S.B. No. 1474

	AN ACT
	relating to private activity bonds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 1372.001(1) and (2), Government Code,
	are amended to read as follows:
	(1)  "Additional state ceiling" means authorization
	under federal law for the issuance of bonds that are tax-exempt
	private activity bonds subject to the limits imposed by Section
	146, Internal Revenue Code (26 U.S.C. Section 146), in an amount in
	addition to the state ceiling[, including the additional tax-exempt
	private activity bonds authorized by Section 3021 of the Housing
	and Economic Recovery Act of 2008 (Pub. L. No.   110-289)].
	(2)  "Bonds" means all obligations, including bonds,
	certificates, or notes, that are:
	(A)  authorized to be issued by:
	(i)  the constitution or a statute of this
	state; or
	(ii)  the charter of a home-rule
	municipality; and
	(B)  either:
	(i)  subject to the limitations of Section
	146, Internal Revenue Code (26 U.S.C. Section 146); or
	(ii)  with respect to Subchapter D,
	otherwise entitled to a federal subsidy only if designated for the
	exemption, credit, or other subsidy, or allocated a portion of a
	limited amount of obligations for which the exemption, credit, or
	other subsidy is authorized, by this state or an applicable
	official or by an issuer to which this state or the applicable
	official has made an allocation, including exemptions, credits, and
	other subsidies authorized by[:
	[(a)     the Heartland Disaster Tax
	Relief Act of 2008 (Pub. L. No.   110-343), regarding Hurricane Ike
	disaster area bonds;
	[(b)     the American Recovery and
	Reinvestment Act of 2009 (Pub. L. No.   111-5); or
	[(c)]  any [other] federal law
	authorizing a federal subsidy.
	SECTION 2.  Sections 1372.002(a) and (c), Government Code,
	are amended to read as follows:
	(a)  For purposes of this chapter, a project is:
	(1)  an eligible facility or facilities that are
	proposed to be financed, in whole or in part, by an issue of
	qualified residential rental project bonds;
	(2)  in connection with an issue of qualified mortgage
	bonds [or qualified student loan bonds], the providing of financial
	assistance to qualified mortgagors [or students] located in all or
	any part of the jurisdiction of the issuer; [or]
	(3)  in connection with an issue of qualified student
	loan bonds:
	(A)  if the issuer is the Texas Higher Education
	Coordinating Board, the provision of financial assistance to
	students; or
	(B)  if an issuer is authorized by Section 53B.47,
	Education Code, the provision of guaranteed student loans or
	alternative education loans that satisfy the requirements of
	Section 53B.47(b), Education Code; or
	(4)  an eligible facility or facilities that are
	proposed to be financed, in whole or in part, by an issue of bonds
	other than bonds described by Subdivision (1), [or] (2), or (3).
	(c)  For purposes of Subsection (a)(1), an application under
	this chapter may include either the rehabilitation or new
	construction, or both the rehabilitation and new construction, of
	qualified residential rental facilities located at multiple sites
	and with respect to which 51 percent or more of the residential
	units are located:
	(1)  in a county with a population of less than 100,000
	[75,000]; or
	(2)  in a county in which the median income is less than
	the median income for the state, provided that the units are located
	in that portion of the county that is not included in a metropolitan
	statistical area containing one or more projects that are proposed
	to be financed, in whole or in part, by an issuance of bonds.
	SECTION 3.  Section 1372.006(a), Government Code, is amended
	to read as follows:
	(a)  An application for a reservation under Subchapter B or a
	carryforward designation under Subchapter C must be accompanied by
	a nonrefundable fee in the amount of $500, except that:
	(1)  for projects that include multiple facilities
	authorized under Section 1372.002(e), the application must be
	accompanied by a nonrefundable fee in an amount of $500 for each
	facility included in the application for the project;
	(2)  for issuers of qualified residential rental
	project bonds the application must be accompanied by a
	nonrefundable fee of $5,000, of which the board shall retain $1,000
	to offset the costs of the private activity bond allocation program
	and the administration of that program and of which the board shall
	transfer $4,000 through an interagency agreement to the Texas
	Department of Housing and Community Affairs for use in the
	affordable housing research and information program as provided by
	Section 2306.259; and
	(3)  for a [combined] project that includes multiple
	qualified residential rental projects authorized under Section
	1372.002(f), the application must be accompanied by a nonrefundable
	fee in an amount of $5,000 for each qualified residential rental
	project included in the application for the [combined] project,
	with a maximum total fee of $25,000. The [the total amount of which
	the] board shall retain 20 percent to offset the costs of the
	private activity bond allocation program and the administration of
	that program. The [and of which the] board shall transfer 80
	percent through an interagency agreement to the Texas Department of
	Housing and Community Affairs for use in the affordable housing
	research and information program as provided by Section 2306.259.
	SECTION 4.  Section 1372.022(a), Government Code, is amended
	to read as follows:
	(a)  If the state ceiling is computed on the basis of $75 per
	capita or a greater amount, before August 15 of each year:
	(1)  32.25 [28.0] percent of the state ceiling is
	available exclusively for reservations by issuers of qualified
	mortgage bonds;
	(2)  10.0 [8] percent of the state ceiling is available
	exclusively for reservations by issuers of state-voted issues;
	(3)  2.0 percent of the state ceiling is available
	exclusively for reservations by issuers of qualified small issue
	bonds and enterprise zone facility bonds;
	(4)  26.25 [22.0] percent of the state ceiling is
	available exclusively for reservations by issuers of qualified
	residential rental project bonds; and
	(5)  [10.5 percent of the state ceiling is available
	exclusively for reservations by issuers of qualified student loan
	bonds authorized by Section 53B.47, Education Code, that are
	nonprofit corporations able to issue a qualified scholarship
	funding bond as defined by Section 150(d)(2), Internal Revenue Code
	(26 U.S.C. Section 150(d)(2)); and
	[(6)]  29.5 percent of the state ceiling is available
	exclusively for reservations by any other issuer of bonds that
	require an allocation.
	SECTION 5.  Section 1372.0231(b), Government Code, as
	amended by Chapters 1329 (S.B. 1664) and 330 (S.B. 264), Acts of the
	78th Legislature, Regular Session, 2003, is reenacted and amended
	to read as follows:
	(b)  With respect to the amount of the state ceiling set
	aside under Subsection (a)(1), the board shall grant reservations
	at the direction of the Texas Department of Housing and Community
	Affairs as provided by Section 2306.359 and in a manner that ensures
	that[:
	[(1)]  the set-aside amount is used for proposed
	projects that are located throughout the state[; and
	[(2)     not more than 50 percent of the set-aside amount
	is used for proposed projects that are located in qualified census
	tracts as defined by Section 143(j), Internal Revenue Code of
	1986].
	SECTION 6.  Sections 1372.0231(d), (g), and (i), Government
	Code, are amended to read as follows:
	(d)  Except as provided by Subsection (i), before March [May]
	1, the board shall apportion the amount of the state ceiling set
	aside under Subsection (a)(2) among the uniform state service
	regions according to the percentage of the state's population that
	resides in each of those regions.
	(g)  On or after March [May] 1, the board may not grant
	available reservations to housing finance corporations described
	by Subsection (a) based on uniform state service regions or any
	segments of those regions.
	(i)  Before March [May] 1, the board shall apportion the
	amount of the state ceiling set aside under Subsection (a)(2) only
	among uniform state service regions with respect to which an issuer
	has submitted an application for a reservation of the state ceiling
	[on or] before March 1.
	SECTION 7.  Sections 1372.024(a) and (b), Government Code,
	are amended to read as follows:
	(a)  If, before January 2, applications received for
	reservations for state-voted issues total more than 10 [eight]
	percent of the available state ceiling for that program year, the
	percentage of state-voted ceiling requested that is more than 10
	[eight] percent of the state ceiling:
	(1)  is removed from the state ceiling available to
	other issuers on January 2; and
	(2)  is available for those applications for
	reservations for state-voted issues.
	(b)  The amount removed under Subsection (a) may not exceed
	10 [eight] percent of the state ceiling.
	SECTION 8.  Section 1372.026(b), Government Code, is amended
	to read as follows:
	(b)  A housing finance corporation may not receive an
	allocation for the issuance of qualified mortgage bonds in an
	amount that exceeds the greater of:
	(1)  $50 [$40] million; or
	(2)  1.70 percent of the state ceiling.
	SECTION 9.  Sections 1372.0261(d) and (g), Government Code,
	are amended to read as follows:
	(d)  A housing finance corporation may not be penalized under
	Subsection (c) if:
	(1)  the corporation fails to use:
	(A)  bond proceeds recycled from previous
	allocations of the state ceiling; or
	(B)  taxable bond proceeds; [or]
	(2)  as the result of an issuance of bonds, the
	corporation's utilization percentage is 80 percent or greater; or
	(3)  the application is received after July 14.
	(g)  An issuer that has carryforward available from the
	additional state ceiling [created by the Housing and Economic
	Recovery Act of 2008 (Pub. L. No.   110-289)] is not restricted by
	project limits for the state ceiling. An issuer who uses the
	carryforward to issue qualified mortgage bonds or mortgage credit
	certificates is not subject to the utilization percentage
	calculation in determining the amount of the issuer's reservation
	request.
	SECTION 10.  Section 1372.0281, Government Code, is amended
	to read as follows:
	Sec. 1372.0281.  INFORMATION REQUIRED OF ISSUERS OF CERTAIN
	QUALIFIED STUDENT LOAN BONDS. (a)  An issuer of qualified student
	loan bonds authorized by Section 53B.47 [53.47], Education Code,
	shall provide to the board together with its application for a
	reservation information required by board rule.
	(b)  The board may require an issuer described by Subsection
	(a) to provide information with its application, or to supplement
	the application with information, that includes:
	(1)  financial statements;
	(2)  portfolio amounts;
	(3)  default rates;
	(4)  descriptions of how bond proceeds [student loans]
	are being used or spent; and
	(5)  other information required by the board [about the
	issuer's client agencies].
	SECTION 11.  Sections 1372.031(a) and (b), Government Code,
	are amended to read as follows:
	(a)  Except as provided by Subsection (b) and subject to
	Sections 1372.0321, 1372.0231, and 1372.035(c), if, on or before
	October 20, more than one issuer in a category described by Section
	1372.022(a)(2), (3), (4), or (5) [(6)] applies for a reservation of
	the state ceiling for the next program year, the board shall grant
	reservations in that category in the order determined by the board
	by lot.
	(b)  Until August 1 of the program year, within the category
	described by Section 1372.022(a)(5) [1372.022(a)(6)], the board
	shall grant priority to the Texas Economic Development Bank for
	projects that the Texas Economic Development and Tourism Office
	determines meet the governor's criteria for funding from the Texas
	Enterprise Fund.  Notwithstanding the priority, the Texas Economic
	Development Bank may not receive an amount greater than one-sixth
	of the portion of the state ceiling available under Section
	1372.022(a)(5) [1372.022(a)(6)] on January 1 of the program year.
	SECTION 12.  Sections 1372.033(a), (d), and (g), Government
	Code, are amended to read as follows:
	(a)  In this section, "qualified nonprofit corporation"[:
	[(1)  "Qualified nonprofit corporation"] has the
	meaning assigned by Section 53B.02(11), Education Code.
	[(2)     "Student loan bond allocation" means the total
	amount of the allocation for private activity bonds under Section
	1372.022(a)(5) for a program year divided by the number of
	qualified nonprofit corporation applicants that comply with all
	applicable application requirements for that year.]
	(d)  Each qualified nonprofit corporation that applies for a
	student loan bond allocation in compliance with all applicable
	application requirements for a program year is entitled to receive
	a student loan bond allocation prioritized in the order that the
	application was received by the board for that year.
	(g)  A qualified nonprofit corporation that receives a
	student loan bond allocation may not:
	(1)  transfer the allocation to another entity; or
	(2)  loan to another entity, other than a qualified
	borrower, [student] proceeds of bonds issued under the allocation.
	SECTION 13.  Section 1372.037(a), Government Code, is
	amended to read as follows:
	(a)  Before [Except as provided by Subsection (b), before]
	August 15 the board may not grant for any single project a
	reservation for that year that is greater than:
	(1)  [$40 million,] if the issuer is an issuer of
	qualified mortgage bonds, other than the Texas Department of
	Housing and Community Affairs or the Texas State Affordable Housing
	Corporation, the greater of:
	(A)  $50 million; or
	(B)  1.70 percent of the available state ceiling;
	(2)  [$50 million,] if the issuer is an issuer of a
	state-voted issue, other than the Texas Higher Education
	Coordinating Board, the greater of:
	(A)  $100 million; or
	(B)  3.40 percent of the available state ceiling;
	(3)  [or $75 million,] if the issuer of a state-voted
	issue is the Texas Higher Education Coordinating Board, the greater
	of:
	(A)  $200 million; or
	(B)  6.80 percent of the available state ceiling;
	(4)  if the issuer is an issuer of qualified small issue
	bonds and enterprise zone facility bonds, [(3)]  the amount to
	which the Internal Revenue Code limits issuers of [qualified small
	issue bonds and enterprise zone facility bonds, if the issuer is an
	issuer of] those bonds;
	(5)  [(4)     the lesser of $20 million or 15 percent of
	the amount set aside for reservation by issuers of qualified
	residential rental project bonds,] if the issuer is an issuer of
	qualified residential rental project [those] bonds, the greater of:
	(A)  $50 million; or
	(B)  1.70 percent of the available state ceiling;
	[(5)     the amount as prescribed in Sections 1372.033(d),
	(e), and (f), if the issuer is an issuer authorized by Section
	53B.47, Education Code, to issue qualified student loan bonds;] or
	(6)  [$50 million,] if the issuer is any other issuer of
	bonds that require an allocation, the greater of:
	(A)  $100 million; or
	(B)  3.40 percent of the available state ceiling.
	SECTION 14.  Sections 1372.042(a), (a-1), (b), and (c),
	Government Code, are amended to read as follows:
	(a)  An issuer other than an issuer of qualified residential
	rental project bonds, an issuer of state-voted issues, a qualified
	nonprofit corporation issuer of qualified student loan bonds, or an
	issuer of qualified mortgage bonds shall close on the bonds for
	which the reservation was granted not later than the 150th [120th]
	day after the reservation date.
	(a-1)  An issuer of qualified residential rental project
	bonds shall close on the bonds for which the reservation was granted
	not later than the 180th [150th] day after the reservation date. If
	an issuer of qualified residential rental project bonds fails to
	close on the bonds for which a reservation was granted, the issuer
	shall pay the full closing fee provided by Section 1372.006(b) if
	the application is not withdrawn before the 150th [120th] day after
	the reservation date.
	(b)  An issuer of state-voted issues, a qualified nonprofit
	corporation issuer of qualified student loan bonds, or an issuer of
	qualified mortgage revenue bonds shall close on the bonds for which
	the reservation was granted not later than the 210th [180th] day
	after the reservation date.
	(c)  Notwithstanding Subsections (a), (a-1), and (b), if the
	150-day [120-day] period, the 180-day [150-day] period, or the
	210-day [180-day] period, as applicable, expires on or after
	December 24 of the year in which the reservation was granted, the
	issuer shall close on the bonds before December 24, except that if
	the applicable period expires after December 31 of that year, the
	issuer may notify the board in writing before December 24 of the
	issuer's election to carry forward the reservation and of the
	issuer's expected bond closing date. In compliance with the
	requirements of Section 146(f), Internal Revenue Code of 1986, the
	board shall file in a timely manner a carryforward election with
	respect to any bonds expected to close after December 31 to permit
	the bonds to close by the expected date, except that the board may
	not file the carryforward election after February 15 of the year
	following the year in which the reservation was granted. The grant
	of the reservation for the balance of the 150-day [120-day] period,
	the 180-day [150-day] period, or the 210-day [180-day] period, as
	applicable, is automatically and immediately reinstated on the
	board's filing of a carryforward election with respect to the
	reservation.
	SECTION 15.  Section 1372.043, Government Code, is amended
	to read as follows:
	Sec. 1372.043.  CANCELLATION OF RESERVATION ON ISSUER'S
	FAILURE TO TIMELY CLOSE ON BONDS. If an issuer does not close on the
	issuer's bonds as required by Section 1372.042:
	(1)  the reservation for the issue is canceled; and
	(2)  for the period beginning on the reservation date
	and ending on the 150th day, the 180th day, or the 210th day after
	the reservation date, as applicable under Section 1372.042, or on
	the 210th day after the reservation date if the issuer is an issuer
	of qualified mortgage bonds:
	(A)  no issuer may submit an application for a
	reservation for the same project; and
	(B)  the issuer is eligible for a carryforward
	designation for the project only as provided by Subchapter C.
	SECTION 16.  Section 1372.069, Government Code, is amended
	by amending Subsection (c) and adding Subsection (e) to read as
	follows:
	(c)  An issuer may [not] apply for the carryforward
	designation of an amount that is not more [greater] than the greater
	of:
	(1)  $50 million; or
	(2)  1.70 percent of the available state ceiling.
	(e)  A carryforward designation granted under this section
	must comply with the Internal Revenue Code of 1986.
	SECTION 17.  Section 1372.073, Government Code, is amended
	to read as follows:
	Sec. 1372.073.  DESIGNATION BY BOARD OF UNENCUMBERED STATE
	CEILING. Notwithstanding any other provision of this chapter, the
	board on the last business day of the year may assign as
	carryforward to a state agency or to an issuer that was created to
	act on behalf of this state [agencies] at the [their] request of the
	issuer and in the order received any state ceiling that is not
	reserved or designated as carryforward and for which no application
	for carryforward is pending.
	SECTION 18.  Subchapter C, Chapter 1372, Government Code, is
	amended by adding Section 1372.074 to read as follows:
	Sec. 1372.074.  REASSIGNMENT OF CARRYFORWARD DESIGNATION.
	(a)  After one year from the initial carryforward designation, an
	issuer may elect to reassign all or part of the carryforward
	designation to a new project if the issuer provides:
	(1)  the designation on a form described by Section
	1372.070;
	(2)  a written request signed by an authorized
	representative of the issuer;
	(3)  the issuing board resolution authorizing the
	carryforward designation reassignment with an original signature
	by an officer of the issuer;
	(4)  applicable fees under Section 1372.006;
	(5)  an opinion of legal counsel stating that the
	carryforward designation reassignment does not conflict with
	Section 146, Internal Revenue Code of 1986; and
	(6)  any other information required by the board.
	(b)  A new project that is reassigned a carryforward
	designation under this section must close within the time period
	allowed by the Internal Revenue Code of 1986.
	(c)  An unutilized carryforward designation available after
	a project closes on a carryforward designation under Section
	1372.069 may be used by the issuer for other projects subject to
	Subsection (b) and Section 1372.061(b).
	SECTION 19.  Sections 53B.02(2) and (7), Education Code, are
	amended to read as follows:
	(2)  "Alternative education loan" means a loan other
	than a guaranteed student loan that is made to a student, a former
	student, or any other person [or] for the benefit of the [a] student
	or former student for the purpose of financing or refinancing all or
	part of the student's or former student's cost of attendance at an
	accredited institution.  The term includes:
	(A)  indebtedness that meets the definition of a
	qualified education loan under Section 221(d)(1), Internal Revenue
	Code of 1986; and
	(B)  indebtedness used to refinance indebtedness
	that meets the definition of a qualified education loan under
	Section 221(d)(1), Internal Revenue Code of 1986.
	(7)  "Cost of attendance" means all costs of a student
	or former student incurred in connection with that student's or
	former student's [a] program of study at an accredited institution,
	as determined by the institution, including tuition and
	instructional fees, the cost of room and board, books, computers,
	and supplies, and other related fees, charges, and expenses.
	SECTION 20.  Sections 53B.47(b), (d), and (h), Education
	Code, are amended to read as follows:
	(b)  An authority may cause money to be expended to make or
	purchase for its account guaranteed student loans that are
	guaranteed by the Texas Guaranteed Student Loan Corporation, other
	guaranteed student loans, or alternative education loans that are
	executed by or on behalf of students or former students who:
	(1)  are residents of this state; or
	(2)  have been admitted to attend or who attended an
	accredited institution within this state.
	(d)  The authority, as a municipal corporation of the state,
	is charged with a portion of the responsibility of the state to
	provide educational opportunities in keeping with all applicable
	state and federal laws.  This [Nothing in this] section may not
	[shall] be construed as a prohibition against establishing policies
	to limit the purchase of guaranteed student loans or alternative
	education loans executed by or on behalf of students or former
	students who are attending or who attended [attending] school in a
	certain geographical area or by or on behalf of students or former
	students who are residents of the area.
	(h)  An alternative education loan may be made under this
	section only by or on behalf of a qualified alternative education
	loan lender. An alternative education loan may not be in an amount
	that exceeds the amount permitted under Section 144(b)(1)(B),
	Internal Revenue Code of 1986 [in excess of the difference between
	the cost of attendance and the amount of other student assistance to
	the student, other than loans under Section 428B(a)(1), Higher
	Education Act of 1965 (20 U.S.C. Section 1078-2) (relating to
	parent loans), for which the student borrower may be eligible].  An
	alternative education loan covered by this subsection is subject to
	Chapter 342, Finance Code, as applicable, except that:
	(1)  the maximum interest rate on the loan may not
	exceed the rate permitted under Subchapter A, Chapter 303, Finance
	Code; and
	(2)  application and origination fees may be agreed to
	by the parties and assessed at the inception of the loan, provided
	that if any such fees constitute additional interest under
	applicable law, the effective rate of interest agreed to over the
	stated term of the loan may not exceed the rate allowed by
	Subchapter A, Chapter 303, Finance Code, and accrued unpaid
	interest may be added to unpaid principal at the beginning of the
	agreed repayment period at the borrower's option and in accordance
	with the terms of the agreement for purposes of determining the
	total principal amount due at the inception of the repayment
	period.
	SECTION 21.  The following provisions of the Government Code
	are repealed:
	(1)  Section 1372.001(18);
	(2)  Sections 1372.0231(c) and (e); and
	(3)  Section 1372.037(b).
	SECTION 22.  The change in law made by this Act to Chapter
	1372, Government Code, applies to the allocation of the available
	state ceiling under that chapter beginning with the 2020 program
	year.
	SECTION 23.  This Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1474 passed the Senate on
	April 16, 2019, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1474 passed the House on
	May 21, 2019, by the following vote:  Yeas 146, Nays 0,
	two present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor