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A BILL TO BE ENTITLED
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AN ACT
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relating to the allocation of low income housing tax credits. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 2306.6710(b), (f), and (g), Government |
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Code, are amended to read as follows: |
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(b) If an application satisfies the threshold criteria, the |
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department shall score and rank the application using a point |
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system that: |
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(1) prioritizes in descending order criteria |
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regarding: |
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(A) financial feasibility of the development |
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based on the supporting financial data required in the application |
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that will include a project underwriting pro forma from the |
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permanent or construction lender; |
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(B) quantifiable community participation with |
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respect to the development, evaluated on the basis of a resolution |
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concerning the development that is voted on and adopted by the |
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following, as applicable: |
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(i) the governing body of a municipality in |
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which the proposed development site is to be located; |
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(ii) subject to Subparagraph (iii), the |
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commissioners court of a county in which the proposed development |
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site is to be located, if the proposed site is to be located in an |
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area of a county that is not part of a municipality; or |
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(iii) the commissioners court of a county |
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in which the proposed development site is to be located and the |
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governing body of the applicable municipality, if the proposed site |
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is to be located in the extraterritorial jurisdiction of a |
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municipality; |
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(C) the income levels of tenants of the |
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development; |
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(D) the size and quality of the units; |
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(E) the rent levels of the units; |
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(F) [the cost of the development by square foot; |
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[(G)] the services to be provided to tenants of |
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the development; |
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(G) [(H)] whether, at the time the complete |
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application is submitted or at any time within the two-year period |
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preceding the date of submission, the proposed development site is |
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located in an area declared to be a disaster under Section 418.014; |
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(H) [(I)] quantifiable community participation |
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with respect to the development, evaluated on the basis of written |
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statements from any neighborhood organizations on record with the |
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state or county in which the development is to be located and whose |
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boundaries contain the proposed development site; and |
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(I) [(J)] the level of community support for the |
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application, evaluated on the basis of a written statement from the |
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state representative who represents the district containing the |
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proposed development site; |
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(2) uses criteria imposing penalties on applicants or |
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affiliates who have requested extensions of department deadlines |
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relating to developments supported by housing tax credit |
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allocations made in the application round preceding the current |
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round or a developer or principal of the applicant that has been |
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removed by the lender, equity provider, or limited partners for its |
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failure to perform its obligations under the loan documents or |
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limited partnership agreement; |
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(3) encourages applicants to provide free notary |
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public service to the residents of the developments for which the |
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allocation of housing tax credits is requested; and |
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(4) for an application concerning a development that |
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is or will be located in a county with a population of 1 million or |
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more but less than 4 million and that is or will be located not more |
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than two miles from a veterans hospital, veterans affairs medical |
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center, or veterans affairs health care center, encourages |
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applicants to provide a preference for leasing units in the |
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development to low income veterans. |
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(f) In evaluating the level of community support for an |
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application under Subsection (b)(1)(I) [(b)(1)(J)], the department |
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shall award: |
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(1) positive points for positive written statements |
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received; |
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(2) negative points for negative written statements |
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received; and |
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(3) zero points for neutral statements received. |
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(g) If no written statement is received for an application |
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under Subsection (b)(1)(I) [(b)(1)(J)], the department shall use |
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the maximum number of points that could have been awarded under that |
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paragraph to increase the maximum number of points that may be |
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awarded for that application under Subsection (b)(1)(B). If |
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awarding points under Subsection (b)(1)(B)(iii), the department |
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shall reallocate the points from the scoring category provided by |
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Subsection (b)(1)(I) [(b)(1)(J)] equally between the political |
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subdivisions described by Subsection (b)(1)(B)(iii). In awarding |
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points transferred under this subsection from the scoring category |
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provided by Subsection (b)(1)(I) [(b)(1)(J)] to the scoring |
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category provided by Subsection (b)(1)(B), the department shall |
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award: |
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(1) positive points for positive resolutions adopted; |
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(2) negative points for negative resolutions adopted; |
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and |
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(3) zero points for neutral resolutions adopted. |
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SECTION 2. Section 2306.6711(b), Government Code, is |
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amended to read as follows: |
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(b) Not later than the deadline specified in the qualified |
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allocation plan, the board shall issue commitments for available |
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housing tax credits based on the application evaluation process |
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provided by Section 2306.6710. The board may not allocate to an |
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applicant housing tax credits in any unnecessary amount, as |
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determined by the department's underwriting policy and by federal |
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law, and in any event may not allocate to the applicant housing tax |
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credits in an amount greater than $4 [$3] million in a single |
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application round or to an individual development more than $2 |
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million in a single application round. |
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SECTION 3. Section 2306.6725(b), Government Code, is |
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amended to read as follows: |
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(b) The department shall provide appropriate incentives as |
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determined through the qualified allocation plan to reward |
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applicants who agree to: |
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(1) equip the development that is the basis of the |
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application with energy saving devices that meet the standards |
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established by the state energy conservation office; or |
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(2) provide to a qualified entity, in a land use |
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restriction agreement in accordance with Section 2306.6726, a right |
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of first refusal to purchase the development at the minimum price |
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provided in, and in accordance with the requirements of, Section |
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42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section |
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42(i)(7))[; and |
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[(2) locate the development in a census tract in which |
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there are no other existing developments supported by housing tax |
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credits]. |
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SECTION 4. The change in law made by this Act applies only |
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to an application for low income housing tax credits that is |
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submitted to the Texas Department of Housing and Community Affairs |
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during an application cycle that is based on the 2024 qualified |
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allocation plan or a subsequent plan adopted by the governing board |
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of the department. An application that is submitted during an |
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application cycle that is based on an earlier qualified allocation |
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plan is governed by the law in effect on the date the application |
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cycle began, and the former law is continued in effect for that |
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purpose. |
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SECTION 5. This Act takes effect September 1, 2023. |