1-1 By: Bernsen S.B. No. 929 1-2 (In the Senate - Filed February 26, 2001; February 27, 2001, 1-3 read first time and referred to Committee on Intergovernmental 1-4 Relations; April 19, 2001, reported adversely, with favorable 1-5 Committee Substitute by the following vote: Yeas 5, Nays 0, 1 1-6 present, not voting; April 19, 2001, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 929 By: Lindsay 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to a restriction on the financing of multifamily 1-11 residential developments by housing authorities and housing finance 1-12 corporations. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. Section 303.042, Local Government Code, is 1-15 amended to read as follows: 1-16 Sec. 303.042. TAXATION. (a) A public facility, including a 1-17 leasehold estate in a public facility, that is owned by a 1-18 corporation and that, except for the purposes and nonprofit nature 1-19 of the corporation, would be taxable to the corporation under Title 1-20 1, Tax Code, shall be assessed to the user of the public facility 1-21 to the same extent and subject to the same exemptions from taxation 1-22 as if the user owned the public facility. If there is more than 1-23 one user of the public facility, the public facility shall be 1-24 assessed to the users in proportion to the value of the rights of 1-25 each user to occupy, operate, manage, or use the public facility. 1-26 (b) The user of a public facility is considered the owner of 1-27 the facility for purposes of the application of: 1-28 (1) sales and use taxes in the construction, sale, 1-29 lease, or rental of the public facility; and 1-30 (2) other taxes imposed by this state or a political 1-31 subdivision of this state. 1-32 (c) A corporation is engaged exclusively in performance of 1-33 charitable functions and is exempt from taxation by this state or a 1-34 municipality or other political subdivision of this state. Bonds 1-35 issued by a corporation under this chapter, a transfer of the 1-36 bonds, interest on the bonds, and a profit from the sale or 1-37 exchange of the bonds are exempt from taxation by this state or a 1-38 municipality or other political subdivision of this state. 1-39 (d) An exemption under this section for a multifamily 1-40 residential development which is owned by a public facility 1-41 corporation created by a housing authority under this chapter and 1-42 which does not have at least 15 percent of its units reserved for 1-43 public housing units applies only if: 1-44 (1) the housing authority holds a public hearing, at a 1-45 regular meeting of the authority's governing body, to approve the 1-46 development; and 1-47 (2) at least 50 percent of the units in the 1-48 multifamily residential development are reserved for occupancy by 1-49 individuals and families earning less than 80 percent of the area 1-50 median family income. 1-51 (e) For the purposes of Subsection (d), a "public housing 1-52 unit" is a dwelling unit for which the landlord receives a public 1-53 housing operating subsidy. It does not include a unit for which 1-54 payments are made to the landlord under the federal Section 8 1-55 Housing Choice Voucher Program. 1-56 SECTION 2. Section 392.005, Local Government Code, is 1-57 amended to read as follows: 1-58 Sec. 392.005. TAX EXEMPTION. (a) The property of an 1-59 authority is public property used for essential public and 1-60 governmental purposes. The authority and the authority's property 1-61 are exempt from all taxes and special assessments of a 1-62 municipality, a county, another political subdivision, or the 1-63 state. 1-64 (b) If a municipality, county, or political subdivision 2-1 furnishes improvements, services, or facilities for a housing 2-2 project, an authority may, in lieu of paying taxes or special 2-3 assessments, agree to reimburse in payments to the municipality, 2-4 county, or political subdivision an amount not greater than the 2-5 estimated cost to the municipality, county, or political 2-6 subdivision for the improvements, services, or facilities. 2-7 (c) An exemption under this section for a multifamily 2-8 residential development which is owned by (i) a public facility 2-9 corporation created by a housing authority under Chapter 303, 2-10 (ii) a housing development corporation, or (iii) a similar entity 2-11 created by a housing authority and which does not have at least 15 2-12 percent of its units reserved for public housing units applies only 2-13 if: 2-14 (1) the authority holds a public hearing, at a regular 2-15 meeting of the authority's governing body, to approve the 2-16 development; and 2-17 (2) at least 50 percent of the units in the 2-18 multifamily residential development are reserved for occupancy by 2-19 individuals and families earning less than 80 percent of the area 2-20 median family income. 2-21 (d) For the purposes of Subsection (c), a "public housing 2-22 unit" is a dwelling unit for which the owner receives a public 2-23 housing operating subsidy. It does not include a unit for which 2-24 payments are made to the landlord under the federal Section 8 2-25 Housing Choice Voucher Program. 2-26 SECTION 3. Subchapter Z, Chapter 394, Local Government Code, 2-27 is amended by adding Section 394.9025 to read as follows: 2-28 Sec. 394.9025. MULTIFAMILY RESIDENTIAL DEVELOPMENT. 2-29 (a) Following a public hearing, a housing finance corporation may 2-30 issue bonds to finance a multifamily residential development to be 2-31 owned by the housing finance corporation if at least 50 percent of 2-32 the units in the multifamily residential development are reserved 2-33 for occupancy by individuals and families earning less than 80 2-34 percent of the area median family income. 2-35 (b) Following a public hearing by the governing body of the 2-36 local government, a housing finance corporation may issue bonds to 2-37 finance a multifamily residential development to be owned by the 2-38 housing finance corporation in accordance with Section 394.004 if 2-39 the housing finance corporation receives approval of the governing 2-40 body of the local government. 2-41 SECTION 4. (a) The change in law made by Subsection (d), 2-42 Section 303.042, Local Government Code, as added by this Act, 2-43 applies only to a multifamily residential development that is 2-44 developed as a result of an official decision by a housing 2-45 authority or an entity created by the housing authority to develop 2-46 the property that occurs on or after the effective date of this 2-47 Act. 2-48 (b) The change in law made by Subsection (c), Section 2-49 392.005, Local Government Code, as added by this Act, applies only 2-50 to a multifamily residential development that is developed as a 2-51 result of an official decision by a housing authority or an entity 2-52 created by the housing authority to develop the property that 2-53 occurs on or after the effective date of this Act. 2-54 (c) The change in law made by Section 394.9025, Local 2-55 Government Code, as added by this Act, applies only to a 2-56 multifamily residential development that is financed by bonds 2-57 issued under Chapter 394, Local Governmental Code, as a result of 2-58 an official decision to issue bonds that occurs on or after the 2-59 effective date of this Act. 2-60 SECTION 5. This Act takes effect August 31, 2002. 2-61 * * * * *