The bill, H.B. No. 1342, amends Section 1372.0321 of the Government Code to enhance the process for issuing private activity bonds for qualified residential rental projects. It introduces new subsections (a-1) and (a-2), which establish a second priority for projects that meet specific criteria, such as having applications filed by a certain date and demonstrating significant expenditures related to construction or rehabilitation. The bill also redefines the criteria for prioritizing projects based on income restrictions, increasing the allowable income limits for certain units from 60% to 80% of the area median income. Additionally, it modifies the priority ranking for projects, changing the order of priority from second to third, third to fourth, and fourth to fifth.

Furthermore, the bill amends Section 1372.042(d) to streamline the reporting requirements for issuers after bond closure, removing the need for evidence of low-income housing tax credit approval for certain priority projects. It also repeals subsection (e) of Section 1372.0321, which may have contained outdated provisions. The changes will take effect on September 1, 2025, and will apply to the allocation of the available state ceiling under Chapter 1372 starting with the 2026 program year.

Statutes affected:
Introduced: Government Code 1372.0321, Government Code 1372.042 (Government Code 1372)
House Committee Report: Government Code 1372.0321, Government Code 1372.042 (Government Code 1372)