Texas 2025 - 89th Regular

Texas House Bill HB4589 Compare Versions

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1	1		By: Cole H.B. No. 4589
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to the operation and functions of the Texas Department of
7	9		Housing and Community Affairs.
8	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	11		SECTION 1. Section 2306.004(3), Government Code, is amended
10	12		to read as follows:
11	13		(3) "Contract for Deed" means a seller-financed
12	14		contract for the conveyance of real property under which:
13	15		(A) legal title does not pass to the purchaser
14	16		until the consideration of the contract is fully paid to the seller;
15	17		and
16	18		(B) the seller's remedy for nonpayment is
17	19		recision or forfeiture or acceleration of any remaining payments
18	20		rather than judicial or nonjudicial foreclosure.
19	21		(3) "Contract for Deed" a seller-financed executory
20	22		contract for the conveyance of real property, as further defined in
21	23		chapter 5, subchapter D, Property Code, under which:
22	24		(A) upon recordation of the contract for deed in
23	25		the county in which the property is located, the contract for deed
24	26		shall be the same as a deed with a vendor's lien. The vendor's lien
25	27		is for the amount of the unpaid contract price, less any lawful
26	28		deductions, and may be enforced by foreclosure sale under Section
27	29		5.066, Property Code, or by judicial foreclosure. A general
28	30		warranty is implied unless otherwise limited by the recorded
29	31		executory contract, and the seller is not required to continue
30	32		insuring the property; and
31	33		(B) if the contract for deed has not been
32	34		recorded, the seller may enforce the remedy of rescission or of
33	35		forfeiture and acceleration as further outlined in Section 5.064
34	36		Property Code against the buyer in default under a contract for
35	37		deed; and
36	38		(C) for purposes of department loan programs,
37	39		satisfaction of this section raises the presumption that ownership
38	40		of a residential property under a contract for deed that has been
39	41		properly recorded as vested in the buyer.
40	42		SECTION 2. Section 2306.004(36), Government Code, is
41	43		amended to read as follows:
42	44		(36) "Urban area" means the area that is located
43	45		within the boundaries of a primary metropolitan statistical area or
44	46		a metropolitan statistical area other than an area described by
45	47		Subdivision (28-a)(B) or eligible for funding as described by
46	48		Subdivision (28-a)(C).
47	49		SECTION 3. Section 2306.057(b), Government Code, is amended
48	50		to read as follows:
49	51		Sec. 2306.057. COMPLIANCE ASSESSMENT REQUIRED FOR PROJECT
50	52		APPROVAL BY BOARD. (a) Before the board approves any project
51	53		application submitted under this chapter, the department, through
52	54		the division with responsibility for compliance matters, shall:
53	55		(1) assess:
54	56		(A) the compliance history in this state of the
55	57		applicant and any affiliate of the applicant with respect to all
56	58		applicable requirements; and
57	59		(B) the compliance issues associated with the
58	60		proposed project; and
59	61		(2) provide to the board a written report regarding
60	62		the results of the assessments described by Subdivision (1).
61	63		(b) The written report described by Subsection (a)(2) must
62	64		be included in the appropriate project file for board and
63	65		department review.may be a summary of any concerns or conditions
64	66		identified in the compliance assessment. Full project files shall
65	67		be made available to the board upon request.
66	68		(c) The board shall fully document and disclose any
67	69		instances in which the board approves a project application despite
68	70		any noncompliance associated with the project, applicant, or
69	71		affiliate.
70	72		(d) In assessing the compliance of the project, applicant,
71	73		or affiliate, the board shall consider any relevant compliance
72	74		information in the department's database created under Section
73	75		2306.081, including compliance information provided to the
74	76		department by the Texas State Affordable Housing Corporation.
75	77		SECTION 4. Section 2306.1112, Government Code, is amended
76	78		to read as follows:
77	79		Sec. 2306.1112. EXECUTIVE AWARD AND REVIEW ADVISORY
78	80		COMMITTEE. (a) The department shall establish an executive award
79	81		and review processadvisory committee to make recommendations to
80	82		the board regarding funding and allocation decisions.
81	83		(b) Prior to making recommendations to the Board, the
82	84		Director shall consult withThe advisory committee must include
83	85		representatives from the department's underwriting and compliance
84	86		functions and from the divisions responsible for administering
85	87		federal housing funds provided to the state under the
86	88		Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
87	89		Section 12701 et seq.) and for administering low income housing tax
88	90		credits.
89	91		(c) The advisory committee is not subject to Chapter 2110.
90	92		(d) expired.
91	93		SECTION 5. Section 2306.1113, Government Code, is amended
92	94		by amending subchapter (a-2) to read as follows:
93	95		Sec. 2306.1113. EX PARTE COMMUNICATIONS. (a) During the
94	96		period beginning on the date project applications are filed in an
95	97		application cycle and ending on the date the board makes a final
96	98		decision with respect to the approval of any application in that
97	99		cycle, a member of the board may not communicate with the following
98	100		persons:
99	101		(1) an applicant or a related party, as defined by
100	102		state law, including board rules, and federal law; and
101	103		(2) any person who is:
102	104		(A) active in the construction, rehabilitation,
103	105		ownership, or control of a proposed project, including:
104	106		(i) a general partner or contractor; and
105	107		(ii) a principal or affiliate of a general
106	108		partner or contractor; or
107	109		(B) employed as a consultant, lobbyist, or
108	110		attorney by an applicant or a related party.
109	111		(a-1) Subject to Subsection (a-2), during the period
110	112		beginning on the date project applications are filed in an
111	113		application cycle and ending on the date the board makes a final
112	114		decision with respect to the approval of any application in that
113	115		cycle, an employee of the department may communicate about an
114	116		application with the following persons:
115	117		(1) the applicant or a related party, as defined by
116	118		state law, including board rules, and federal law; and
117	119		(2) any person who is:
118	120		(A) active in the construction, rehabilitation,
119	121		ownership, or control of the proposed project, including:
120	122		(i) a general partner or contractor; and
121	123		(ii) a principal or affiliate of a general
122	124		partner or contractor; or
123	125		(B) employed as a consultant, lobbyist, or
124	126		attorney by the applicant or a related party.
125	127		(a-2) A communication under Subsection (a-1) may be oral or
126	128		in any written form, including electronic communication through the
127	129		Internet, and must satisfy the following conditions:
128	130		(1) the communication must be restricted to technical
129	131		or administrative matters directly affecting the application; and
130	132		(2) the communication may must occur or be received on
131	133		the premises of the department during established business hours;
132	134		and
133	135		(32) a record of the communication must be maintained
134	136		and included with the application for purposes of board review and
135	137		must contain the following information:
136	138		(A) the date, time, and means of communication;
137	139		(B) the names and position titles of the persons
138	140		involved in the communication and, if applicable, the person's
139	141		relationship to the applicant;
140	142		(C) the subject matter of the communication; and
141	143		(D) a summary of any action taken as a result of
142	144		the communication.
143	145		SECTION 6. Sections 2306.142 and 2306.143, Government Code,
144	146		are repealed.
145	147		SECTION 7. Section 2306.0723, Government Code, is repealed.
146	148		SECTION 8. Subchapter NN, Government Code, is repealed.
147	149		SECTION 9. Section 2306.353, Government Code, is amended by
148	150		adding the following subchapters:
149	151		(d) In this section, "credit agreement" and "obligation"
150	152		have the meanings assigned by Section 1371.001, Government Code.
151	153		(e) Notwithstanding any other statute, the board may
152	154		exercise any of the rights or powers of the governing body of an
153	155		issuer under Chapter 1371, Government Code, and may enter into a
154	156		credit agreement under that chapter. An obligation issued under
155	157		this section is an obligation under Chapter 1371, Government Code,
156	158		but is not required to be rated as required by that chapter.
157	159		SECTION 10. Section 2306.6712, Government Code, is amended
158	160		by amending subchapter (d) to read as follows:
159	161		Sec. 2306.6712. AMENDMENT OF APPLICATION SUBSEQUENT TO
160	162		ALLOCATION BY BOARD. (a) If a proposed modification would
161	163		materially alter a development approved for an allocation of a
162	164		housing tax credit or other multifamily funding, the department
163	165		shall require the applicant to file a formal, written amendment to
164	166		the application on a form prescribed by the department.
165	167		(b) The director shall require the department staff
166	168		assigned to underwrite applications to evaluate the amendment and
167	169		provide an analysis and written recommendation to the board. The
168	170		appropriate monitor under Section 2306.6719 shall also provide to
169	171		the board an analysis and written recommendation regarding the
170	172		amendment.
171	173		(c) The board must vote on whether to approve the amendment.
172	174		The board by vote may reject an amendment and, if appropriate,
173	175		rescind the allocation of housing tax credits and reallocate the
174	176		credits to other applicants on the waiting list required by Section
175	177		2306.6711 if the board determines that the modification proposed in
176	178		the amendment:
177	179		(1) would materially alter the development in a
178	180		negative manner; or
179	181		(2) would have adversely affected the selection of the
180	182		application in the application round.
181	183		(d) Material alteration of a development includes:
182	184		(1) a significant modification of the site plan;
183	185		(2) a modification of the number of units or bedroom
184	186		mix of units;
185	187		(3) a substantive modification of the scope of tenant
186	188		services;
187	189		(4) a reduction of threefive percent or more in the
188	190		square footage of the unitsnet rentable area or common areas;
189	191		(5) a significant modification of the architectural
190	192		design of the development;
191	193		(6) a modification of the residential density of the
192	194		development of at least fiveten percent; and
193	195		(7) any other modification considered significant by
194	196		the boarddirector.
195	197		(e) In evaluating the amendment under this subsection, the
196	198		department staff shall consider whether the need for the
197	199		modification proposed in the amendment was:
198	200		(1) reasonably foreseeable by the applicant at the
199	201		time the application was submitted; or
200	202		(2) preventable by the applicant.
201	203		(f) For housing tax credit developments, Tthisthis section
202	204		shall be administered in a manner that is consistent with Section
203	205		42, Internal Revenue Code of 1986 (26 U.S.C. Section 42).
204	206		SECTION 11. Section 2306.6713 is amended as follows:
205	207		Sec. 2306.6713. HOUSING TAX CREDIT AND OWNERSHIP TRANSFERS
206	208		FOR MULTIFAMILY DEVELOPMENTS. (a) An applicant may not transfer an
207	209		allocation of housing tax credits or ownership of a development
208	210		supported with an allocation of housing tax credits or other
209	211		multifamily program funds from the department to any person other
210	212		than an affiliate unless the applicant obtains the director's
211	213		prior, written approval of the transfer.
212	214		(b) The director may not unreasonably withhold approval of
213	215		the transfer.
214	216		(c) An applicant seeking director approval of a transfer and
215	217		the proposed transferee must provide to the department a copy of any
216	218		applicable agreement between the parties to the transfer, including
217	219		any third-party agreement with the department.
218	220		(d) On request, an applicant seeking director approval of a
219	221		transfer must provide to the department:
220	222		(1) a list of the names of transferees and related
221	223		controlling parties; and
222	224		(2) detailedan explanationinformation describing
223	225		the experience and financial capacity of transferees and related
224	226		parties.
225	227		(e) When a transfer involves the sale of the development to
226	228		a new development owner, theThe development owner or proposed
227	229		transferee shall certify to the director that the tenants in the
228	230		development have been provided at least a 30-day written
229	231		notification of the proposed transfer. The director's approval of
230	232		the transfer may not occur prior to the end of the 30-day
231	233		notification period to the tenants.notified in writing of the
232	234		transfer before the 30th day preceding the date of submission of the
233	235		transfer request to the department.
234	236		(f) Not later than the fifth working day after the dateOnce
235	237		the department receives all necessary information under this
236	238		section, the department shall conduct a qualifications review of a
237	239		transferee to determine:
238	240		(1) the transferee's past compliance with all aspects
239	241		of the low income housing tax credit program or other multifamily
240	242		funding program, including land use restriction agreements; and
241	243		(2) the sufficiency of the transferee's experience
242	244		with developments supported with housing tax credit allocations or
243	245		other multifamily funds from the department.
244	246		(g) The transfer of ownership of a development supported
245	247		with an allocation of housing tax credits under this section does
246	248		not subject the development to a right of first refusal under
247	249		Section 2306.6726 if the transfer is made to a newly formed entity:
248	250		(1) that is under common control with the development
249	251		owner; and
250	252		(2) the primary purpose of the formation of which is to
251	253		facilitate the financing of the rehabilitation of the development
252	254		using assistance administered through a state financing program.
253	255		SECTION 12. Not later than March 1, 2026, the Texas
254	256		Department of Housing and Community Affairs shall adopt the rules
255	257		necessary to implement Section 2306.6712, Chapter 2306, Government
256	258		Code, as amended by this Act.
257	259		SECTION 13. The changes in law made by this Act relating to
258	260		the evaluation of applications for financial assistance
259	261		administered by the Texas Department of Housing and Community
260	262		Affairs apply only to an application submitted on or after the
261	263		effective date of this Act. An application submitted before the
262	264		effective date of this Act is governed by the law in effect when the
263	265		application was submitted, and the former law is continued in
264	266		effect for that purpose.
265	267		SECTION 14. This Act takes effect September 1, 2025.