79R3959 QS-D
By: Isett H.B. No. 728
A BILL TO BE ENTITLED
AN ACT
relating to the system by which an application for a low income
housing tax credit is scored.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2306.6710(b) and (d), Government Code,
are 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 that:
(1) prioritizes in descending order criteria
regarding:
(A) financial feasibility of the development
based on the supporting financial data required in the application
that will include a project underwriting pro forma from the
permanent or construction lender;
(B) quantifiable community participation with
respect to the development, evaluated on the basis of written
statements from any neighborhood organizations on record with the
state or county in which the development is to be located and whose
boundaries contain the proposed development site;
(C) the income levels of tenants of the
development;
(D) the size and quality of the units;
(E) the commitment of development funding by
local political subdivisions;
(F) [the level of community support for the
application, evaluated on the basis of written statements from
state elected officials;
[(G)] the rent levels of the units;
(G) [(H)] the cost of the development by square
foot; and
(H) [(I)] the services to be provided to tenants
of the development; and
(2) uses criteria 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 or a developer or principal of the applicant that has been
removed by the lender, equity provider, or limited partners for its
failure to perform its obligations under the loan documents or
limited partnership agreement.
(d) The department shall underwrite the applications ranked
under Subsection (b) beginning with the applications with the
highest scores in each region described by Section 2306.111(d) and
in each set-aside category described in the qualified allocation
plan, taking into consideration any comments provided by elected
officials under Section 2306.6718. Based on application rankings
and any comments by elected officials, the department shall
continue to underwrite applications until the department has
processed enough applications satisfying the department's
underwriting criteria to enable the allocation of all available
housing tax credits according to regional allocation goals and
set-aside categories. To enable the board to establish an
applications waiting list under Section 2306.6711, the department
shall underwrite as many additional applications as the board
considers necessary to ensure that all available housing tax
credits are allocated within the period required by law. The
department shall underwrite an application to determine the
financial feasibility of the development and an appropriate level
of housing tax credits. In determining an appropriate level of
housing tax credits, the department shall evaluate the cost of the
development based on acceptable cost parameters as adjusted for
inflation and as established by historical final cost
certifications of all previous housing tax credit allocations for:
(1) the county in which the development is to be
located;
(2) if certifications are unavailable under
Subdivision (1), the metropolitan statistical area in which the
development is to be located; or
(3) if certifications are unavailable under
Subdivisions (1) and (2), the uniform state service region in which
the development is to be located.
SECTION 2. Section 2306.6711(d), Government Code, is
amended to read as follows:
(d) The board shall issue commitments for housing tax
credits with respect to applications on the waiting list as
additional credits become available, taking into consideration any
comments provided by elected officials during the application
evaluation process.
SECTION 3. Sections 2306.6710(f) and (g), Government Code,
are repealed.
SECTION 4. The change in law made by this Act applies only
to an application for a low income housing tax credit filed on or
after the effective date of this Act. An application filed before
the effective date of this Act is governed by the law in effect on
the date the application was filed, and the former law is continued
in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2005.