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A BILL TO BE ENTITLED
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AN ACT
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relating to requirements for beneficial tax treatment related to a |
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leasehold or other possessory interest in a public facility used to |
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provide affordable housing. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 303.042(f), Local Government Code, is |
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amended to read as follows: |
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(f) Notwithstanding Subsections (a) and (b), during the |
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period of time that a corporation owns a particular public |
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facility, a leasehold or other possessory interest in the real |
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property of the public facility granted by the corporation shall be |
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treated in the same manner as a leasehold or other possessory |
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interest in real property granted by an authority under Section |
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379B.011(b) if the requirements under Subchapter F are met. |
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SECTION 2. Chapter 303, Local Government Code, is amended |
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by adding Subchapter F to read as follows: |
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SUBCHAPTER F. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT RELATED TO |
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AFFORDABLE HOUSING |
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Sec. 303.201. DEFINITIONS. In this subchapter: |
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(1) "Affordable housing unit" means a residential unit |
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reserved for occupancy by an individual or family earning not more |
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than 80 percent of the area median income, adjusted for family size. |
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(2) "Department" means the Texas Department of Housing |
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and Community Affairs. |
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(3) "Developer" means a private entity that constructs |
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or rehabilitates a development. |
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(4) "Housing choice voucher program" means the housing |
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choice voucher program under Section 8, United States Housing Act |
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of 1937 (42 U.S.C. Section 1437f). |
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(5) "Housing development" means a development |
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constructed or rehabilitated to provide multifamily housing that |
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includes affordable housing units. |
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(6) "Public facility user" means a developer or other |
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private entity that has a leasehold or other possessory interest in |
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a public facility used to provide multifamily housing. |
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Sec. 303.202. COMPLIANCE WITH SUBCHAPTER REQUIRED FOR |
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BENEFICIAL TAX TREATMENT FOR CERTAIN PUBLIC FACILITIES. (a) |
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Section 303.042(f) applies to a leasehold or other possessory |
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interest in a public facility only if the sponsor, the corporation, |
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the public facility user, and the housing development meet the |
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requirements of this subchapter, as applicable. |
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(b) The requirements prescribed by this subchapter apply |
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only to the application of taxes related to a leasehold or other |
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possessory interest in a public facility under Section 303.042(f) |
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and do not restrict the authority of a corporation to lease a public |
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facility to a private entity under terms other than the terms |
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described by this subchapter. |
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Sec. 303.203. SPONSOR GOALS; REQUEST FOR PROPOSALS. (a) A |
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sponsor shall identify goals for public facilities used for housing |
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developments and establish selection criteria based on the goals to |
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be used by corporations for scoring proposals from developers of |
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housing developments. |
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(b) A corporation must issue a request for proposals from |
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developers before the corporation enters into a lease agreement for |
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a public facility with a developer for the purpose of constructing |
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or rehabilitating a housing development. |
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Sec. 303.204. REHABILITATION REQUIREMENTS. If a developer |
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substantially rehabilitates an existing multifamily residential |
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property that is a public facility leased by the developer, the |
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original construction of the property must have been completed at |
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least 10 years before the date the developer begins rehabilitation |
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of the property. |
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Sec. 303.205. RESERVATION REQUIREMENTS. (a) A public |
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facility user must reserve: |
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(1) at least 50 percent of the total units in a housing |
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development as affordable housing units; |
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(2) at least 50 percent of the affordable housing |
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units in the development for occupancy by individuals or families |
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earning not more than 60 percent of area median income, adjusted for |
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family size; and |
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(3) at least 20 percent of the affordable housing |
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units in the development for occupancy by individuals or families |
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participating in the housing choice voucher program if the |
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development is located: |
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(A) in the attendance zone of an elementary |
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school that has passed accountability standards adopted by the |
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Texas Education Agency for the most recent school year available; |
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(B) in the attendance zone of a high school with a |
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graduation rate of at least 85 percent; and |
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(C) in a census tract in which: |
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(i) fewer than 10 percent of the households |
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have a household income equal to or less than the federal poverty |
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line; and |
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(ii) the median income for households is |
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equal to or greater than 80 percent of area median income. |
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(b) The percentage of affordable housing units reserved in |
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each category of units in the housing development, based on the |
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number of bedrooms and bathrooms per unit, must be the same as the |
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percentage of affordable housing units reserved in the housing |
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development as a whole. |
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Sec. 303.206. RENT LIMITATIONS. The monthly rent charged |
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by a public facility user for an affordable housing unit may not |
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exceed: |
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(1) 30 percent of 80 percent of area median income, |
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minus an allowance for utility costs, if the individual or family |
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renting the unit earns more than 60 percent but not more than 80 |
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percent of the area median income, adjusted for family size; and |
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(2) 30 percent of 60 percent of area median income, |
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minus an allowance for utility costs, if the individual or family |
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renting the unit earns not more than 60 percent of the area median |
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income, adjusted for family size. |
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Sec. 303.207. CALCULATION OF INCOME. In calculating the |
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income of an individual or family for an affordable housing unit, |
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the public facility user must consider the income of every |
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individual who will be living in the unit. |
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Sec. 303.208. PUBLIC FACILITY PROHIBITIONS. A public |
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facility user may not: |
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(1) refuse to rent an affordable housing unit to an |
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individual or family because the individual or family participates |
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in the housing choice voucher program; or |
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(2) use a financial or minimum income standard that |
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requires an individual or family participating in the housing |
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choice voucher program to have a monthly income of more than 250 |
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percent of the individual's or family's share of the total monthly |
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rent payable for an affordable housing unit. |
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Sec. 303.209. HOUSING AUTHORITY DUTIES. A housing |
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authority that sponsors a corporation that leases a public facility |
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used as a housing development to a public facility user shall: |
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(1) publish information about the affordable housing |
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units in the housing development on its Internet website, if the |
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authority maintains a website; and |
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(2) provide information about the affordable housing |
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units directly to individuals and families participating in the |
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authority's housing choice voucher program. |
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Sec. 303.210. REPORTS. (a) Not later than February 1 of |
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each year, a public facility user of a housing development must |
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submit to the chief appraiser of the appraisal district in which the |
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housing development is located an audit report for a compliance |
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audit conducted by an independent auditor to determine whether the |
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public facility user is in compliance with: |
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(1) all contracts and other agreements between the |
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public facility user and the sponsor or corporation relating to the |
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housing development; and |
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(2) all applicable state and local laws, including the |
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requirements of this subchapter. |
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(b) The sponsor of a corporation that leases a public |
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facility used as a housing development to a public facility user |
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shall submit an annual report to the department and to the |
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comptroller. The report must include: |
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(1) a copy of all contracts and other agreements |
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between the public facility user and the sponsor or corporation |
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relating to the housing development; and |
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(2) statistics describing the demographics of the |
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residents of the housing development, including incomes and family |
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sizes. |
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(c) The department and the comptroller shall each post a |
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copy of a report received under Subsection (b) on their respective |
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Internet websites. |
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(d) The governing board of the department shall adopt rules |
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and forms necessary to implement Subsection (b). |
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SECTION 3. Subchapter F, Chapter 303, Local Government |
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Code, as added by this Act, applies only to a leasehold or other |
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possessory interest in a public facility granted by a public |
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facility corporation to a public facility user, as defined by that |
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subchapter, on or after the effective date of this Act. |
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SECTION 4. As soon as practicable after the effective date |
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of this Act, the governing board of the Texas Department of Housing |
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and Community Affairs shall adopt rules as necessary to implement |
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Section 303.210(b), Local Government Code, as added by this Act. |
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SECTION 5. This Act takes effect September 1, 2023. |