By: Watson S.B. No. 1316
 
 
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 (f), 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 a resolution
  concerning the development that is voted on and adopted by the
  following, as applicable:
                           (i)  the governing body of a municipality in
  which the proposed development site is to be located;
                           (ii)  subject to Subparagraph (iii), the
  commissioners court of a county in which the proposed development
  site is to be located, if the proposed site is to be located in an
  area of a county that is not part of a municipality; or
                           (iii)  the commissioners court of a county
  in which the proposed development site is to be located and the
  governing body of the applicable municipality, if the proposed site
  is to be located in the extraterritorial jurisdiction of a
  municipality;
                     (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 rent levels of the units;
                     (F) [(G)]  the cost of the development by square
  foot;
                     (G) [(H)]  the services to be provided to tenants
  of the development;
                     (H) [(I)]  whether, at the time the complete
  application is submitted or at any time within the two-year period
  preceding the date of submission, the proposed development site is
  located in an area declared to be a disaster under Section 418.014;
                     (I) [(J)]  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; and
                     (J) [(K)]  the level of community support for the
  application, evaluated on the basis of a written statement from the
  state representative who represents the district containing the
  proposed development site;
               (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; and
               (3)  encourages applicants to provide free notary
  public service to the residents of the developments for which the
  allocation of housing tax credits is requested.
         (f)  In evaluating the level of community support for an
  application under Subsection (b)(1)(J) [(b)(1)(K)], the department
  shall award:
               (1)  positive points for positive written statements
  received;
               (2)  negative points for negative written statements
  received; and
               (3)  zero points for neutral statements received.
         SECTION 2.  Section 2306.6725, Government Code, is amended
  by amending Subsection (a) and adding Subsections (e), (f), and (g)
  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)  demonstrate support from local political
  subdivisions based on the subdivisions' commitment of development
  funding;
               (6)  rehabilitate or adaptive reuse a historic building
  as part of the development;
               (7)  remain affordable to qualified tenants for an
  extended, economically feasible period; and
               (8) [(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.
         (e)  In establishing the scoring criterion in the 2016 and
  2017 qualified allocation plans related to the commitment of
  development funding by local political subdivisions, the
  department shall significantly reduce for each place regardless of
  population the amount in funding per low income unit required for a
  proposed project to receive the applicable number of points for
  that criterion.  After the reduction, the amount of required
  funding may be a de minimis amount.
         (f)  Subsection (e) and this subsection expire September 1,
  2019.
         (g)  The department may not award points for the
  rehabilitation of a historic building under Subsection (a)(6) to
  more than two projects in the same application cycle.
         SECTION 3.  Section 2306.004(4-a), Government Code, is
  repealed.
         SECTION 4.  The change in law made by this Act applies only
  to an application for low income housing tax credits 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 is 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 5.  This Act takes effect September 1, 2015.