88R2287 JAM-F
By: Parker S.B. No. 1651
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 Subsection
(e).
(b) In granting reservations to issuers of qualified
residential rental project issues, the board shall give second
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 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 not more than 60 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 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 not more than 60 percent of the area median income;
(3) projects:
(A) in which 100 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 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 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.
(c) [(a-1)] In granting reservations to issuers of
qualified residential rental project issues, the board shall give
third [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 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 not
more than 60 percent of the area median income.
(d) [(a-2)] In granting reservations to issuers of
qualified residential rental project issues, the board shall give
fourth [third] priority to any other qualified residential rental
project.
(e) [(b)] The board may not reserve a portion of the state
ceiling for a first, [or] second, or third 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 31, 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 used to finance each project and requested in an application
for a reservation 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, or third 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.