87R18253 JAM-D     By: Cortez H.B. No. 2027     Substitute the following for H.B. No. 2027:     By:  J. Johnson of Harris C.S.H.B. No. 2027       A BILL TO BE ENTITLED   AN ACT   relating to the allocation of low income housing tax credits.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Section 2306.67071, Government   Code, is amended to read as follows:          Sec. 2306.67071.  ADDITIONAL APPLICATION REQUIREMENT:   NOTICE [, HEARING,] AND CERTIFICATION [RESOLUTION] BY CERTAIN   GOVERNING BODIES.          SECTION 2.  Section 2306.67071, Government Code, is amended   by amending Subsections (c) and (d) and adding Subsection (c-1) to   read as follows:          (c)  Except as provided by Subsection (c-1), the [The] board   may not approve an application for housing tax credits for   developments financed through the private activity bond program   unless each applicable governing body described by Subsection (a)    [the applicant] has submitted to the department a certification   stating [certified copy of a resolution from each applicable   governing body described by Subsection (a).  The resolution must   certify] that:                (1)  notice has been provided to the [each] governing   body as required by Subsection (a); and                (2)  the [each] governing body has had sufficient   opportunity to obtain a response from the applicant regarding any   questions or concerns about the proposed development[;                [(3)  each governing body has held a hearing under   Subsection (b); and                [(4)  after due consideration of the information   provided by the applicant and public comment, the governing body   does not object to the proposed application].          (c-1)  The board may approve an application for housing tax   credits without receiving each certification required by   Subsection (c) if after the 60th day following the date on which all   applicable governing bodies have received notice under Subsection   (a) the applicant submits to the department a certification stating   that the applicant has substantially complied with the requirements   of Subsection (c)(2).          (d)  The department by rule may provide for additional   requirements relating to the time and manner of the submission to   the department of a certification [resolution] required by   Subsection (c) or (c-1).          SECTION 3.  Section 2306.6710(b), Government Code, is   amended 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)  considers [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 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)  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.          SECTION 4.  Section 2306.6725(b), Government Code, is   amended to read as follows:          (b)  The department shall provide appropriate incentives as   determined through the qualified allocation plan to reward   applicants who agree to:                (1)  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                (2)  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                [(2)  locate the development in a census tract in which   there are no other existing developments supported by housing tax   credits].          SECTION 5.  Section 2306.67071(b), Government Code, is   repealed.          SECTION 6.  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 2022 qualified   allocation plan or a subsequent plan adopted by the governing board   of the department. 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 7.  This Act takes effect September 1, 2021.