34 TAC §§190.1-190.7
The Texas Bond Review Board proposes amendments to §§190.1-190.7.
The program rules are amended to comply with changes in Texas Civil Statutes,
Article 5190.9a, as amended. Generally, the amendments will allow more applications
to receive a reservation and more applications to successfully close their
bond transactions. Additionally, the amendments serve to encourage more affordable
rental housing targeted to lower income families. The amendments also recognize
the codification of Texas Civil Statutes, Article 5190.9a, as amended, as
Chapter 1372, Texas Government Code, effective September 1, 1999.
José A. Hernández, Executive Director of the Bond Review
Board, has determined that for the first five-year period the sections are
in effect there will be negligible fiscal implications for state and local
government as a result of enforcing or administering the sections.
Mr. Hernández also has determined that for each year of the first
five years the sections are in effect the public benefit anticipated as a
result of enforcing the sections will be an increase in the number of applications
receiving a reservation and an increase in applications successfully completing
their bond issue. There will be no effect on small businesses. There is little
anticipated economic cost to persons who are required to comply with the sections
as proposed.
Comments on the proposal may be submitted to Jose A. Hernandez, Texas Bond
Review Board, P.O. Box 13292, Austin, Texas 78711-3292.
The amendments are proposed under Texas Civil Statutes, Article
5190.9a, as amended, which give the Texas Bond Review Board the authority
to adopt rules governing the implementation and administration of the allocation
of the state's ceiling on private activity bonds.
Texas Civil Statutes, Article 5190.9a is affected by these proposed amendments.
§190.1.General Provisions.
(a)
Introduction. Pursuant to the authority granted by Chapters
2001 and 2002, Government Code, as amended, and Texas Civil Statutes, Article
5190.9a, as amended,
and Chapter 1372, Texas Government Code,
the
Bond Review Board prescribes the following sections regarding practice and
procedure before the board in the administration of the allocation of the
authority in the state to issue private activity bonds.
(b)
(No change.)
(c)
Definition of terms. The following words and terms, when
used in this section, shall have the following meanings, unless the context
clearly indicates otherwise.
(1)
Act - Texas Civil Statutes, Article 5190.9a, as amended,
and Chapter 1372, Texas Government Code,
(2)-(19)
(No change.)
(20)
Closing documents - Those documents that are required
to be filed by the issuer not later than the fifth
business
day
after the day on which the bonds are closed.
(21)
Closing fee - The nonrefundable fee in the amount
of $1,000 or 0.025% of the principal amount of the bonds certified as provided
by
§1372.039(a)(1), Texas Government Code,
[
the Act,
§6(a)(2)
] whichever is greater. The foregoing notwithstanding,
an issuer exchanging a portion of the state ceiling for mortgage credit certificates
shall submit to the board a closing fee in the amount of $1,000 or 0.0125%
of the amount of the state ceiling
exchanged
[
reserved
],
whichever is greater.
(22)-(56)
(No change.)
(d)-(f)
(No change.)
§190.2.Allocation and Reservation System.
(a)
(No change.)
(b)
On or after October 10 of the year preceding the applicable
program year, the board will accept applications for reservation from issuers
authorized to issue private activity bonds. The board shall not grant a reservation
to any issuer prior to January 2 of the program year. If two or more issuers
file an application for reservation of the state ceiling in any of the categories
described in
Article 5190.9a
[
the Act
], §2(b),
the board shall conduct a lottery establishing the order of priority of each
such application for reservation. Once the order of priority for all applications
for reservation filed on or before October 20 of the year preceding the applicable
program year is established, reservations for each issuer within the categories
described in subsection (b)(2), (3), [
(b)(4),
] and (6) of §2
[
of the Act
], shall be granted in the order of priority established
by such lottery. Each issuer of state voted issues granted a reservation initially
shall be granted a reservation date which is the first business day of the
program year. If more than ten applications by issuers, other than issuers
of state voted issues, are granted a reservation initially, an additional
lottery will be held immediately to determine staggered reservation dates
for such issuers.
(c)
The order of priority for reservations in the
category described in
Article 5190.9a
[
the Act
], §2(b)(1),
shall further be determined as provided in
§1372.032, Texas Government
Code
[
the Act, §3(c)
].
(1)
The first category of priority shall include those applications
for a reservation filed by housing finance corporations which filed an application
for a reservation on behalf of the same local population prior to September
1 of the previous calendar year, but which did not receive a reservation during
such year. Any such priority of an issuer composed of more than one jurisdiction
is not affected by the issuer's loss of a sponsoring governmental unit and
that unit's population base if the dollar amount of the application has not
increased.
(2)
The second category of priority shall include those
applications for a reservation not included in the first category of priority.
(3)
Within each category of priority, reservations shall
be granted in reverse calendar year order of the most recent closing of qualified
mortgage bonds by each housing finance corporation, with the most recent closing
being the last to receive a reservation and with those housing finance corporations
that have never received a reservation for mortgage revenue bonds being the
first to receive a reservation, and, in the case of closings occurring on
the same date, reservations shall be granted in an order determined by the
board by lot. The most recent closing applicable to:
(A)
a newly created housing finance corporation that was created
by a local government or local governments that had previously sponsored an
existing housing finance corporation or a disbanded housing finance corporation,
is the most recent closing of qualified mortgage bonds the proceeds of which
were available to the population of the housing finance corporation;
(B)
a housing finance corporation sponsored by a local government
that has participated in the program of another housing finance corporation,
is the most recent closing of qualified mortgage bonds the proceeds of which
were available to the population of the housing finance corporation; and
(C)
all other housing finance corporations, is the most recent
closing of qualified mortgage bonds by the housing finance corporation. In
no event will a housing finance corporation or its sponsoring local government
be allowed to achieve an advantage in the determination of its last closing
date by creating or disbanding from a housing finance corporation.
(d)
The order of priority for reservations
in the category described in Article 5190.9a, §2(b)(4), shall further
be determined as provided in Article 5190.9a, §3(h).
(1)
The first category of priority shall include
those applications for a reservation for a project in which the maximum allowable
rents are restricted to 30% of 50% adjusted median family income, minus an
allowance for utility costs authorized under the federal Low Income Housing
Tax Credit Program, for 100% of the units.
(2)
The second category of priority shall include
those applications for a reservation for a project in which the maximum allowable
rents are restricted to 30% of 60% adjusted median family income, minus an
allowance for utility costs authorized under the federal Low Income Housing
Tax Credit Program, for 100% of the units.
(3)
The third category of priority shall include
those applications for any other qualified residential rental project.
(4)
Within each category of priority, reservations
shall be granted in the order established by the lottery.
(e)
The order of priority for reservations in the
category described in
Article 5190.9a
[
the Act
], §2(b)(5),
shall further be determined as provided in
§1372.033, Texas Government
Code
[
the Act, §3(c)
]. Reservations shall be granted
in reverse calendar year order of the most recent closing of qualified student
loan bonds by each issuer of qualified student loan bonds authorized by §53.47,
Education Code, with the most recent closing being the last to receive a reservation
and with those higher education authorities that have never received a reservation
for student loan bonds being the first to receive a reservation, and, in the
case of closings occurring on the same date, reservations shall be granted
in an order determined by the board by lot.
(f)
If state ceiling becomes available
on August 15, it shall be available prior to September 1 for qualified residential
rental project issues in the order of priority described in subsection (d)
of this section.
(g)
[
(c)
] If any issuer which was subject
to the lottery conducted as described in subsection (b) of this section does
not, prior to September 1 of the program year, receive the amount requested
by such issuer in its application for reservation filed on or before October
20 of the preceding year, and if state ceiling becomes available on or after
September 1 of the program year, such issuer, subject to the provisions of
§1372.037, Texas Government Code
[
the Act, §3(a)
],
shall receive a reservation for any state ceiling becoming available on or
after September 1
of the program year,
in the order of priority
established by such lottery, without regard to the provisions of
§§1372.032,
1372.033, Texas Government Code and Article 5190.9a §3(h)
[
the Act §3(c), relating to the order of priority for the categories described
in subsections (b)(1) and (b)(5) of §2 of the Act
].
(h)
[
(d)
] All applications for a reservation
filed after October 20 of the preceding year by any issuer for the issuance
of bonds shall be accepted by the board in their order of receipt.
(i)
[
(e)
] An application for a reservation
for the current program year may not be submitted and a reservation may not
be granted after December 1 of the program year.
(j)
[
(f)
] An issuer may refuse to accept
a reservation for any amount if the reservation is granted after September
23 of the program year.
(k)
[
(g)
] The amount of the state's
ceiling that has not been reserved prior to December 1 of the program year
and any amount previously reserved that becomes available on or after that
date because of the cancellation of a reservation or any other reason, may
be designated, by the board, as carryforward for the carryforward purposes
outlined in the Code through submission of the application for carryforward
and any other required documentation.
(l)
[
(h)
] An issuer may submit an application
for carryforward to the board at any time during the year through the last
business day in December.
(m)
[
(i)
] Issuers will be eligible for
carryforward according to the priority classifications listed in the Act.
§190.3.Filing Requirements for Applications for Reservation.
(a)
(No change.)
(b)
Application Filing. The issuer shall submit one original
and two copies of the application for reservation. Each application must be
accompanied by the following:
(1)-(4)
(No change.)
(5)
a copy of the issuer's certificate of continued existence
from the secretary of state of Texas [
or a copy of the issuer's certificate
of good standing from the comptroller of public accounts of Texas,
]
dated within 30 days of submission of application;
(6)
a copy of the borrower's
and, if the borrower is a partnership, each partner's certificate of good
standing from the comptroller of public accounts of Texas, dated within 30
days of submission of application;
(7)
[
(6)
] a statement by the issuer,
other than an issuer of a state-voted issue or the Texas Department of Housing
and Community Affairs, that the bonds are not being issued for the same stated
purpose for which the issuer has received sufficient carryforward during a
prior year or for which there exists unexpended proceeds from a prior issue
or issues of bonds issued by the same issuer, or based on the issuer's population;
(8)
[
(7)
] if unexpended proceeds
exist from
, including transferred proceeds representing unexpended proceeds
from,
a prior issue or issues of bonds, other than a state-voted issue
or an issue by the Texas Department of Housing and Community Affairs, issued
by the issuer or on behalf of the issuer, or based on the issuer's population,
for the same stated purpose for which the bonds are the subject of this application,
a statement by the trustee as to the current amount of unexpended proceeds
that exists for each such issue. The issuer of the prior issue of bonds shall
certify to the current amount of unexpended proceeds that exists for each
issue should a trustee not administer the bond issues;
(9)
[
(8)
] if unexpended proceeds
, including transferred proceeds representing unexpended proceeds,
other
than prepayments exist from a prior issue or issues of bonds, other than a
state-voted issue or an issue by the Texas Department of Housing and Community
Affairs, issued by issuer or on behalf of issuer, or based on the issuer's
population, for the same stated purpose for which the bonds are the subject
of this application, a definite and binding financial commitment agreement
must accompany the application in such form as the board finds acceptable,
to expend the unexpended proceeds
by the later of
[
within
] 12 months after the date of receipt by the board of an application
for reservation
or December 31 of the program year for which the application
is being filed
. For purposes of this paragraph, the commitment by lenders
to originate and close loans within a certain period of time shall be deemed
a definite and binding agreement to expend bond proceeds within such period
of time and any additional period of time during which such origination period
may be extended under the terms of such agreement; provided however, that
any such extension provision may be amended, prior to the date on which the
bond authorization requirements described in subsection (c) of this section
must be satisfied, to provide that such period shall not be extended beyond
the later of
12 months after the date of receipt by the board of an
application for reservation
or December 31 of the program year for which
the application is being filed. For purposes of this paragraph, issuers of
qualified student loan bonds authorized by §53.47, Education Code, may
satisfy the requirements of Article 5190.9a, §4(a)(6) by, in lieu of
a definite and binding agreement, providing with the application evidence
as certified by the issuer that the issuer has purchased, in each of the last
three calendar years, qualified student loans in amounts greater than or equal
to the amount of the unexpended proceeds
;
(10)
[
(9)
] if unexpended proceeds
exist from a prior issue or issues of bonds, other than a state-voted issue
or an issue by the Texas Department of Housing and Community Affairs, issued
by the issuer or on behalf of the issuer, or based on the issuer's population,
for the same stated purpose for which the bonds are the subject of the pending
application, a written opinion of legal counsel, addressed to the board, to
the effect, that the board may rely on the representation contained in the
application to fulfill the requirements of the Act and that the agreement
referred to in paragraph
(9)
[
(8)
] of this subsection
constitutes a legal and binding obligation of the issuer, if applicable, and
the other party or parties to the agreement;
(11)
[
(10)
] a written opinion of
legal counsel, addressed to the board, to the effect that the bonds are required
to be included under the state ceiling and that the issuer is authorized under
the laws of the state to issue bonds for projects of the same type and nature
as the project which is the subject of the application. This opinion shall
cite by constitutional or statutory reference, the provision of the Constitution
or law of the state which authorizes the bonds for the project;
(12)
[
(11)
] a qualified mortgage
bond issuer that submits an application for reservation as described in
§1372.032, Texas Government Code
[
the Act, §3(c)
],
shall provide a statement certifying to the most recent closing of qualified
mortgage bonds determined as provided in §190.2
(c)
[
(b)
](3) of this title, and the most recent date of a reservation received
for mortgage revenue bonds and state the government unit(s) for which the
local population was based for the issuance of bonds or for receipt of a reservation;
and
(13)
[
(12)
] For a qualified residential
rental project issue, an issuer [
that submits an application as described
in the Act, §3(c),
] shall provide a copy of an executed earnest
money contract between the borrower and the seller of the project. This earnest
money contract must be in effect at the time of submission of the application
to the board
and expire no earlier than March 1 of the program year,
with the option to extend as necessary so that the borrower will have site
control at the time a reservation is granted
. If the borrower owns the
property, evidence of ownership must be provided.
(c)-(d)
(No change.)
(e)
Closing documents. Not later than the fifth business day
after the day on which the bonds are closed the issuer shall file with the
board:
(1)-(5)
(No change.)
(6)
the document evidencing compliance with
§1372.040,
Texas Government Code
[
Section 3(g) of the Act
] ;
(7)-(9)
(No change.)
(10)
For a residential rental
project described in §190.2(d)(1) or (2) of this title (relating to Allocation
and Reservation System), 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.
(f)
(No change.)
(g)
Application restrictions.
(1)-(3)
(No change.)
(4)
For any one project, no issuer, prior to September
1 of the program year, may exceed the following maximum application limits:
(A)
$25 million for issuers described by
Article 5190.9a,
§2(b)(1) [
of the Act
] other than the Texas Department
of Housing and Community Affairs;
(B)
$50 million for issuers described by
Article 5190.9a,
[
the Act
] §2(b)(2) other than the Texas Higher Education
Coordinating Board and $75 million for the Texas Higher Education Coordinating
Board;
(C)
an amount as limited by the code for issuers described
by
Article 5190.9a,
§2(b)(3) [
of the Act
];
(D)
the lesser of $15 million or 15 percent of the amount set
aside for this purpose for issuers described by
Article 5190.9a,
[
of the Act,
] § 2(b)(4);
(E)
$25 million for issuers described by
Article 5190.9a,
[
the Act,
] §2(b)(6); and
(F)
$35 million for issuers described by
Article 5190.9a,
§2(b)(5) [
of the Act
].
(5)
(No change.)
§190.4.Filing Requirements for Applications for Carryforward.
(a)-(b)
(No change.)
(c)
Fee. The fee required by Article
5190.9a, §12 must be paid within 5 business days of receipt of the certificate
of carryforward designation.
(d)
[
(c)
] Additional Information. The
board may require additional information at any time before granting a certificate
of carryforward.
(e)
[
(d)
] Closing documents. Not later
than the fifth business day after the day on which the bonds are closed the
issuer shall file with the board:
(1)
a closing documents checklist on the form prescribed by
the board;
(2)
a certificate of delivery on the form prescribed by
the board;
(3)
a certified copy of the bond resolution authorizing
the issuance of bonds, and setting forth the specific principal amount of
the bond issue;
(4)
if one is required, a copy of the approval of the
local government unit or local government units, certified by a public official
with the authority to certify such approval. This requirement shall not apply
to any bonds for which the Code does not require such a public hearing and
approval of a local government unit or local government units;
(5)
other documents relating to the issuance of bonds,
including a statement of the bonds':
(A)
principal amount;
(B)
interest rate or the formula by which the interest is calculated;
(C)
maturity schedule;
(D)
purchaser or purchasers; and
(6)
an official statement.
§190.5.Consideration of Qualified Applications by the Board.
(a)-(f)
(No change.)
[
(g)
After August 25 of the program
year but prior to September 1 of the program year, if any portion of the state
ceiling set aside exclusively for the housing finance division of the Texas
Department of Housing and Community Affairs is not subject to a reservation,
such portion prior to September 1 of the program year shall be available exclusively
to issuers of qualified mortgage bonds in accordance with the Act, §3(c).]
(g)
[
(h)
] A reservation that is received
by an issuer of qualified mortgage bonds for only a portion of the amount
requested in the application for reservation shall be considered a reservation
for the program year regardless of the amount reserved, and if an application
for a reservation is submitted for the following program year by such issuer,
as described in
§1372.032, Texas Government Code
[
the
Act, §3(c)
], the category of priority will be determined in accordance
with
§1372.032(a), Texas Government Code
[
the Act, §3(c)(2)
] and the order determined by
§1372.032 (c), Texas Government
Code
[
the Act, §3(c)(4)
].
(h)
[
(i)
] If any change in a qualified
application or in any of the items accompanying the application should occur
prior to the date state ceiling becomes available to an issuer, the issuer
or authorized representative shall promptly notify the board of any such change.
Upon state ceiling becoming available, an issuer or authorized representative,
within three days upon receipt of notice from the board that a portion of
the state ceiling will be available to the issuer, must confirm and certify
that the information contained in the qualified application and all items
accompanying the application are and remain accurate and in full force and
effect, except as may be specifically set forth in any amendment to the qualified
application (which does not result in the application failing to constitute
a qualified application), which amendment will constitute such certification.
Prior to receiving a reservation, only an issuer may amend the application
to change the amount of the state ceiling requested, but the board may not
accept an amendment to increase the amount of the state ceiling requested
unless at the time of the amendment seeking an increase in the amount of state
ceiling there are no other qualified applications pending, subsequent in order
to said application, for which state ceiling is not available. A reservation
date will not be given by the board until the receipt of such certification.
(i)
[
(j)
] Upon notice by the board that
a portion of the state ceiling will be available to the issuer for less than
the requested amount, the issuer or authorized representative must confirm
in writing its acceptance or denial of the amount available, within three
business days. Refusal by an issuer to accept a certificate of reservation
for less than the amount requested in a qualified application shall not change
the chronological order in which such issuer will be offered a certificate
of reservation. If an issuer accepts a certificate of reservation for less
than the requested amount, the issuer shall maintain its current position,
and will be offered the next available reservation amounts until the original
request has been satisfied. However, the deadline restrictions will be calculated
from the date of reservation for each reservation amount.
§190.6.Expiration Provisions.
(a)
A certificate of reservation for an application within
the category described by
Article 5190.9a,
§2(b)(1) [
of the Act
] shall expire at the close of business on the 180th calendar
day after the date on which the reservation is given. A certificate of reservation
for an application within the categories described by
Article 5190.9a,
§2(b)(2)-(6) [
of the Act
] shall expire at the close
of business on the 120th calendar day after the date on which the reservation
is given.
(b)
(No change.)
§190.7.Cancellation, Withdrawal and Penalty Provisions.
(a)
(No change.)
(b)
If the closing documents are not received within five business
days after the closing as described in §190.3(e) of this title (relating
to Filing Requirements for Applications for Reservation), the issuer's reservation
is cancelled and during the 150-day period beginning on the reservation date
of the cancelled reservation for applications within the categories described
by
Article 5190.9a,
§2(b)(2)-(6) [
of the Act
],
and the 210-day period for an application within the category described by
Article 5190.9a,
[
the Act,
] §2(b)(1):
(1)-(2)
(No change.)
(c)-(d)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on June
18, 1999.
TRD-9903654
José Hernández
Executive Director
Texas Bond Review Board
Earliest possible date of adoption: August 8, 1999
For further information, please call: (512) 463-1741