By: Lucio S.B. No. 1934

(In the Senate - Filed March 9, 2007; March 22, 2007, read first time and referred to Committee on Intergovernmental Relations; May 21, 2007, reported adversely, with favorable Committee Substitute by the following vote: Yeas 3, Nays 1; May 21, 2007, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 1934 By: Patrick

A BILL TO BE ENTITLED

AN ACT

relating to low-income or moderate-income housing.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subsections (b), (e), and (h), Section 11.182, Tax Code, are amended to read as follows:

(b) An organization is entitled to an exemption from taxation of improved or unimproved real property it owns or controls if the organization:

(1) is organized as a community housing development organization;

(2) meets the requirements of a charitable organization provided by Sections 11.18(e) and (f);

(3) owns the property for the purpose of building or repairing housing on the property to sell without profit to a low-income or moderate-income individual or family satisfying the organization's eligibility requirements or to rent without profit to such an individual or family or owns or controls 100 percent of:

(A) the general partner interest of the limited partnership that owns the property, if applicable; or

(B) the entity that owns the property, if applicable; and

(4) engages [exclusively] in the building, repair, and sale or rental of housing as described by Subdivision (3) and related activities.

(e) In addition to meeting the applicable requirements of Subsections (b) and (c), to receive an exemption under Subsection (b) for improved real property that is [includes a housing project constructed after December 31, 2001, and] financed with qualified 501(c)(3) bonds issued under Section 145 of the Internal Revenue Code of 1986, tax-exempt private activity bonds subject to volume cap, or low-income housing tax credits, the organization must:

(1) [control 100 percent of the interest in the general partner if the project is owned by a limited partnership;

[(2)] comply with all rules of and laws administered by the Texas Department of Housing and Community Affairs applicable to community housing development organizations; and

(2) [(3)] submit annually to the Texas Department of Housing and Community Affairs and to the governing body of each taxing unit for which the project receives an exemption for the housing project evidence demonstrating that the organization spent an amount equal to at least 90 percent of the project's cash flow in the preceding fiscal year as determined by the audit required by Subsection (g), for eligible persons in the county in which the property is located, on social, educational, or economic development services, capital improvement projects, or rent reduction.

(h) Subsections (d) and (e)(2) [(e)(3)] do not apply to property owned by an organization if:

(1) the entity that provided the financing for the acquisition or construction of the property:

(A) requires the organization to make payments in lieu of taxes to the school district in which the property is located; or

(B) restricts the amount of rent the organization may charge for dwelling units on the property; or

(2) the organization has entered into an agreement with each taxing unit for which the property receives an exemption to spend in each tax year for the purposes provided by Subsection (d) or (e)(2) [(e)(3)] an amount equal to the total amount of taxes imposed on the property in the tax year preceding the year in which the organization acquired the property.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.

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