BILL ANALYSIS

Senate Research Center	S.B. 805
88R4568 KBB-D	By: Bettencourt
	Local Government
	4/7/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Affordable housing projects in Texas are intended to utilize public-private partnerships whereby property and sales taxes are reduced or entirely waived for private developers, who, in turn, provide the public benefit of housing at rental rates affordable to Texans who are most economically disadvantaged. While these are laudable goals, the need for improvement has been recognized by a 2020 study by The University of Texas School of Law Entrepreneurship and Community Development Clinic.

Under current law, public facility corporations (PFCs) too often make the sole decision to grant tax breaks to developers to develop affordable housing, leaving all other affected taxing entities without a say in removing taxable properties from their tax rolls. This shifts the remainder of the tax burden to other property owners, residents, and businesses. 

S.B. 805 seeks to repeal the tax exemption for leasehold or other possessory interests in a public facility granted by a PFC.

As proposed, S.B. 805 amends current law relating to the taxation of a leasehold or other possessory interest in a public facility granted by a public facility corporation.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Repealer: Section 303.042(f) (relating to requiring a leasehold or other possessory interest in the real property of a particular public facility, during the period of time that a corporation owns the facility, to be treated in the same manner as a leasehold or other possessory interest in real property granted by a certain authority), Local Government Code.

SECTION 2. Provides that the repeal of Section 303.042(f), Local Government Code, does not apply to a leasehold or other possessory interest granted before the effective date of this Act. Provides that a leasehold or other possessory interest granted before the effective date of this Act� is governed by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 3. Effective date: January 1, 2024.