Judges: JIM MATTOX, Attorney General of Texas
Filed Date: 10/2/1987
Status: Precedential
Modified Date: 7/6/2016
Mr. O.P. (Bob) Bobbitt Executive Director Texas Department on Aging P.O. Box 12786 Austin, Texas 78711
Re: Whether amendments to the Texas Housing Agency Act and the Texas Finance Corporations Act concerning housing for the elderly apply to refunding bonds
Dear Mr. Bobbitt:
You inquire about the scope of the 1985 amendments to the Texas Housing Agency Act, article 12691-6, V.T.C.S., and the Texas Finance Corporations Act, Local Government Code, chapter 394 (formerly codified as article 12691-7, V.T.C.S.). Senate Bill No. 969 of the 69th Legislature added provisions to each act requiring the reservation of space for elderly persons in specified housing developments financed by bond issuances under either act. Acts 1985, 69th Leg., ch. 650, at 2399. You wish to know whether this requirement applies to refunding bonds issued under these statutes.
The Texas Housing Agency is authorized to make mortgage loans to private entities to help finance low and moderate income housing developments. V.T.C.S. art. 12691-6, §§ 9, 10. The board of directors has authority to issue revenue bonds to finance mortgage loans. Id. § 21(b); see also §§ 21(a); 48 (authority to issue general obligation bonds contingent on adoption of constitutional amendment). Any bonds issued by the agency may be refunded, or otherwise refinanced, by the issuance of refunding bonds. Id. § 34. The following provision was added by Senate Bill No. 696 in 1985:
Sec. 10A. (a) The agency shall adopt rules to achieve occupancy of at least five percent of the units in a multifamily housing development by elderly individuals of low income or by families of low or moderate income in which an elderly individual is head of the household. This provision applies only to a multifamily housing development that contains at least 20 units and is financed by bonds issued under this Act. (Emphasis added.)
V.T.C.S. art. 12691-6, § 10A(a).
A similar provision appears in the "Texas Housing Finance Corporations Act." Local Gov't Code §
(a) The housing finance corporation shall require that at least five percent of the units in a multifamily residential development be built or renovated and be reserved for the lifetime of the development for occupancy by elderly persons of low income or by families of low or moderate income in which an elderly person is the head of a household if the development:
(1) contains at least 20 units; and
(2) is financed by bonds issued under this chapter as a result of an official decision to issue bonds that occurs on or after January 1, 1986.
Instead of requiring a reservation of units for the elderly, a housing finance corporation may collect a fee from the person who receives a loan for residential development and remit the fee to the Texas Department on Aging. Local Gov't Code §
You ask whether the required reservation of space for the elderly applies to a housing development financed under either act by the issuance of bonds prior to the effective date of the requirement and refinanced after the effective date through the issuance of refunding bonds. Under the Housing Finance Corporation Act, this requirement applies only if a development contains at least 20 units and it
is financed by bonds issued . . . as a result of an official decision to issue bonds that occurs on or after January 1, 1986. (Emphasis added.)
Local Gov't Code §
The issuance of refunding bonds extends the time for paying an existing debt previously funded by a bond issuance. See City of Long Beach v. Lisenby,
Since the issuance of refunding bonds under chapter 394 of the Local Government Code merely extends an existing obligation and existing financing, we believe the reservation of space for elderly persons under section 394.902 does not become applicable when a development is refinanced by the issuance of refunding bonds. The requirement is applicable to the provision of original financing by the issuance of bonds on or after January 1, 1986. Where the original bonds were issued prior to that date, the development is not subject to the reservation requirement, even if refunding bonds are issued after that date. This reasoning and conclusion also apply to the issuance of refunding bonds under the Texas Housing Agency Act.1
Article 12691-6, V.T.C.S., also includes the following provision:
Bonds issued by the agency also may be refunded in the manner provided by any other applicable statute, including . . . (Articles 717k and 717k-3, Vernon's Texas Civil Statutes).
V.T.C.S. art. 12691-6, § 34(d). Articles 717k and 717k-3, V.T.C.S., provide full authority to refund bonds. Refunding of bonds under these statutes would not be subject to the requirement in section 10A of article 1269l-6, V.T.C.S., of reserving space for the elderly. It is therefore apparent that the legislature did not intend the issuance of refunding bonds to subject the development to the section 10A requirement.
Very truly yours,
Jim Mattox Attorney General of Texas
Mary Keller Executive Assistant Attorney General
Judge Zollie Steakly Special Assistant Attorney General
Rick Gilpin Chairman Opinion Committee
Prepared by Susan L. Garrison Assistant Attorney General