Texas 2021 - 87th Regular

Texas House Bill HB1931 Compare Versions

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1	1		By: Walle, Campos, Morales Shaw H.B. No. 1931
2		-	(Senate Sponsor - Bettencourt)
3		-	(In the Senate - Received from the House April 19, 2021;
4		-	May 6, 2021, read first time and referred to Committee on Local
5		-	Government; May 24, 2021, reported adversely, with favorable
6		-	Committee Substitute by the following vote: Yeas 7, Nays 0;
7		-	May 24, 2021, sent to printer.)
8		-	Click here to see the committee vote
9		-	COMMITTEE SUBSTITUTE FOR H.B. No. 1931 By: Bettencourt
10	2
11	3
12	4		A BILL TO BE ENTITLED
13	5		AN ACT
14		-	relating to certain public facilities used to provide affordable
15		-	housing.
	6	+	relating to requirements for beneficial tax treatment related to a
	7	+	leasehold or other possessory interest in a public facility used to
	8	+	provide multifamily housing.
16	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17		-	SECTION 1. Section 303.021, Local Government Code, is
18		-	amended by adding Subsection (c) to read as follows:
19		-	(c) A corporation or a sponsor may finance, own, or operate
20		-	a multifamily residential development in the jurisdictional
21		-	boundaries of the sponsor if the corporation or sponsor complies
22		-	with all applicable provisions of this chapter.
23		-	SECTION 2. Section 303.042, Local Government Code, is
24		-	amended by amending Subsections (d) and (f) and adding Subsections
25		-	(d-1) and (d-2) to read as follows:
26		-	(d) This subsection applies only to a multifamily
27		-	residential development that is owned by a corporation created
28		-	under this chapter by a housing authority and that does not have at
29		-	least 20 percent of its units reserved for public housing units,
30		-	participate in the Rental Assistance Demonstration program
31		-	administered by the United States Department of Housing and Urban
32		-	Development, or receive financial assistance administered under
33		-	Chapter 1372, Government Code, or Subchapter DD, Chapter 2306,
34		-	Government Code. Notwithstanding Subsections (a) and (b), an [An]
35		-	exemption under this section for a multifamily residential
36		-	development [which is owned by a public facility corporation
37		-	created by a housing authority under this chapter and which does not
38		-	have at least 20 percent of its units reserved for public housing
39		-	units,] applies only if:
40		-	(1) the housing authority:
41		-	(A) provides notice of the development to the
42		-	governing body of each municipality or county for which the
43		-	authority was created; and
44		-	(B) holds a public hearing, at a [regular]
45		-	meeting of the authority's governing body, to approve the
46		-	development; [and]
47		-	(2) at least 50 percent of the units in the multifamily
48		-	residential development are reserved for occupancy by individuals
49		-	and families earning less than 80 percent of the area median
50		-	[family] income;
51		-	(3) the requirements under Sections 303.0425 and
52		-	303.0426 are met; and
53		-	(4) for an occupied multifamily residential
54		-	development that is acquired by a corporation:
55		-	(A) the governing body of each municipality or
56		-	county for which the authority was created approves a resolution of
57		-	"no objection" for the development; and
58		-	(B) a sum of not less than 50 percent of the total
59		-	gross cost of the existing project in its entirety is expended on
60		-	rehabilitating, renovating, reconstructing, or repairing the
61		-	project.
62		-	(d-1) This subsection applies only to a multifamily
63		-	residential development that is owned by a corporation created
64		-	under this chapter by a sponsor other than a housing authority and
65		-	that does not have at least 20 percent of its units reserved for
66		-	public housing units, participate in the Rental Assistance
67		-	Demonstration program administered by the United States Department
68		-	of Housing and Urban Development, or receive financial assistance
69		-	administered under Chapter 1372, Government Code, or Subchapter DD,
70		-	Chapter 2306, Government Code. Notwithstanding Subsections (a) and
71		-	(b), an exemption under this section for a multifamily residential
72		-	development applies only if:
73		-	(1) at least 50 percent of the units in the multifamily
74		-	residential development are reserved for occupancy by individuals
75		-	and families earning less than 80 percent of the area median income;
76		-	(2) before constructing or acquiring the development,
77		-	the corporation provides notice of the construction or acquisition
78		-	to the governing body of each sponsor for which the corporation was
79		-	created unless at least one elected member of the governing body of
80		-	the sponsor serves on the board of directors of the corporation; and
81		-	(3) the requirements under Section 303.0426 are met.
82		-	(d-2) This subsection applies to a multifamily residential
83		-	development that is owned by a corporation created by any sponsor
84		-	under this chapter. Notwithstanding Subsections (a), (b), (d), and
85		-	(d-1), an exemption under this section for an occupied multifamily
86		-	residential development that is acquired by the corporation applies
87		-	only if the development comes into compliance with the requirements
88		-	of Subsection (d) or (d-1), as applicable, not later than the first
89		-	anniversary of the date of the acquisition.
90		-	(f) Notwithstanding Subsections (a) and (b), during
91		-	the period [of time] that a corporation owns a particular public
92		-	facility that provides multifamily housing:
93		-	(1) [,] a leasehold or other possessory interest in
94		-	the real property of the public facility granted by the corporation
95		-	shall be treated in the same manner as a leasehold or other
96		-	possessory interest in real property granted by an authority under
97		-	Section 379B.011(b); and
98		-	(2) the materials used by a person granted a
99		-	possessory interest described by Subdivision (1) to improve the
100		-	real property of the public facility shall be exempt from all sales
101		-	and use taxes because the materials are for the benefit of the
102		-	corporation.
103		-	SECTION 3. Subchapter B, Chapter 303, Local Government
104		-	Code, is amended by adding Sections 303.0425 and 303.0426 to read as
105		-	follows:
106		-	Sec. 303.0425. ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX
107		-	TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY
108		-	CORPORATIONS CREATED BY HOUSING AUTHORITIES. (a) In this section:
	10	+	SECTION 1. Section 303.042(f), Local Government Code, is
	11	+	amended to read as follows:
	12	+	(f) Notwithstanding Subsections (a) and (b), during the
	13	+	period of time that a corporation owns a particular public
	14	+	facility, a leasehold or other possessory interest in the real
	15	+	property of the public facility granted by the corporation shall
	16	+	be treated in the same manner as a leasehold or other possessory
	17	+	interest in real property granted by an authority under Section
	18	+	379B.011(b) if the requirements under Section 303.0425 are met.
	19	+	SECTION 2. Subchapter B, Chapter 303, Local Government
	20	+	Code, is amended by adding Section 303.0425 to read as follows:
	21	+	Sec. 303.0425. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT
	22	+	RELATING TO CERTAIN PUBLIC FACILITIES. (a) In this section:
109	23		(1) "Developer" means a private entity that constructs
110		-	a development.
	24	+	or rehabilitates a development.
111	25		(2) "Housing choice voucher program" means the housing
112	26		choice voucher program under Section 8, United States Housing Act
113	27		of 1937 (42 U.S.C. Section 1437f).
114		-	(3) "Lower income housing unit" means a residential
	28	+	(3) "Housing development" means a development
	29	+	constructed or rehabilitated to provide multifamily housing.
	30	+	(4) "Lower income housing unit" means a residential
115	31		unit reserved for occupancy by an individual or family earning not
116	32		more than 60 percent of the area median income, adjusted for family
117	33		size.
118		-	(4) "Public facility user" means a public-private
119		-	partnership entity or a developer or other private entity that has
120		-	an ownership interest or a leasehold or other possessory interest
121		-	in a public facility used to provide multifamily housing.
122		-	(b) The requirements prescribed by this section do not apply
123		-	to a multifamily residential development that is:
124		-	(1) owned by a corporation that was not created by a
125		-	housing authority; or
126		-	(2) owned by a corporation created by a housing
127		-	authority and:
128		-	(A) in which at least 20 percent of the units are
129		-	reserved for public housing units;
130		-	(B) that participates in the Rental Assistance
131		-	Demonstration program administered by the United States Department
132		-	of Housing and Urban Development; or
133		-	(C) that receives financial assistance
134		-	administered under Chapter 1372, Government Code, or Subchapter DD,
135		-	Chapter 2306, Government Code.
136		-	(c) A corporation must use an open, transparent, and
137		-	competitive process for selecting a developer for the purpose of
138		-	constructing a housing development.
139		-	(d) At least 10 percent of the units in the development must
	34	+	(5) "Public facility user" means a developer or other
	35	+	private entity that has a leasehold or other possessory interest in
	36	+	a public facility used to provide multifamily housing.
	37	+	(b) Section 303.042(f) applies to a leasehold or other
	38	+	possessory interest in a public facility only if the public
	39	+	facility user meets the requirements of this section. The
	40	+	requirements prescribed by this section apply only to the
	41	+	application of taxes related to a leasehold or other possessory
	42	+	interest in a public facility under Section 303.042(f) and do not
	43	+	restrict the authority of a corporation to lease a public facility
	44	+	to a private entity under terms other than the terms described by
	45	+	this section.
	46	+	(c) A public facility user may not:
	47	+	(1) refuse to rent a residential unit in a housing
	48	+	development to an individual or family because the individual or
	49	+	family participates in the housing choice voucher program; or
	50	+	(2) use a financial or minimum income standard that
	51	+	requires an individual or family participating in the housing
	52	+	choice voucher program to have a monthly income of more than 250
	53	+	percent of the individual's or family's share of the total monthly
	54	+	rent payable for a residential unit.
	55	+	(d) A public facility user must reserve at least 10 percent
	56	+	of the residential units in a housing development for individuals
	57	+	or families participating in the housing choice voucher program.
	58	+	(e) At least 10 percent of the units in the development must
140	59		be reserved as lower income housing units. A unit may not be used to
141	60		satisfy the reservation required under this subsection if every
142	61		tenant in the unit is:
143	62		(1) a part-time or full-time student at an institution
144	63		of higher education;
145	64		(2) under the age of 24; and
146	65		(3) ineligible for housing assistance under Section 8,
147	66		United States Housing Act of 1937 (42 U.S.C. Section 1437f).
148		-	(e) The percentage of lower income housing ~~units reserved in~~
149		-	each category of units in the housing development, ~~based on the~~
150		-	number of bedrooms and bathrooms per unit, must be the ~~same as the~~
151		-	percentage of lower income housing units reserved in the ~~housing~~
152		-	development as a whole.
153		-	(f) The monthly rent charged for a lower income housing unit
	67	+	(f) The percentage of lower income housing development,
	68	+	reserved in each category of units in the housing development,
	69	+	based on the number of bedrooms and bathrooms per unit, must be the
	70	+	same as the percentage of lower income housing units reserved in the
	71	+	housing development as a whole.
	72	+	(g) The monthly rent charged for a lower income housing unit
154	73		may not exceed:
155	74		(1) 30 percent of 60 percent of the area median income,
156	75		adjusted for family size; or
157	76		(2) if the unit is occupied by a participant in the
158	77		housing choice voucher program, the payment standard used by the
159	78		housing authority that administers the voucher for the unit.
160		-	(g) In calculating the income of an individual or family for
	79	+	(h) In calculating the income of an individual or family for
161	80		a lower income housing unit, the public facility user must consider
162	81		the income of every individual who will be living in the unit.
163		-	Sec. 303.0426. ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX
164		-	TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY
165		-	CORPORATIONS CREATED BY ANY SPONSOR. (a) In this section, "housing
166		-	choice voucher program," "lower income housing unit," and "public
167		-	facility user" have the meanings assigned by Section 303.0425.
168		-	(b) The requirements prescribed by this section do not apply
169		-	to a multifamily residential development owned by a corporation:
170		-	(1) in which at least 20 percent of the units are
171		-	reserved for public housing units;
172		-	(2) that participates in the Rental Assistance
173		-	Demonstration program administered by the United States Department
174		-	of Housing and Urban Development; or
175		-	(3) that receives financial assistance administered
176		-	under Chapter 1372, Government Code, or Subchapter DD, Chapter
177		-	2306, Government Code.
178		-	(c) A public facility user may not:
179		-	(1) refuse to rent a residential unit to an individual
180		-	or family because the individual or family participates in the
181		-	housing choice voucher program; or
182		-	(2) use a financial or minimum income standard that
183		-	requires an individual or family participating in the housing
184		-	choice voucher program to have a monthly income of more than 250
185		-	percent of the individual's or family's share of the total monthly
186		-	rent payable for a unit.
187		-	(d) A corporation that owns or leases to a public facility
188		-	user a public facility used as a multifamily residential
189		-	development shall publish on its Internet website information about
190		-	the development's:
191		-	(1) compliance with the requirements of this section;
192		-	and
193		-	(2) policies regarding tenant participation in the
194		-	housing choice voucher program.
195		-	(e) A public facility user shall:
196		-	(1) affirmatively market available residential units
197		-	directly to individuals and families participating in the housing
198		-	choice voucher program; and
199		-	(2) notify local housing authorities of any available
200		-	units in the development.
201		-	(f) Not later than April 1 of each year, a public facility
202		-	user of a multifamily residential development must:
203		-	(1) submit to the chief appraiser of the appraisal
204		-	district in which the development is located an audit report for a
205		-	compliance audit conducted by an independent auditor or compliance
206		-	expert to determine whether the public facility user is in
207		-	compliance with the requirements of this section; and
208		-	(2) submit to the comptroller a report that includes,
209		-	for each housing development:
210		-	(A) the name of the development;
211		-	(B) the street address and municipality or county
212		-	in which the development is located;
213		-	(C) the name of the developer;
214		-	(D) the total number of residential units,
215		-	reported by bedroom size;
216		-	(E) the total number of lower income housing
217		-	units, reported by bedroom size, level of income restriction, and
218		-	rent;
219		-	(F) the total number of residential units,
220		-	reported by bedroom size, level of income restriction, and rent,
221		-	that are not lower income housing units but that are reserved for
222		-	occupancy by an individual or family earning less than 80 percent of
223		-	the area median income;
224		-	(G) the number of residential units rented by
225		-	individuals and families who participate in the housing choice
226		-	voucher program, reported by bedroom size;
227		-	(H) the race, ethnicity, and age of all
228		-	occupants, if available; and
229		-	(I) if not previously submitted in a report to
230		-	the comptroller, or if amended since the previous submission:
231		-	(i) a copy of the ground lease; and
232		-	(ii) a copy of the partnership agreement
233		-	for the public facility.
234		-	(g) The reports submitted under Subsection (f) are public
235		-	information and subject to disclosure under Chapter 552, Government
236		-	Code, except that information containing tenant names, unit
237		-	numbers, or other identifying information may be redacted. The
238		-	comptroller shall post a copy of the report received under
239		-	Subsection (f)(2) on its Internet website.
240		-	(h) Each lease agreement for a unit in a multifamily
241		-	residential development subject to this section must provide that:
242		-	(1) the landlord may not retaliate against the tenant
243		-	or the tenant's guests by taking an action because the tenant
244		-	established, attempted to establish, or participated in a tenant
245		-	organization;
246		-	(2) the landlord may only choose to not renew the lease
247		-	if the tenant:
248		-	(A) is in material noncompliance with the lease,
249		-	including nonpayment of rent after the required cure period;
250		-	(B) committed one or more substantial violations
251		-	of the lease;
252		-	(C) failed to provide required information on the
253		-	income, composition, or eligibility of the tenant's household; or
254		-	(D) committed repeated minor violations of the
255		-	lease that:
256		-	(i) disrupt the livability of the property;
257		-	(ii) adversely affect the health and safety
258		-	of any person or the right to quiet enjoyment of the leased premises
259		-	and related project facilities;
260		-	(iii) interfere with the management of the
261		-	project; or
262		-	(iv) have an adverse financial effect on
263		-	the project, including the repeated failure of the tenant to pay
264		-	rent in a timely manner;
265		-	(3) to not renew the lease, the landlord must serve a
266		-	written notice of proposed nonrenewal on the tenant at least 30 days
267		-	before the effective date of nonrenewal; and
268		-	(4) any written notice of a proposed nonrenewal that
269		-	is required to be provided under Subdivision (3) must specify the
270		-	date of the proposed nonrenewal.
271		-	(i) A tenant may not waive the protections provided by
272		-	Subsection (h).
273		-	(j) A public facility corporation must be given:
274		-	(1) written notice of an instance of noncompliance
275		-	with this section; and
276		-	(2) 90 days after the day notice is received under
277		-	Subdivision (1) to cure the matter that is the subject of the
278		-	notice.
279		-	(k) Notwithstanding any other law, an occupied multifamily
280		-	residential development that is acquired by a public facility
281		-	corporation is eligible for an exemption under Section 303.042(d-2)
282		-	for the one-year period following the date of the acquisition
283		-	regardless of whether the development complies with the other
284		-	requirements of that section or with this section, as applicable.
285		-	SECTION 4. Section 392.005(c), Local Government Code, is
286		-	amended to read as follows:
287		-	(c) An exemption under this section for a multifamily
288		-	residential development which is owned by [(i) a public facility
289		-	corporation created by a housing authority under Chapter 303, (ii)]
290		-	a housing development corporation[,] or [(iii)] a similar entity
291		-	created by a housing authority, other than a public facility
292		-	corporation created by a housing authority under Chapter 303, and
293		-	which does not have at least 20 percent of its units reserved for
294		-	public housing units, applies only if:
295		-	(1) the authority holds a public hearing, at a regular
296		-	meeting of the authority's governing body, to approve the
297		-	development; and
298		-	(2) at least 50 percent of the units in the multifamily
299		-	residential development are reserved for occupancy by individuals
300		-	and families earning less than 80 percent of the area median family
301		-	income.
302		-	SECTION 5. (a) Section 303.042(d), Local Government Code,
303		-	as amended by this Act, applies only to a multifamily residential
304		-	development that is approved by a housing authority on or after the
305		-	effective date of this Act. A multifamily residential development
306		-	that is approved by a housing authority before the effective date of
307		-	this Act is governed by the law in effect on the date the
308		-	development was approved by the housing authority, and the former
309		-	law is continued in effect for that purpose.
310		-	(b) Section 303.042(d-1), Local Government Code, as added
311		-	by this Act, applies only to a multifamily residential development
312		-	that is approved by a public facility corporation on or after the
313		-	effective date of this Act. A multifamily residential development
314		-	that is approved by a public facility corporation before the
315		-	effective date of this Act is governed by the law in effect on the
316		-	date the development was approved by the public facility
317		-	corporation, and the former law is continued in effect for that
318		-	purpose.
319		-	(c) Section 303.042(d-2), Local Government Code, as added
320		-	by this Act, applies only to a multifamily residential development
321		-	that is acquired by a public facility corporation on or after the
322		-	effective date of this Act. A multifamily residential development
323		-	that is acquired by a public facility corporation before the
324		-	effective date of this Act is governed by the law in effect on the
325		-	date the development was acquired by the public facility
326		-	corporation, and the former law is continued in effect for that
327		-	purpose.
328		-	SECTION 6. This Act takes effect September 1, 2021.
329		-	* * * * *
	82	+	SECTION 3. Section 303.0425, Local Government Code, as
	83	+	added by this Act, applies only to a leasehold or other possessory
	84	+	interest in a public facility granted by a public facility
	85	+	corporation to a public facility user, as defined by that section,
	86	+	on or after the effective date of this Act.
	87	+	SECTION 4. This Act takes effect September 1, 2021.