Texas 2021 - 87th Regular

Texas Senate Bill SB2030 Compare Versions

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1	1	87R10936 JAM-F
2	2	By: Eckhardt S.B. No. 2030
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to requirements for beneficial tax treatment related to a
8	8	public facility used to provide affordable housing.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Sections 303.042(d) and (f), Local Government
11	11	Code, are amended to read as follows:
12	12	(d) An exemption under this section for a multifamily
13	13	residential development which is owned by a public facility
14	14	corporation created [by a housing authority] under this chapter and
15	15	which does not have at least 20 percent of its units reserved for
16	16	public housing units, applies only if[:
17	17	[(1)] the corporation's sponsor [housing authority]
18	18	holds a public hearing, at a regular meeting of the sponsor's
19	19	[authority's] governing body, to approve the development[;] and:
20	20	(1) for a development that receives financial
21	21	assistance administered under Chapter 1372, Government Code, or
22	22	Subchapter DD, Chapter 2306, Government Code:
23	23	(A) [(2)] at least 50 percent of the units in the
24	24	multifamily residential development are reserved for occupancy by
25	25	individuals and families earning less than 80 percent of the area
26	26	median family income; or
27	27	(B) the requirements under Section 303.0425 are
28	28	met;
29	29	(2) for a development that does not receive financial
30	30	assistance administered under Chapter 1372, Government Code, or
31	31	Subchapter DD, Chapter 2306, Government Code, the requirements
32	32	under Section 303.0425 are met; or
33	33	(3) for an occupied multifamily residential
34	34	development that is acquired by the public facility corporation,
35	35	the development comes into compliance with the requirements of this
36	36	section or Section 303.0425, as applicable, not later than the
37	37	first anniversary of the date of the acquisition.
38	38	(f) Notwithstanding Subsections (a) and (b), during the
39	39	period [of time] that a corporation owns a particular public
40	40	facility that provides multifamily housing, a leasehold or other
41	41	possessory interest in the real property of the public facility
42	42	granted by the corporation shall be treated in the same manner as a
43	43	leasehold or other possessory interest in real property granted by
44	44	a housing [an] authority under Section 379B.011(b) only if the
45	45	requirements under Subsection (d) are met.
46	46	SECTION 2. Subchapter B, Chapter 303, Local Government
47	47	Code, is amended by adding Section 303.0425 to read as follows:
48	48	Sec. 303.0425. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT
49	49	RELATING TO CERTAIN PUBLIC FACILITIES. (a) In this section:
50	50	(1) "Affordable housing unit" means a residential unit
51	51	reserved for occupancy by an individual or family earning not more
52	52	than 80 percent of the area median income, adjusted for family size.
53	53	(2) "Developer" means a private entity that constructs
54	54	a development.
55	55	(3) "Housing choice voucher program" means the housing
56	56	choice voucher program under Section 8, United States Housing Act
57	57	of 1937 (42 U.S.C. Section 1437f).
58	58	(4) "Housing development" means a development
59	59	providing multifamily housing that includes affordable housing
60	60	units.
61	61	(5) "Public facility user" means a developer or other
62	62	private entity that has a leasehold or other possessory interest in
63	63	a public facility used to provide multifamily housing.
64	64	(b) The requirements prescribed by this section:
65	65	(1) must be recorded as a deed restriction, the term of
66	66	which must be for a period of at least 10 years, the length of the
67	67	term of which must be stated in the instrument, and which may be
68	68	terminated only if:
69	69	(A) a foreclosure occurs with respect to the
70	70	housing development that is the subject of the deed restriction; or
71	71	(B) beneficial tax treatment is no longer
72	72	authorized under Section 303.042; and
73	73	(2) do not apply to a multifamily residential
74	74	development owned by a corporation:
75	75	(A) in which at least 20 percent of the units are
76	76	reserved for public housing units; or
77	77	(B) that receives financial assistance
78	78	administered under Chapter 1372, Government Code, or Subchapter DD,
79	79	Chapter 2306, Government Code, and in which at least 50 percent of
80	80	the units in the development are reserved for occupancy by
81	81	individuals and families earning less than 80 percent of the area
82	82	median family income.
83	83	(c) A sponsor shall identify goals for public facilities
84	84	used for housing developments and establish selection criteria
85	85	based on the goals to be used by corporations for scoring proposals
86	86	from developers to construct housing developments. A corporation
87	87	must use an open, transparent, and competitive process for
88	88	selecting a developer for the purpose of constructing a housing
89	89	development.
90	90	(d) Selection criteria established under Subsection (c) may
91	91	consider whether the development will:
92	92	(1) be located:
93	93	(A) in the attendance zone of an elementary
94	94	school that has passed accountability standards adopted by the
95	95	Texas Education Agency for the most recent school year available;
96	96	(B) in the attendance zone of a high school with a
97	97	graduation rate of at least 85 percent; and
98	98	(C) in a census tract in which:
99	99	(i) fewer than 10 percent of the households
100	100	have a household income equal to or less than the federal poverty
101	101	line; and
102	102	(ii) the median household income is equal
103	103	to or greater than 80 percent of area median income;
104	104	(2) serve residents most in need of affordable
105	105	housing, including families with children or elderly individuals
106	106	with disabilities; and
107	107	(3) provide affordable housing beyond the minimum
108	108	period of affordability required by this section to receive the tax
109	109	exemption described by Section 303.042.
110	110	(e) A public facility user must reserve at least 20 percent
111	111	of the affordable housing units in the development for occupancy by
112	112	individuals or families earning not more than 50 percent of area
113	113	median income, adjusted for family size. A unit may not be used to
114	114	satisfy the reservation required under this subsection if every
115	115	tenant in the unit is:
116	116	(1) a part-time or full-time student at an institution
117	117	of higher education;
118	118	(2) under the age of 24; and
119	119	(3) ineligible for housing assistance under Section 8,
120	120	United States Housing Act of 1937 (42 U.S.C. Section 1437f).
121	121	(f) The percentage of affordable housing units reserved in
122	122	each category of units in the housing development, based on the
123	123	number of bedrooms and bathrooms per unit, must be the same as the
124	124	percentage of affordable housing units reserved in the housing
125	125	development as a whole.
126	126	(g) The monthly rent charged by a public facility user for
127	127	an affordable housing unit may not exceed:
128	128	(1) 30 percent of 80 percent of area median income,
129	129	adjusted for family size; or
130	130	(2) if the unit is occupied by a participant in the
131	131	housing choice voucher program, the payment standard for that unit
132	132	used by the housing authority that administers the voucher for the
133	133	unit.
134	134	(h) In calculating the income of an individual or family for
135	135	an affordable housing unit, the public facility user must consider
136	136	the income of every individual who will be living in the unit.
137	137	(i) A public facility user may not:
138	138	(1) refuse to rent an affordable housing unit to an
139	139	individual or family because the individual or family participates
140	140	in the housing choice voucher program; or
141	141	(2) use a financial or minimum income standard that
142	142	requires an individual or family participating in the housing
143	143	choice voucher program to have a monthly income of more than 250
144	144	percent of the individual's or family's share of the total monthly
145	145	rent payable for an affordable housing unit.
146	146	(j) The sponsor of a corporation that leases a public
147	147	facility used as a housing development to a public facility user
148	148	shall publish on its Internet website information about:
149	149	(1) the affordable housing units in the housing
150	150	development; and
151	151	(2) the development's policies regarding tenant
152	152	participation in the housing choice voucher program.
153	153	(k) A public facility user shall:
154	154	(1) affirmatively market available units directly to
155	155	individuals and families participating in the housing choice
156	156	voucher program; and
157	157	(2) notify local housing authorities of any available
158	158	units in the development.
159	159	(l) Not later than April 1 of each year, a public facility
160	160	user of a housing development must:
161	161	(1) submit to the chief appraiser of the appraisal
162	162	district in which the housing development is located an audit
163	163	report for a compliance audit conducted by an independent auditor
164	164	to determine whether the public facility user is in compliance with
165	165	the requirements of this section; and
166	166	(2) submit to the comptroller a report that includes,
167	167	for each housing development:
168	168	(A) the name of the development;
169	169	(B) the street address and municipality or county
170	170	in which the development is located;
171	171	(C) the name of the developer;
172	172	(D) the total number of market rate units,
173	173	reported by bedroom size and rent;
174	174	(E) the total number of units with income
175	175	restrictions, reported by bedroom size, level of income
176	176	restriction, and rent;
177	177	(F) the total number of units, reported by
178	178	bedroom size, that are designed for individuals who are physically
179	179	challenged or who have special needs, and the number of those
180	180	individuals served annually by those units;
181	181	(G) the number of units rented by individuals and
182	182	families who participate in the housing choice voucher program, as
183	183	reported by bedroom size;
184	184	(H) the race, ethnicity, and age of all
185	185	occupants; and
186	186	(I) if it has not been previously submitted in a
187	187	report to the comptroller, or if it has been amended since the
188	188	previous submission:
189	189	(i) a copy of the ground lease; and
190	190	(ii) a copy of the partnership agreement
191	191	for the public facility.
192	192	(m) The reports submitted under Subsection (l) are public
193	193	information and subject to disclosure under Chapter 552, Government
194	194	Code. The comptroller shall post a copy of the report received
195	195	under Subsection (l)(1) on its Internet website.
196	196	(n) Each lease agreement for a unit in a housing development
197	197	must provide that:
198	198	(1) the landlord may not retaliate against the tenant
199	199	or the tenant's guests by taking an action because the tenant
200	200	established, attempted to establish, or participated in a tenant
201	201	organization;
202	202	(2) the landlord may only terminate or choose to not
203	203	renew the lease because the tenant:
204	204	(A) is in material noncompliance with the lease,
205	205	including nonpayment of rent after the required cure period;
206	206	(B) committed one or more substantial violations
207	207	of the lease;
208	208	(C) failed to provide required information on the
209	209	income, composition, or eligibility of the tenant's household; or
210	210	(D) committed repeated minor violations of the
211	211	lease that:
212	212	(i) disrupt the livability of the property;
213	213	(ii) adversely affect the health and safety
214	214	of any person or the right to quiet enjoyment of the leased premises
215	215	and related project facilities;
216	216	(iii) interfere with the management of the
217	217	project; or
218	218	(iv) have an adverse financial effect on
219	219	the project, including the repeated failure of the tenant to pay
220	220	rent in a timely manner;
221	221	(3) except in the case of termination for lease
222	222	violations based on criminal activity that pose a threat to the
223	223	safety of staff and other residents, to terminate or not renew the
224	224	lease the landlord must serve a written notice of proposed
225	225	termination on the tenant:
226	226	(A) at least 30 days before the effective date of
227	227	the termination or nonrenewal; and
228	228	(B) before issuing a notice to vacate under
229	229	Section 24.005, Property Code; and
230	230	(4) the notice of a proposed termination provided
231	231	under Subdivision (3) must:
232	232	(A) specify the date of the proposed termination;
233	233	(B) state the grounds for termination;
234	234	(C) advise the tenant of the tenant's right to
235	235	defend the action in court; and
236	236	(D) advise the tenant that the tenant has a
237	237	10-day period following the date of service of the notice to discuss
238	238	the proposed termination of the tenancy with the landlord and cure
239	239	the alleged lease violation if the lease violation is not based on
240	240	drug activity, violent criminal activity, or other serious criminal
241	241	activity.
242	242	(o) A tenant may not waive the protections provided by
243	243	Subsection (n).
244	244	(p) A public facility corporation must be given:
245	245	(1) written notice of an instance of noncompliance
246	246	with this section; and
247	247	(2) 90 days after the day notice is received under
248	248	Subdivision (1) to cure the matter that is the subject of the
249	249	notice.
250	250	(q) Notwithstanding any other law, an occupied multifamily
251	251	residential development that is acquired by a public facility
252	252	corporation is eligible for an exemption under Section
253	253	303.042(d)(3) for the one-year period following the date of the
254	254	acquisition regardless of whether the development complies with the
255	255	other requirements of that section or with this section, as
256	256	applicable.
257	257	SECTION 3. Section 392.005, Local Government Code, is
258	258	amended by amending Subsections (c) and (d) and adding Subsection
259	259	(c-1) to read as follows:
260	260	(c) An exemption under this section for a multifamily
261	261	residential development which is owned by [(i) a public facility
262	262	corporation created by a housing authority under Chapter 303, (ii)]
263	263	a housing development corporation[,] or [(iii)] a similar entity
264	264	created by a housing authority and which does not have at least 20
265	265	percent of its units reserved for public housing units, applies
266	266	only if:
267	267	(1) the authority holds a public hearing, at a regular
268	268	meeting of the authority's governing body, to approve the
269	269	development; and
270	270	(2) at least 50 percent of the units in the multifamily
271	271	residential development are reserved for occupancy by individuals
272	272	and families earning less than 80 percent of the area median family
273	273	income.
274	274	(c-1) An exemption under this section for a multifamily
275	275	residential development which is owned by a public facility
276	276	corporation created by a housing authority under Chapter 303 and
277	277	which does not have at least 20 percent of its units reserved for
278	278	public housing units, applies only if the authority holds a public
279	279	hearing, at a regular meeting of the authority's governing body, to
280	280	approve the development and:
281	281	(1) for a development that receives financial
282	282	assistance administered under Chapter 1372, Government Code, or
283	283	Subchapter DD, Chapter 2306, Government Code:
284	284	(A) at least 50 percent of the units in the
285	285	multifamily residential development are reserved for occupancy by
286	286	individuals and families earning less than 80 percent of the area
287	287	median family income; or
288	288	(B) the requirements under Section 303.0425 are
289	289	met;
290	290	(2) for a development that does not receive financial
291	291	assistance administered under Chapter 1372, Government Code, or
292	292	Subchapter DD, Chapter 2306, Government Code, the requirements
293	293	under Section 303.0425 are met; or
294	294	(3) for an occupied multifamily residential
295	295	development that is acquired by the public facility corporation,
296	296	the development comes into compliance with the requirements of this
297	297	section or Section 303.0425, as applicable, not later than the
298	298	first anniversary of the date of the acquisition.
299	299	(d) For the purposes of Subsections [Subsection] (c) and
300	300	(c-1), a "public housing unit" is a dwelling unit for which the
301	301	owner receives a public housing operating subsidy. It does not
302	302	include a unit for which payments are made to the landlord under the
303	303	federal Section 8 Housing Choice Voucher Program.
304	304	SECTION 4. The changes in law made by this Act apply only to
305	305	an ownership interest obtained by a public facility corporation or
306	306	a leasehold or other possessory interest in a public facility
307	307	granted by a public facility corporation to a public facility user,
308	308	as defined by Section 303.0425, Local Government Code, as added by
309	309	this Act, on or after the effective date of this Act.
310	310	SECTION 5. This Act takes effect September 1, 2021.