88R559 JAM-F
By: Gervin-Hawkins H.B. No. 4858
A BILL TO BE ENTITLED
AN ACT
relating to the allocation of low income housing tax credits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2306.6710(b), (f), and (g), 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 rent levels of the units;
(F) [the cost of the development by square foot;
[(G)] the services to be provided to tenants of
the development;
(G) [(H)] 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;
(H) [(I)] 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
(I) [(J)] 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;
(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; and
(4) for an application concerning a development that
is or will be located in a county with a population of 1 million or
more but less than 4 million and that is or will be located not more
than two miles from a veterans hospital, veterans affairs medical
center, or veterans affairs health care center, encourages
applicants to provide a preference for leasing units in the
development to low income veterans.
(f) In evaluating the level of community support for an
application under Subsection (b)(1)(I) [(b)(1)(J)], 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.
(g) If no written statement is received for an application
under Subsection (b)(1)(I) [(b)(1)(J)], the department shall use
the maximum number of points that could have been awarded under that
paragraph to increase the maximum number of points that may be
awarded for that application under Subsection (b)(1)(B). If
awarding points under Subsection (b)(1)(B)(iii), the department
shall reallocate the points from the scoring category provided by
Subsection (b)(1)(I) [(b)(1)(J)] equally between the political
subdivisions described by Subsection (b)(1)(B)(iii). In awarding
points transferred under this subsection from the scoring category
provided by Subsection (b)(1)(I) [(b)(1)(J)] to the scoring
category provided by Subsection (b)(1)(B), the department shall
award:
(1) positive points for positive resolutions adopted;
(2) negative points for negative resolutions adopted;
and
(3) zero points for neutral resolutions adopted.
SECTION 2. Section 2306.6711(b), Government Code, is
amended to read as follows:
(b) Not later than the deadline specified in the qualified
allocation plan, the board shall issue commitments for available
housing tax credits based on the application evaluation process
provided by Section 2306.6710. The board may not allocate to an
applicant housing tax credits in any unnecessary amount, as
determined by the department's underwriting policy and by federal
law, and in any event may not allocate to the applicant housing tax
credits in an amount greater than $4 [$3] million in a single
application round or to an individual development more than $2
million in a single application round.
SECTION 3. Section 2306.6725(b), Government Code, is
amended to read as follows:
(b) The department shall provide appropriate incentives as
determined through the qualified allocation plan to reward
applicants who agree to:
(1) equip the development that is the basis of the
application with energy saving devices that meet the standards
established by the state energy conservation office; or
(2) provide to a qualified entity, in a land use
restriction agreement in accordance with Section 2306.6726, a right
of first refusal to purchase the development at the minimum price
provided in, and in accordance with the requirements of, Section
42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section
42(i)(7))[; and
[(2) locate the development in a census tract in which
there are no other existing developments supported by housing tax
credits].
SECTION 4. The change in law made by this Act 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 is based on the 2024 qualified
allocation plan or a subsequent plan adopted by the governing board
of the department. An application that is submitted during an
application cycle that is based on an earlier qualified allocation
plan 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.
SECTION 5. This Act takes effect September 1, 2023.