Bill Text: TX HB96 | 2019-2020 | 86th Legislature | Introduced

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Bill Title: Relating to the evaluation of an application for a low income housing tax credit.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2019-03-21 - Left pending in committee [HB96 Detail]

Download: Texas-2019-HB96-Introduced.html

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86R1732 JAM-D
By: Swanson H.B. No. 96

A BILL TO BE ENTITLED
AN ACT
relating to the evaluation of an application for a low income
housing tax credit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2306.6705, Government Code, is amended
to read as follows:
Sec. 2306.6705. GENERAL APPLICATION REQUIREMENTS. (a) An
application must contain at a minimum the following written,
detailed information in a form prescribed by the board:
(1) a description of:
(A) the financing plan for the development,
including any nontraditional financing arrangements;
(B) the use of funds with respect to the
development;
(C) the funding sources for the development,
including:
(i) construction, permanent, and bridge
loans; and
(ii) rents, operating subsidies, and
replacement reserves; and
(D) the commitment status of the funding sources
for the development;
(2) if syndication costs are included in the eligible
basis, a justification of the syndication costs for each cost
category by an attorney or accountant specializing in tax matters;
(3) from a syndicator or a financial consultant of the
applicant, an estimate of the amount of equity dollars expected to
be raised for the development in conjunction with the amount of
housing tax credits requested for allocation to the applicant,
including:
(A) pay-in schedules; and
(B) syndicator consulting fees and other
syndication costs;
(4) if rental assistance, an operating subsidy, or an
annuity is proposed for the development, any related contract or
other agreement securing those funds and an identification of:
(A) the source and annual amount of the funds;
(B) the number of units receiving the funds; and
(C) the term and expiration date of the contract
or other agreement;
(5) if the development is located within the
boundaries of a political subdivision with a zoning ordinance,
evidence in the form of a letter from the chief executive officer of
the political subdivision or from another local official with
jurisdiction over zoning matters that states that:
(A) the development is permitted under the
provisions of the ordinance that apply to the location of the
development; or
(B) the applicant is in the process of seeking
the appropriate zoning and has signed and provided to the political
subdivision a release agreeing to hold the political subdivision
and all other parties harmless in the event that the appropriate
zoning is denied;
(6) if an occupied development is proposed for
rehabilitation:
(A) an explanation of the process used to notify
and consult with the tenants in preparing the application;
(B) a relocation plan outlining:
(i) relocation requirements; and
(ii) a budget with an identified funding
source; and
(C) if applicable, evidence that the relocation
plan has been submitted to the appropriate local agency;
(7) a certification of the applicant's compliance with
appropriate state and federal laws, as required by other state law
or by the board;
(8) any other information required by the board in the
qualified allocation plan; and
(9) evidence that the applicant has notified the
following entities with respect to the filing of the application:
(A) any neighborhood organization that is
[organizations] on record with the state or county in which the
development is to be located and that has [whose] boundaries
containing [contain] the proposed development site or has a
boundary located not more than one mile from the proposed site;
(B) the superintendent and the presiding officer
of the board of trustees of the school district containing the
development;
(C) the presiding officer of the governing body
of any municipality containing the development and all elected
members of that body;
(D) the presiding officer of the governing body
of the county containing the development and all elected members of
that body; and
(E) the state senator and state representative of
the district containing the development.
(b) Notice provided under Subsection (a)(9) must:
(1) be given at least 90 days before the date the
application is submitted to the department;
(2) name the development and conspicuously identify
the development as "low-income government-subsidized housing"; and
(3) contain a description of the development and an
independent study of the development's anticipated effects on local
schools, area crime rates, infrastructure, governmental
expenditures, population density, area property values, and the
revenue of local, state, and federal governmental entities.
(c) In addition to the requirements under Subsection (a) and
other provisions of this subchapter, an application must be
accompanied by any written statements submitted to the developer
under Section 2306.6710(b)(1)(I), (J), or (K).
SECTION 2. Section 2306.6708, Government Code, is amended
by amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) Except as provided by Subsections [Subsection] (b) and
(c), an applicant may not change or supplement an application in any
manner after the filing deadline.
(c) Not later than June 15, an applicant may supplement an
application with a written statement provided under Section
2306.6710(b)(1)(J).
SECTION 3. Section 2306.6710, Government Code, is amended
by amending Subsections (b) and (f) and adding Subsections (g),
(h), and (i) to read as follows:
(b) If an application satisfies the threshold criteria, the
department shall score and rank the application using a point
system that:
(1) prioritizes in descending order criteria
regarding:
(A) financial feasibility of the development
based on the supporting financial data required in the application
that will include a project underwriting pro forma from the
permanent or construction lender;
(B) quantifiable community participation with
respect to the development, evaluated on the basis of a resolution
concerning the development that is voted on and adopted by the
following, as applicable:
(i) the governing body of a municipality in
which the proposed development site is to be located;
(ii) subject to Subparagraph (iii), the
commissioners court of a county in which the proposed development
site is to be located, if the proposed site is to be located in an
area of a county that is not part of a municipality; or
(iii) the commissioners court of a county
in which the proposed development site is to be located and the
governing body of the applicable municipality, if the proposed site
is to be located in the extraterritorial jurisdiction of a
municipality;
(C) the income levels of tenants of the
development;
(D) the size and quality of the units;
(E) the rent levels of the units;
(F) the cost of the development by square foot;
(G) the services to be provided to tenants of the
development;
(H) whether, at the time the complete application
is submitted or at any time within the two-year period preceding the
date of submission, the proposed development site is located in an
area declared to be a disaster under Section 418.014;
(I) quantifiable community participation with
respect to the development, evaluated on the basis of written
statements from any neighborhood organization that is
[organizations] on record with the state or county in which the
development is to be located and that has [whose] boundaries
containing [contain] the proposed development site; [and]
(J) the level of community support for the
application, evaluated on the basis of a written statement from the
state representative who represents the district containing the
proposed development site; and
(K) quantifiable community participation with
respect to the development, evaluated on the basis of written
statements from any neighborhood organization that is on record
with the state or county in which the development is to be located
and that has a boundary located not more than one mile from the
proposed site, other than an organization described by Paragraph
(I);
(2) uses criteria imposing penalties on applicants or
affiliates who have requested extensions of department deadlines
relating to developments supported by housing tax credit
allocations made in the application round preceding the current
round or a developer or principal of the applicant that has been
removed by the lender, equity provider, or limited partners for its
failure to perform its obligations under the loan documents or
limited partnership agreement; and
(3) encourages applicants to provide free notary
public service to the residents of the developments for which the
allocation of housing tax credits is requested.
(f) In evaluating quantifiable community participation or
the level of community support [for an application] under
Subsection (b)(1)(I) or (J) [(b)(1)(J)], as applicable, the
department shall award:
(1) positive points for positive written statements
received;
(2) negative points for negative written statements
received; and
(3) zero points for neutral written statements
received.
(g) In evaluating quantifiable community participation
under Subsection (b)(1)(K), the department shall award:
(1) zero points for positive or neutral written
statements received; and
(2) negative points for negative written statements
received.
(h) The maximum number of negative points that may be
awarded under Subsection (g) based on quantifiable community
participation described by Subsection (b)(1)(K) shall be
three-eighths of the maximum number of negative points that may be
awarded under Subsection (f) based on the level of community
support described by Subsection (b)(1)(J).
(i) The department shall notify a person or organization who
submits a written statement under Subsection (b)(1)(I), (J), or (K)
that the department has received the statement and shall provide a
copy of that statement to the applicant.
SECTION 4. 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 2020 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 5. This Act takes effect September 1, 2019.