BILL ANALYSIS

C.S.H.B. 4582

By: Bell, Keith

Land & Resource Management

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that there is a need for more attainable housing in Texas and that the median home price for a single-family home in November 2024 was approximately six times the median household income in Dallas County in 2022. The bill author has also informed the committee that an impediment to homeownership for middle-income buyers is the lack of new housing units. C.S.H.B. 4582 seeks to incentivize further development of housing units for such buyers by making a developer eligible for reimbursement for a cost incurred to build infrastructure related to an attainable housing development under certain conditions.

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

C.S.H.B. 4582 amends the Local Government Code to set out provisions relating to attainable housing development infrastructure applicable only to the following:

· a county with a population greater than 2.5 million but less than 4 million;

· a county with a population greater than 190,000 that is adjacent to such an aforementioned county; and

· a municipality wholly or partly located in any of those counties.

C.S.H.B. 4582 makes a developer eligible for reimbursement under the bill's provisions for a cost incurred to build infrastructure related to an attainable housing development under the following conditions:

· the developer directly or indirectly incurred the cost of building or financing the construction, maintenance, or renovation of the infrastructure or connection of the infrastructure to the development;

· a municipality or county would have built or financed the infrastructure had the infrastructure not been built by the developer;

· at least 80 percent of the lots in the development accommodate a single-family offsite residence that is at least 1,000 square feet and not more than 2,500 square feet in area;

· the development is connected to the following:

o a public water system; and

o a sewer system, as defined by applicable Water Code provisions relating to water quality control;

· the development is governed by a property owners' association agreement or land lease agreement that includes restrictive covenants relating to the maintenance of the common areas and grounds of the development and enforcement of community regulations;

· the developer offers units in the development to veterans or active duty members of the military, first responders, or employees of a school district; and

· the developer complies with Federal Housing Administration tenant site lease protections required by the following:

o a municipality in which the development is wholly or partly located; and

o a county in which the development is located if the development is wholly or partly located in the county's unincorporated area.

Costs that may be reimbursed under the bill's provisions include the following:

· financing costs;

· installation, maintenance, or renovation costs, including supplies and labor; and

· costs to connect to existing infrastructure.

The bill defines the following:

· "attainable housing development" as a residential development consisting of at least seven acres that is developed or renovated to provide at least 50 single-family offsite residences;

· "infrastructure" as the following:

o a facility for water, wastewater, electricity, broadband Internet service, or another utility; and

o a street, road, highway, or bridge; and

· "single-family offsite residence" as a housing unit governed by the Texas Manufactured Housing Standards Act.

C.S.H.B. 4582 authorizes an eligible developer to request reimbursement by providing written notice to the following:

· a municipality in which the development is wholly or partly located; and

· a county in which the development is located if the development is wholly or partly located in the county's unincorporated area.

The notice must include the following:

· an itemized list of the applicable infrastructure costs incurred by the developer; and

· proof of payment for each infrastructure cost incurred by the developer.

C.S.H.B. 4582 authorizes a municipality or county receiving notice of reimbursement from an eligible developer to reimburse the developer's applicable infrastructure costs in accordance with these provisions of the bill. The bill caps the amount of reimbursement paid to a developer under the bill's provisions in a tax year at the amount of property taxes assessed by the municipality or county and paid by the developer for that tax year on the property on which the attainable housing development for which the developer seeks reimbursement is located. The bill limits a county's liability for reimbursement to the property taxes assessed by the county on and paid by the developer for the property located in the county's unincorporated area. The bill makes an eligible developer eligible for reimbursement until the earlier of the following:

· the date on which the total reimbursement paid by a municipality or county is equal to the total applicable infrastructure costs incurred by the developer for the attainable housing development; or

· the 10th anniversary of the date the developer first receives a reimbursement payment under the bill's provisions.

The bill requires a municipality or county that reimburses a developer to pay the initial reimbursement payment not later than the 90th day after the date the municipality or county receives the notice of reimbursement.

C.S.H.B. 4582 requires a developer that receives reimbursement to submit an annual report to the municipality or county from which the developer receives reimbursement that includes the following:

· an itemized list of the infrastructure costs incurred by the developer during that year; and

· proof of payment for each infrastructure cost incurred by the developer during that year.

C.S.H.B. 4582 applies only to costs incurred by an attainable housing development project on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 4582 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes in the definition of "infrastructure" a facility for broadband Internet service, whereas the introduced did not include such a facility in the definition of that term.

With respect to the reimbursement eligibility condition that at least 80 percent of the lots in the development accommodate a single-family offsite residence that is at least 1,000 square feet in area, the substitute caps the area at 2,500 square feet whereas the introduced did not provide a cap. The substitute specifies that the installation, maintenance, or renovation costs that may be reimbursed include supplies and labor, whereas the introduced did not include this specification.

Whereas the introduced required an eligible developer to provide written notice of reimbursement to applicable entities, the substitute instead authorizes the developer to request reimbursement by providing written notice to such entities.

Whereas the introduced required a municipality or county receiving notice of reimbursement from an eligible developer to reimburse the developer's applicable infrastructure costs, the substitute instead authorizes the municipality or county to reimburse such costs. Whereas the introduced entitled an eligible developer to reimbursement until the earlier of certain dates, the substitute instead makes the developer eligible for reimbursement until the earlier of such dates.

Whereas the introduced required a municipality or county that receives notice of reimbursement to pay the initial reimbursement payment by a certain deadline, the substitute instead requires a municipality or county that reimburses a developer to pay such an initial payment by such a deadline. Whereas the introduced required a developer that provided notice of reimbursement to submit an annual report to the municipality or county from which the developer receives reimbursement, the substitute instead requires a developer that receives reimbursement to submit such a report to such a municipality or county.

Whereas the introduced applied only to an attainable housing development project initiated on or after the bill's effective date, the substitute applies only to costs incurred by such a project on or after such a date.