81R30143 JAM-F
By: Menendez H.B. No. 563
Substitute the following for H.B. No. 563:
By: Alvarado C.S.H.B. No. 563
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 organizations on record with the
state, municipality, or county in which the development described
in the application is to be located and whose boundaries contain the
proposed development site.
SECTION 2. Section 2306.6703, Government Code, is amended
to read as follows:
Sec. 2306.6703. INELIGIBILITY FOR CONSIDERATION. (a) An
application is ineligible for consideration under the low income
housing tax credit program if:
(1) at the time of application or at any time during
the two-year period preceding the date the application round
begins, the applicant or a related party is or has been:
(A) a member of the board; or
(B) the director, a deputy director, the director
of housing programs, the director of compliance, the director of
underwriting, or the low income housing tax credit program manager
employed by the department;
(2) the applicant proposes to replace in less than 15
years any private activity bond financing of the development
described by the application, unless:
(A) the applicant proposes to maintain for a
period of 30 years or more 100 percent of the development units
supported by housing tax credits as rent-restricted and exclusively
for occupancy by individuals and families earning not more than 50
percent of the area median income, adjusted for family size; [and]
(B) at least one-third of all the units in the
development are public housing units or Section 8 project-based
units; or
(C) the proceeds of the private activity bond
financing will only be redeemed in an amount consistent with their
proportionate amortization; or
(D) the proceeds of the private activity bond
financing will only be redeemed in an amount necessary to ensure the
financial feasibility of the proposal described by the application
and according to underwriting criteria established by the
department and provided that such redemption to the extent that it
reduces the bond amount to less than 50 percent of the cost of the
land plus depreciable basis in the first five years of operation is
allowed only if the Bond Review Board has determined that there
remain sufficient funds to fund all other mutlifamily applications
for such bonds that do not call for such a reduction;
(3) unless the applicant obtains approval of the
development from the governing body of the appropriate municipality
or county containing the development, the applicant proposes to
develop [construct] a new construction development that is located
one linear mile or less from a development that:
(A) serves the same type of household as the new
development[, regardless of whether the developments serve
families, elderly individuals, or another type of household];
(B) has received an allocation of housing tax
credits for new construction at any time during the three-year
period preceding the date the application round begins; and
(C) has not been withdrawn or terminated from the
low income housing tax credit program; or
(4) the development is located in a municipality or,
if located outside a municipality, a county that has more than twice
the state average of units per capita supported by housing tax
credits or private activity bonds, unless the applicant:
(A) obtains [has obtained prior] approval of the
development from the governing body of the appropriate municipality
or county containing the development; and
(B) provides, not later than the 30th day before
the date the board first meets to consider applications for an
allocation of housing tax credits, [has included in the
application] a written statement of support from that governing
body referencing this section and authorizing an allocation of
housing tax credits for the development.
(b) Subsections (a)(2), (3), and (4) do [Subsection (a)(3)
does] not apply to a development:
(1) that is using:
(A) federal HOPE VI funds or other similar funds
received through the United States Department of Housing and Urban
Development to assist in the preservation, through same-site
reconstruction or rehabilitation, of distressed federally assisted
housing;
(B) locally approved funds received from a public
improvement district or a tax increment financing district;
(C) funds provided to the state under the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
Section 12701 et seq.); or
(D) funds provided to the state and participating
jurisdictions under the Housing and Community Development Act of
1974 (42 U.S.C. Section 5301 et seq.); or
(2) that is located in a county with a population of
less than one million[;
[(3) that is located outside of a metropolitan
statistical area; or
[(4) that a local government where the project is to be
located has by vote specifically allowed the construction of a new
development located within one linear mile or less from a
development under Subsection (a)].
SECTION 3. 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 organizations on record with the
state, municipality, or county 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 4. 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 organizations on record
with the state, municipality, or county 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 5. 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 written
statements from any neighborhood organizations on record with the
state, municipality, or county in which the development is to be
located and whose boundaries contain the proposed development site;
(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 level of community support for the
application, evaluated on the basis of written statements from the
state representative or the state senator that represents the
district containing the proposed development site;
(G) the rent levels of the units;
(H) the cost of the development by square foot;
(I) the services to be provided to tenants of the
development; and
(J) 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;
(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 6. Section 2306.6711(f), Government Code, is
amended to read as follows:
(f) The board may allocate housing tax credits to
developments [more than one development] in a single community that
are or will be located one linear mile or less from each other, as
defined by department rule, in the same calendar year [only] if:
(1) the community is located in a county with a
population of one million or less;
(2) one or more of the allocations involves the
rehabilitation of existing developments and not more than one of
the allocations involves new construction; or
(3) the developments each serve a different type of
household from the other [the developments are or will be located
more than one linear mile apart]. [This subsection applies only to
communities contained within counties with populations exceeding
one million.]
SECTION 7. The changes in law made by this Act relating to
applications for financial assistance administered by the Texas
Department of Housing and Community Affairs apply only to an
application filed on or after the effective date of this Act. An
application filed before the effective date of this Act is governed
by the law in effect on the date the application was filed, and the
former law is continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2009.