bill widening which developments count as at-risk for tax credits

The text as introduced · 830 words

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.