By Carona S.B. No. 1902
75R9646 RJA-D
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) [(15)] "Related person" has the meaning given
4-4 that term under Section 144(a)(3) of the code.
4-5 (17) [(16)] "Reservation" means a reservation of a
4-6 portion of the state ceiling for a specific bond issue.
4-7 (18) [(17)] "State-voted issue" means an issue of
4-8 bonds which has been authorized pursuant to a statewide referendum
4-9 approved by the voters of the State of Texas.
4-10 (19) [(18)] "State ceiling" means the amount of
4-11 authority in the State of Texas to issue tax-exempt private
4-12 activity bonds during the calendar year, as determined under
4-13 Section 146(d) of the code.
4-14 (20) [(19)] "Qualified residential rental project
4-15 issue" means an issue of bonds for a qualified residential rental
4-16 project, as that term is defined under Section 142(d) of the code.
4-17 (21) [(20)] "Tax-exempt enterprise zone facility
4-18 bonds" has the meaning given that term under Section 1394 of the
4-19 code.
4-20 SECTION 2. Effective January 1, 1998, Sections 2(b) and (e),
4-21 Chapter 1092, Acts of the 70th Legislature, Regular Session, 1987
4-22 (Article 5190.9a, Vernon's Texas Civil Statutes), are amended to
4-23 read as follows:
4-24 (b) Prior to September 1, (1) 28 percent of the state
4-25 ceiling is available exclusively for reservations by issuers of
4-26 qualified mortgage bonds, (2) 15.5 [17.5] percent of the state
4-27 ceiling is available exclusively for reservations by issuers of
5-1 state-voted issues for the purpose of issuing a state-voted issue,
5-2 (3) 7.5 percent of the state ceiling is available exclusively for
5-3 reservations by issuers of qualified small issue bonds and
5-4 tax-exempt enterprise zone facility bonds, (4) seven [five] percent
5-5 of the state ceiling is available exclusively for reservations by
5-6 issuers of qualified residential rental project issues; [and] (5)
5-7 15 percent of the state ceiling is available exclusively for
5-8 reservations by issuers of qualified student loan bonds; and (6) 27
5-9 [42] percent of the state ceiling is available exclusively for
5-10 reservations by all other issuers of bonds requiring an allocation.
5-11 (e) If any particular type of bonds do not qualify on
5-12 January 2 of any year for treatment as tax-exempt obligations under
5-13 the provisions of the code, then the provisions of Subsection
5-14 (b)(1), (2), (3), (4), [or] (5), or (6) of this section, as
5-15 applicable, shall be of no effect for such year, and the portion of
5-16 the state ceiling that is available exclusively for reservations by
5-17 issuers of the type of applicable bonds shall be reallocated
5-18 proportionately by March 1 for reservations by each other category
5-19 of issuers under Subsection (b) of this section.
5-20 SECTION 3. Section 2(c), Chapter 1092, Acts of the 70th
5-21 Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's Texas
5-22 Civil Statutes), is amended to read as follows:
5-23 (c) Of that portion of the state ceiling that is available
5-24 exclusively for reservations by issuers of qualified mortgage
5-25 bonds, one-third of said portion shall be made available until
5-26 August 25 exclusively to the Texas Department of Housing and
5-27 Community Affairs for the purpose of issuing qualified mortgage and
6-1 residential rental project bonds [until August 25].
6-2 SECTION 4. Effective January 1, 1998, Section 3(c), Chapter
6-3 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
6-4 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
6-5 follows:
6-6 (c) The board shall not grant a reservation of a portion of
6-7 the state ceiling to any issuer prior to January 10. If two or
6-8 more issuers apply for a reservation of state ceiling in a category
6-9 described in Subsections (b)(2), (b)(3), (b)(4), [and] (b)(5), and
6-10 (b)(6) of Section 2 of this Act on or before January 10,
6-11 reservations within that category shall be granted from the state
6-12 ceiling available in that category in an order determined by the
6-13 board by lot. If two or more housing finance corporations apply
6-14 for a reservation of state ceiling in the category described by
6-15 Section 2(b)(1) of this Act on or before January 10, reservations
6-16 within that category shall be granted from the state ceiling
6-17 available in that category according to the following categories of
6-18 priority: (1) the first category of priority shall include those
6-19 applications for a reservation filed by housing finance
6-20 corporations which filed an application for a reservation on behalf
6-21 of the same local population prior to September 1 of the previous
6-22 calendar year, but which did not receive a reservation during such
6-23 year; (2) [the second category of priority shall include those
6-24 applications for a reservation filed by housing finance
6-25 corporations to which state ceiling could not be made available by
6-26 August 31 for that calendar year because of the application of
6-27 Section 4(b) of this Act; (3)] the second [third] category of
7-1 priority shall include those applications for a reservation not
7-2 included in the first category [and second categories] of priority;
7-3 (3) a priority under (1) of an issuer composed of more than one
7-4 jurisdiction is not affected by the issuer's loss of a sponsoring
7-5 governmental unit and that unit's population base if the dollar
7-6 amount of the application has not increased; and (4) within each
7-7 category or priority, reservations shall be granted in reverse
7-8 calendar year order of the most recent closing of qualified
7-9 mortgage bonds applicable to [by] each housing finance corporation,
7-10 with the most recent closing being the last to receive a
7-11 reservation and with those housing finance corporations that have
7-12 never received a reservation for mortgage revenue bonds being the
7-13 first to receive a reservation, and, in the case of closings
7-14 occurring on the same date, reservations shall be granted in an
7-15 order determined by the board by lot. The most recent closing
7-16 applicable to: (A) a newly created housing finance corporation that
7-17 was created by a local government or local governments that had
7-18 previously sponsored an existing housing finance corporation or a
7-19 disbanded housing finance corporation, is the most recent closing
7-20 of qualified mortgage bonds the proceeds of which were available to
7-21 the population of the housing finance corporation; (B) a housing
7-22 finance corporation sponsored by a local government that has
7-23 participated in the program of another housing finance corporation,
7-24 is the most recent closing of qualified mortgage bonds the proceeds
7-25 of which were available to the population of the housing finance
7-26 corporation; and (C) all other housing finance corporations, is
7-27 the most recent closing of qualified mortgage bonds by the housing
8-1 finance corporation. All applications for a reservation filed
8-2 after January 10 by any issuer for the issuance of bonds shall be
8-3 accepted by the board in their order of receipt. [A priority under
8-4 (1) of an issuer composed of more than one jurisdiction is not
8-5 affected by the issuer's loss of a sponsoring governmental unit and
8-6 that unit's population base if the dollar amount of the application
8-7 has not increased.]
8-8 SECTION 5. Effective January 1, 1998, Section 3(a), Chapter
8-9 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
8-10 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
8-11 follows:
8-12 (a) For any one project, no issuer:
8-13 (1) prior to September 1, shall receive reservations
8-14 in excess of:
8-15 (A) $25,000,000 for issuers described by Section
8-16 2(b)(1) of this Act other than the Texas Department of Housing and
8-17 Community Affairs;
8-18 (B) $50,000,000 for issuers described by Section
8-19 2(b)(2) of this Act other than the Texas Higher Education
8-20 Coordinating Board;
8-21 (C) an amount as limited by the code for issuers
8-22 described by Section 2(b)(3) of this Act;
8-23 (D) $15,000,000 for issuers described by Section
8-24 2(b)(4) of this Act;
8-25 (E) $35,000,000 for higher education authorities
8-26 authorized by Section 53.47, Education Code, and described by
8-27 Section 2(b)(5) of this Act; and
9-1 (F) $25,000,000 for issuers described by Section
9-2 2(b)(6) [2(b)(5)] of this Act [except higher education authorities
9-3 authorized by Section 53.47, Education Code; and]
9-4 [(F) $35,000,000 for higher education
9-5 authorities authorized by Section 53.47, Education Code]; and
9-6 (2) prior to November 1, shall receive reservations in
9-7 excess of $100,000,000.
9-8 SECTION 6. Effective January 1, 1998, Section 4(a), Chapter
9-9 1092, Acts of the 70th Legislature, Regular Session, 1987 (Article
9-10 5190.9a, Vernon's Texas Civil Statutes), is amended to read as
9-11 follows:
9-12 (a) An application for a reservation may be filed by an
9-13 issuer on or after January 2 and must be on a form prescribed by
9-14 the board and signed by a member or officer of the issuer and must
9-15 state:
9-16 (1) the maximum amount of the bonds in the issue
9-17 requiring an allocation pursuant to Section 146 of the code;
9-18 (2) the purpose of the bonds or a functional
9-19 description of the project, including the identification of the
9-20 user of the proceeds or project financed thereby;
9-21 (3) whether the bonds are qualified bonds;
9-22 (4) if the bonds are qualified bonds, the paragraph of
9-23 Section 141(e)(1) of the code that applies, and if Section
9-24 141(e)(1)(A) of the code applies, the paragraph of Section 142(a)
9-25 of the code that applies;
9-26 (5) if the bonds are not qualified bonds, that Section
9-27 141(b)(5) of the code applies, or in the case of transition rule
10-1 projects, the paragraph of the Tax Reform Act of 1986 that applies;
10-2 (6) a statement by the issuer, other than an issuer of
10-3 a state-voted issue or the Texas Department of Housing and
10-4 Community Affairs, that bonds are not being issued for the same
10-5 stated purpose for which the issuer has received sufficient
10-6 carryforward during a prior year or for which there exists
10-7 unexpended proceeds from a prior issue or issues of bonds issued by
10-8 the same issuer, or based on the issuer's population, unless such
10-9 issuer provides evidence that a binding contract or binding
10-10 contracts have been entered into to expend the unexpended proceeds
10-11 within 12 months after the date of receipt by the board of an
10-12 application for a reservation; and
10-13 (7) other information that the board may require.
10-14 SECTION 7. Sections 7(a) and (c), Chapter 1092, Acts of the
10-15 70th Legislature, Regular Session, 1987 (Article 5190.9a, Vernon's
10-16 Texas Civil Statutes), are amended to read as follows:
10-17 (a) Except as provided in Subsection (b) of this section,
10-18 the issuer shall close on the bonds for which a reservation has
10-19 been granted not later than the 120th [90th] day after the
10-20 reservation date.
10-21 (c) If the issuer does not timely close on the bonds, the
10-22 issue's reservation is canceled and during the 150-day [120-day]
10-23 period beginning on the reservation date of the canceled
10-24 reservation:
10-25 (1) the issuer or any other issuer may not submit an
10-26 application for a reservation for the same project; and
10-27 (2) the issuer is eligible for a carryforward
11-1 designation for the project only as provided by Section 9 of this
11-2 Act.
11-3 SECTION 8. The importance of this legislation and the
11-4 crowded condition of the calendars in both houses create an
11-5 emergency and an imperative public necessity that the
11-6 constitutional rule requiring bills to be read on three several
11-7 days in each house be suspended, and this rule is hereby suspended,
11-8 and that this Act take effect and be in force from and after its
11-9 passage, and it is so enacted.