Bill Text: TX HB4162 | 2019-2020 | 86th Legislature | Introduced

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Bill Title: Relating to the system by which an application for a low income housing tax credit is scored.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-03-25 - Referred to Urban Affairs [HB4162 Detail]

Download: Texas-2019-HB4162-Introduced.html

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86R14092 JAM-D
By: Swanson H.B. No. 4162

A BILL TO BE ENTITLED
AN ACT
relating to the system by which an application for a low income
housing tax credit is scored.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2306.6710, Government Code, is amended
by amending Subsections (b) and (f) and adding Subsections (b-1),
(g), and (h) 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 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;
(G) the cost of the development by square foot;
(H) [(G)] the services to be provided to tenants
of the development, including quality social services;
[(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 organizations on record with the
state or county in which the development is to be located and whose
boundaries contain the proposed development site; [and]
(J) demonstrated community and neighborhood
support other than that described by Paragraphs (B), (F), and (I);
(K) whether the proposed project is consistent
with sound underwriting practices and when economically feasible,
serves individuals and families of extremely low income by
leveraging private and state and federal resources, including
federal HOPE VI grants received through the United States
Department of Housing and Urban Development;
(L) whether the proposed project serves
traditionally underserved populations;
(M) demonstrated support from local political
subdivisions based on the subdivisions' commitment of development
funding;
(N) whether the proposed project rehabilitates
or performs an adaptive reuse of a certified historic structure, as
defined by Section 171.901(1), Tax Code, as part of the
development;
(O) whether the proposed project remains
affordable to qualified tenants for an extended, economically
feasible period; and
(P) whether the proposed project complies with
the accessibility standards that are required under Section 504,
Rehabilitation Act of 1973 (29 U.S.C. Section 794), and specified
under 24 C.F.R. Part 8, Subpart C [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];
(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; and
(4) provides appropriate incentives to reward
applicants who agree to:
(A) equip the development that is the basis of
the application with energy saving devices that meet the standards
established by the state energy conservation office or provide to a
qualified entity, in a land use restriction agreement in accordance
with Section 2306.6726, a right of first refusal to purchase the
development at the minimum price provided in, and in accordance
with the requirements of, Section 42(i)(7), Internal Revenue Code
of 1986 (26 U.S.C. Section 42(i)(7)); and
(B) locate the development in:
(i) a census tract in which there are no
other existing developments supported by housing tax credits; or
(ii) an area that will serve residents of
the development without displacing established communities.
(b-1) For each scoring criterion, the department shall use a
range of points to evaluate the degree to which a proposed project
satisfies the criterion. The department may not award:
(1) a number of points for a scoring criterion that is
disproportionate to the degree to which a proposed project complies
with that criterion; or
(2) to a proposed project for the general population a
number of points for a scoring criterion that is different than the
number of points awarded for that criterion to a proposed project
reserved for elderly persons if the proposed project complies with
the criterion to the same degree.
(f) In evaluating the level of community support for an
application under Subsection (b)(1)(F) [(b)(1)(J)], 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) On awarding housing tax credit allocations, the board
shall document the reasons for each project's selection, including
an explanation of:
(1) all discretionary factors used in making its
determination; and
(2) the reasons for any decision that conflicts with
the recommendations of department staff under Section 2306.6731.
(h) For purposes of evaluating applications submitted under
this subchapter, the department may adopt only a scoring criterion
that is specified in this section.
SECTION 2. Sections 2306.6726(a), (b), and (c), Government
Code, are amended to read as follows:
(a) An owner of a development subject to a right of first
refusal under Section 2306.6710(b)(4) [2306.6725] who intends to
sell the development at any time after the expiration of the
compliance period shall notify the department and the tenants of
the development of the owner's intent to sell and, if applicable,
shall specifically identify to the department any qualified entity
that is the owner's intended recipient of the right of first refusal
in the land use restriction agreement.
(b) The owner of a development subject to a right of first
refusal under Section 2306.6710(b)(4) [2306.6725] may:
(1) during the first 60-day period after notice is
provided under Subsection (a-1), negotiate or enter into a purchase
agreement only with a qualified entity that is:
(A) a community housing development organization
as defined by the federal HOME investment partnership program; or
(B) controlled by an entity described by
Paragraph (A);
(2) during the second 60-day period after notice is
provided under Subsection (a-1), negotiate or enter into a purchase
agreement with a qualified entity that:
(A) is described by Section 2306.6706;
(B) is controlled by an entity described by
Paragraph (A); or
(C) is a tenant organization; and
(3) during the last 60-day period after notice is
provided under Subsection (a-1), negotiate or enter into a purchase
agreement with any other qualified entity.
(c) Beginning on the 181st day after the date the department
posts notice under Subsection (a-1), an owner of a development
subject to a right of first refusal under Section 2306.6710(b)(4)
[2306.6725] may sell to any purchaser a development to which the
right of first refusal applies if a qualified entity does not offer
to purchase the development for a price that the department
determines to be reasonable.
SECTION 3. Section 2306.6725, Government Code, is repealed.
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.