BILL ANALYSIS |
C.S.H.B. 3576 |
By: Alvarado |
Urban Affairs |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Interested parties contend that currently there is a disincentive to owners who want to retain and preserve their affordable housing properties and undue restriction on the ability of nonprofit organizations and governmental agencies to acquire and preserve affordable housing properties. In order to enhance the value and viability of affordable housing properties, C.S.H.B. 3576 seeks to amend the applicable law.
|
||||||||||||||||||||
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
|
||||||||||||||||||||
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Texas Department of Housing and Community Affairs in SECTIONS 1 and 5 of this bill.
|
||||||||||||||||||||
ANALYSIS
C.S.H.B. 3576 amends the Government Code to require the Texas Department of Housing and Community Affairs (TDHCA) to adopt rules that provide for the amendment of a land use restriction agreement for certain multifamily rental housing developments, including rules that give the owner of a development the right to amend any existing restriction on the right of first refusal to purchase the property to conform to statutory provisions regarding a sale of certain low income housing tax credit property. The bill requires these rules to require reasonable notice to tenants, a public hearing, and approval by the governing board of TDHCA for any material amendment to a land use restriction agreement.
C.S.H.B. 3576 specifies that each representation made by an applicant to secure a low income housing tax credit allocation that is enforceable by TDHCA and the tenants of the qualified low income housing project development supported with the allocation be a material representation. The bill establishes that a land use restriction agreement that is recorded with respect to such a development, subject to authorized modification and enforcement, is considered to state the development owner's ongoing obligations with regard to the matters addressed in the agreement.
C.S.H.B. 3576 establishes that the transfer of ownership of a development supported with an allocation of low income housing tax credits does not subject the development to a right of first refusal to purchase the development provided to a qualified nonprofit or tenant organization if the transfer is made to certain qualified entities or to a newly formed entity that is under common control with the development owner and the primary purpose of the formation of which is to facilitate the financing of the rehabilitation of the development using assistance administered through a state financing program.
C.S.H.B. 3576 revises statutory provisions establishing procedures for the sale of certain low income housing tax credit developments to require an owner of a development who agreed to provide to a qualified nonprofit or tenant organization a right of first refusal to purchase the development at the minimum purchase price provided under federal law and who intends to sell the development at any time after the expiration of the compliance period to notify TDHCA of the owner's intent to sell and, if applicable, to specifically identify to TDHCA any qualified entity that is the owner's intended recipient of the right of first refusal in the land use restriction agreement. The bill requires TDHCA, after receiving the notice, to provide to any specifically identified qualified entity notice regarding the owner's intent to sell the development at not less than the minimum purchase price. The bill requires notice that the development is available for purchase by qualified entities at not less than the minimum purchase price, in the absence of a specifically identified entity or if that entity no longer exists, to be provided to the tenants of the development by the owner of the development and posted on TDHCA's website. The bill requires a qualified entity seeking to purchase a development pursuant to the right of first refusal, not later than the 180th day after the date such notice is provided or posted, whichever date is later, to submit to TDHCA the terms of the entity's offer along with evidence of its financial plan to enable the purchase. The bill requires TDHCA to review for reasonableness the submitted terms of the offer and financial plan.
C.S.H.B. 3576 authorizes the owner of the development subject to a right of first refusal, beginning on the 181st day after the date the notice regarding a development's availability for purchase by qualified entities at not less than the minimum purchase price is provided or posted, whichever date is later, to sell to any purchaser a development to which the right of first refusal applies if a qualified entity does not offer to purchase the development for a price that is at least equivalent to the minimum purchase price or if a qualified entity offers to purchase the development for such a price but does not complete the purchase. The bill requires TDHCA to adopt rules and procedures to give effect to the right of first refusal granted by any land use restriction agreement. The bill's provisions relating to the transfer of ownership or sale of a development apply to the transfer or sale of a development supported with an allocation of low income housing tax credits issued before, on, or after the bill's effective date.
|
||||||||||||||||||||
EFFECTIVE DATE
September 1, 2015.
|
||||||||||||||||||||
COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 3576 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
|
||||||||||||||||||||
|