89R12385 JG-F
By: Moody H.B. No. 2985
A BILL TO BE ENTITLED
AN ACT
relating to the eligibility of certain at-risk developments to
receive low income housing tax credits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2306.6702(a)(5), Government Code, is
amended to read as follows:
(5) "At-risk development" means:
(A) a development that:
(i) has received the benefit of a subsidy in
the form of a below-market interest rate loan, interest rate
reduction, rental subsidy, Section 8 housing assistance payment,
rental supplement payment, rental assistance payment, or equity
incentive under the following federal laws, as applicable:
(a) Sections 221(d)(3) and (5),
National Housing Act (12 U.S.C. Section 1715l);
(b) Section 236, National Housing Act
(12 U.S.C. Section 1715z-1);
(c) Section 202, Housing Act of 1959
(12 U.S.C. Section 1701q);
(d) Section 101, Housing and Urban
Development Act of 1965 (12 U.S.C. Section 1701s);
(e) the Section 8 Additional
Assistance Program for housing developments with HUD-Insured and
HUD-Held Mortgages administered by the United States Department of
Housing and Urban Development as specified by 24 C.F.R. Part 886,
Subpart A;
(f) the Section 8 Housing Assistance
Program for the Disposition of HUD-Owned Projects administered by
the United States Department of Housing and Urban Development as
specified by 24 C.F.R. Part 886, Subpart C;
(g) the Section 8 Housing Assistance
Payments Program for New Construction administered by the United
States Department of Housing and Urban Development as specified by
24 C.F.R. Part 880;
(h) the Section 8 Housing Assistance
Payments Program for Substantial Rehabilitation administered by
the United States Department of Housing and Urban Development as
specified by 24 C.F.R. Part 881;
(i) Sections 514, 515, and 516,
Housing Act of 1949 (42 U.S.C. Sections 1484, 1485, and 1486); or
(j) [(h)] Section 42, Internal
Revenue Code of 1986; and
(ii) is subject to the following
conditions:
(a) the stipulation to maintain
affordability in the contract granting the subsidy is nearing
expiration; or
(b) the HUD-insured or HUD-held
mortgage on the development is eligible for prepayment or is
nearing the end of its term; or
(B) a development that proposes to rehabilitate
or reconstruct housing units that:
(i) receive assistance under Section 9,
United States Housing Act of 1937 (42 U.S.C. Section 1437g) and are
owned by:
(a) a public housing authority; or
(b) a public facility corporation
created by a public housing authority under Chapter 303, Local
Government Code;
(ii) received assistance under Section 9,
United States Housing Act of 1937 (42 U.S.C. Section 1437g) and:
(a) are proposed to be disposed of or
demolished by a public housing authority or a public facility
corporation created by a public housing authority under Chapter
303, Local Government Code; or
(b) have been disposed of or
demolished by a public housing authority or a public facility
corporation created by a public housing authority under Chapter
303, Local Government Code, in the two-year period preceding the
application for housing tax credits; or
(iii) receive assistance or will receive
assistance through the Rental Assistance Demonstration program
administered by the United States Department of Housing and Urban
Development as specified by the Consolidated and Further Continuing
Appropriations Act, 2012 (Pub. L. No. 112-55) and its subsequent
amendments, if the application for assistance through the Rental
Assistance Demonstration program is included in the applicable
public housing plan that was most recently approved by the United
States Department of Housing and Urban Development as specified by
24 C.F.R. Section 903.23.
SECTION 2. Section 2306.6702, Government Code, is amended
by adding Subsection (c) to read as follows:
(c) For purposes of Subsection (a)(5), a development
described by that subdivision is considered an at-risk development
under this subchapter regardless of whether:
(1) the development proposes to newly construct
housing units or rehabilitate or reconstruct housing units at the
same location of any of the original development sites; or
(2) the development proposes to wholly construct or
reconstruct housing units at a location other than the location of
any of the original development sites and the development:
(A) qualifies for points on the opportunity index
under department rule; or
(B) is supported by the applicable governing body
of the municipality or county in which the development is located,
as evidenced by a resolution adopted by the governing body.
SECTION 3. 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 2026 qualified
allocation plan or a subsequent plan adopted by the governing board
of the department under Section 2306.67022, Government Code. 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 4. This Act takes effect September 1, 2025.