89R12385 JG-F     By: Moody H.B. No. 2985       A BILL TO BE ENTITLED   AN ACT   relating to the eligibility of certain at-risk developments to   receive low income housing tax credits.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 2306.6702(a)(5), Government Code, is   amended to read as follows:                (5)  "At-risk development" means:                      (A)  a development that:                            (i)  has received the benefit of a subsidy in   the form of a below-market interest rate loan, interest rate   reduction, rental subsidy, Section 8 housing assistance payment,   rental supplement payment, rental assistance payment, or equity   incentive under the following federal laws, as applicable:                                  (a)  Sections 221(d)(3) and (5),   National Housing Act (12 U.S.C. Section 1715l);                                  (b)  Section 236, National Housing Act   (12 U.S.C. Section 1715z-1);                                  (c)  Section 202, Housing Act of 1959   (12 U.S.C. Section 1701q);                                  (d)  Section 101, Housing and Urban   Development Act of 1965 (12 U.S.C. Section 1701s);                                  (e)  the Section 8 Additional   Assistance Program for housing developments with HUD-Insured and   HUD-Held Mortgages administered by the United States Department of   Housing and Urban Development as specified by 24 C.F.R. Part 886,   Subpart A;                                  (f)  the Section 8 Housing Assistance   Program for the Disposition of HUD-Owned Projects administered by   the United States Department of Housing and Urban Development as   specified by 24 C.F.R. Part 886, Subpart C;                                  (g)  the Section 8 Housing Assistance   Payments Program for New Construction administered by the United   States Department of Housing and Urban Development as specified by   24 C.F.R. Part 880;                                  (h)  the Section 8 Housing Assistance   Payments Program for Substantial Rehabilitation administered by   the United States Department of Housing and Urban Development as   specified by 24 C.F.R. Part 881;                                  (i)  Sections 514, 515, and 516,   Housing Act of 1949 (42 U.S.C. Sections 1484, 1485, and 1486); or                                  (j) [(h)]  Section 42, Internal   Revenue Code of 1986; and                            (ii)  is subject to the following   conditions:                                  (a)  the stipulation to maintain   affordability in the contract granting the subsidy is nearing   expiration; or                                  (b)  the HUD-insured or HUD-held   mortgage on the development is eligible for prepayment or is   nearing the end of its term; or                      (B)  a development that proposes to rehabilitate   or reconstruct housing units that:                            (i)  receive assistance under Section 9,   United States Housing Act of 1937 (42 U.S.C. Section 1437g) and are   owned by:                                  (a)  a public housing authority; or                                  (b)  a public facility corporation   created by a public housing authority under Chapter 303, Local   Government Code;                            (ii)  received assistance under Section 9,   United States Housing Act of 1937 (42 U.S.C. Section 1437g) and:                                  (a)  are proposed to be disposed of or   demolished by a public housing authority or a public facility   corporation created by a public housing authority under Chapter   303, Local Government Code; or                                  (b)  have been disposed of or   demolished by a public housing authority or a public facility   corporation created by a public housing authority under Chapter   303, Local Government Code, in the two-year period preceding the   application for housing tax credits; or                            (iii)  receive assistance or will receive   assistance through the Rental Assistance Demonstration program   administered by the United States Department of Housing and Urban   Development as specified by the Consolidated and Further Continuing   Appropriations Act, 2012 (Pub. L. No. 112-55) and its subsequent   amendments, if the application for assistance through the Rental   Assistance Demonstration program is included in the applicable   public housing plan that was most recently approved by the United   States Department of Housing and Urban Development as specified by   24 C.F.R. Section 903.23.          SECTION 2.  Section 2306.6702, Government Code, is amended   by adding Subsection (c) to read as follows:          (c)  For purposes of Subsection (a)(5), a development   described by that subdivision is considered an at-risk development   under this subchapter regardless of whether:                (1)  the development proposes to newly construct   housing units or rehabilitate or reconstruct housing units at the   same location of any of the original development sites; or                (2)  the development proposes to wholly construct or   reconstruct housing units at a location other than the location of   any of the original development sites and the development:                      (A)  qualifies for points on the opportunity index   under department rule; or                      (B)  is supported by the applicable governing body   of the municipality or county in which the development is located,   as evidenced by a resolution adopted by the governing body.          SECTION 3.  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 2026 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 4.  This Act takes effect September 1, 2025.