Untitled Texas Attorney General Opinion ( 2014 )

GREG
0
ATTORNEY GENERAL OF TEXAS
ABBOTT
May 20,2014
Mr. J. Paul Oxer, Chair Opinion No. GA-1060
Governing Board
Texas Department of Housing and Re: Authority of the Texas Department of
Community Affairs Housing and Community Affairs over
Post Office Box 13941 implementation of the at-risk development set-
Austin, Texas 78711-3941 asides under the low income housing tax credit
program in Government Code sections
2306.6702(a)(5) and 2306.6714 (RQ-1167-GA)
Dear Mr. Oxer:
You ask whether the governing board of the Texas Department of Housing and
Community Affairs ("TDHCA") is authorized to treat certain housing developments as eligible
to receive a tax credit that has been set aside for "at-risk developments" under Government Code
section 2306.6714. 1 You explain that TDHCA administers the state's low income housing tax
credit program2-governed by chapter 2306, subchapter DD, of the Government Code-under
which tax credits are competitively awarded to developers of low income housing. Request
Letter at 1; see generally TEX. Gov'T CODE ANN. §§ 2306.6701-.6735 (West 2008 & Supp.
2013). You state that subchapter DD "provides for the establishment of certain set-asides."
Request Letter at 1. A "set-aside" is defined under chapter 2306 as "a reservation of a portion of
the available housing tax credits to provide financial support for specific types of housing ... or
serve specific types of applicants." TEX. Gov'T CODE ANN. § 2306.6702(a)(l4) (West Supp.
2013). Your question concerns the set-aside for "at-risk developments" under section
2306.6714. See id § 2306.6714(a).
As background, you explain that the United States Department of Housing and Urban
Development created the Rental Assistance Demonstration ("RAD") program, by which a
"public housing annual operating subsidy ... under Section 9 of the United States Housing Act
1
See Letter from Mr. J. Paul Oxer, Chair, Tex. Dept. of Housing & Cmty. Affairs, to Honorable Greg
Abbott, Tex. Att'y Gen. at 1 (Nov. 13, 2013), http://www.texasattomeygeneral.gov/opin ("Request Letter").
2
Federal law provides for the allocation and awarding of federal tax credits at the state level to developers
of low income housing. See generally 26 U.S.C.A. § 42 (West Supp. 2013).
Mr. J. Paul Oxer - Page 2 (GA-1060)
of 193 7 ... converts to a rental subsidy under Section 8 of the Act." Request Letter at 1. You
describe TDHCA's belief that "many of the [public housing authorities] in Texas will be seeking
to convert operating subsidies [to rental subsidies] under the RAD program." /d. at 2. Your
question is whether TDHCA may, as the administrator of the low income housing tax credit
program, treat public housing developments undergoing a RAD conversion as eligible to
compete for the at-risk set-aside under section 2306.6714. /d.
Like the courts, when construing a statute we seek to draw the Legislature's intent from
the statute's plain language. See Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437
(Tex. 2009). Section 2306.6714 provides in relevant part:
(a) [TDHCA] shall set aside for eligible at-risk developments
not less than 15 percent of the housing tax credits available
for allocation in the calendar year.
(a-1) An at-risk development described by Section
2306.6702(a)(5)(B) is eligible for housing tax credits set
aside under Subsection (a) if:
(1) a portion of the public housing operating subsidy
received from [TDHCA] is retained for the
development; and
(2) a portion of the units of the development are reserved
for public housing as specified in the qualified
housing plan.
TEX. Gov'T CODE ANN. § 2306.6714 (West Supp. 2013). Subsection (a) provides that tax credits
shall be set aside for "eligible at-risk developments." /d. § 2306.6714(a). Subsection (a-1) then
imposes conditions for eligibility on "[a]n at-risk development described by Subsection
2306.6702(a)(5)(B)." /d. § 2306.6714(a-1). Subsection 2306.6702(a)(5) contains two possible
definitions of "at-risk development" that are differentiated by the form of federal subsidy
assistance a development receives. See id. § 2306.6702(a)(5)(A) (describing, in part, a
development that receives federal subsidy under Section 8); (a)(5)(B) (describing, in part, a
development that receives or has received federal subsidy under Section 9).
Subsection 2306.6714(a-1) limits the eligibility of subsection 2306.6702(a)(5)(B)
developments, but it does not affect, much less eliminate, the eligibility of subsection
2306.6702(a)(5)(A) developments. Thus, a development that undergoes a RAD conversion and
no longer satisfies subsection 2306.6702(a)(5)(B) would still be eligible for the at-risk set-aside
if it satisfied subsection 2306.6702(a)(5)(A).
As the administering agency of the low income housing tax credit program, TDHCA has
discretion to determine whether a development has satisfied the eligibility requirements for
competing for a set-aside. /d. §§ 2306.6701 (West 2008), .67022 (West Supp. 2013). A
development is an at-risk development under subsection 2306.6702(a)(5)(A) if it "has received
Mr. J. Paul Oxer - Page 3 (GA-1060)
the benefit of a subsidy in the form of a ... rental subsidy, [or] Section 8 housing assistance
payment." /d. § 2306.6702(a)(5)(A)(i). If TDHCA determines that a development undergoing a
RAD conversion has received assistance under section 8 of the Act and consequently is eligible
for the at-risk set-aside, a court is not likely to disturb that determination. See R.R. Comm 'n of
Tex. v. Tex. Citizens for a Safe Future and Clean Water, 336 S.W.3d 619, 624 (Tex. 2011)
(stating that courts will generally uphold a state agency's interpretation of a statute it is charged
with administering, so long as the construction is reasonable and not contrary to the statute's
language).
Mr. J. Paul Oxer - Page 4 (GA-1060)
SUMMARY
A court would likely conclude that it is within the authority
of the Texas Department of Housing and Community Affairs
("TDHCA") to consider a development undergoing a conversion
pursuant to the United States Department of Housing's Rental
Assistance Demonstration program as eligible to compete for the
at-risk set-aside under Government Code section 2306.6714 if
TDHCA determines that all applicable eligibility requirements
have been satisfied.
EG ABBOTT
Attorney General ofTexas
DANIEL T. HODGE
First Assistant Attorney General
JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel
VIRGINIA K. HOELSCHER
Chair, Opinion Committee
Stephen L. Tatum, Jr.
Assistant Attorney General, Opinion Committee