By: Gervin-Hawkins H.B. No. 5169
A BILL TO BE ENTITLED
AN ACT
relating to the issuance of private activity bonds for qualified
residential rental projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1202.003, Government Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) Notwithstanding Subsection (b), if Section
1372.037(b) applies with respect to the issuance of qualified
residential rental project bonds in a program year, the attorney
general must certify the issuer's compliance with that subsection
before approving the issuance of those bonds.
SECTION 2. Section 1372.0231(f), Government Code, is
amended to read as follows:
(f) In each area described by Subsection (d) [or (e)], the
board shall grant reservations based on the priority levels of
proposed projects as described by Section 1372.0321.
SECTION 3. Section 1372.0321, Government Code, is amended
to read as follows:
Sec. 1372.0321. PRIORITIES FOR RESERVATIONS AMONG ISSUERS
OF QUALIFIED RESIDENTIAL RENTAL PROJECT ISSUES. (a) In granting
reservations to issuers of qualified residential rental project
issues, the board shall give first priority to projects that:
(1) during the three-year period preceding the date of
the application, have closed on a previous reservation of bonds in
accordance with Section 1372.042, as determined based on the date
of allocation of those bonds; and
(2) require a subsequent issuance of bonds to maintain
compliance with the percentage requirement described by Internal
Revenue Code Section 42(h)(4)(B).
(b) In granting reservations to issuers of qualified
residential rental project issues, the board shall give second
priority to projects for which an application was filed on or before
October 20 of the program year 2 years preceding the current program
year and which:
(1) meet one of the requirements of Section
1372.0321(c), and
(2) was not withdrawn and did not receive a bond
reservation, and
(3) for which:
(A) a binding contract to incur significant
expenditures for construction, reconstruction, or rehabilitation
was entered into before submission of the application;
(B) significant expenditures for construction,
reconstruction, or rehabilitation were readily identifiable with
and necessary to carry out a binding contract for the supply of
property or services or the sale of output; or
(C) significant expenditures were paid or
incurred before submission of the application.
(4) In this section, "significant expenditures" means
expenditures that are greater than the lesser of:
(A) $500,000; or
(B) 10 percent of the reasonably anticipated cost
of the project
(c) In granting reservation to issuers of qualified
residential rental project issues, the board shall give third
priority to
(1) projects in which:
(A) 50 percent of the residential units in the
project are:
(i) under the restriction that the maximum
allowable rents are an amount equal to 30 percent of 50 percent of
the area median family income minus an allowance for utility costs
authorized under the federal low-income housing tax credit program;
and
(ii) reserved for families and individuals
earning not more than 50 percent of the area median income; and
(B) the remaining 50 percent of the residential
units in the project are:
(i) under the restriction that the maximum
allowable rents are an amount equal to 30 percent of 6080 percent of
the area median family income minus an allowance for utility costs
authorized under the federal low-income housing tax credit program;
and
(ii) reserved for families and individuals
earning not more than 6080 percent of the area median income;
(2) projects in which:
(A) 15 percent of the residential units in the
project are:
(i) under the restriction that the maximum
allowable rents are an amount equal to 30 percent of 30 percent of
the area median family income minus an allowance for utility costs
authorized under the federal low-income housing tax credit program;
and
(ii) reserved for families and individuals
earning not more than 30 percent of the area median income; and
(B) the remaining 85 percent of the residential
units in the project are:
(i) under the restriction that the maximum
allowable rents are an amount equal to 30 percent of 6080 percent of
the area median family income minus an allowance for utility costs
authorized under the federal low-income housing tax credit program;
and
(ii) reserved for families and individuals
earning not more than 6080 percent of the area median income;
(3) projects:
(A) in which 100 percent of the residential units
in the project are, on average:
(i) under the restriction that the maximum
allowable rents are an amount equal to 30 percent of 60 percent of
the area median family income minus an allowance for utility costs
authorized under the federal low-income housing tax credit program;
and
(ii) reserved for families and individuals
earning, on average, not more than 60 percent of the area median
income; and
(B) which are located in a census tract in which
the median income, based on the most recent information published
by the United States Bureau of the Census, is higher than the median
income for the county, metropolitan statistical area, or primary
metropolitan statistical area in which the census tract is located
as established by the United States Department of Housing and Urban
Development; or
(4) on or after June 1, projects that are located in
counties, metropolitan statistical areas, or primary metropolitan
statistical areas with area median family incomes at or below the
statewide median family income established by the United States
Department of Housing and Urban Development.
(d) [(a-1)] In granting reservations to issuers of
qualified residential rental project issues, the board shall give
fourth [second] priority to projects in which 80 percent or more of
the residential units in the project are:
(1) under the restriction that the maximum allowable
rents are, on average, an amount equal to 30 percent of 60 percent
of the area median family income minus an allowance for utility
costs authorized under the federal low-income housing tax credit
program; and
(2) reserved for families and individuals earning, on
average, not more than 60 percent of the area median income.
(e) [(a-2)] In granting reservations to issuers of
qualified residential rental project issues, the board shall give
fifth [third] priority to any other qualified residential rental
project.
(b) The board may not reserve a portion of the state ceiling
for a first or second priority project described by this section
unless the board receives evidence that an application has been
filed with the Texas Department of Housing and Community Affairs
for the low-income housing tax credit that is available for
multifamily transactions that are at least 51 percent financed by
tax-exempt private activity bonds.
SECTION 4. Section 1372.037, Government Code, is amended by
adding Subsection (b) to read as follows:
(b) This subsection applies only to projects that are
granted a reservation of a portion of the available state ceiling
for a program year under Subsection (a)(5). If for a program year
the total amount of qualified residential rental project bonds for
which reservations are sought exceeds, as of October 20 of the
preceding year, 55.75 percent of the portion of state ceiling
available for that year exclusively for reservations by issuers of
qualified residential rental project bonds under Section
1372.0231(f), the amount of bonds issued to each project may not
exceed 55 percent of the reasonably expected aggregate basis of the
project and the land on which the project is or will be located.
SECTION 5. Section 1372.042(d), Government Code, is amended
to read as follows:
(d) Not later than the fifth business day after the date on
which the bonds are closed, the issuer shall submit to the board:
(1) a written notice stating the delivery date of the
bonds and the principal amount of the bonds issued;
(2) if the project is a project entitled to first, [or]
second, third or fourth priority under Section 1372.0321, evidence
from the Texas Department of Housing and Community Affairs that an
award of low-income housing tax credits has been approved for the
project; and
(3) a certified copy of the document authorizing the
bonds and any other document relating to the issuance of the bonds,
including a statement of the bonds':
(A) principal amount;
(B) interest rate or formula by which the
interest rate is computed;
(C) maturity schedule; and
(D) purchaser or purchasers.
SECTION 6. The change in law made by this Act in adding
Section 1202.003(b-1), Government Code, and in amending Chapter
1372, Government Code, applies to the allocation of the available
state ceiling under Chapter 1372 beginning with the 2024 program
year.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.