86R6366 JG-D
 
  By: Watson S.B. No. 545
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the evaluation of applications for certain financial
  assistance administered by the Texas Department of Housing and
  Community Affairs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2306.1114(a), Government Code, is
  amended to read as follows:
         (a)  Not later than the 14th day after the date an
  application or a proposed application for housing funds described
  by Section 2306.111 has been filed, the department shall provide
  written notice of the filing of the application or proposed
  application to the following persons:
               (1)  the United States representative who represents
  the community containing the development described in the
  application;
               (2)  members of the legislature who represent the
  community containing the development described in the application;
               (3)  the presiding officer of the governing body of the
  political subdivision containing the development described in the
  application;
               (4)  any member of the governing body of a political
  subdivision who represents the area containing the development
  described in the application;
               (5)  the superintendent and the presiding officer of
  the board of trustees of the school district containing the
  development described in the application; and
               (6)  any neighborhood organization [organizations] on
  record and in good standing with the secretary of state or, if
  applicable and verifiable, the county or municipality in which the
  development described in the application is to be located and whose
  boundaries contain the proposed development site.
         SECTION 2.  Section 2306.6704(b-1), Government Code, is
  amended to read as follows:
         (b-1)  The preapplication process must require the applicant
  to provide the department with evidence that the applicant has
  notified the following entities with respect to the filing of the
  application:
               (1)  any neighborhood organization [organizations] on
  record and in good standing with the secretary of state or, if
  applicable and verifiable, the county or municipality in which the
  development is to be located and whose boundaries contain the
  proposed development site;
               (2)  the superintendent and the presiding officer of
  the board of trustees of the school district containing the
  development;
               (3)  the presiding officer of the governing body of any
  municipality containing the development and all elected members of
  that body;
               (4)  the presiding officer of the governing body of the
  county containing the development and all elected members of that
  body; and
               (5)  the state senator and state representative of the
  district containing the development.
         SECTION 3.  Section 2306.6705, Government Code, is amended
  to read as follows:
         Sec. 2306.6705.  GENERAL APPLICATION REQUIREMENTS. An
  application must contain at a minimum the following written,
  detailed information in a form prescribed by the board:
               (1)  a description of:
                     (A)  the financing plan for the development,
  including any nontraditional financing arrangements;
                     (B)  the use of funds with respect to the
  development;
                     (C)  the funding sources for the development,
  including:
                           (i)  construction, permanent, and bridge
  loans; and
                           (ii)  rents, operating subsidies, and
  replacement reserves; and
                     (D)  the commitment status of the funding sources
  for the development;
               (2)  if syndication costs are included in the eligible
  basis, a justification of the syndication costs for each cost
  category by an attorney or accountant specializing in tax matters;
               (3)  from a syndicator or a financial consultant of the
  applicant, an estimate of the amount of equity dollars expected to
  be raised for the development in conjunction with the amount of
  housing tax credits requested for allocation to the applicant,
  including:
                     (A)  pay-in schedules; and
                     (B)  syndicator consulting fees and other
  syndication costs;
               (4)  if rental assistance, an operating subsidy, or an
  annuity is proposed for the development, any related contract or
  other agreement securing those funds and an identification of:
                     (A)  the source and annual amount of the funds;
                     (B)  the number of units receiving the funds; and
                     (C)  the term and expiration date of the contract
  or other agreement;
               (5)  if the development is located within the
  boundaries of a political subdivision with a zoning ordinance,
  evidence in the form of a letter from the chief executive officer of
  the political subdivision or from another local official with
  jurisdiction over zoning matters that states that:
                     (A)  the development is permitted under the
  provisions of the ordinance that apply to the location of the
  development; or
                     (B)  the applicant is in the process of seeking
  the appropriate zoning and has signed and provided to the political
  subdivision a release agreeing to hold the political subdivision
  and all other parties harmless in the event that the appropriate
  zoning is denied;
               (6)  if an occupied development is proposed for
  rehabilitation:
                     (A)  an explanation of the process used to notify
  and consult with the tenants in preparing the application;
                     (B)  a relocation plan outlining:
                           (i)  relocation requirements; and
                           (ii)  a budget with an identified funding
  source; and
                     (C)  if applicable, evidence that the relocation
  plan has been submitted to the appropriate local agency;
               (7)  a certification of the applicant's compliance with
  appropriate state and federal laws, as required by other state law
  or by the board;
               (8)  any other information required by the board in the
  qualified allocation plan; and
               (9)  evidence that the applicant has notified the
  following entities with respect to the filing of the application:
                     (A)  any neighborhood organization
  [organizations] on record and in good standing with the secretary
  of state or, if applicable and verifiable, the county or
  municipality in which the development is to be located and whose
  boundaries contain the proposed development site;
                     (B)  the superintendent and the presiding officer
  of the board of trustees of the school district containing the
  development;
                     (C)  the presiding officer of the governing body
  of any municipality containing the development and all elected
  members of that body;
                     (D)  the presiding officer of the governing body
  of the county containing the development and all elected members of
  that body; and
                     (E)  the state senator and state representative of
  the district containing the development.
         SECTION 4.  Section 2306.6710(b), Government Code, is
  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 rent levels of the units;
                     (F)  the cost of the development by square foot;
                     (G)  the services to be provided to tenants of the
  development;
                     (H)  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)  quantifiable community participation with
  respect to the development, evaluated on the basis of written
  statements from any neighborhood organization [organizations] on
  record and in good standing with the secretary of state or, if
  applicable and verifiable, the county or municipality in which the
  development is to be located and whose boundaries contain the
  proposed development site; and
                     (J)  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.
         SECTION 5.  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 is based on the 2020 qualified
  allocation plan or a subsequent plan adopted by the governing board
  of the department under Section 2306.67022, Government Code. An
  application that is submitted during an application cycle that is
  based on an earlier qualified allocation plan is governed by the law
  in effect on the date the application cycle began, and the former
  law is continued in effect for that purpose.
         SECTION 6.  This Act takes effect September 1, 2019.