Bill Caption

Relating to the system by which an application for a low income housing tax credit is scored.

Fiscal Notes

The bill amends the Government Code relating to the system by which an application for a low income housing tax credit is scored. Based on the analysis of the Department of Housing and Community Affairs, duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing resources. 

Bill Analysis

SB 1316 would remove the commitment of development funding by local political subdivisions among the criteria used by the Texas Department of Housing and Community Affairs (TDHCA) or any successor agency to score and rank an application using a point system that prioritizes in descending order certain criteria. 

SB 1316 would amend the statute regarding the TDHCA, in allocating low income housing tax credits, to score each application using a point system based on criteria adopted by TDHCA that is consistent with TDHCA's housing goals by including including to demonstrate support from local political subdivisions based on the subdivisions' commitment of development funding.

SB 1316 would also add that In establishing the scoring criterion in the 2016 and 2017 qualified allocation plans related to the commitment of development funding by local political subdivisions, the department shall significantly reduce for each place regardless of population the amount in funding per low income unit required for a proposed project to receive the applicable number of points for that criterion. After the reduction, the amount of required funding may be a de minimis amount. This provision would expire in 2019. 

Vote Recommendation Notes

SB 1316 seeks to amend the housing projects scoring criteria to receive federal tax credits. Ostensibly this would diminish the importance of local buy-in to the process of awarding federal tax benefits to an affordable housing project. The likely impact of this legislation would be to allow some affordable housing projects to receive federal tax benefits that otherwise may not absent these proposed changes. As such this bill would expand the pool of projects eligible for the tax credits which would drive up competition for those credits, expand the number of subsidized projects, and thus continue to perpetuate that bad policy of subsidized housing which distorts free markets, confers special privileges, and reduces personal responsibility. On these grounds we oppose SB 1316.