BILL ANALYSIS

H.B. 1634

By: Walle

Urban Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

State law provides a property tax exemption for certain multifamily housing developments sponsored by a public facility corporation. A recent study published by the Entrepreneurship and Community Development Clinic of The University of Texas School of Law regarding this tax exemption has led to concerns that some of these developments do not produce public benefits significant enough to warrant such significant tax breaks, particularly with respect to individuals and families who participate in the housing choice voucher program. H.B. 1634 seeks to address this issue by establishing requirements for certain public facility users seeking beneficial tax treatment with respect to the housing choice voucher program.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 1634 amends the Local Government Code to prohibit a public facility user, defined by the bill as a developer or other private entity that has a leasehold or other possessory interest in a public facility used to provide multifamily housing, from doing the following:

·         refusing to rent a residential unit in a housing development to an individual or family because the individual or family participates in the housing choice voucher program under Section 8 of the United States Housing Act of 1937; or

·         using a financial or minimum income standard that requires an individual or family participating in that 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 residential unit.

The bill conditions the application of a statutory requirement that a leasehold or other possessory interest in the real property of a public facility granted by an applicable public facility corporation (PFC) be treated in the same manner prescribed for the beneficial tax treatment as a leasehold or other possessory interest in real property granted by a defense base development authority on the public facility user complying with the bill's prohibition. The requirement to comply with the prohibition applies only to the application of taxes related to the leasehold or other possessory interest and does not restrict a PFC's authority to lease a public facility to a private entity under terms other than the terms described by the bill.

H.B. 1634 defines "developer" as a private entity that constructs or rehabilitates a development and defines "housing development" as a development constructed or rehabilitated to provide multifamily housing. The bill applies only to a leasehold or other possessory interest in a public facility granted by a PFC to a public facility user on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2023.