86R24624 JAM-D
By: Howard, Frullo H.B. No. 2206
Substitute the following for H.B. No. 2206:
By: Howard C.S.H.B. No. 2206
A BILL TO BE ENTITLED
AN ACT
relating to private activity bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 1372.001(1) and (2), Government Code,
are amended to read as follows:
(1) "Additional state ceiling" means authorization
under federal law for the issuance of bonds that are tax-exempt
private activity bonds subject to the limits imposed by Section
146, Internal Revenue Code (26 U.S.C. Section 146), in an amount in
addition to the state ceiling[, including the additional tax-exempt
private activity bonds authorized by Section 3021 of the Housing
and Economic Recovery Act of 2008 (Pub. L. No. 110-289)].
(2) "Bonds" means all obligations, including bonds,
certificates, or notes, that are:
(A) authorized to be issued by:
(i) the constitution or a statute of this
state; or
(ii) the charter of a home-rule
municipality; and
(B) either:
(i) subject to the limitations of Section
146, Internal Revenue Code (26 U.S.C. Section 146); or
(ii) with respect to Subchapter D,
otherwise entitled to a federal subsidy only if designated for the
exemption, credit, or other subsidy, or allocated a portion of a
limited amount of obligations for which the exemption, credit, or
other subsidy is authorized, by this state or an applicable
official or by an issuer to which this state or the applicable
official has made an allocation, including exemptions, credits, and
other subsidies authorized by[:
[(a) the Heartland Disaster Tax
Relief Act of 2008 (Pub. L. No. 110-343), regarding Hurricane Ike
disaster area bonds;
[(b) the American Recovery and
Reinvestment Act of 2009 (Pub. L. No. 111-5); or
[(c)] any [other] federal law
authorizing a federal subsidy.
SECTION 2. Sections 1372.002(a) and (c), Government Code,
are amended to read as follows:
(a) For purposes of this chapter, a project is:
(1) an eligible facility or facilities that are
proposed to be financed, in whole or in part, by an issue of
qualified residential rental project bonds;
(2) in connection with an issue of qualified mortgage
bonds [or qualified student loan bonds], the providing of financial
assistance to qualified mortgagors [or students] located in all or
any part of the jurisdiction of the issuer; [or]
(3) in connection with an issue of qualified student
loan bonds:
(A) if the issuer is the Texas Higher Education
Coordinating Board, the provision of financial assistance to
students; or
(B) if an issuer is authorized by Section 53B.47,
Education Code, the provision of guaranteed student loans or
alternative education loans that satisfy the requirements of
Section 53B.47(b), Education Code; or
(4) an eligible facility or facilities that are
proposed to be financed, in whole or in part, by an issue of bonds
other than bonds described by Subdivision (1), [or] (2), or (3).
(c) For purposes of Subsection (a)(1), an application under
this chapter may include either the rehabilitation or new
construction, or both the rehabilitation and new construction, of
qualified residential rental facilities located at multiple sites
and with respect to which 51 percent or more of the residential
units are located:
(1) in a county with a population of less than 100,000
[75,000]; or
(2) in a county in which the median income is less than
the median income for the state, provided that the units are located
in that portion of the county that is not included in a metropolitan
statistical area containing one or more projects that are proposed
to be financed, in whole or in part, by an issuance of bonds.
SECTION 3. Section 1372.006(a), Government Code, is amended
to read as follows:
(a) An application for a reservation under Subchapter B or a
carryforward designation under Subchapter C must be accompanied by
a nonrefundable fee in the amount of $500, except that:
(1) for projects that include multiple facilities
authorized under Section 1372.002(e), the application must be
accompanied by a nonrefundable fee in an amount of $500 for each
facility included in the application for the project;
(2) for issuers of qualified residential rental
project bonds the application must be accompanied by a
nonrefundable fee of $5,000, of which the board shall retain $1,000
to offset the costs of the private activity bond allocation program
and the administration of that program and of which the board shall
transfer $4,000 through an interagency agreement to the Texas
Department of Housing and Community Affairs for use in the
affordable housing research and information program as provided by
Section 2306.259; and
(3) for a [combined] project that includes multiple
qualified residential rental projects authorized under Section
1372.002(f), the application must be accompanied by a nonrefundable
fee in an amount of $5,000 for each qualified residential rental
project included in the application for the [combined] project,
with a maximum total fee of $25,000. The [the total amount of which
the] board shall retain 20 percent to offset the costs of the
private activity bond allocation program and the administration of
that program. The [and of which the] board shall transfer 80
percent through an interagency agreement to the Texas Department of
Housing and Community Affairs for use in the affordable housing
research and information program as provided by Section 2306.259.
SECTION 4. Section 1372.022(a), Government Code, is amended
to read as follows:
(a) If the state ceiling is computed on the basis of $75 per
capita or a greater amount, before August 15 of each year:
(1) 32.25 [28.0] percent of the state ceiling is
available exclusively for reservations by issuers of qualified
mortgage bonds;
(2) 10.0 [8] percent of the state ceiling is available
exclusively for reservations by issuers of state-voted issues;
(3) 2.0 percent of the state ceiling is available
exclusively for reservations by issuers of qualified small issue
bonds and enterprise zone facility bonds;
(4) 26.25 [22.0] percent of the state ceiling is
available exclusively for reservations by issuers of qualified
residential rental project bonds; and
(5) [10.5 percent of the state ceiling is available
exclusively for reservations by issuers of qualified student loan
bonds authorized by Section 53B.47, Education Code, that are
nonprofit corporations able to issue a qualified scholarship
funding bond as defined by Section 150(d)(2), Internal Revenue Code
(26 U.S.C. Section 150(d)(2)); and
[(6)] 29.5 percent of the state ceiling is available
exclusively for reservations by any other issuer of bonds that
require an allocation.
SECTION 5. Section 1372.0231(b), Government Code, as
amended by Chapters 1329 (S.B. 1664) and 330 (S.B. 264), Acts of the
78th Legislature, Regular Session, 2003, is reenacted and amended
to read as follows:
(b) With respect to the amount of the state ceiling set
aside under Subsection (a)(1), the board shall grant reservations
at the direction of the Texas Department of Housing and Community
Affairs as provided by Section 2306.359 and in a manner that ensures
that[:
[(1)] the set-aside amount is used for proposed
projects that are located throughout the state[; and
[(2) not more than 50 percent of the set-aside amount
is used for proposed projects that are located in qualified census
tracts as defined by Section 143(j), Internal Revenue Code of
1986].
SECTION 6. Sections 1372.0231(d), (g), and (i), Government
Code, are amended to read as follows:
(d) Except as provided by Subsection (i), before March [May]
1, the board shall apportion the amount of the state ceiling set
aside under Subsection (a)(2) among the uniform state service
regions according to the percentage of the state's population that
resides in each of those regions.
(g) On or after March [May] 1, the board may not grant
available reservations to housing finance corporations described
by Subsection (a) based on uniform state service regions or any
segments of those regions.
(i) Before March [May] 1, the board shall apportion the
amount of the state ceiling set aside under Subsection (a)(2) only
among uniform state service regions with respect to which an issuer
has submitted an application for a reservation of the state ceiling
[on or] before March 1.
SECTION 7. Sections 1372.024(a) and (b), Government Code,
are amended to read as follows:
(a) If, before January 2, applications received for
reservations for state-voted issues total more than 10 [eight]
percent of the available state ceiling for that program year, the
percentage of state-voted ceiling requested that is more than 10
[eight] percent of the state ceiling:
(1) is removed from the state ceiling available to
other issuers on January 2; and
(2) is available for those applications for
reservations for state-voted issues.
(b) The amount removed under Subsection (a) may not exceed
10 [eight] percent of the state ceiling.
SECTION 8. Section 1372.026(b), Government Code, is amended
to read as follows:
(b) A housing finance corporation may not receive an
allocation for the issuance of qualified mortgage bonds in an
amount that exceeds the greater of:
(1) $50 [$40] million; or
(2) 1.70 percent of the state ceiling.
SECTION 9. Sections 1372.0261(d) and (g), Government Code,
are amended to read as follows:
(d) A housing finance corporation may not be penalized under
Subsection (c) if:
(1) the corporation fails to use:
(A) bond proceeds recycled from previous
allocations of the state ceiling; or
(B) taxable bond proceeds; [or]
(2) as the result of an issuance of bonds, the
corporation's utilization percentage is 80 percent or greater; or
(3) the application is received after July 14.
(g) An issuer that has carryforward available from the
additional state ceiling [created by the Housing and Economic
Recovery Act of 2008 (Pub. L. No. 110-289)] is not restricted by
project limits for the state ceiling. An issuer who uses the
carryforward to issue qualified mortgage bonds or mortgage credit
certificates is not subject to the utilization percentage
calculation in determining the amount of the issuer's reservation
request.
SECTION 10. Section 1372.0281, Government Code, is amended
to read as follows:
Sec. 1372.0281. INFORMATION REQUIRED OF ISSUERS OF CERTAIN
QUALIFIED STUDENT LOAN BONDS. (a) An issuer of qualified student
loan bonds authorized by Section 53B.47 [53.47], Education Code,
shall provide to the board together with its application for a
reservation information required by board rule.
(b) The board may require an issuer described by Subsection
(a) to provide information with its application, or to supplement
the application with information, that includes:
(1) financial statements;
(2) portfolio amounts;
(3) default rates;
(4) descriptions of how bond proceeds [student loans]
are being used or spent; and
(5) other information required by the board [about the
issuer's client agencies].
SECTION 11. Sections 1372.031(a) and (b), Government Code,
are amended to read as follows:
(a) Except as provided by Subsection (b) and subject to
Sections 1372.0321, 1372.0231, and 1372.035(c), if, on or before
October 20, more than one issuer in a category described by Section
1372.022(a)(2), (3), (4), or (5) [(6)] applies for a reservation of
the state ceiling for the next program year, the board shall grant
reservations in that category in the order determined by the board
by lot.
(b) Until August 1 of the program year, within the category
described by Section 1372.022(a)(5) [1372.022(a)(6)], the board
shall grant priority to the Texas Economic Development Bank for
projects that the Texas Economic Development and Tourism Office
determines meet the governor's criteria for funding from the Texas
Enterprise Fund. Notwithstanding the priority, the Texas Economic
Development Bank may not receive an amount greater than one-sixth
of the portion of the state ceiling available under Section
1372.022(a)(5) [1372.022(a)(6)] on January 1 of the program year.
SECTION 12. Sections 1372.033(a), (d), and (g), Government
Code, are amended to read as follows:
(a) In this section, "qualified nonprofit corporation" [:
[(1) "Qualified nonprofit corporation"] has the
meaning assigned by Section 53B.02(11), Education Code.
[(2) "Student loan bond allocation" means the total
amount of the allocation for private activity bonds under Section
1372.022(a)(5) for a program year divided by the number of
qualified nonprofit corporation applicants that comply with all
applicable application requirements for that year.]
(d) Each qualified nonprofit corporation that applies for a
student loan bond allocation in compliance with all applicable
application requirements for a program year is entitled to receive
a student loan bond allocation prioritized in the order that the
application was received by the board for that year.
(g) A qualified nonprofit corporation that receives a
student loan bond allocation may not:
(1) transfer the allocation to another entity; or
(2) loan to another entity, other than a qualified
borrower, [student] proceeds of bonds issued under the allocation.
SECTION 13. Section 1372.037(a), Government Code, is
amended to read as follows:
(a) Before [Except as provided by Subsection (b), before]
August 15 the board may not grant for any single project a
reservation for that year that is greater than:
(1) [$40 million,] if the issuer is an issuer of
qualified mortgage bonds, other than the Texas Department of
Housing and Community Affairs or the Texas State Affordable Housing
Corporation, the greater of:
(A) $50 million; or
(B) 1.70 percent of the available state ceiling;
(2) [$50 million,] if the issuer is an issuer of a
state-voted issue, other than the Texas Higher Education
Coordinating Board, the greater of:
(A) $100 million; or
(B) 3.40 percent of the available state ceiling;
(3) [or $75 million,] if the issuer of a state-voted
issue is the Texas Higher Education Coordinating Board, the greater
of:
(A) $200 million; or
(B) 6.80 percent of the available state ceiling;
(4) if the issuer is an issuer of qualified small issue
bonds and enterprise zone facility bonds, [(3)] the amount to
which the Internal Revenue Code limits issuers of [qualified small
issue bonds and enterprise zone facility bonds, if the issuer is an
issuer of] those bonds;
(5) [(4) the lesser of $20 million or 15 percent of
the amount set aside for reservation by issuers of qualified
residential rental project bonds,] if the issuer is an issuer of
qualified residential rental project [those] bonds, the greater of:
(A) $50 million; or
(B) 1.70 percent of the available state ceiling;
[(5) the amount as prescribed in Sections 1372.033(d),
(e), and (f), if the issuer is an issuer authorized by Section
53B.47, Education Code, to issue qualified student loan bonds;] or
(6) [$50 million,] if the issuer is any other issuer of
bonds that require an allocation, the greater of:
(A) $100 million; or
(B) 3.40 percent of the available state ceiling.
SECTION 14. Sections 1372.042(a), (a-1), (b), and (c),
Government Code, are amended to read as follows:
(a) An issuer other than an issuer of qualified residential
rental project bonds, an issuer of state-voted issues, a qualified
nonprofit corporation issuer of qualified student loan bonds, or an
issuer of qualified mortgage bonds shall close on the bonds for
which the reservation was granted not later than the 150th [120th]
day after the reservation date.
(a-1) An issuer of qualified residential rental project
bonds shall close on the bonds for which the reservation was granted
not later than the 180th [150th] day after the reservation date. If
an issuer of qualified residential rental project bonds fails to
close on the bonds for which a reservation was granted, the issuer
shall pay the full closing fee provided by Section 1372.006(b) if
the application is not withdrawn before the 150th [120th] day after
the reservation date.
(b) An issuer of state-voted issues, a qualified nonprofit
corporation issuer of qualified student loan bonds, or an issuer of
qualified mortgage revenue bonds shall close on the bonds for which
the reservation was granted not later than the 210th [180th] day
after the reservation date.
(c) Notwithstanding Subsections (a), (a-1), and (b), if the
150-day [120-day] period, the 180-day [150-day] period, or the
210-day [180-day] period, as applicable, expires on or after
December 24 of the year in which the reservation was granted, the
issuer shall close on the bonds before December 24, except that if
the applicable period expires after December 31 of that year, the
issuer may notify the board in writing before December 24 of the
issuer's election to carry forward the reservation and of the
issuer's expected bond closing date. In compliance with the
requirements of Section 146(f), Internal Revenue Code of 1986, the
board shall file in a timely manner a carryforward election with
respect to any bonds expected to close after December 31 to permit
the bonds to close by the expected date, except that the board may
not file the carryforward election after February 15 of the year
following the year in which the reservation was granted. The grant
of the reservation for the balance of the 150-day [120-day] period,
the 180-day [150-day] period, or the 210-day [180-day] period, as
applicable, is automatically and immediately reinstated on the
board's filing of a carryforward election with respect to the
reservation.
SECTION 15. Section 1372.043, Government Code, is amended
to read as follows:
Sec. 1372.043. CANCELLATION OF RESERVATION ON ISSUER'S
FAILURE TO TIMELY CLOSE ON BONDS. If an issuer does not close on the
issuer's bonds as required by Section 1372.042:
(1) the reservation for the issue is canceled; and
(2) for the period beginning on the reservation date
and ending on the 150th day, the 180th day, or the 210th day after
the reservation date, as applicable under Section 1372.042, or on
the 210th day after the reservation date if the issuer is an issuer
of qualified mortgage bonds:
(A) no issuer may submit an application for a
reservation for the same project; and
(B) the issuer is eligible for a carryforward
designation for the project only as provided by Subchapter C.
SECTION 16. Section 1372.069, Government Code, is amended
by amending Subsection (c) and adding Subsection (e) to read as
follows:
(c) An issuer may [not] apply for the carryforward
designation of an amount that is not more [greater] than the greater
of:
(1) $50 million; or
(2) 1.70 percent of the available state ceiling.
(e) A carryforward designation granted under this section
must comply with the Internal Revenue Code of 1986.
SECTION 17. Section 1372.073, Government Code, is amended
to read as follows:
Sec. 1372.073. DESIGNATION BY BOARD OF UNENCUMBERED STATE
CEILING. Notwithstanding any other provision of this chapter, the
board on the last business day of the year may assign as
carryforward to a state agency or to an issuer that was created to
act on behalf of this state [agencies] at the [their] request of the
issuer and in the order received any state ceiling that is not
reserved or designated as carryforward and for which no application
for carryforward is pending.
SECTION 18. Subchapter C, Chapter 1372, Government Code, is
amended by adding Section 1372.074 to read as follows:
Sec. 1372.074. REASSIGNMENT OF CARRYFORWARD DESIGNATION.
(a) After one year from the initial carryforward designation, an
issuer may elect to reassign all or part of the carryforward
designation to a new project if the issuer provides:
(1) the designation on a form described by Section
1372.070;
(2) a written request signed by an authorized
representative of the issuer;
(3) the issuing board resolution authorizing the
carryforward designation reassignment with an original signature
by an officer of the issuer;
(4) applicable fees under Section 1372.006;
(5) an opinion of legal counsel stating that the
carryforward designation reassignment does not conflict with
Section 146, Internal Revenue Code of 1986; and
(6) any other information required by the board.
(b) A new project that is reassigned a carryforward
designation under this section must close within the time period
allowed by the Internal Revenue Code of 1986.
(c) An unutilized carryforward designation available after
a project closes on a carryforward designation under Section
1372.069 may be used by the issuer for other projects subject to
Subsection (b) and Section 1372.061(b).
SECTION 19. Sections 53B.02(2) and (7), Education Code, are
amended to read as follows:
(2) "Alternative education loan" means a loan other
than a guaranteed student loan that is made to a student, a former
student, or any other person [or] for the benefit of the [a] student
or former student for the purpose of financing or refinancing all or
part of the student's or former student's cost of attendance at an
accredited institution. The term includes:
(A) indebtedness that meets the definition of a
qualified education loan under Section 221(d)(1), Internal Revenue
Code of 1986; and
(B) indebtedness used to refinance indebtedness
that meets the definition of a qualified education loan under
Section 221(d)(1), Internal Revenue Code of 1986.
(7) "Cost of attendance" means all costs of a student
or former student incurred in connection with that student's or
former student's [a] program of study at an accredited institution,
as determined by the institution, including tuition and
instructional fees, the cost of room and board, books, computers,
and supplies, and other related fees, charges, and expenses.
SECTION 20. Sections 53B.47(b), (d), and (h), Education
Code, are amended to read as follows:
(b) An authority may cause money to be expended to make or
purchase for its account guaranteed student loans that are
guaranteed by the Texas Guaranteed Student Loan Corporation, other
guaranteed student loans, or alternative education loans that are
executed by or on behalf of students or former students who:
(1) are residents of this state; or
(2) have been admitted to attend or who attended an
accredited institution within this state.
(d) The authority, as a municipal corporation of the state,
is charged with a portion of the responsibility of the state to
provide educational opportunities in keeping with all applicable
state and federal laws. This [Nothing in this] section may not
[shall] be construed as a prohibition against establishing policies
to limit the purchase of guaranteed student loans or alternative
education loans executed by or on behalf of students or former
students who are attending or who attended [attending] school in a
certain geographical area or by or on behalf of students or former
students who are residents of the area.
(h) An alternative education loan may be made under this
section only by or on behalf of a qualified alternative education
loan lender. An alternative education loan may not be in an amount
that exceeds the amount permitted under Section 144(b)(1)(B),
Internal Revenue Code of 1986 [in excess of the difference between
the cost of attendance and the amount of other student assistance to
the student, other than loans under Section 428B(a)(1), Higher
Education Act of 1965 (20 U.S.C. Section 1078-2) (relating to
parent loans), for which the student borrower may be eligible]. An
alternative education loan covered by this subsection is subject to
Chapter 342, Finance Code, as applicable, except that:
(1) the maximum interest rate on the loan may not
exceed the rate permitted under Subchapter A, Chapter 303, Finance
Code; and
(2) application and origination fees may be agreed to
by the parties and assessed at the inception of the loan, provided
that if any such fees constitute additional interest under
applicable law, the effective rate of interest agreed to over the
stated term of the loan may not exceed the rate allowed by
Subchapter A, Chapter 303, Finance Code, and accrued unpaid
interest may be added to unpaid principal at the beginning of the
agreed repayment period at the borrower's option and in accordance
with the terms of the agreement for purposes of determining the
total principal amount due at the inception of the repayment
period.
SECTION 21. The following provisions of the Government Code
are repealed:
(1) Section 1372.001(18);
(2) Sections 1372.0231(c) and (e); and
(3) Section 1372.037(b).
SECTION 22. The change in law made by this Act to Chapter
1372, Government Code, applies to the allocation of the available
state ceiling under that chapter beginning with the 2020 program
year.
SECTION 23. This Act takes effect September 1, 2019.