| 3 | 5 | | |
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| 4 | 6 | | |
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| 5 | 7 | | A BILL TO BE ENTITLED |
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| 6 | 8 | | AN ACT |
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| 7 | 9 | | relating to the requirements for an application for a low income |
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| 8 | 10 | | housing tax credit allocation from the nonprofit set-aside. |
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| 9 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 12 | | SECTION 1. Section 2306.6706(a), Government Code, is |
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| 11 | 13 | | amended to read as follows: |
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| 12 | 14 | | (a) In addition to the information required by Section |
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| 13 | 15 | | 2306.6705, an application for a housing tax credit allocation from |
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| 14 | 16 | | the nonprofit set-aside, as defined by Section 42(h)(5), Internal |
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| 15 | 17 | | Revenue Code of 1986 (26 U.S.C. Section 42(h)(5)), must contain the |
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| 16 | 18 | | following written, detailed information with respect to each |
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| 17 | 19 | | development owner and each general partner of a development owner: |
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| 18 | 20 | | (1) Internal Revenue Service documentation of |
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| 19 | 21 | | designation as a Section 501(c)(3) or 501(c)(4) organization; |
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| 20 | 22 | | (2) evidence that one of the exempt purposes of the |
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| 21 | 23 | | nonprofit organization is to provide low income housing; |
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| 22 | 24 | | (3) a description of the nonprofit organization's |
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| 23 | 25 | | participation in the construction or rehabilitation of the |
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| 24 | 26 | | development and in the ongoing operations of the development; |
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| 25 | 27 | | (4) evidence that the nonprofit organization |
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| 26 | 28 | | prohibits a member of its board of directors, other than a chief |
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| 27 | 29 | | staff member serving concurrently as a member of the board, from |
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| 28 | 30 | | receiving material compensation for service on the board; |
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| 29 | 31 | | (5) a third-party legal opinion stating that the |
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| 30 | 32 | | nonprofit organization is not affiliated with or controlled by a |
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| 31 | 33 | | for-profit organization and the basis for that opinion; |
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| 32 | 34 | | (6) a copy of the nonprofit organization's most recent |
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| 33 | 35 | | audited financial statement; |
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| 34 | 36 | | (7) a list of the names and home addresses of members |
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| 35 | 37 | | of the board of directors of the nonprofit organization; |
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| 36 | 38 | | (8) a third-party legal opinion stating that the |
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| 37 | 39 | | nonprofit organization is eligible under Subsection (b) for a |
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| 38 | 40 | | housing tax credit allocation from the nonprofit set-aside and the |
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| 39 | 41 | | basis for that opinion; and |
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| 40 | 42 | | (9) evidence that a majority of the members of the |
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| 41 | 43 | | nonprofit organization's board of directors principally reside[: |
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| 42 | 44 | | [(A)] in this state[, if the development is |
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| 43 | 45 | | located in a rural area; or |
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| 44 | 46 | | [(B) not more than 90 miles from the development |
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| 45 | 47 | | in the community in which the development is located, if the |
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| 46 | 48 | | development is not located in a rural area]. |
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| 47 | 49 | | SECTION 2. The change in law made by this Act applies only |
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| 48 | 50 | | to an application for low income housing tax credits that is |
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| 49 | 51 | | submitted to the Texas Department of Housing and Community Affairs |
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| 50 | 52 | | during an application cycle that is based on the 2022 qualified |
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| 51 | 53 | | allocation plan or a subsequent plan adopted by the governing board |
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| 52 | 54 | | of the department under Section 2306.67022, Government Code. An |
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| 53 | 55 | | application that is submitted during an application cycle that is |
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| 54 | 56 | | based on an earlier qualified allocation plan is governed by the law |
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| 55 | 57 | | in effect on the date the application cycle began, and the former |
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| 56 | 58 | | law is continued in effect for that purpose. |
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| 57 | 59 | | SECTION 3. This Act takes effect September 1, 2021. |
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