85R6506 JAM-D     By: Swanson H.B. No. 1792       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 five miles 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 five miles 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 2018 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, 2017.