Honorable J. M. Lozano, Chair, House Committee on Urban Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3568 by Gates (Relating to certain public facilities used to provide affordable housing.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3568, As Introduced : a negative impact of ($594,000) through the biennium ending August 31, 2025.
According to the Comptroller of Public Accounts, the bill could limit the amount of property qualifying for future property tax exemptions, which could create a revenue gain to the state through the school funding formula. Because the number and values of properties that could be affected is unknown, the amount of revenue potentially gained cannot be estimated.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024
($441,000)
2025
($153,000)
2026
($153,000)
2027
($153,000)
2028
($153,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from Appropriated Receipts 666
Probable Revenue Gain/(Loss) from Appropriated Receipts 666
Change in Number of State Employees from FY 2023
2024
($441,000)
$0
$0
2.0
2025
($153,000)
$0
$0
2.0
2026
($153,000)
($83,098)
$360,000
3.0
2027
($153,000)
($80,598)
$480,000
3.0
2028
($153,000)
($80,598)
$520,902
3.0
Fiscal Analysis
The bill would specify that the current property tax exemption for leaseholds or other possessory interest in a public facility would apply to a public facility used to provide multifamily housing only if the public facility user meets specified low-income housing occupancy requirements.
The bill would require the Texas Department of Housing and Community Affairs (TDHCA) to conduct audits of certain public facility corporations' (PFC) multifamily residential developments approved after the enactment of the bill.
The bill would require the Comptroller of Public Accounts (CPA) to receive and post on its website an annual report from certain PFCs.
Methodology
The CPA anticipates administrative costs of $153,000 per fiscal year for two FTEs to develop and report on a new registry of low-income multifamily housing units in the state.
TDHCA assumes required audits would commence in fiscal year 2026, allowing two years for approved PFC projects to become operational with occupancy, and anticipates related costs of $80,598 per fiscal year, beginning in fiscal year 2026, for one FTE to conduct compliance monitoring activities.
According to TDHCA, approximately 9,000 housing units would require monitoring beginning in fiscal year 2026. With TDHCA collecting a $40 fee per unit, the agency anticipates a revenue gain of $360,000 to Appropriated Receipts in fiscal year 2026 and, with assumed annual growth of monitored units and associated fees, the revenue gain to increase to $480,000 in fiscal year 2027 and $520,902 in fiscal year 2028.
According to the CPA, the bill could limit the amount of property qualifying for future property tax exemptions, which could create a revenue gain to the state through the school funding formula. Because the number and values of properties that could be affected is unknown, the amount of revenue potentially gained cannot be estimated.
Technology
Technology costs for fiscal year 2024 consist of a one-time cost of $288,000, per the CPA, for 1,920 programming hours to modify the tax systems that would be impacted by the bill.
Technology costs to Appropriated Receipts for fiscal year 2026 consist a one-time technology cost of $2,500, per TDHCA, for a computer and software for the one anticipated FTE.
Local Government Impact
According to the CPA, the bill could limit the amount of property qualifying for future property tax exemptions, which could create an indeterminate revenue gain to local taxing units through the school funding formula.
Source Agencies:
304 Comptroller of Public Accounts, 332 Department of Housing and Community Affairs