81R28549 JAM-D

By: Davis of Dallas H.B. No. 3171

Substitute the following for H.B. No. 3171:

By: Gutierrez C.S.H.B. No. 3171

A BILL TO BE ENTITLED

AN ACT

relating to the duties and programs of the Texas Department of Housing and Community Affairs.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2306.001, Government Code, is amended to read as follows:

Sec. 2306.001. PURPOSES. The purposes of the department are to:

(1) assist local governments in:

(A) providing essential public services for their residents; and

(B) overcoming financial, social, and environmental problems;

(2) provide for the housing needs of individuals and families of low, very low, and extremely low income and families of moderate income;

(3) contribute to the preservation, development, and redevelopment of neighborhoods and communities, including cooperation in the preservation of government-assisted housing occupied by individuals and families of very low and extremely low income;

(4) assist the governor and the legislature in coordinating federal and state programs affecting local government;

(5) inform state officials and the public of the needs of local government;

(6) serve as the lead agency for:

(A) addressing at the state level the problem of homelessness in this state;

(B) coordinating interagency efforts to address homelessness; and

(C) addressing at the state level and coordinating interagency efforts to address any problem associated with homelessness, including hunger; [and]

(7) serve as a source of information to the public regarding all affordable housing resources and community support services in the state; and

(8) administer programs to achieve the purposes described by this section and implement procedures to improve the efficiency of those programs and to maximize federal funding.

SECTION 2. Section 2306.041, Government Code, is amended to read as follows:

Sec. 2306.041. IMPOSITION OF PENALTY. The board shall [may] impose an administrative penalty on a person who violates this chapter or a rule or order adopted under this chapter.

SECTION 3. Subchapter D, Chapter 2306, Government Code, is amended by adding Section 2306.085 to read as follows:

Sec. 2306.085. GENERAL ENFORCEMENT AUTHORITY; STUDY. (a) The department shall develop and implement procedures to ensure that all programs administered by the department comply with the requirements of this chapter and applicable federal laws.

(b) The department shall conduct a study to determine whether the creation of new programs or expansion of existing services would improve the department's ability to perform the duties assigned by this chapter.

SECTION 4. Subchapter E, Chapter 2306, Government Code, is amended by adding Section 2306.095 to read as follows:

Sec. 2306.095. FINANCIAL ASSISTANCE FOR LOCAL INITIATIVES REGARDING THE HOMELESS. (a) The department shall provide financial assistance to political subdivisions, housing finance corporations, for-profit corporations, and nonprofit organizations that provide services for individuals and families who are homeless.

(b) Assistance provided under this section must be used only to support local initiatives regarding homeless individuals and families.

(c) The department shall seek any federal funding available for the purposes of the program.

(d) The department may adopt rules to administer this section.

SECTION 5. Section 2306.111(d-1), Government Code, is amended to read as follows:

(d-1) In allocating low income housing tax credit commitments under Subchapter DD, the department shall, before applying the regional allocation formula prescribed by Section 2306.1115, set aside for at-risk developments, as defined by Section 2306.6702, not less than the minimum amount of housing tax credits required under Section 2306.6714. Funds or credits are also not required to be allocated according to the regional allocation formula under Subsection (d) if:

(1) the funds or credits are reserved for contract-for-deed conversions or for set-asides mandated by state or federal law, including the nonprofit set-aside mandated by Section 42(h)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 42(h)(5)), and each contract-for-deed allocation or set-aside allocation equals not more than 10 percent of the total allocation of funds or credits for the applicable program;

(2) the funds or credits are allocated by the department primarily to serve persons with disabilities; or

(3) the funds are housing trust funds administered by the department under Sections 2306.201-2306.206 that are not otherwise required to be set aside under state or federal law and do not exceed $3 million during each application cycle.

SECTION 6. Subchapter F, Chapter 2306, Government Code, is amended by adding Section 2306.122 to read as follows:

Sec. 2306.122. ASSISTANCE FROM AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009. (a) To the extent permitted by federal law, in administering money provided to the department under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), the department shall secure the interests of the state through bonds, retention of ownership interests in the affected properties, or restrictive covenants or liens filed in real property records for the affected properties.

(b) The interests of the state must be secured with respect to the use of federal money described by Subsection (a) until the department and the state do not have any specified liability to repay or recapture that money.

SECTION 7. Section 2306.6703(a), Government Code, is amended to read as follows:

(a) An application is ineligible for consideration under the low income housing tax credit program if:

(1) at the time of application or at any time during the two-year period preceding the date the application round begins, the applicant or a related party is or has been:

(A) a member of the board; or

(B) the director, a deputy director, the director of housing programs, the director of compliance, the director of underwriting, or the low income housing tax credit program manager employed by the department;

(2) the applicant proposes to replace in less than 15 years any private activity bond financing of the development described by the application, unless:

(A) at least one-third of all the units in the development are public housing units or Section 8 project-based units and the applicant proposes to maintain for a period of 30 years or more 100 percent of the [development] units supported by housing tax credits as rent-restricted and exclusively for occupancy by individuals and families earning not more than 50 percent of the area median income, adjusted for family size[; and

[(B) at least one-third of all the units in the development are public housing units or Section 8 project-based units];

(B) the applicable private activity bonds will be redeemed only in an amount consistent with their proportionate amortization; or

(C) if the redemption of the applicable private activity bonds will occur in the first five years of the operation of the development and will reduce the amount of bonds outstanding to less than 50 percent of the cost of the real property plus depreciable basis:

(i) the Bond Review Board determines that there will be money available to fund all other multifamily developments financed by the bonds without requiring any reduction in the financing for those developments;

(ii) the applicable private activity bonds will be redeemed according to underwriting criteria established by the department; and

(iii) the applicable private activity bonds will be redeemed only in an amount necessary to ensure the financial feasibility of the development described by the application;

(3) the applicant proposes to construct a new development that is located one linear mile or less from a development that:

(A) serves the same type of household as the new development, regardless of whether the developments serve families, elderly individuals, or another type of household;

(B) has received an allocation of housing tax credits for new construction at any time during the three-year period preceding the date the application round begins; and

(C) has not been withdrawn or terminated from the low income housing tax credit program; or

(4) the development is located in a municipality or, if located outside a municipality, a county that has more than twice the state average of units per capita supported by housing tax credits or private activity bonds, unless the applicant:

(A) has obtained prior approval of the development from the governing body of the appropriate municipality or county containing the development; and

(B) has included in the application a written statement of support from that governing body referencing this section and authorizing an allocation of housing tax credits for the development.

SECTION 8. Section 2306.6711, Government Code, is amended by amending Subsection (b) and adding Subsection (g) to read as follows:

(b) Not later than the deadline specified in the qualified allocation plan, the board shall issue commitments for available housing tax credits based on the application evaluation process provided by Section 2306.6710. The board may not allocate to an applicant housing tax credits in any unnecessary amount, as determined by the department's underwriting policy and by federal law, and in any event may not, except as permitted by Subsection (g), allocate to the applicant housing tax credits in an amount greater than $3 [$2] million in a single application round.

(g) Beginning in 2012, on January 1 of each even-numbered year, the department may adjust the maximum amount of the allocation prescribed by Subsection (b) by an amount equal to the amount prescribed by that subsection multiplied by the percentage change during the preceding state fiscal biennium in the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, published monthly by the United States Bureau of Labor Statistics, or its successor in function. The department shall publish the new amount in the qualified allocation plan.

SECTION 9. Subchapter DD, Chapter 2306, Government Code, is amended by adding Sections 2306.6736 and 2306.6737 to read as follows:

Sec. 2306.6736. LOW INCOME HOUSING TAX CREDITS FINANCED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009. (a) Except as provided by Subsection (b), a reference in this chapter to the administration of the low income housing tax credit program applies to federally administered money:

(1) received by the department under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), or any similar federal legislation that is enacted on or after January 1, 2009; and

(2) that is required to be allocated by the department in the same manner and subject to the same limitations as allocations of housing tax credits.

(b) Notwithstanding any other provision of this chapter, including Sections 2306.1111 and 2306.6724, the department may establish a separate application procedure for money described by Subsection (a), the application period of which must begin on the date the department begins accepting applications for the money and must continue until all the available money is allocated.

(c) This section expires August 31, 2011.

Sec. 2306.6737. PROHIBITED PRACTICES. (a) Notwithstanding any other law, a development owner of a development supported with a housing tax credit allocation may not:

(1) lock out or threaten to lock out any person residing in the development except by judicial process unless the exclusion results from:

(A) a necessity to perform bona fide repairs or construction work; or

(B) an emergency; or

(2) seize or threaten to seize the personal property of any person residing in the development except by judicial process unless the resident has abandoned the premises.

(b) Each development owner shall:

(1) include a conspicuous provision in the lease agreement prohibiting the owner from engaging in a practice described by Subsection (a); and

(2) remove in the manner specified by department rule any provisions in the lease agreement that are contrary to Subsection (a).

SECTION 10. The Texas Department of Housing and Community Affairs shall adopt rules as necessary to implement and enforce Section 2306.6737, Government Code, as added by this Act, not later than November 1, 2009.

SECTION 11. The changes in law made by this Act in amending Sections 2306.111(d-1), 2306.6703(a), and 2306.6711, Government Code, and adding Section 2306.6736, Government Code, apply only to an application for financial assistance that is 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 that was 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.

SECTION 12. This Act takes effect September 1, 2009.