Texas Statutes
Subchapter DD. Low Income Housing Tax Credit Program
Section 2306.6702. Definitions

Sec. 2306.6702. DEFINITIONS. (a) In this subchapter:
(1) "Applicant" means any person or affiliate of a person who files an application with the department requesting a housing tax credit allocation.
(2) "Application" means an application filed with the department by an applicant and includes any exhibits or other supporting materials.
(3) "Application log" means a form containing at least the information required by Section 2306.6709.
(4) "Application round" means the period beginning on the date the department begins accepting applications and continuing until all available housing tax credits are allocated, but not extending past the last day of the calendar year.
(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) Sections 514, 515, and 516, Housing Act of 1949 (42 U.S.C. Sections 1484, 1485, and 1486); or
(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.
(6) "Development" means a proposed qualified low income housing project, as defined by Section 42(g), Internal Revenue Code of 1986 (26 U.S.C. Section 42(g)), that consists of one or more buildings containing multiple units, that is financed under a common plan, and that is owned by the same person for federal tax purposes, including a project consisting of multiple buildings that:
(A) are located on scattered sites; and
(B) contain only rent-restricted units.
(7) "Development owner" means any person or affiliate of a person who owns or proposes a development or expects to acquire control of a development under a purchase contract approved by the department.
(8) "Housing tax credit" means a tax credit allocated under the low income housing tax credit program.
(9) "Land use restriction agreement" means an agreement between the department, the development owner, and the development owner's successors in interest that encumbers the development with respect to the requirements of this subchapter and the requirements of Section 42, Internal Revenue Code of 1986 (26 U.S.C. Section 42).
(10) "Qualified allocation plan" means a plan adopted by the board under this subchapter that:
(A) provides the threshold, scoring, and underwriting criteria based on housing priorities of the department that are appropriate to local conditions;
(B) consistent with Section 2306.6710(e), gives preference in housing tax credit allocations to developments that, as compared to the other developments:
(i) when practicable and feasible based on documented, committed, and available third-party funding sources, serve the lowest income tenants per housing tax credit; and
(ii) produce for the longest economically feasible period the greatest number of high quality units committed to remaining affordable to any tenants who are income-eligible under the low income housing tax credit program; and
(C) provides a procedure for the department, the department's agent, or another private contractor of the department to use in monitoring compliance with the qualified allocation plan and this subchapter.
(11) "Related party" means the following individuals or entities:
(A) the brothers, sisters, spouse, ancestors, and descendants of a person within the third degree of consanguinity, as determined by Chapter 573;
(B) a person and a corporation, if the person owns more than 50 percent of the outstanding stock of the corporation;
(C) two or more corporations that are connected through stock ownership with a common parent possessing more than 50 percent of:
(i) the total combined voting power of all classes of stock of each of the corporations that can vote;
(ii) the total value of shares of all classes of stock of each of the corporations; or
(iii) the total value of shares of all classes of stock of at least one of the corporations, excluding, in computing that voting power or value, stock owned directly by the other corporation;
(D) a grantor and fiduciary of any trust;
(E) a fiduciary of one trust and a fiduciary of another trust, if the same person is a grantor of both trusts;
(F) a fiduciary of a trust and a beneficiary of the trust;
(G) a fiduciary of a trust and a corporation if more than 50 percent of the outstanding stock of the corporation is owned by or for:
(i) the trust; or
(ii) a person who is a grantor of the trust;
(H) a person or organization and an organization that is tax-exempt under Section 501(a), Internal Revenue Code of 1986 (26 U.S.C. Section 501), and that is controlled by that person or the person's family members or by that organization;
(I) a corporation and a partnership or joint venture if the same persons own more than:
(i) 50 percent of the outstanding stock of the corporation; and
(ii) 50 percent of the capital interest or the profits' interest in the partnership or joint venture;
(J) an S corporation and another S corporation if the same persons own more than 50 percent of the outstanding stock of each corporation;
(K) an S corporation and a C corporation if the same persons own more than 50 percent of the outstanding stock of each corporation;
(L) a partnership and a person or organization owning more than 50 percent of the capital interest or the profits' interest in that partnership; or
(M) two partnerships, if the same person or organization owns more than 50 percent of the capital interests or profits' interests.
(12) "Rural area" means an area that is:
(A) described by Section 2306.004(28-a); or
(B) designated by the department as a rural area under Section 2306.6740.
(13) "Rural development agency" means the state agency designated by the legislature as primarily responsible for rural area development in the state.
(14) "Set-aside" means a reservation of a portion of the available housing tax credits to provide financial support for specific types of housing or geographic locations or serve specific types of applicants as permitted by the qualified allocation plan on a priority basis.
(15) "Threshold criteria" means the criteria used to determine whether the development satisfies the minimum level of acceptability for consideration established in the department's qualified allocation plan.
(16) "Unit" means any residential rental unit in a development consisting of an accommodation, including a single room used as an accommodation on a non-transient basis, that contains complete physical facilities and fixtures for living, sleeping, eating, cooking, and sanitation.
(17) "Urban area" means the area that is located within the boundaries of a primary metropolitan statistical area or a metropolitan statistical area other than an area:
(A) described by Section 2306.004(28-a)(B); or
(B) designated by the department as a rural area under Section 2306.6740.
(b) For purposes of Subsection (a)(11), the constructive ownership provisions of Section 267, Internal Revenue Code of 1986 (26 U.S.C. Section 267), apply. The board may lower in the qualified allocation plan the percentages described by Subsection (a)(11).
Added by Acts 2001, 77th Leg., ch. 1367, Sec. 8.01, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 330, Sec. 17, eff. Sept. 1, 2003.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 857 (H.B. 429), Sec. 3, eff. September 1, 2013.
Acts 2013, 83rd Leg., R.S., Ch. 963 (H.B. 1888), Sec. 1, eff. September 1, 2013.
Acts 2015, 84th Leg., R.S., Ch. 896 (S.B. 1315), Sec. 1, eff. September 1, 2015.
Acts 2015, 84th Leg., R.S., Ch. 916 (H.B. 74), Sec. 1, eff. September 1, 2015.
Acts 2015, 84th Leg., R.S., Ch. 1259 (H.B. 2926), Sec. 1, eff. September 1, 2015.
Acts 2017, 85th Leg., R.S., Ch. 646 (S.B. 1238), Sec. 1, eff. June 12, 2017.

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