Relating to the issuance of private activity bonds for qualified residential rental projects.

89(R) HB 1342 - House Committee Report version - Bill Text

89R3702 JAM-F

By: Gervin-Hawkins

H.B. No. 1342

A BILL TO BE ENTITLED

AN ACT

relating to the issuance of private activity bonds for qualified

residential rental projects.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1372.0321, Government Code, is amended

by adding Subsections (a-1) and (a-2) and amending Subsections (b),

(c), and (d) to read as follows:

(a-1)

In granting reservations to issuers of qualified

residential rental project issues, the board shall give second

priority to projects:

(1) for which an application:

(A)

was filed on or before October 20 of the

program year occurring two years before the current program year;

and

(B)

was not withdrawn and did not receive a bond

reservation;

(2)

that meet at least one requirement of Subsection

(b); and

(3) for which:

(A)

a binding contract to incur significant

expenditures for construction, reconstruction, or rehabilitation

was entered into before submission of the application;

(B)

significant expenditures for construction,

reconstruction, or rehabilitation were readily identifiable with

and necessary to carry out a binding contract for the supply of

property or services or the sale of output; or

(C)

significant expenditures were paid or

incurred before submission of the application.

(a-2)

For purposes of Subsection (a-1), "significant

expenditures" means expenditures that exceed the lesser of:

(1) $500,000; or

(2)

10 percent of the reasonably anticipated cost of

the project.

(b) In granting reservations to issuers of qualified

residential rental project issues, the board shall give
third

[
second
] priority to:

(1) projects in which:

(A) 50 percent of the residential units in the

project are:

(i) under the restriction that the maximum

allowable rents are an amount equal to 30 percent of 50 percent of

the area median family income minus an allowance for utility costs

authorized under the federal low-income housing tax credit program;

and

(ii) reserved for families and individuals

earning not more than 50 percent of the area median income; and

(B) the remaining 50 percent of the residential

units in the project are:

(i) under the restriction that the maximum

allowable rents are an amount equal to 30 percent of
80
[
60
] percent

of the area median family income minus an allowance for utility

costs authorized under the federal low-income housing tax credit

program; and

(ii) reserved for families and individuals

earning not more than
80
[
60
] percent of the area median income;

(2) projects in which:

(A) 15 percent of the residential units in the

project are:

(i) under the restriction that the maximum

allowable rents are an amount equal to 30 percent of 30 percent of

the area median family income minus an allowance for utility costs

authorized under the federal low-income housing tax credit program;

and

(ii) reserved for families and individuals

earning not more than 30 percent of the area median income; and

(B) the remaining 85 percent of the residential

units in the project are:

(i) under the restriction that the maximum

allowable rents are an amount equal to 30 percent of
80
[
60
] percent

of the area median family income minus an allowance for utility

costs authorized under the federal low-income housing tax credit

program; and

(ii) reserved for families and individuals

earning not more than
80
[
60
] percent of the area median income;

(3) projects:

(A) in which 100 percent of the residential units

in the project are:

(i) under the restriction that the maximum

allowable rents are
, on average,
an amount equal to 30 percent of 60

percent of the area median family income minus an allowance for

utility costs authorized under the federal low-income housing tax

credit program; and

(ii) reserved for families and individuals

earning
, on average,
not more than 60 percent of the area median

income; and

(B) which are located in a census tract in which

the median income, based on the most recent information published

by the United States Bureau of the Census, is higher than the median

income for the county, metropolitan statistical area, or primary

metropolitan statistical area in which the census tract is located

as established by the United States Department of Housing and Urban

Development; or

(4) on or after June 1, projects that are located in

counties, metropolitan statistical areas, or primary metropolitan

statistical areas with area median family incomes at or below the

statewide median family income established by the United States

Department of Housing and Urban Development.

(c) In granting reservations to issuers of qualified

residential rental project issues, the board shall give
fourth

[
third
] priority to projects in which 80 percent or more of the

residential units in the project are:

(1) under the restriction that the maximum allowable

rents are
, on average,
an amount equal to 30 percent of 60 percent

of the area median family income minus an allowance for utility

costs authorized under the federal low-income housing tax credit

program; and

(2) reserved for families and individuals earning
, on

average,
not more than 60 percent of the area median income.

(d) In granting reservations to issuers of qualified

residential rental project issues, the board shall give
fifth

[
fourth
] priority to any other qualified residential rental

project.

SECTION 2. Section 1372.042(d), Government Code, is amended

to read as follows:

(d) Not later than the fifth business day after the date on

which the bonds are closed, the issuer shall submit to the board:

(1) a written notice stating the delivery date of the

bonds and the principal amount of the bonds issued;
and

(2) [
if the project is a project entitled to first,

second, or third priority under Section 1372.0321, evidence from

the Texas Department of Housing and Community Affairs that an award

of low-income housing tax credits has been approved for the

project; and

[
(3)
] a certified copy of the document authorizing the

bonds and any other document relating to the issuance of the bonds,

including a statement of the bonds':

(A) principal amount;

(B) interest rate or formula by which the

interest rate is computed;

(C) maturity schedule; and

(D) purchaser or purchasers.

SECTION 3. Section 1372.0321(e), Government Code, is

repealed.

SECTION 4. The change in law made by this Act in amending

Chapter 1372, Government Code, applies to the allocation of the

available state ceiling under Chapter 1372 beginning with the 2026

program year.

SECTION 5. This Act takes effect September 1, 2025.