H.B. No. 3311
AN ACT
relating to the scoring criteria for an application for a low income
housing tax credit and the allocation of those credits to
developments reserved for elderly persons.
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 2306.6711, Government Code, is amended
by adding Subsections (h) and (i) to read as follows:
(h) Notwithstanding Section 2306.6710(d), and except as
necessary to comply with the nonprofit set-aside required by
Section 42(h)(5), Internal Revenue Code of 1986 (26 U.S.C. Section
42(h)(5)), the board may not allocate to developments reserved for
elderly persons and located in an urban subregion of a uniform state
service region a percentage of the available housing tax credits
allocated to developments located in that subregion that is greater
than the percentage that results from the following formula, unless
there are no other qualified applicants in that region:
MP = [(LEH - ERU)/(TLH - TEU)] X 100
where:
"MP" is the maximum percentage of the available housing tax
credits allocated to developments in the subregion that may be
allocated to developments reserved for elderly persons;
"LEH" is the number of low income elderly households in the
subregion;
"ERU" is the number of existing units reserved for elderly
persons in developments located in the subregion that already
receive housing tax credits;
"TLH" is the total number of low income households in the
subregion; and
"TEU" is the total number of existing units in developments
located in the subregion that already receive housing tax credits.
(i) Subsection (h) applies only to a uniform state service
region that contains a county with a population of more than one
million.
SECTION 3. Section 2306.6725, Government Code, is amended
by amending Subsections (a) and (d) and adding Subsections (e) and
(f) 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) remain affordable to qualified tenants for an
extended, economically feasible period; and
(7) [(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.
(d) For each scoring criterion, the department shall use a
range of points to evaluate the degree to which a proposed project
satisfies the criterion. The department may not award:
(1) a number of points for a scoring criterion that is
disproportionate to the degree to which a proposed project complies
with that criterion; or
(2) to a proposed project for the general population a
number of points for a scoring criterion that is different than the
number of points awarded for that criterion to a proposed project
reserved for elderly persons if the proposed projects comply with
the criterion to the same degree.
(e) In establishing for the 2016 and 2017 qualified
allocation plans the scoring criterion 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, that is
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.
SECTION 4. (a) The change in law made by this Act to
Section 2306.6711, Government Code, applies only to the allocation
of low income housing tax credits for an application cycle that
begins on or after the effective date of this Act. The allocation
of low income housing tax credits for an application cycle that
begins before the effective date of this Act 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.
(b) The change in law made by this Act to Sections 2306.6710
and 2306.6725, Government Code, 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.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3311 was passed by the House on May 8,
2015, by the following vote: Yeas 123, Nays 19, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 3311 on May 28, 2015, by the following vote: Yeas 128, Nays 16,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3311 was passed by the Senate, with
amendments, on May 26, 2015, by the following vote: Yeas 28, Nays
3.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor