By Ellis S.B. No. 1700
76R3309 KEL-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the federal low income housing tax
1-3 credit program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter BB, Chapter 2306, Government Code, as
1-6 added by Chapter 980, Acts of the 75th Legislature, Regular
1-7 Session, 1997, is amended by adding Section 2306.6705 to read as
1-8 follows:
1-9 Sec. 2306.6705. DEFINITIONS. In this subchapter:
1-10 (1) "Region" means a geographical region in this state
1-11 identified in the state low income housing plan.
1-12 (2) "Review panel" means a tax credit review panel
1-13 established under this subchapter.
1-14 SECTION 2. Section 2306.671, Government Code, is amended to
1-15 read as follows:
1-16 Sec. 2306.671. QUALIFIED ALLOCATION PLAN [DEADLINES FOR
1-17 ALLOCATION OF LOW INCOME HOUSING TAX CREDITS]. (a) Not later than
1-18 November 15 of each year, the department shall prepare and submit
1-19 to the board for adoption the qualified allocation plan required by
1-20 federal law for use by the department in setting criteria and
1-21 priorities for the allocation of tax credits under the low income
1-22 housing tax credit program.
1-23 (b) The board shall adopt and submit to the governor the
1-24 qualified allocation plan not later than January 31.
2-1 (c) The governor shall approve, reject, or modify and
2-2 approve the qualified allocation plan not later than February 28.
2-3 (d) The qualified allocation plan must state that [An
2-4 applicant for a] low income housing tax credits shall [credit to]
2-5 be allocated to a region based on the population of the region
2-6 [issued a commitment during the initial allocation cycle in a
2-7 calendar year must submit an application to the department not
2-8 later than May 15].
2-9 [(e) The board shall issue a commitment for allocation for
2-10 the initial cycle of low income housing tax credits each year in
2-11 accordance with the qualified allocation plan not later than July
2-12 31.]
2-13 SECTION 3. Subchapter BB, Chapter 2306, Government Code, as
2-14 added by Chapter 980, Acts of the 75th Legislature, Regular
2-15 Session, 1997, is amended by adding Section 2306.6715 to read as
2-16 follows:
2-17 Sec. 2306.6715. REVIEW PANEL. (a) On a majority vote of
2-18 the state representatives whose districts cover a part of a region,
2-19 the region may establish a tax credit review panel to propose an
2-20 allocation plan for the region's share of low income housing tax
2-21 credits.
2-22 (b) A review panel consists of nine members appointed by a
2-23 majority vote of the state representatives described by Subsection
2-24 (a). The members serve staggered two-year terms, with four or five
2-25 members' terms expiring February 1 of each year. A member may not
2-26 receive compensation for the member's service on the review panel.
2-27 During a member's term and the two-year period following that term,
3-1 the member may not apply for a low income housing tax credit
3-2 proposed for allocation by the review panel on which the member
3-3 serves or served, whether the member applies on behalf of the
3-4 member or on behalf of a business in which the member has any
3-5 financial interest.
3-6 (c) Not later than May 15, an applicant for a low income
3-7 housing tax credit shall apply to the review panel established by
3-8 the region in which the property proposed for development is
3-9 located. If a review panel has not been established by that
3-10 region, the applicant shall apply to the department.
3-11 (d) Each region shall submit a proposed allocation plan to
3-12 the board not later than June 30. If a review panel for a region
3-13 does not submit the proposed plan on or before that date, the
3-14 department shall allocate the region's share of tax credits to
3-15 regions that make timely submissions under this subsection.
3-16 (e) The board shall approve each region's proposed
3-17 allocation plan unless the proposed plan violates state or federal
3-18 law, in which event the board shall direct the department to
3-19 develop an alternative allocation plan for the region.
3-20 (f) If a region does not establish a review panel, not later
3-21 than July 31 the department shall allocate the region's share of
3-22 tax credits to qualified applicants who apply to develop property
3-23 located in that region.
3-24 (g) The board shall approve or disapprove a review panel's
3-25 proposed allocation of low income housing tax credits each year in
3-26 accordance with the qualified allocation plan not later than July
3-27 31.
4-1 SECTION 4. Section 2306.672, Government Code, is amended to
4-2 read as follows:
4-3 Sec. 2306.672. SCORING OF APPLICATIONS. (a) The goal of
4-4 the low income housing tax credit program is to provide permanent
4-5 affordable housing. In allocating low income housing tax credits,
4-6 a review panel or the department, as appropriate, shall score each
4-7 application using a point system based on criteria adopted by the
4-8 review panel or department that are consistent with the region's or
4-9 department's housing goals. The department shall also publish in
4-10 the qualified allocation plan any discretionary factor that the
4-11 department will consider in evaluating a review panel's proposed
4-12 allocation plan or in scoring an application.
4-13 (b) If an applicant meets the [department's] scoring and
4-14 underwriting criteria, the review panel or or department shall add:
4-15 (1) five bonus points to the applicant's score if the
4-16 applicant agrees to provide to a qualified nonprofit organization
4-17 or tenant organization a right of first refusal to purchase the
4-18 property to which the tax credit applies at the minimum price
4-19 provided in, and in accordance with the requirements of, Section
4-20 42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section
4-21 42(i)(7)); and
4-22 (2) two bonus points to the applicant's score if the
4-23 application is received within the first 10 days of the application
4-24 acceptance period.
4-25 (c) The review panel or department, as appropriate, shall
4-26 provide the score of each application on each criterion to the
4-27 board and the governor. The results of the scoring shall be
5-1 available to the public.
5-2 (d) Upon awarding tax credit allocations, the board shall
5-3 document the reasons for each project's selection, including an
5-4 explanation of any [all] discretionary factors used in making its
5-5 determination.
5-6 SECTION 5. Section 2306.675, Government Code, is amended to
5-7 read as follows:
5-8 Sec. 2306.675. WAITING LIST [ALLOCATION OF LOW INCOME
5-9 HOUSING TAX CREDIT]. The review panel or [(a) Department staff
5-10 shall provide recommendations to the board concerning the
5-11 financial or programmatic viability of each application for a low
5-12 income housing tax credit before the board makes a decision
5-13 relating to the allocation of tax credits.]
5-14 [(b) Not later than the deadline specified in Section
5-15 2306.671(e), the board shall issue a commitment for tax credits
5-16 available to the department. Concurrently with the issuance of a
5-17 commitment for initial tax credits, the] board, as applicable,
5-18 shall establish a waiting list of additional applications, ranked
5-19 in descending order of priority, to be allocated tax credits
5-20 [issued a commitment for tax credits] if additional credits become
5-21 available.
5-22 SECTION 6. Section 2306.677, Government Code, is amended to
5-23 read as follows:
5-24 Sec. 2306.677. FEES. (a) A fee charged by the review panel
5-25 or department, as applicable, to an applicant for a low income
5-26 housing tax credit may not be excessive and must reflect [the
5-27 department's] actual costs in processing applications and providing
6-1 copies of documents in connection with the allocation process.
6-2 (b) The review panel or department, as applicable, shall
6-3 refund a fee charged to an applicant if the [department does not
6-4 score the] applicant's application is not scored, except the review
6-5 panel or department may retain a reasonable portion of the fee as
6-6 compensation [to compensate the department] for costs associated
6-7 with the application.
6-8 SECTION 7. Section 2306.678(b), Government Code, is amended
6-9 to read as follows:
6-10 (b) The department shall hold at least three public hearings
6-11 in each region [different regions] of the state to receive public
6-12 comments on low income housing tax credit applications.
6-13 SECTION 8. The change in law made by this Act applies only
6-14 to allocations made in connection with a qualified allocation plan
6-15 that is submitted to the board of directors of the Texas Department
6-16 of Housing and Community Affairs on or after the effective date of
6-17 this Act.
6-18 SECTION 9. This Act takes effect September 1, 1999.
6-19 SECTION 10. The importance of this legislation and the
6-20 crowded condition of the calendars in both houses create an
6-21 emergency and an imperative public necessity that the
6-22 constitutional rule requiring bills to be read on three several
6-23 days in each house be suspended, and this rule is hereby suspended.