,
3-3 the term "local government" has ["local governmental unit" shall
3-4 have] the same meaning as in Chapter 394, Local Government Code
3-5 (Texas Housing Finance Corporations Act).
3-6 (9) "Locally voted issue" means an issue of bonds
3-7 which has been authorized pursuant to a referendum approved by the
3-8 voters of a political subdivision of the State of Texas.
3-9 (10) "Mortgage credit certificate" means a certificate
3-10 of the nature described in Section 25 of the code.
3-11 (11) "Private activity bond" has the meaning given
3-12 that term under Section 141(a) of the code.
3-13 (12) "Project" means any eligible facility, as
3-14 described in the application for reservation or carryforward,
3-15 proposed to be financed, in whole or in part, by an issue of bonds.
3-16 With respect to qualified mortgage bonds or student loan bonds, the
3-17 board shall consider the project or purpose to be the provision of
3-18 financial assistance to qualifying mortgagors or students within
3-19 all or any portion of the jurisdiction of the issuer. For purposes
3-20 of this definition, jurisdiction of the issuer is determined on the
3-21 date the application for reservation is delivered to the board.
3-22 (13) "Qualified bond" has the meaning given that term
3-23 under Section 141(e) of the code.
3-24 (14) [(13)] "Qualified mortgage bond" has the meaning
3-25 given that term under Section 143(a) of the code; and for the
3-26 purposes of this Act, the term "qualified mortgage bond" shall
3-27 include mortgage credit certificates.
4-1 (15) [(14)] "Qualified small issue bond" has the
4-2 meaning given that term under Section 144(a) of the code.
4-3 (16) "Qualified student loan bond" has the meaning
4-4 given that term under Section 144(b) of the code.
4-5 (17) [(15)] "Related person" has the meaning given
4-6 that term under Section 144(a)(3) of the code.
4-7 (18) [(16)] "Reservation" means a reservation of a
4-8 portion of the state ceiling for a specific bond issue.
4-9 (19) [(17)] "State-voted issue" means an issue of
4-10 bonds which has been authorized pursuant to a statewide referendum
4-11 approved by the voters of the State of Texas.
4-12 (20) [(18)] "State ceiling" means the amount of
4-13 authority in the State of Texas to issue tax-exempt private
4-14 activity bonds during the calendar year, as determined under
4-15 Section 146(d) of the code.
4-16 (21) [(19)] "Qualified residential rental project
4-17 issue" means an issue of bonds for a qualified residential rental
4-18 project, as that term is defined under Section 142(d) of the code.
4-19 (22) [(20)] "Tax-exempt enterprise zone facility
4-20 bonds" has the meaning given that term under Section 1394 of the
4-21 code.
4-22 SECTION 2. Effective January 1, 1998, Section 2, Chapter
4-23 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
4-24 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
4-25 follows:
4-26 Sec. 2. ALLOCATION AND RESERVATION SYSTEM. (a) The state
4-27 ceiling for each calendar year is allocated to issuers that issue
5-1 private activity bonds. Except as provided by Section 3 of this
5-2 Act, reservations are granted in the order of receipt by the board
5-3 of an application for a reservation, regardless of the amount of
5-4 the issue.
5-5 (b) Prior to September 1, (1) 31.5 [28] percent of the state
5-6 ceiling is available exclusively for reservations by issuers of
5-7 qualified mortgage bonds, (2) 13 [17.5] percent of the state
5-8 ceiling is available exclusively for reservations by issuers of
5-9 state-voted issues for the purpose of issuing a state-voted issue,
5-10 (3) 7.5 percent of the state ceiling is available exclusively for
5-11 reservations by issuers of qualified small issue bonds and
5-12 tax-exempt enterprise zone facility bonds, (4) 7.5 [five] percent
5-13 of the state ceiling is available exclusively for reservations by
5-14 issuers of qualified residential rental project issues; [and] (5)
5-15 11 percent of the state ceiling is available exclusively for
5-16 reservations by issuers of qualified student loan bonds authorized
5-17 by Section 53.47, Education Code; and (6) 29.5 [42] percent of the
5-18 state ceiling is available exclusively for reservations by all
5-19 other issuers of bonds requiring an allocation.
5-20 (c) If applications for state-voted issues received prior to
5-21 January 2, from issuers described in Subsection (b)(2) of this
5-22 section, total more than 13 percent of the available state ceiling
5-23 for that program year, the incremental amount of state-voted
5-24 ceiling requested in excess of 13 percent, up to 17.5 percent of
5-25 state ceiling, will be removed from the state ceiling available to
5-26 other issuers on January 2 and made available for those additional
5-27 state-voted applications. The remaining portion of state ceiling
6-1 will be made available according to Subsection (b) of this section.
6-2 (d) Of that portion of the state ceiling that is available
6-3 exclusively for reservations by issuers of qualified mortgage
6-4 bonds, one-third of said portion shall be made available
6-5 exclusively to the Texas Department of Housing and Community
6-6 Affairs for the purpose of issuing qualified mortgage bonds until
6-7 August 25.
6-8 (e) [(d)] On and after September 1, that portion of the
6-9 state ceiling available for reservations shall become available to
6-10 any issuer for any bonds requiring an allocation, subject to the
6-11 provisions of Section 3 of this Act.
6-12 (f) [(e)] If any particular type of bonds do not qualify on
6-13 January 2 of any year for treatment as tax-exempt obligations under
6-14 the provisions of the code, then the provisions of Subsection
6-15 (b)(1), (2), (3), (4), [or] (5), or (6) of this section, as
6-16 applicable, shall be of no effect for such year, and the portion of
6-17 the state ceiling that is available exclusively for reservations by
6-18 issuers of the type of applicable bonds shall be reallocated
6-19 proportionately by March 1 for reservations by each other category
6-20 of issuers under Subsection (b) of this section.
6-21 (g) [(f)] Subsection (f) [(e)] of this section does not
6-22 apply to qualified mortgage bonds made available exclusively to the
6-23 Texas Department of Housing and Community Affairs under Subsection
6-24 (d) [(c)] of this section.
6-25 (h) [(g)] In addition to the amount provided in Subsection
6-26 (d) [(c)] of this section, $20,000,000 in reservations for each
6-27 year for the years 1996 and 1997 is available to the Texas
7-1 Department of Housing and Community Affairs from that portion of
7-2 the state ceiling that is available exclusively for reservations by
7-3 issuers of qualified mortgage bonds for the purpose of issuing
7-4 qualified mortgage bonds until August 25.
7-5 (i) [(h)] A bond issued for the reservation made by
7-6 Subsection (h) [(g)] of this section must:
7-7 (1) be used to finance or refinance single-family home
7-8 construction, reconstruction, or acquisition or to finance or
7-9 refinance contracts for deed for single-family housing; and
7-10 (2) target families that earn 60 percent or less of
7-11 the median family income in a colonia, as defined by Section 916 of
7-12 Pub. L. No. 101-625.
7-13 SECTION 3. Effective January 1, 1998, Section 3(c), Chapter
7-14 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
7-15 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
7-16 follows:
7-17 (c) The board shall not grant a reservation of a portion of
7-18 the state ceiling to any issuer prior to January 2 [10]. If two or
7-19 more issuers apply for a reservation of state ceiling for the
7-20 upcoming program year in a category described in Subsections
7-21 (b)(2), (b)(3), (b)(4), and (b)(6) [(b)(5)] of Section 2 of this
7-22 Act on or before October 20 [January 10], reservations within that
7-23 category shall be granted from the state ceiling available in that
7-24 category in an order determined by the board by lot. If two or
7-25 more housing finance corporations apply for a reservation of state
7-26 ceiling for the upcoming program year in the category described by
7-27 Section 2(b)(1) of this Act on or before October 20 [January 10],
8-1 reservations within that category shall be granted from the state
8-2 ceiling available in that category according to the following
8-3 categories of priority: (1) the first category of priority shall
8-4 include those applications for a reservation filed by housing
8-5 finance corporations which filed an application for a reservation
8-6 on behalf of the same local population prior to September 1 of the
8-7 previous calendar year, but which did not receive a reservation
8-8 during such year; (2) [the second category of priority shall
8-9 include those applications for a reservation filed by housing
8-10 finance corporations to which state ceiling could not be made
8-11 available by August 31 for that calendar year because of the
8-12 application of Section 4(b) of this Act; (3)] the second [third]
8-13 category of priority shall include those applications for a
8-14 reservation not included in the first category [and second
8-15 categories] of priority; (3) a priority under (1) of an issuer
8-16 composed of more than one jurisdiction is not affected by the
8-17 issuer's loss of a sponsoring governmental unit and that unit's
8-18 population base if the dollar amount of the application has not
8-19 increased; and (4) within each category or priority, reservations
8-20 shall be granted in reverse calendar year order of the most recent
8-21 closing of qualified mortgage bonds applicable to [by] each housing
8-22 finance corporation, with the most recent closing being the last to
8-23 receive a reservation and with those housing finance corporations
8-24 that have never received a reservation for mortgage revenue bonds
8-25 being the first to receive a reservation, and, in the case of
8-26 closings occurring on the same date, reservations shall be granted
8-27 in an order determined by the board by lot. The most recent
9-1 closing applicable to: (A) a newly created housing finance
9-2 corporation that was created by a local government or local
9-3 governments that had previously sponsored an existing housing
9-4 finance corporation or a disbanded housing finance corporation, is
9-5 the most recent closing of qualified mortgage bonds the proceeds of
9-6 which were available to the population of the housing finance
9-7 corporation; (B) a housing finance corporation sponsored by a
9-8 local government that has participated in the program of another
9-9 housing finance corporation, is the most recent closing of
9-10 qualified mortgage bonds the proceeds of which were available to
9-11 the population of the housing finance corporation; and (C) all
9-12 other housing finance corporations, is the most recent closing of
9-13 qualified mortgage bonds by the housing finance corporation. In no
9-14 event will a housing finance corporation or its sponsoring local
9-15 government be allowed to achieve an advantage in the determination
9-16 of their last closing date by creating or disbanding from a housing
9-17 finance corporation. If two or more higher education authorities
9-18 apply for a reservation of state ceiling for the upcoming year in
9-19 the category described by Section 2(b)(5) of this Act on or before
9-20 October 20, reservations within that category shall be granted from
9-21 the state ceiling available in that category in reverse calendar
9-22 year order of the most recent closing of qualified student loan
9-23 bonds by each higher education authority, with the most recent
9-24 closing being the last to receive a reservation, and, in the case
9-25 of closings occurring on the same date, reservations shall be
9-26 granted in an order determined by the board by lot. All
9-27 applications for a reservation filed after October 20 [January 10]
10-1 by any issuer for the issuance of bonds shall be accepted by the
10-2 board in their order of receipt. [A priority under (1) of an
10-3 issuer composed of more than one jurisdiction is not affected by
10-4 the issuer's loss of a sponsoring governmental unit and that unit's
10-5 population base if the dollar amount of the application has not
10-6 increased.]
10-7 SECTION 4. Effective January 1, 1998, Section 3(a), Chapter
10-8 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
10-9 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
10-10 follows:
10-11 (a) For any one project, no issuer[:]
10-12 [(1)] prior to September 1, shall receive reservations
10-13 in excess of:
10-14 (1) [(A)] $25,000,000 for issuers described by Section
10-15 2(b)(1) of this Act other than the Texas Department of Housing and
10-16 Community Affairs;
10-17 (2) [(B)] $50,000,000 for issuers described by Section
10-18 2(b)(2) of this Act other than the Texas Higher Education
10-19 Coordinating Board and $75,000,000 for the Texas Higher Education
10-20 Coordinating Board;
10-21 (3) [(C)] an amount as limited by the code for issuers
10-22 described by Section 2(b)(3) of this Act;
10-23 (4) [(D)] $15,000,000 or 15 percent of the amount set
10-24 aside for this purpose, whichever is less, for issuers described by
10-25 Section 2(b)(4) of this Act;
10-26 (5) $35,000,000 for higher education authorities
10-27 authorized by Section 53.47, Education Code, and described by
11-1 Section 2(b)(5) of this Act; and
11-2 (6) [(E)] $25,000,000 for issuers described by Section
11-3 2(b)(6) [2(b)(5)] of this Act [except higher education authorities
11-4 authorized by Section 53.47, Education Code; and]
11-5 [(F) $35,000,000 for higher education
11-6 authorities authorized by Section 53.47, Education Code; and]
11-7 [(2) prior to November 1, shall receive reservations
11-8 in excess of $100,000,000].
11-9 SECTION 5. Sections 3(d) and (e), Chapter 1092, Acts of the
11-10 70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's
11-11 Texas Civil Statutes), are amended to read as follows:
11-12 (d) An application for a reservation may not be submitted
11-13 and a reservation may not be granted after December 1 of the
11-14 current program year.
11-15 (e) If any portion of state ceiling in any category
11-16 described in Section 2(b) of this Act from which issuers were
11-17 granted reservations becomes available in that category before June
11-18 1, those amounts shall be aggregated and reservations shall be
11-19 granted from that category on June 1. If any portion of state
11-20 ceiling from which issuers were granted reservations becomes
11-21 available in that category after June 1 and before August 25, those
11-22 amounts shall be aggregated and reservations shall be granted from
11-23 that category on August 25. The department may also grant a
11-24 reservation to an issuer at any time on or after January 2 [10] if
11-25 the amount of state ceiling available in any category exceeds the
11-26 amount of state ceiling applied for in that category.
11-27 SECTION 6. Effective January 1, 1998, Section 4(a), Chapter
12-1 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
12-2 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
12-3 follows:
12-4 (a) An application for a reservation for a particular
12-5 program year may be filed by an issuer on or after October 10 of
12-6 the preceding year [January 2] and must be on a form prescribed by
12-7 the board and signed by a member or officer of the issuer and must
12-8 state:
12-9 (1) the maximum amount of the bonds in the issue
12-10 requiring an allocation pursuant to Section 146 of the code;
12-11 (2) the purpose of the bonds or a functional
12-12 description of the project, including the identification of the
12-13 user of the proceeds or project financed thereby;
12-14 (3) whether the bonds are qualified bonds;
12-15 (4) if the bonds are qualified bonds, the paragraph of
12-16 Section 141(e)(1) of the code that applies, and if Section
12-17 141(e)(1)(A) of the code applies, the paragraph of Section 142(a)
12-18 of the code that applies;
12-19 (5) if the bonds are not qualified bonds, that Section
12-20 141(b)(5) of the code applies, or in the case of transition rule
12-21 projects, the paragraph of the Tax Reform Act of 1986 that applies;
12-22 (6) a statement by the issuer, other than an issuer of
12-23 a state-voted issue or the Texas Department of Housing and
12-24 Community Affairs, that bonds are not being issued for the same
12-25 stated purpose for which the issuer has received sufficient
12-26 carryforward during a prior year or for which there exists
12-27 unexpended proceeds from a prior issue or issues of bonds issued by
13-1 the same issuer, or based on the issuer's population, unless such
13-2 issuer provides evidence that a binding contract or binding
13-3 contracts have been entered into to expend the unexpended proceeds
13-4 within 12 months after the date of receipt by the board of an
13-5 application for a reservation; and
13-6 (7) other information that the board may require.
13-7 SECTION 7. Section 4(c), Chapter 1092, Acts of the 70th
13-8 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
13-9 Civil Statutes), is amended to read as follows:
13-10 (c) The board may not accept applications for more than one
13-11 project located at, or related to, a business operation at a
13-12 particular site for [in] any one program [calendar] year.
13-13 SECTION 8. Section 6(c), Chapter 1092, Acts of the 70th
13-14 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
13-15 Civil Statutes), is amended to read as follows:
13-16 (c) If the issuer does not timely submit the documents and
13-17 fee required by this section, the issue's reservation is canceled
13-18 and during the [90 day] period described by Section 7(a) of this
13-19 Act beginning on the reservation date of the canceled reservation:
13-20 (1) the issuer or any other issuer may not submit an
13-21 application for a reservation for the same project; and
13-22 (2) the issuer is eligible for a carryforward
13-23 designation for the project only as provided by Section 9 of this
13-24 Act.
13-25 SECTION 9. Sections 7(a) and (c), Chapter 1092, Acts of the
13-26 70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's
13-27 Texas Civil Statutes), are amended to read as follows:
14-1 (a) Except as provided in Subsection (b) of this section,
14-2 the issuer, other than an issuer that received a reservation of
14-3 state ceiling from the category described by Section 2(b)(1) of
14-4 this Act, shall close on the bonds for which a reservation has been
14-5 granted not later than the 120th [90th] day after the reservation
14-6 date. An issuer of qualified mortgage revenue bonds shall close on
14-7 the bonds for which a reservation has been granted not later than
14-8 the 180th day after the reservation date.
14-9 (c) If the issuer does not timely close on the bonds, the
14-10 issue's reservation is canceled and during the 150-day [120-day]
14-11 period beginning on the reservation date of the canceled
14-12 reservation, or during the 210-day period beginning on the
14-13 reservation date of the canceled reservation for Section 2(b)(1)
14-14 issuers:
14-15 (1) the issuer or any other issuer may not submit an
14-16 application for a reservation for the same project; and
14-17 (2) the issuer is eligible for a carryforward
14-18 designation for the project only as provided by Section 9 of this
14-19 Act.
14-20 SECTION 10. This Act takes effect immediately except as
14-21 otherwise provided by this Act.
14-22 SECTION 11. The importance of this legislation and the
14-23 crowded condition of the calendars in both houses create an
14-24 emergency and an imperative public necessity that the
14-25 constitutional rule requiring bills to be read on three several
14-26 days in each house be suspended, and this rule is hereby suspended,
14-27 and that this Act take effect and be in force according to its
15-1 terms, and it is so enacted.