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Presentation, discussion, and possible action regarding Resolution 27-003 authorizing a request for Unencumbered State Ceiling
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RECOMMENDED ACTION
WHEREAS, federal law limits the amount of private activity bonds that may be issued within each state each calendar year, and Chapter 1372 of the Texas Government Code establishes the process for allocating the State of Texas private activity bond ceiling;
WHEREAS, on the last business day of the year, the Texas Bond Review Board may assign as carryforward to state agencies, upon request, State Ceiling that has not otherwise been reserved, designated as carryforward, or made subject to a pending carryforward application;
WHEREAS, the Department may use private activity bond volume cap for future issuance of single family mortgage revenue bonds and Mortgage Credit Certificate programs consistent with its statutory purposes;
WHEREAS, volume cap assigned as carryforward must be used within three years;
WHEREAS, requesting available Unencumbered State Ceiling provides the Department an opportunity to obtain additional volume cap that would otherwise remain unallocated at the end of the calendar year; and
WHEREAS, staff recommends authorizing the Department to request assignment of all remaining Unencumbered State Ceiling for calendar year 2026, in an aggregate amount not to exceed $400 million;
NOW, therefore, it is hereby
RESOLVED, that the Governing Board of the Texas Department of Housing and Community Affairs hereby adopts Resolution No. 27-003 authorizing the Department to request from the Texas Bond Review Board assignment as carryforward of all remaining Unencumbered State Ceiling for calendar year 2026 in an aggregate amount not to exceed $400 million.
BACKGROUND
Private activity bonds are subject to an annual federal volume cap allocated among issuers within each state. Texas Government Code Chapter 1372 governs the allocation of the State's private activity bond ceiling.
At the end of the calendar year, the Texas Bond Review Board may assign State Ceiling that remains unencumbered as carryforward to state agencies that have submitted requests. Staff is seeking authority to request up to $400 million of any such remaining 2026 State Ceiling.
Any volume cap assigned to the Department as carryforward must be used within three years and may be used for future issuance of single-family mortgage revenue bonds or Mortgage Credit Certificate programs. This authorization does not approve any specific bond issuance or program and does not guarantee that TDHCA will receive additional volume cap; the amount available for assignment will depend upon the State Ceiling remaining unencumbered at year-end.