By: Bettencourt S.B. No. 591
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain public facilities used to provide affordable
  housing.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 303.021, Local Government Code, is
  amended by adding Subsection (c) to read as follows:
         (c)  A corporation or a sponsor may finance, own, or operate
  a multifamily residential development if the corporation or sponsor
  complies with all applicable provisions of this chapter.
         SECTION 2.  Section 303.042, Local Government Code, is
  amended by amending Subsections (d) and (f) and adding Subsections
  (d-1) and (d-2) to read as follows:
         (d)  This subsection applies only to a multifamily
  residential development that is owned by a corporation created
  under this chapter by a housing authority and that does not have at
  least 20 percent of its units reserved for public housing units,
  participate in the Rental Assistance Demonstration program
  administered by the United States Department of Housing and Urban
  Development, or receive financial assistance administered under
  Chapter 1372, Government Code, or Subchapter DD, Chapter 2306,
  Government Code. Notwithstanding Subsections (a) and (b), an [An]
  exemption under this section for a multifamily residential
  development [which is owned by a public facility corporation
  created by a housing authority under this chapter and which does not
  have at least 20 percent of its units reserved for public housing
  units,] applies only if:
               (1)  the housing authority holds a public hearing, at a
  [regular] meeting of the authority's governing body, to approve the
  development; [and]
               (2)  at least 50 percent of the units in the multifamily
  residential development are reserved for occupancy by individuals
  and families earning less than 80 percent of the area median
  [family] income;
               (3)  the requirements under Sections 303.0425 and
  303.0426 are met; and
               (4)  for an occupied multifamily residential
  development that is acquired by a corporation:
                     (A)  the governing body of each municipality or
  county for which the sponsor of the corporation was created
  approves a resolution of "no objection" for the development; and
                     (B)  a sum of not less than 50 percent of the total
  gross cost of the existing project in its entirety is expended on
  rehabilitating, renovating, reconstructing, or repairing the
  project.
         (d-1)  This subsection applies only to a multifamily
  residential development that is owned by a corporation created
  under this chapter by a sponsor other than a housing authority and
  that does not have at least 20 percent of its units reserved for
  public housing units, participate in the Rental Assistance
  Demonstration program administered by the United States Department
  of Housing and Urban Development, or receive financial assistance
  administered under Chapter 1372, Government Code, or Subchapter DD,
  Chapter 2306, Government Code. Notwithstanding Subsections (a) and
  (b), an exemption under this section for a multifamily residential
  development applies only if:
               (1)  at least 50 percent of the units in the multifamily
  residential development are reserved for occupancy by individuals
  and families earning less than 80 percent of the area median income;
  and
               (2)  the requirements under Section 303.0426 are met.
         (d-2)  This subsection applies to a multifamily residential
  development that is owned by a corporation created by any sponsor
  under this chapter. Notwithstanding Subsections (a), (b), (d), and
  (d-1), an exemption under this section for an occupied multifamily
  residential development that is acquired by the corporation applies
  only if the development comes into compliance with the requirements
  of Subsection (d) or (d-1), as applicable, not later than the first
  anniversary of the date of the acquisition. 
         (f)  Notwithstanding Subsections (a) and (b), during
  the  period [of time] that a corporation owns a particular public
  facility that provides multifamily housing:
               (1)  [,] a leasehold or other possessory interest in
  the real property of the public facility granted by the corporation
  shall be treated in the same manner as a leasehold or other
  possessory interest in real property granted by an authority under
  Section 379B.011(b); and
               (2)  the materials used by a person granted a
  possessory interest described by Subdivision (1) to improve the
  real property of the public facility shall be exempt from all sales
  and use taxes because the materials are for the benefit of the
  corporation.
         SECTION 3.  Subchapter B, Chapter 303, Local Government
  Code, is amended by adding Sections 303.0425 and 303.0426 to read as
  follows:
         Sec. 303.0425.  ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX
  TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY
  CORPORATIONS CREATED BY HOUSING AUTHORITIES. (a) In this section:
               (1)  "Developer" means a private entity that constructs
  a development.
               (2)  "Housing choice voucher program" means the housing
  choice voucher program under Section 8, United States Housing Act
  of 1937 (42 U.S.C. Section 1437f).
               (3)  "Lower income housing unit" means a residential
  unit reserved for occupancy by an individual or family earning not
  more than 60 percent of the area median income, adjusted for family
  size.
               (4)  "Public facility user" means a public-private
  partnership entity or a developer or other private entity that has
  an ownership interest or a leasehold or other possessory interest
  in a public facility used to provide multifamily housing.
         (b)  The requirements prescribed by this section do not apply
  to a multifamily residential development that is:
               (1)  owned by a corporation that was not created by a
  housing authority; or
               (2)  owned by a corporation created by a housing
  authority and:
                     (A)  in which at least 20 percent of the units are
  reserved for public housing units;
                     (B)  that participates in the Rental Assistance
  Demonstration program administered by the United States Department
  of Housing and Urban Development; or
                     (C)  that receives financial assistance
  administered under Chapter 1372, Government Code, or Subchapter DD,
  Chapter 2306, Government Code.
         (c)  A corporation must use an open, transparent, and
  competitive process for selecting a developer for the purpose of
  constructing a housing development.
         (d)  At least 10 percent of the units in the development must
  be reserved as lower income housing units. A unit may not be used to
  satisfy the reservation required under this subsection if every
  tenant in the unit is:
               (1)  a part-time or full-time student at an institution
  of higher education;
               (2)  under the age of 24; and
               (3)  ineligible for housing assistance under Section 8,
  United States Housing Act of 1937 (42 U.S.C. Section 1437f).
         (e)  The percentage of lower income housing units reserved in
  each category of units in the housing development, based on the
  number of bedrooms and bathrooms per unit, must be the same as the
  percentage of lower income housing units reserved in the housing
  development as a whole.
         (f)  The monthly rent charged for a lower income housing unit
  may not exceed:
               (1)  30 percent of 60 percent of the area median income,
  adjusted for family size; or
               (2)  if the unit is occupied by a participant in the
  housing choice voucher program, the payment standard used by the
  housing authority that administers the voucher for the unit.
         (g)  In calculating the income of an individual or family for
  a lower income housing unit, the public facility user must consider
  the income of every individual who will be living in the unit.
         Sec. 303.0426.  ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX
  TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY
  CORPORATIONS CREATED BY ANY SPONSOR. (a) In this section, "housing
  choice voucher program," "lower income housing unit," and "public
  facility user" have the meanings assigned by Section 303.0425.
         (b)  The requirements prescribed by this section do not apply
  to a multifamily residential development owned by a corporation:
               (1)  in which at least 20 percent of the units are
  reserved for public housing units;
               (2)  that participates in the Rental Assistance
  Demonstration program administered by the United States Department
  of Housing and Urban Development; or
               (3)  that receives financial assistance administered
  under Chapter 1372, Government Code, or Subchapter DD, Chapter
  2306, Government Code.
         (c)  A public facility user may not:
               (1)  refuse to rent a residential unit to an individual
  or family because the individual or family participates in the
  housing choice voucher program; or
               (2)  use a financial or minimum income standard that
  requires an individual or family participating in the housing
  choice voucher program to have a monthly income of more than 250
  percent of the individual's or family's share of the total monthly
  rent payable for a unit.
         (d)  A corporation that owns or leases to a public facility
  user a public facility used as a multifamily residential
  development shall publish on its Internet website information about
  the development's:
               (1)  compliance with the requirements of this section;
  and
               (2)  policies regarding tenant participation in the
  housing choice voucher program.
         (e)  A public facility user shall:
               (1)  affirmatively market available residential units
  directly to individuals and families participating in the housing
  choice voucher program; and
               (2)  notify local housing authorities of any available
  units in the development.
         (f)  Not later than April 1 of each year, a public facility
  user of a multifamily residential development must:
               (1)  submit to the chief appraiser of the appraisal
  district in which the development is located an audit report for a
  compliance audit conducted by an independent auditor or compliance
  expert to determine whether the public facility user is in
  compliance with the requirements of this section; and
               (2)  submit to the comptroller a report that includes,
  for each housing development:
                     (A)  the name of the development;
                     (B)  the street address and municipality or county
  in which the development is located;
                     (C)  the name of the developer;
                     (D)  the total number of residential units,
  reported by bedroom size;
                     (E)  the total number of lower income housing
  units, reported by bedroom size, level of income restriction, and
  rent;
                     (F)  the total number of residential units,
  reported by bedroom size, level of income restriction, and rent,
  that are not lower income housing units but that are reserved for
  occupancy by an individual or family earning less than 80 percent of
  the area median income;
                     (G)  the number of residential units rented by
  individuals and families who participate in the housing choice
  voucher program, reported by bedroom size;
                     (H)  the race, ethnicity, and age of all
  occupants, if available; and
                     (I)  if not previously submitted in a report to
  the comptroller, or if amended since the previous submission:
                           (i)  a copy of the ground lease; and
                           (ii)  a copy of the partnership agreement
  for the public facility.
         (g)  The reports submitted under Subsection (f) are public
  information and subject to disclosure under Chapter 552, Government
  Code, except that information containing tenant names, unit
  numbers, or other identifying information may be redacted. The
  comptroller shall post a copy of the report received under
  Subsection (f)(2) on its Internet website.
         (h)  Each lease agreement for a unit in a multifamily
  residential development subject to this section must provide that:
               (1)  the landlord may not retaliate against the tenant
  or the tenant's guests by taking an action because the tenant
  established, attempted to establish, or participated in a tenant
  organization;
               (2)  the landlord may only choose to not renew the lease
  if the tenant:
                     (A)  is in material noncompliance with the lease,
  including nonpayment of rent after the required cure period;
                     (B)  committed one or more substantial violations
  of the lease;
                     (C)  failed to provide required information on the
  income, composition, or eligibility of the tenant's household; or
                     (D)  committed repeated minor violations of the
  lease that:
                           (i)  disrupt the livability of the property;
                           (ii)  adversely affect the health and safety
  of any person or the right to quiet enjoyment of the leased premises
  and related project facilities;
                           (iii)  interfere with the management of the
  project; or
                           (iv)  have an adverse financial effect on
  the project, including the repeated failure of the tenant to pay
  rent in a timely manner;
               (3)  to not renew the lease, the landlord must serve a
  written notice of proposed nonrenewal on the tenant at least 30 days
  before the effective date of nonrenewal; and
               (4)  any written notice of a proposed nonrenewal that
  is required to be provided under Subdivision (3) must specify the
  date of the proposed nonrenewal.
         (i)  A tenant may not waive the protections provided by
  Subsection (h).
         (j)  A public facility corporation must be given:
               (1)  written notice of an instance of noncompliance
  with this section; and
               (2)  90 days after the day notice is received under
  Subdivision (1) to cure the matter that is the subject of the
  notice.
         (k)  Notwithstanding any other law, an occupied multifamily
  residential development that is acquired by a public facility
  corporation is eligible for an exemption under Section 303.042(d-2)
  for the one-year period following the date of the acquisition
  regardless of whether the development complies with the other
  requirements of that section or with this section, as applicable.
         SECTION 4.  Section 392.005(c), Local Government Code, is
  amended to read as follows:
         (c)  An exemption under this section for a multifamily
  residential development which is owned by [(i) a public facility
  corporation created by a housing authority under Chapter 303, (ii)]
  a housing development corporation[,] or [(iii)] a similar entity
  created by a housing authority, other than a public facility
  corporation created by a housing authority under Chapter 303, and
  which does not have at least 20 percent of its units reserved for
  public housing units, applies only if:
               (1)  the authority holds a public hearing, at a regular
  meeting of the authority's governing body, to approve the
  development; and
               (2)  at least 50 percent of the units in the multifamily
  residential development are reserved for occupancy by individuals
  and families earning less than 80 percent of the area median family
  income.
         SECTION 5.  (a)  Section 303.042(d), Local Government Code,
  as amended by this Act, applies only to a multifamily residential
  development that is approved by a housing authority on or after the
  effective date of this Act. A multifamily residential development
  that is approved by a housing authority before the effective date of
  this Act is governed by the law in effect on the date the
  development was approved by the housing authority, and the former
  law is continued in effect for that purpose.
         (b)  Section 303.042(d-1), Local Government Code, as added
  by this Act, applies only to a multifamily residential development
  that is approved by a public facility corporation on or after the
  effective date of this Act. A multifamily residential development
  that is approved by a public facility corporation before the
  effective date of this Act is governed by the law in effect on the
  date the development was approved by the public facility
  corporation, and the former law is continued in effect for that
  purpose.
         (c)  Section 303.042(d-2), Local Government Code, as added
  by this Act, applies only to a multifamily residential development
  that is acquired by a public facility corporation on or after the
  effective date of this Act. A multifamily residential development
  that is acquired by a public facility corporation before the
  effective date of this Act is governed by the law in effect on the
  date the development was acquired by the public facility
  corporation, and the former law is continued in effect for that
  purpose.
         SECTION 6.  This Act takes effect September 1, 2021.