78R2874 QS/SMH-D
By: Mowery, Hamric H.B. No. 2617
A BILL TO BE ENTITLED
AN ACT
relating to tax credits and tax exemptions awarded to certain
entities providing affordable housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter DD, Chapter 2306, Government Code, is
amended by adding Section 2306.67023 to read as follows:
Sec. 2306.67023. THRESHOLD CRITERIA: APPROVAL BY POLITICAL
SUBDIVISION. The threshold criteria in the qualified allocation
plan must include a requirement that the applicant obtain approval
of the development from the governing body of a municipality
containing the development or, if the development is not located in
a municipality, the governing body of a county containing the
development.
SECTION 2. Section 2306.6705, Government Code, is amended
to read as follows:
Sec. 2306.6705. GENERAL APPLICATION REQUIREMENTS. An
application must contain at a minimum the following written,
detailed information in a form prescribed by the board:
(1) a description of:
(A) the financing plan for the development,
including any nontraditional financing arrangements;
(B) the use of funds with respect to the
development;
(C) the funding sources for the development,
including:
(i) construction, permanent, and bridge
loans; and
(ii) rents, operating subsidies, and
replacement reserves; and
(D) the commitment status of the funding sources
for the development;
(2) if syndication costs are included in the eligible
basis, a justification of the syndication costs for each cost
category by an attorney or accountant specializing in tax matters;
(3) from a syndicator or a financial consultant of the
applicant, an estimate of the amount of equity dollars expected to
be raised for the development in conjunction with the amount of
housing tax credits requested for allocation to the applicant,
including:
(A) pay-in schedules; and
(B) syndicator consulting fees and other
syndication costs;
(4) if rental assistance, an operating subsidy, or an
annuity is proposed for the development, any related contract or
other agreement securing those funds and an identification of:
(A) the source and annual amount of the funds;
(B) the number of units receiving the funds; and
(C) the term and expiration date of the contract
or other agreement;
(5) if the development is located within the
boundaries of a political subdivision with a zoning ordinance,
evidence in the form of a letter from the presiding officer of the
governing body [chief executive officer] of the political
subdivision or from another local official with jurisdiction over
zoning matters that states that:
(A) the development is permitted under the
provisions of the ordinance that apply to the location of the
development; or
(B) the applicant is in the process of seeking
the appropriate zoning and has signed and provided to the political
subdivision a release agreeing to hold the political subdivision
and all other parties harmless in the event that the appropriate
zoning is denied;
(6) if an occupied development is proposed for
rehabilitation:
(A) an explanation of the process used to notify
and consult with the tenants in preparing the application;
(B) a relocation plan outlining:
(i) relocation requirements; and
(ii) a budget with an identified funding
source; and
(C) if applicable, evidence that the relocation
plan has been submitted to the appropriate local agency and to the
presiding officer of the governing body of each political
subdivision in which the development is located;
(7) evidence in the form of a written statement that
the application has been approved by the governing body of each
political subdivision in which the development is located;
(8) evidence, in the form of a copy of the published
notice for the meeting, that the applicant has held a community
meeting in the community in which the development is located;
(9) a certification of the applicant's compliance with
appropriate state and federal laws, as required by other state law
or by the board; and
(10) [(8)] any other information required by the board
in the qualified allocation plan.
SECTION 3. Section 2306.6710(b), Government Code, is
amended to read as follows:
(b) If an application satisfies the threshold criteria, the
department shall score and rank the application using a point
system based on criteria that are adapted to regional market
conditions and adopted by the department, including criteria:
(1) regarding:
(A) the income levels of tenants of the
development;
(B) the rent levels of the units;
(C) the period of guaranteed affordability for
low income tenants;
(D) the cost by square foot of the development;
(E) the size, quality, and amenities of the
units;
(F) the services to be provided to tenants of the
development;
(G) the commitment of development funding by
local political subdivisions that enables additional units for
individuals and families of very low income; [and]
(H) the level of community support for, and the
level of community opposition to, the application, as evaluated on
the basis of written statements [of support] from local and state
elected officials representing constituents in areas that include
the location of the development; [and]
(I) the level of support for the application from
the chief administrative officer of each political subdivision in
which the development is located; and
(J) the existing density of multifamily housing
in the area in which the development is located; and
(2) imposing penalties on applicants or affiliates who
have requested extensions of department deadlines relating to
developments supported by housing tax credit allocations made in
the application round preceding the current round.
SECTION 4. Section 2306.6717(b), Government Code, is
amended to read as follows:
(b) The department shall provide information regarding the
low income housing tax credit program, including notice regarding
public hearings, board meetings, and the opening and closing dates
for applications, to:
(1) local housing departments;
(2) newspapers;
(3) nonprofit organizations;
(4) on-site property managers of occupied
developments that are the subject of applications; [and]
(5) chief administrative officers and governing
bodies of political subdivisions; and
(6) any other interested persons, including community
groups, who request the information.
SECTION 5. Section 2306.6718(a), Government Code, is
amended to read as follows:
(a) The department shall provide written notice of the
filing of an application to the following elected officials:
(1) members of the legislature who represent the
community containing the development described in the application;
[and]
(2) the presiding [chief executive] officer of the
governing body of each [the] political subdivision containing the
development described in the application; and
(3) each member of the governing body of each
political subdivision who represents an area containing the
development described in the application.
SECTION 6. Section 2306.6724(e), Government Code, is
amended to read as follows:
(e) The board shall review the recommendations of
department staff regarding applications and shall issue a list of
approved applications each year in accordance with the qualified
allocation plan not later than June 30. The department, not later
than June 30, shall mail the list of approved applications to the
chief administrative officer, governing body, and local housing
department of each political subdivision that contains a
development for which an application has been approved.
SECTION 7. Section 2306.6725(a), Government Code, is
amended to read as follows:
(a) In allocating low income housing tax credits, the
department shall score each application using a point system based
on criteria adopted by the department that are consistent with the
department's housing goals, including criteria addressing the
ability of the proposed project to:
(1) provide quality social support services to
residents;
(2) demonstrate community and neighborhood support as
defined by the qualified allocation plan;
(3) consistent with sound underwriting practices and
when economically feasible, serve individuals and families of
extremely low income by leveraging private and state and federal
resources, including federal HOPE VI grants received through the
United States Department of Housing and Urban Development;
(4) serve traditionally underserved areas;
(5) remain affordable to qualified tenants for an
extended, economically feasible period; [and]
(6) comply with the accessibility standards that are
required under Section 504, Rehabilitation Act of 1973 (29 U.S.C.
Section 794), and specified under 24 C.F.R. Part 8, Subpart C; and
(7) fill a need for multifamily housing in the area in
which the project is located.
SECTION 8. Section 2306.6732, Government Code, is amended
to read as follows:
Sec. 2306.6732. PUBLIC INFORMATION. The department shall
provide information regarding the low income housing tax credit
program, including notices of public hearings, meetings, and
opening and closing dates for applications for a low income housing
tax credit, to local housing departments, any appropriate
newspapers of general or limited circulation that serve the
community in which the proposed project is to be located, nonprofit
organizations, on-site property managers of occupied projects that
are the subject of tax credit applications for posting in prominent
locations at those projects, chief administrative officers and
governing bodies of political subdivisions, and any other
interested persons and community groups who request the
information. The department shall also publish the information on
the department's website.
SECTION 9. Section 11.182, Tax Code, is amended by adding
Subsections (j)-(n) to read as follows:
(j) Notwithstanding the other provisions of this section,
the governing body of a taxing unit by official action of the
governing body adopted in the manner required by law for official
action may provide for taxation of property exempted under
Subsection (b) or Subsection (f), as added by Chapter 1191, Acts of
the 77th Legislature, Regular Session, 2001, unless the property
qualifies for an exemption under the criteria adopted by the
governing body.
(k) If a taxing unit provides under Subsection (j) for
taxation of property exempted under Subsection (b) or Subsection
(f), as added by Chapter 1191, Acts of the 77th Legislature, Regular
Session, 2001, the exemptions prescribed by Subsections (b) and (f)
do not apply to the taxing unit except as to property that qualifies
for an exemption under the criteria adopted by the governing body of
the taxing unit.
(l) To receive an exemption under Subsection (b) or
Subsection (f), as added by Chapter 1191, Acts of the 77th
Legislature, Regular Session, 2001, from taxation by a taxing unit
described by Subsection (j), an organization must submit a written
request to the taxing unit for a determination of whether the
property qualifies for an exemption under the criteria adopted by
the governing body of the taxing unit. The request must include
information that permits the taxing unit to determine whether the
property qualifies for the exemption.
(m) Following submission of a written request under
Subsection (l), the taxing unit shall determine whether the
property qualifies for an exemption under the criteria adopted by
the governing body of the taxing unit. The taxing unit shall issue
a letter to the organization stating the taxing unit's
determination of whether the property qualifies for the exemption.
The taxing unit shall send a copy of the letter by regular mail to
the chief appraiser of the appraisal district that appraises the
property for the taxing unit. The taxing unit may charge the
organization a fee not to exceed the taxing unit's administrative
costs for processing the information submitted by the organization,
making the determination, and issuing the letter required by this
subsection.
(n) An organization seeking an exemption from taxation by a
taxing unit described by Subsection (j) shall provide to the chief
appraiser a copy of the letter issued by the taxing unit under
Subsection (m) stating the taxing unit's determination that the
property qualifies for an exemption under the criteria adopted by
the governing body of the taxing unit. The chief appraiser shall
accept the determination of the taxing unit as conclusive evidence
that the property qualifies for an exemption under the criteria
adopted by the governing body.
SECTION 10. (a) This Act takes effect September 1, 2003.
(b) The changes in law made by this Act relating to
increased public participation in decisions regarding applications
for low income housing tax credits apply only to an application for
low income housing tax credits submitted to the Texas Department of
Housing and Community Affairs during an application cycle that
begins on or after the effective date of this Act. An application
submitted during an application cycle that began before the
effective date of this Act is governed by the law in effect at the
time the application cycle began, and the former law is continued in
effect for that purpose.
(c) The changes in law made by this Act relating to the
eligibility of property for an exemption from ad valorem taxation
under Section 11.182, Tax Code, apply only to a tax year beginning
on or after the effective date of this Act. The eligibility of
property for an exemption from ad valorem taxation under Section
11.182, Tax Code, for a tax year beginning before the effective date
of this Act is governed by the law as it existed immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
COMMITTEE AMENDMENT NO. 1
Amend H.B. 2617 as follows:
On page 1, lines 11-12, delete "or, if the development is not
located in a municipality," and insert "and"
Talton