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A BILL TO BE ENTITLED
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AN ACT
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relating to prohibiting the allocation of low income housing tax |
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credits for certain developments. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2306.6703(a), Government Code, is |
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amended to read as follows: |
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(a) An application is ineligible for consideration under |
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the low income housing tax credit program if: |
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(1) at the time of application or at any time during |
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the two-year period preceding the date the application round |
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begins, the applicant or a related party is or has been: |
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(A) a member of the board; or |
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(B) the director, a deputy director, the director |
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of housing programs, the director of compliance, the director of |
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underwriting, or the low income housing tax credit program manager |
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employed by the department; |
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(2) the applicant proposes to replace in less than 15 |
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years any private activity bond financing of the development |
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described by the application, unless: |
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(A) at least one-third of all the units in the |
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development are public housing units or Section 8 project-based |
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units and the applicant proposes to maintain for a period of 30 |
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years or more 100 percent of the units supported by housing tax |
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credits as rent-restricted and exclusively for occupancy by |
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individuals and families earning not more than 50 percent of the |
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area median income, adjusted for family size; |
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(B) the applicable private activity bonds will be |
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redeemed only in an amount consistent with their proportionate |
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amortization; or |
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(C) if the redemption of the applicable private |
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activity bonds will occur in the first five years of the operation |
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of the development and complies with Section 42(h)(4), Internal |
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Revenue Code of 1986: |
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(i) on the date the certificate of |
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reservation is issued, the Bond Review Board determines that there |
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is not a waiting list for private activity bonds in the same |
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priority level established under Section 1372.0321 or, if |
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applicable, in the same uniform state service region, as referenced |
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in Section 1372.0231, that is served by the proposed development; |
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and |
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(ii) the applicable private activity bonds |
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will be redeemed according to underwriting criteria, if any, |
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established by the department; |
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(3) the applicant proposes to construct a new |
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development that is located one linear mile or less from a |
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development that: |
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(A) serves the same type of household as the new |
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development, regardless of whether the developments serve |
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families, elderly individuals, or another type of household; |
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(B) has received an allocation of housing tax |
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credits for new construction at any time during the three-year |
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period preceding the date the application round begins; and |
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(C) has not been withdrawn or terminated from the |
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low income housing tax credit program; [or] |
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(4) the development is located in a municipality or, |
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if located outside a municipality, a county that has more than twice |
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the state average of units per capita supported by housing tax |
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credits or private activity bonds, unless the applicant: |
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(A) has obtained prior approval of the |
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development from the governing body of the appropriate municipality |
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or county containing the development; and |
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(B) has included in the application a written |
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statement of support from that governing body referencing this |
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section and authorizing an allocation of housing tax credits for |
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the development; or |
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(5) the development is not located within two miles of |
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a grocery store. |
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SECTION 2. 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 2026 qualified |
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allocation plan or a subsequent plan adopted by the governing board |
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of the department under Section 2306.67022, Government Code. An |
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application that is submitted during an application cycle that is |
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based on an earlier qualified allocation plan is governed by the law |
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in effect on the date the application cycle began, and the former |
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law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2025. |