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                                  * * * * *