PART 9. TEXAS BOND REVIEW BOARD
CHAPTER 190. ALLOCATION OF STATE'S LIMIT ON CERTAIN PRIVATE ACTIVITY BONDS
SUBCHAPTER A. PROGRAM RULES
The Texas Bond Review Board (BRB) adopts amendments to Texas Administrative Code, Title 34, Part 9, Chapter 190, Subchapter A, §190.1 General Provisions; §190.2 Allocation and Reservation System; §190.3 Filing Requirements for Applications for Reservation; §190.4 Filing Requirements for Applications for Carryforward; §190.5 Consideration of Qualified Applications by the Board; §190.6 Expiration Provisions; and §190.8 Notices, Filings, and Submissions. The amendments are adopted without changes as proposed in the August 18, 2023, issue of the Texas Register (48 TexReg 4476) and will not be republished.
Reasoned Justification for the Adoption of the Amendments
The BRB adopted updates and clarifications to its rules in Texas Administrative Code (TAC) Chapter 190 based on the passage of House Bill 1766 by the 88th Legislature (2023 Regular Session). HB 1766 updates sections of Chapter 1372 of the Texas Government Code to stretch the limited "state-ceiling-resource" of the Private Activity Bond (PAB) program and incorporates a new first-priority classification for qualified residential rental projects.
An overview of the adopted rule amendments is as follows:
1) Adopted rule amendment to §190.3(e)(11) extends the limited "state ceiling" by restricting the amount of allocation designated at closing to a residential rental project if the program is oversubscribed for a program year (the amount of residential rental requests submitted for the lottery exceeds the total available amount for SC4 and SC5) as required by HB 1766,
2) Adopted rule amendment to §190.2(d), and §190.3(e)(10) incorporate a new first priority classification and shifts the subsequent existing priority classifications down by one increment as required by HB 1766,
3) Adopted rule amendment to §190.1(c)(34), and §190.3(e)(4) provide uniformity among the timeframe requirements for all bond resolutions to make them valid for a period of 18 months,
4) Adopted rule amendment to §190.5(h), and §190.8(e) correct or eliminate any outdated language in order to conform to current practice, and
5) Adopted rule amendment to §190.2(d), §190.3(b)(13) - (16), §190.3(e)(7), §190.3(e)(9), §190.4(e)(5), §190.6(a), and §190.8(d) correct capitalization, punctuation, typographical, and other miscellaneous grammatical errors.
Public Comment and BRB Responses
The public comment period on the adopted amendments opened on August 18, 2023, and extended through midnight on Sunday, September 17, 2023. During the public comment period, one comment was received electronically from Dominium Development. Specific comments are addressed below.
The BRB held a public meeting to consider comments on the adopted rule changes on Thursday, September 21, 2023, at 10:00 a.m. in Capitol Extension Room E2.028, 1100 Congress Ave., Austin, Texas 78701, and via videoconference meeting.
Public Comment by Khayree Duckett from Dominium Development
COMMENT
Mr. Duckett offered the following comments in support of the proposed rule amendment to §190.3(e)(11):
"House Bill 1766 established a cap on the percentage of a project's costs that may be financed with private activity bonds will result in more vital housing projects being built with the limited state ceiling of available private activity bonds. By instituting a conditional 55 percent bond financing cap applicable in years when demand for these bonds is high, the Legislature sought to reverse trends that saw diluted effectiveness of private activity bond funding and a failure to maximize the number of projects ultimately built in Texas."
"While some language in HB 1766 has proven ambiguous, 34 TAC §§190.3(e)(11) seeks to extend the limited state ceiling of certain private activity bonds by restricting the amount of allocation designated at closing to a residential rental project if the program is oversubscribed for a program year. Dominium is pleased to see that BRB has determined that that 1372.037(b) is: always applicable throughout a program year; for all allocations of residential rental project bonds, regardless of subceilings; and does not exclude allocations of residential rental project bonds that close with traditional or non-traditional carryforward on or after January 1, 2024, thus fulfilling the 88th Legislature’s intent."
RESPONSE
The BRB appreciates the supportive comment. BRB will continue to strive to administer the Private Activity Bond Program to achieve the intent of the Legislature.
Concise Restatement of Statutory Authority:
The amendments are adopted under Texas Government Code §1372.004, which authorizes the BRB to adopt rules relating to its administration of the PAB program. They are also adopted under Texas Government Code §1372.006, which authorizes the BRB to require fees, and Texas Government Code §1372.0321, which sets forth priorities for reservations among issuers of qualified residential rental project issues. The statutory basis that authorizes BRB to designate an unencumbered state ceiling to an issuer is Texas Government Code §1372.073.
No other statute, articles, or codes are affected by the adopted rule amendments.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 21, 2023.
TRD-202303516
Rob Latsha
Executive Director
Texas Bond Review Board
Effective date: October 11, 2023
Proposal publication date: August 18, 2023
For further information, please call: (512) 463-1741