SRC-SEW S.B. 929 77(R)BILL ANALYSIS


Senate Research CenterS.B. 929
By: Bernsen
Intergovernmental Relations
6/18/2001
Enrolled


DIGEST AND PURPOSE 

Housing finance corporations are non-profit entities created by local
governments to encourage the development of affordable housing.  Currently,
housing finance corporations are exempt from taxes for developing and
owning affordable housing.  However, current law does not contain
provisions that create a standard for the level of affordability, similar
to other programs, where in order to qualify, the development must provide
housing to a certain percentage of low- or very low-income residents.  As a
result, some housing finance corporations have developed "market rate"
housing that is tax-exempt, which in effect creates tax-subsidized
competition with private entities.  S.B. 929 authorizes a housing finance
corporation to issue bonds to finance a multifamily residential development
to be owned by the housing finance corporation if at least half of the
units in multifamily developments funded through a housing finance
corporation are reserved for persons earning less than 80 percent of the
area median family income, or if the housing finance corporation receives
approval of the governing body of the local government to issue bonds in
accordance with Section 394.004 (Application of Chapter to Certain
Residential Developments), Local Government Code .   

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 303.042, Local Government Code, as follows:

Sec.  303.042.  Provides that an exemption under this section for certain
multifamily residential developments applies only under certain conditions.
Defines "public housing unit" under this section.   

SECTION 2.  Amends Section 392.005, Local Government Code, as follows:

Sec.  392.005.  Provides that an exemption under this section for certain
multifamily residential developments applies only under certain conditions.
Defines "public housing unit" under this section." 

SECTION 3.  Amends Chapter 394Z, Local Government Code, by adding Section
394.9025, as follows:   

Sec. 394.9025.  MULTIFAMILY RESIDENTIAL DEVELOPMENT. Authorizes a housing
finance corporation, following public hearing, to issue bonds to finance a
multifamily residential development to be owned by the housing finance
corporation under certain conditions. Authorizes a housing finance
corporation, following a public hearing by the governing body of the local
government, to issue bonds to finance a multifamily residential development
to be owned by the housing finance corporation in accordance with Section
394.004 under certain conditions. 
 
SECTION 4.  (a) Provides that the change in law made by Section 303.042(d),
Local Government Code, as added by this Act, applies only to a multifamily
residential development that is developed as a result of an official
decision by a housing authority or an entity created by the housing
authority to develop the property that occurs on or after the effective
date of this Act.   

(b) Provides that the change in law made by Section 392.005(c), Local
Government Code, as added by this Act, applies only to a multifamily
residential development that is developed as a result of an official
decision by a housing authority or an entity created by the housing
authority to develop the property that occurs on or after the effective
date of this Act. 

(c) Provides that the change in law made by Section 394.9025, Local
Government Code, as added by this Act, applies only to a multifamily
residential development that is financed by bonds issued under Chapter 394
(Housing Finance Corporations in Municipalities and Counties), Local
Government Code, as a result of an official decision to issue bonds that
occurs on or after the effective date of this act. 

SECTION 5.  Effective date:  August 31, 2002.