| 1 | 1 | | 89R1962 JG-D |
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| 2 | 2 | | By: Morales of Harris H.B. No. 492 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to prohibiting the allocation of low income housing tax |
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| 10 | 10 | | credits for certain developments. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Section 2306.6703(a), Government Code, is |
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| 13 | 13 | | amended to read as follows: |
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| 14 | 14 | | (a) An application is ineligible for consideration under |
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| 15 | 15 | | the low income housing tax credit program if: |
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| 16 | 16 | | (1) at the time of application or at any time during |
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| 17 | 17 | | the two-year period preceding the date the application round |
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| 18 | 18 | | begins, the applicant or a related party is or has been: |
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| 19 | 19 | | (A) a member of the board; or |
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| 20 | 20 | | (B) the director, a deputy director, the director |
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| 21 | 21 | | of housing programs, the director of compliance, the director of |
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| 22 | 22 | | underwriting, or the low income housing tax credit program manager |
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| 23 | 23 | | employed by the department; |
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| 24 | 24 | | (2) the applicant proposes to replace in less than 15 |
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| 25 | 25 | | years any private activity bond financing of the development |
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| 26 | 26 | | described by the application, unless: |
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| 27 | 27 | | (A) at least one-third of all the units in the |
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| 28 | 28 | | development are public housing units or Section 8 project-based |
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| 29 | 29 | | units and the applicant proposes to maintain for a period of 30 |
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| 30 | 30 | | years or more 100 percent of the units supported by housing tax |
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| 31 | 31 | | credits as rent-restricted and exclusively for occupancy by |
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| 32 | 32 | | individuals and families earning not more than 50 percent of the |
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| 33 | 33 | | area median income, adjusted for family size; |
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| 34 | 34 | | (B) the applicable private activity bonds will be |
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| 35 | 35 | | redeemed only in an amount consistent with their proportionate |
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| 36 | 36 | | amortization; or |
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| 37 | 37 | | (C) if the redemption of the applicable private |
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| 38 | 38 | | activity bonds will occur in the first five years of the operation |
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| 39 | 39 | | of the development and complies with Section 42(h)(4), Internal |
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| 40 | 40 | | Revenue Code of 1986: |
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| 41 | 41 | | (i) on the date the certificate of |
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| 42 | 42 | | reservation is issued, the Bond Review Board determines that there |
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| 43 | 43 | | is not a waiting list for private activity bonds in the same |
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| 44 | 44 | | priority level established under Section 1372.0321 or, if |
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| 45 | 45 | | applicable, in the same uniform state service region, as referenced |
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| 46 | 46 | | in Section 1372.0231, that is served by the proposed development; |
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| 47 | 47 | | and |
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| 48 | 48 | | (ii) the applicable private activity bonds |
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| 49 | 49 | | will be redeemed according to underwriting criteria, if any, |
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| 50 | 50 | | established by the department; |
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| 51 | 51 | | (3) the applicant proposes to construct a new |
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| 52 | 52 | | development that is located one linear mile or less from a |
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| 53 | 53 | | development that: |
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| 54 | 54 | | (A) serves the same type of household as the new |
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| 55 | 55 | | development, regardless of whether the developments serve |
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| 56 | 56 | | families, elderly individuals, or another type of household; |
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| 57 | 57 | | (B) has received an allocation of housing tax |
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| 58 | 58 | | credits for new construction at any time during the three-year |
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| 59 | 59 | | period preceding the date the application round begins; and |
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| 60 | 60 | | (C) has not been withdrawn or terminated from the |
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| 61 | 61 | | low income housing tax credit program; [or] |
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| 62 | 62 | | (4) the development is located in a municipality or, |
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| 63 | 63 | | if located outside a municipality, a county that has more than twice |
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| 64 | 64 | | the state average of units per capita supported by housing tax |
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| 65 | 65 | | credits or private activity bonds, unless the applicant: |
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| 66 | 66 | | (A) has obtained prior approval of the |
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| 67 | 67 | | development from the governing body of the appropriate municipality |
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| 68 | 68 | | or county containing the development; and |
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| 69 | 69 | | (B) has included in the application a written |
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| 70 | 70 | | statement of support from that governing body referencing this |
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| 71 | 71 | | section and authorizing an allocation of housing tax credits for |
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| 72 | 72 | | the development; or |
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| 73 | 73 | | (5) the development is not located within two miles of |
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| 74 | 74 | | a grocery store. |
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| 75 | 75 | | SECTION 2. The change in law made by this Act applies only |
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| 76 | 76 | | to an application for low income housing tax credits that is |
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| 77 | 77 | | submitted to the Texas Department of Housing and Community Affairs |
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| 78 | 78 | | during an application cycle that is based on the 2026 qualified |
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| 79 | 79 | | allocation plan or a subsequent plan adopted by the governing board |
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| 80 | 80 | | of the department under Section 2306.67022, Government Code. An |
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| 81 | 81 | | application that is submitted during an application cycle that is |
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| 82 | 82 | | based on an earlier qualified allocation plan is governed by the law |
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| 83 | 83 | | in effect on the date the application cycle began, and the former |
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| 84 | 84 | | law is continued in effect for that purpose. |
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| 85 | 85 | | SECTION 3. This Act takes effect September 1, 2025. |
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