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SECTION 1. Sections
2306.185(c) and (d), Government Code, are amended to read as follows:
(c) Unless a shorter term
is permitted under federal law, the [The] department shall
require that a recipient of funding maintains the affordability of the
multifamily housing development for households of extremely low, very low,
low, and moderate incomes for the greater of a 30-year period from the date
the recipient takes legal possession of the housing or the remaining term
of the existing federal government assistance. In addition, the agreement
between the department and the recipient shall require the renewal of
rental subsidies if available and if the subsidies are sufficient to
maintain the economic viability of the multifamily development.
(d) The development
restrictions provided by Subsection (a)(1) [(a) and Section
2306.269] are enforceable by [the department, by] tenants of the
development, and [, or by private parties against the initial
owner or any subsequent owner. The department shall require a land use
restriction agreement providing for enforcement of the restrictions by the
department,] a tenant seeking enforcement of the restriction may
[, or a private party that includes the right to] recover reasonable
attorney's fees if the [party seeking] enforcement action [of
the restriction] is successful.
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No
equivalent provision.
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SECTION 2. Section
2306.6713, Government Code, is amended by amending Subsection (a) and
adding Subsection (g) to read as follows:
(a) An applicant may not
transfer an allocation of housing tax credits and a development owner
may not transfer [or] ownership of a development supported with
an allocation of housing tax credits to any person other than an affiliate
unless the applicant obtains the director's prior, written approval of the
transfer.
(g) The transfer of
ownership of a development supported with an allocation of housing tax
credits to an affiliate of the development
owner under this section does not subject the property to a right of
first refusal under Section 2306.6726.
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SECTION 2. Section
2306.6713, Government Code, is amended by amending Subsection (a) and
adding Subsection (g) to read as follows:
(a) An applicant may not
transfer an allocation of housing tax credits and a development owner
may not transfer [or] ownership of a development supported with
an allocation of housing tax credits to any person other than an affiliate
unless the applicant obtains the director's prior, written approval of the
transfer.
(g) The transfer of
ownership of a development supported with an allocation of housing tax
credits under this section does not subject the development to a right of
first refusal under Section 2306.6726 if
the transfer is made to:
(1) a newly formed entity:
(A) that is under common control with the development owner; and
(B) 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; or
(2) a qualified entity, as defined by Section 2306.6726(d)(3).
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SECTION 3. Section
2306.6725(b), Government Code, is amended to read as follows:
(b) The department shall
provide appropriate incentives as determined through the qualified
allocation plan to reward applicants who agree to:
(1) equip the property that is the basis of the
application with energy saving devices that meet the standards established
by the state energy conservation office or to provide to a qualified nonprofit organization or tenant
organization a right of first refusal to purchase the property in the manner provided by
Section 2306.6726 [at the minimum price provided in, and in
accordance with the requirements of, Section 42(i)(7), Internal Revenue
Code of 1986 (26 U.S.C. Section 42(i)(7))]; and
(2) locate the development
in a census tract in which there are no other existing developments
supported by housing tax credits.
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SECTION 4. Section
2306.6725(b), Government Code, is amended to read as follows:
(b) The department shall
provide appropriate incentives as determined through the qualified
allocation plan to reward applicants who agree to:
(1) equip the development [property] that is the basis of the application with
energy saving devices that meet the standards established by the state
energy conservation office or to provide [to
a qualified nonprofit organization or tenant organization] a
right of first refusal to purchase the development
in the manner provided by Section 2306.6726 [property at the minimum price provided in, and in accordance
with the requirements of, Section 42(i)(7), Internal Revenue Code of 1986
(26 U.S.C. Section 42(i)(7))]; and
(2) locate the development
in a census tract in which there are no other existing developments
supported by housing tax credits.
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SECTION 4. Section
2306.6726, Government Code, is amended to read as follows:
Sec. 2306.6726. SALE OF
CERTAIN LOW INCOME HOUSING TAX CREDIT PROPERTY.
(a) An owner of a property subject to [Not later than
two years before the expiration of the compliance period, a recipient of a
low income housing tax credit who agreed to provide] a right of first
refusal under Section 2306.6725 [and] who intends to sell the property at any time after the
expiration of the compliance period shall notify the department of the owner's
[recipient's] intent to sell.
(a-1) After receiving
notice under Subsection (a), the department [The recipient] shall
post on the department's Internet website a notice that the property is
available for [notify qualified nonprofit organizations and tenant
organizations of the opportunity to] purchase by qualified entities
at not less than the minimum purchase price for
a period of 90 days that begins on the date the notice is posted
[the property].
(b) Beginning on the 91st day after the date the department posts
notice under Subsection (a-1), an owner of a property
subject to a right of first refusal [The recipient may:
[(1) during the first
six-month period after notifying the department, negotiate or enter into a
purchase agreement only with a qualified nonprofit organization that is
also a community housing development organization as defined by the federal
home investment partnership program;
[(2) during the second
six-month period after notifying the department, negotiate or enter into a
purchase agreement with any qualified nonprofit organization or tenant
organization; and
[(3) during the year
before the expiration of the compliance period, negotiate or enter into a
purchase agreement with the department or any qualified nonprofit
organization or tenant organization approved by the department.
[(c) Notwithstanding an
agreement] under Section 2306.6725[, a recipient of a low income
housing tax credit] may sell to any purchaser property to which the right of first
refusal [tax credit] applies [to any purchaser after the
expiration of the compliance period] if a qualified entity [nonprofit
organization or tenant organization] does not offer to purchase the property for a price that is at least
equivalent to [at] the minimum purchase price [provided
by Section 42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section
42(i)(7)), and the department declines to purchase the property].
(c) [(d)] In
this section:
(1) [,] "Compliance
[compliance] period" has the meaning assigned by Section
42(i)(1), Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(1)).
(2) "Minimum
purchase price" has the meaning assigned by Section 42(i)(7)(B),
Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)(B)).
(3) "Qualified
entity" means an entity described by Section 42(i)(7)(A), Internal
Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)(A)).
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SECTION 5. Section
2306.6726, Government Code, is amended to read as follows:
Sec. 2306.6726. SALE OF
CERTAIN LOW INCOME HOUSING TAX CREDIT DEVELOPMENTS [PROPERTY].
(a) An owner of a development
subject to [Not later than two years before the expiration of the
compliance period, a recipient of a low income housing tax credit who
agreed to provide] a right of first refusal under Section 2306.6725 [and]
who intends to sell the development
at any time after the expiration of the compliance period [property]
shall notify the department of the owner's [recipient's]
intent to sell and, if applicable, shall
specifically identify to the department any qualified entity that is the
owner's intended recipient of the right of first refusal in the land use
restriction agreement.
(a-1) After receiving
notice under Subsection (a), the department [The recipient]
shall provide to any qualified entity
specifically identified under Subsection (a) notice regarding the owner's
intent to sell the development at not less than the minimum purchase price.
(a-2) In the absence of a specifically identified, qualified
entity under Subsection (a-1), or if the specifically identified, qualified
entity no longer exists, notice that the development is available
for [notify qualified nonprofit organizations and tenant
organizations of the opportunity to] purchase by qualified entities
at not less than the minimum purchase price shall
be:
(1) provided to the tenants of the development by the owner of the
development; and
(2) posted on the department's Internet website [the property].
(a-3) Not later than the 180th day after the date notice is
provided or posted under Subsection (a-1) or (a-2), whichever date is
later, a qualified entity seeking to purchase a development pursuant to the
right of first refusal must submit to the department the terms of the
entity's offer along with evidence of its financial plan to enable the
purchase.
(a-4) The department shall review for reasonableness the terms of
an offer and financial plan submitted under Subsection (a-3).
(b) Beginning on the 181st day after the date the owner provides notice under Subsection (a-2)
or the department posts notice under that subsection, whichever date is later, an owner of a development subject to a right of first
refusal [The recipient may:
[(1) during the first
six-month period after notifying the department, negotiate or enter into a
purchase agreement only with a qualified nonprofit organization that is
also a community housing development organization as defined by the federal
home investment partnership program;
[(2) during the second
six-month period after notifying the department, negotiate or enter into a
purchase agreement with any qualified nonprofit organization or tenant
organization; and
[(3) during the year
before the expiration of the compliance period, negotiate or enter into a
purchase agreement with the department or any qualified nonprofit
organization or tenant organization approved by the department.
[(c) Notwithstanding an
agreement] under Section 2306.6725[, a recipient of a low income
housing tax credit] may sell to any purchaser a development [property] to which the right of first refusal
[tax credit] applies [to any purchaser after the expiration of
the compliance period] if:
(1) a qualified entity
[nonprofit organization or tenant organization] does not offer to
purchase the development for a
price that is at least equivalent to [property at] the minimum purchase
price; or
(2) a qualified entity offers to purchase the development for a
price described by Subdivision (1) but does not complete the purchase
[provided by Section 42(i)(7), Internal Revenue Code of 1986 (26 U.S.C.
Section 42(i)(7)), and the department declines to purchase the property].
(c) The department shall adopt rules and procedures to give effect
to the right of first refusal granted by any land use restriction
agreement.
(d) In this section:
(1) [,] "Compliance
[compliance] period" has the meaning assigned by Section
42(i)(1), Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(1)).
(2) "Minimum
purchase price" has the meaning assigned by Section 42(i)(7)(B),
Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)(B)).
(3) "Qualified
entity" means an entity described by, or
an entity controlled by an entity described by, Section 42(i)(7)(A),
Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)(A)).
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