By West S.B. No. 1710 74R6358 PAM-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to authorizing a municipal tax to provide affordable 1-3 housing in populous municipalities. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. The purpose of this Act is to authorize populous 1-6 municipalities to provide affordable, decent, safe, and sanitary 1-7 housing for very low-income families. 1-8 SECTION 2. Title 3, Tax Code, is amended by adding Subtitle 1-9 E to read as follows: 1-10 SUBTITLE E. LOCAL APARTMENT OCCUPANCY TAXES 1-11 CHAPTER 361. MUNICIPAL APARTMENT OCCUPANCY TAXES 1-12 SUBCHAPTER A. GENERAL PROVISIONS 1-13 Sec. 361.001. DEFINITIONS. In this subchapter: 1-14 (1) "Apartment complex" means five or more dwelling 1-15 units located on a lot. 1-16 (2) "Dwelling unit" means one or more rooms that: 1-17 (A) are occupied by a family for one or more 1-18 weeks in exchange for consideration; and 1-19 (B) contain living, sanitary, and sleeping 1-20 facilities. 1-21 (3) "Family" means one or more individuals who live 1-22 together as a single housekeeping unit. 1-23 (4) "Lot" means: 1-24 (A) a platted parcel of land; or 2-1 (B) an unplatted parcel of land that is adjacent 2-2 to a public street and complies with all zoning ordinances relating 2-3 to: 2-4 (i) minimum dimensions for a parcel; and 2-5 (ii) setback and lot coverage if the 2-6 parcel is improved. 2-7 (5) "Very low-income family" has the meaning assigned 2-8 by 42 U.S.C. Section 1437a(b)(2). 2-9 Sec. 361.002. APPLICABILITY. This subchapter applies only 2-10 to a municipality with a population of one million or more that: 2-11 (1) is located in a county with a population of 1.8 2-12 million or more; and 2-13 (2) has adopted a council-manager form of government. 2-14 (Sections 361.003-361.100 reserved for expansion 2-15 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX 2-16 Sec. 361.101. TAX AUTHORIZED. The governing body of a 2-17 municipality by ordinance may impose a tax on an owner of an 2-18 apartment complex for each dwelling unit in the complex that is 2-19 occupied for 180 days or more in a calendar year. 2-20 Sec. 361.102. TAX RATE. The tax authorized by this chapter 2-21 may be imposed at any rate not to exceed $5 each month for each 2-22 dwelling unit. 2-23 Sec. 361.103. TAX COLLECTION. A person owning, operating, 2-24 managing, or controlling an apartment complex shall collect for the 2-25 municipality the tax that is imposed under this chapter. 2-26 Sec. 361.104. INTEREST AND PENALTIES. (a) A tax imposed 2-27 under this chapter that is not paid to the municipality when it is 3-1 due draws interest as provided by Section 111.060. 3-2 (b) If the person who is required to pay to the municipality 3-3 the tax imposed under this chapter fails to file a report or does 3-4 not pay the tax when it is due, the person shall forfeit to the 3-5 municipality a penalty of five percent of the amount of tax due. 3-6 (c) If the person who is required to pay the tax to the 3-7 municipality does not pay the tax within 30 days after it is due, 3-8 the person shall forfeit to the municipality a penalty of an 3-9 additional five percent of the amount of tax due. 3-10 (d) The minimum penalty under this section is $1. 3-11 Sec. 361.105. ENFORCEMENT. (a) The municipal attorney or 3-12 other attorney acting for the municipality may bring suit against a 3-13 person who is required to collect the tax imposed under this 3-14 chapter and pay the collections over to the municipality and who 3-15 has failed to file a tax report or pay the tax when due to collect 3-16 the tax not paid or to enjoin the person from operating an 3-17 apartment complex in a municipality until the tax is paid or the 3-18 report filed, as applicable, as provided by the court's order. In 3-19 addition to the amount of any tax owed under this chapter, the 3-20 person is liable to the municipality for the municipality's 3-21 reasonable attorney's fees and a penalty equal to 15 percent of the 3-22 total amount of the tax owed. 3-23 (b) Section 16.061, Civil Practice and Remedies Code, 3-24 applies to the collection of a tax under this chapter. A 3-25 limitation period provided by Title 2 relating to the time allowed 3-26 to assess taxes and bring a suit to collect taxes does not apply to 3-27 a tax imposed under this chapter or a suit brought under this 4-1 section. 4-2 (c) A municipality by ordinance may authorize misdemeanor 4-3 punishment for a violation of an ordinance adopted under this 4-4 chapter. 4-5 (d) The remedies provided by this section are in addition to 4-6 other available remedies. 4-7 Sec. 361.106. COLLECTION PROCEDURES ON PURCHASE OF APARTMENT 4-8 COMPLEX. (a) If a person who is liable for the payment of a tax 4-9 under this chapter is the owner of an apartment complex and sells 4-10 the apartment complex, the successor to the seller or the seller's 4-11 assignee shall withhold an amount of the purchase price sufficient 4-12 to pay the amount due until the seller provides a receipt by a 4-13 person designated by the municipality to provide the receipt 4-14 showing that the amount has been paid or a certificate showing that 4-15 no tax is due. 4-16 (b) The purchaser of an apartment complex who fails to 4-17 withhold an amount of the purchase price as required by this 4-18 section is liable for the amount required to be withheld to the 4-19 extent of the value of the purchase price. 4-20 (c) The purchaser of an apartment complex may request that 4-21 the person designated by the municipality to provide a receipt 4-22 under Subsection (a) issue a certificate stating that no tax is due 4-23 or issue a statement of the amount required to be paid before a 4-24 certificate may be issued. The person designated by the 4-25 municipality shall issue the certificate or statement not later 4-26 than the 60th day after the date that the person receives the 4-27 request. 5-1 (d) If the person designated by the municipality to provide 5-2 a receipt under Subsection (a) fails to issue the certificate or 5-3 statement within the period provided by Subsection (c), the 5-4 purchaser is released from the obligation to withhold the purchase 5-5 price or pay the amount due. 5-6 Sec. 361.107. REIMBURSEMENT FOR TAX COLLECTION EXPENSES. 5-7 (a) A municipality may permit a person who is required to collect 5-8 and pay over to the municipality the tax authorized by this chapter 5-9 not more than one percent of the amount collected and required to 5-10 be reported as reimbursement to the person for the costs in 5-11 collecting the tax. 5-12 (b) The municipality may provide that the reimbursement 5-13 provided by this section be forfeited because of a failure to pay 5-14 the tax or to file a report as required by the municipality. 5-15 Sec. 361.108. EXEMPTIONS. (a) This chapter does not impose 5-16 a tax on a corporation or association that is organized and 5-17 operated exclusively for a religious, charitable, or educational 5-18 purpose if no part of the net earnings of the corporation or 5-19 association inure to the benefit of a private shareholder or 5-20 individual. 5-21 (b) This chapter does not impose a tax on the United States, 5-22 this state, or an agency, institution, board, or commission of this 5-23 state other than an institution of higher education. In this 5-24 subsection, "institution of higher education" has the meaning 5-25 assigned by Section 61.003, Education Code. 5-26 (c) A municipality may exempt from taxation an apartment 5-27 complex owner who provides housing for very low-income families 6-1 under a local, state, or federal housing program. 6-2 Sec. 361.109. PREEXISTING CONTRACTS. If a municipality 6-3 increases the rate of the tax authorized by this chapter, the 6-4 increased tax rate does not apply to the tax imposed on the use or 6-5 possession of a dwelling unit under a contract executed before the 6-6 rate increase that provides for the payment of the tax at the rate 6-7 in effect when the contract was executed, unless the contract is 6-8 subject to change or modification by reason of the tax rate 6-9 increase. The tax rate applicable to the use or possession of a 6-10 dwelling unit under the contract is the rate in effect when the 6-11 contract was executed. 6-12 (Sections 361.110-361.200 reserved for expansion 6-13 SUBCHAPTER C. REPORTS AND PAYMENTS 6-14 Sec. 361.201. REPORT AND PAYMENT. (a) A person required to 6-15 collect the tax imposed under this chapter shall pay the 6-16 municipality the tax collected during the preceding reporting 6-17 period and at the same time shall file with the municipality a 6-18 report stating: 6-19 (1) the total amount of the payments made for dwelling 6-20 units at the person's apartment complex during the preceding 6-21 reporting period; 6-22 (2) the amount of the tax collected by the person 6-23 during the preceding reporting period; and 6-24 (3) other information that the municipality requires 6-25 to be in the report. 6-26 (b) Each calendar year is a reporting period and the taxes 6-27 imposed and collected under this chapter are due and payable to the 7-1 municipality on or before the 20th day of January following the end 7-2 of each calendar year. 7-3 Sec. 361.202. ACCESS TO BOOKS AND RECORDS. After the 7-4 municipality gives reasonable notice to a person that the 7-5 municipality intends to inspect the books or records of the person, 7-6 the municipality has access to the person's books or records 7-7 necessary for the municipality to determine the correctness of a 7-8 report filed under this chapter or the amount of taxes due under 7-9 this chapter. 7-10 (Sections 361.203-361.300 reserved for expansion 7-11 SUBCHAPTER D. USE AND ALLOCATION OF REVENUE 7-12 Sec. 361.301. USE OF TAX REVENUE. (a) Revenue from the tax 7-13 imposed under this chapter may be used only to increase housing 7-14 opportunities for very low-income families. 7-15 (b) The municipality shall maintain complete and accurate 7-16 financial records of each expenditure of revenue from the tax 7-17 imposed under this chapter. 7-18 Sec. 361.302. PLEDGE FOR BONDS. A municipality may pledge 7-19 the revenue derived from the tax imposed under this chapter for the 7-20 payment of bonds that are issued under Section 3, Chapter 63, Acts 7-21 of the 59th Legislature, Regular Session, 1965 (Article 1269j-4.1, 7-22 Vernon's Texas Civil Statutes), for the purpose provided by Section 7-23 361.301. 7-24 SECTION 3. The importance of this legislation and the 7-25 crowded condition of the calendars in both houses create an 7-26 emergency and an imperative public necessity that the 7-27 constitutional rule requiring bills to be read on three several 8-1 days in each house be suspended, and this rule is hereby suspended, 8-2 and that this Act take effect and be in force from and after its 8-3 passage, and it is so enacted.