LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 28, 2001
TO: Honorable Bill G. Carter, Chair, House Committee on Urban
Affairs
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2441 by Ehrhardt (Relating to the administration of
the low-income housing tax credit program by the Texas
Department of Housing and Community Affairs.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2441, As Introduced: impact of $0 through the biennium ending *
* August 31, 2003. *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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All Funds, Six-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* Appropriated Appropriated FY 2001 *
* Receipts Receipts *
* 0666 0666 *
* 2001 $(1,279,573) $1,279,573 13.0 *
* 2002 (1,272,624) 1,272,624 14.0 *
* 2003 (1,433,578) 1,433,578 15.0 *
* 2004 (1,447,863) 1,447,863 15.0 *
* 2005 (1,513,939) 1,513,939 15.0 *
* 2006 (1,623,318) 1,623,318 15.0 *
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The first table assumes an effective date of July 1, 2001. The second
table assumes an effective date of September 1, 2001.
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* Appropriated Appropriated FY 2001 *
* Receipts Receipts *
* 0666 0666 *
* 2002 $(1,272,624) $1,272,624 14.0 *
* 2003 (1,433,578) 1,433,578 15.0 *
* 2004 (1,447,863) 1,447,863 15.0 *
* 2005 (1,513,939) 1,513,939 15.0 *
* 2006 (1,623,318) 1,623,318 15.0 *
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Technology Impact
According to the Texas Department of Housing and Community Affairs
(TDHCA), the agency would need new computer equipment associated with
posting of applications on the agency's website, totaling $47,000 for
the biennium and similar cost in subsequent years based on a 3-year
replacement schedule and software updates.
Fiscal Analysis
The bill would completely revise Subchapter DD, Low Income Housing Tax
Credit Program, of Chapter 2306, Government Code by completely rewriting
it. Provisions of the bill would establish two required state set-asides,
the At-Risk Development Set-Aside, which would be allocated 20 percent
of the tax credits available in a calendar year, and the Set-Aside for
Rural Areas, which would be jointly administered with the state agency
for rural development. The bill would create the Rural Development
Agency (RDA) and require the new agency to participate in the development
and approval of all scoring and underwriting criteria developed by TDHCA
for applications for the Set-Aside for Rural Areas. The RDA would also
be required to help score the applications. TDHCA and the new agency
would be required to jointly fund and carry out capacity building efforts
as directed by the RDA to ensure that the Housing Tax Credit Set-Aside
for Rural Areas receives a sufficient volume of qualifying applications.
The bill would further require the new agency and TDHCA to jointly adjust
the regional allocation in order to offset for the under and
over-utilization of multifamily private activity bonds and other housing
resources between different areas of the state. The bill would require
TDHCA to reimburse the new agency for its costs in carrying out these
functions.
Under the provisions of the bill, a tax credit application would be
ineligible if it requests an annual allocation greater than $5,500 per
housing tax credit restricted unit or $6,500 for a unit in an
Economically Distressed Area Program if the application requests more
than $1.6 million per application round; or, if the application is for a
development with more than 100 residential dwelling units.
The bill would require TDHCA to establish a pre-application process and
would set forth the required elements of the application. TDHCA would be
required to post on its website the complete application, all supporting
documents, the application logs, and scoring sheets at least 30 days
prior to the board meeting at which the credits would be awarded.
Provisions of the bill would require the establishment of a process which
would allow for appeals of TDHCA's evaluation and scoring decisions. The
bill would also require TDHCA to publish not later than July 1, a
schedule of application fees. TDHCA would be required to refund the fees
of any application that is withdrawn or not fully processed by the
agency. TDHCA would be required to conduct at least three public hearings
throughout the state to receive public comments on applications.
The bill would also require TDHCA to assign staff, independent of the tax
credit program, or contract with an outside party, to monitor
developments during construction. TDHCA would be required to utilize
fair housing and housing compliance testers to ensure that developments
are in compliance with all agreements and restrictions imposed by TDHCA.
The bill would take effective immediately or September 1, 2001
Methodology
The bill would allow for the collection of fees to offset costs
associated with implementation of the provisions of the bill. The fiscal
impact would be $1,279,573 in fiscal 2002 and $1,272,674 in fiscal 2003.
Similar costs would occur in each subsequent ranging from $1,433,578 to
$1,513,939. TDHCA estimates the need to increase staff by up to 15 FTEs
by fiscal year 2003.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 301 Office of the Governor, 332 Texas Department
of Housing and Community Affairs, 304 Comptroller
of Public Accounts
LBB Staff: JK, DB, RT, ER