Texas Senate Bill SB2814

Texas 2025 - 89th Regular

• Filed: 3/14/25

Caption

Relating to a franchise or insurance premium tax credit for certain housing developments.

Impact

The bill is set to have a significant impact on the state’s housing landscape. With a state housing credit ceiling of $25 million allocated annually, it aims to facilitate the financing of qualified developments that meet specific criteria established by the department. By providing tax credits, the bill encourages developers and investors to participate in creating affordable housing. The credits can be claimed over a 10-year period, which may also help stabilize housing markets by ensuring projects remain financially viable over a longer term.

Summary

SB2814 introduces a tax credit mechanism aimed at incentivizing investment in affordable housing developments in Texas. It amends the Tax Code, adding Subchapter K, which provides low-income housing development tax credits that can be claimed by taxable entities owning interests in qualified developments. The Texas Department of Housing and Community Affairs is tasked with overseeing the administration of these credits and the issuance of necessary allocation certificates. This initiative emphasizes the importance of creating and maintaining affordable housing to meet community needs.

Contention

Some potential points of contention surrounding SB2814 may involve concerns regarding the distribution of tax credits and the effectiveness of the program in genuinely increasing affordable housing availability. Critics may argue that the eligibility criteria could potentially favor developers who do not prioritize low-income housing or fail to adequately address the pressing need for affordable housing across diverse demographic groups. Additionally, the bill outlines procedures for compliance monitoring and requires reporting on the effectiveness of the credits, which may raise debates on transparency and accountability in the implementation of such tax incentives.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section

Insurance Code

• Chapter 233. Credit Against Certain Taxes For Certain Housing Developments
  • Section: New Section