Texas 2023 - 88th Regular

Texas Senate Bill SB1278 Compare Versions

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1	1	88R3102 JAM-F
2	2	By: Bettencourt S.B. No. 1278
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain public facilities used to provide affordable
8	8	housing.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 303.021, Local Government Code, is
11	11	amended by adding Subsection (d) to read as follows:
12	12	(d) A corporation or a sponsor may finance, own, or operate
13	13	a multifamily residential development if:
14	14	(1) the corporation or sponsor complies with all
15	15	applicable provisions of this chapter; and
16	16	(2) the development is located:
17	17	(A) in the area of operation of the sponsor, if
18	18	the sponsor is a housing authority; or
19	19	(B) in the jurisdictional boundaries of the
20	20	sponsor, if the sponsor is not a housing authority.
21	21	SECTION 2. The heading to Section 303.042, Local Government
22	22	Code, is amended to read as follows:
23	23	Sec. 303.042. TAXATION; EXEMPTION.
24	24	SECTION 3. Subchapter B, Chapter 303, Local Government
25	25	Code, is amended by adding Section 303.0421, and a heading is added
26	26	to that section to read as follows:
27	27	Sec. 303.0421. MULTIFAMILY RESIDENTIAL DEVELOPMENTS OWNED
28	28	BY PUBLIC FACILITY CORPORATIONS.
29	29	SECTION 4. Section 303.0421, Local Government Code, as
30	30	added by this Act, is amended by adding Subsections (a), (c), and
31	31	(d) to read as follows:
32	32	(a) This section applies to a multifamily residential
33	33	development that is owned by a corporation created under this
34	34	chapter, except that this section does not apply to a multifamily
35	35	residential development that:
36	36	(1) has at least 20 percent of its residential units
37	37	reserved for public housing units;
38	38	(2) participates in the Rental Assistance
39	39	Demonstration program administered by the United States Department
40	40	of Housing and Urban Development;
41	41	(3) receives financial assistance administered under
42	42	Chapter 1372, Government Code, or receives financial assistance
43	43	from another type of tax-exempt bond; or
44	44	(4) receives financial assistance administered under
45	45	Subchapter DD, Chapter 2306, Government Code.
46	46	(c) A multifamily residential development that is owned by a
47	47	corporation created under this chapter by a housing authority and
48	48	to which Subsection (a) applies must hold a public hearing, at a
49	49	meeting of the authority's governing body, to approve the
50	50	development.
51	51	(d) Notwithstanding Subsection (b), an exemption under
52	52	Section 303.042(c) for an occupied multifamily residential
53	53	development that is acquired by a corporation and to which
54	54	Subsection (a) applies is available only if the development comes
55	55	into compliance with the requirements of Subsection (b), as
56	56	applicable, not later than the first anniversary of the date of the
57	57	acquisition.
58	58	SECTION 5. Sections 303.042(d), (e), and (f), Local
59	59	Government Code, are transferred to Section 303.0421, Local
60	60	Government Code, as added by this Act, redesignated as Sections
61	61	303.0421(b), (e), and (f), Local Government Code, and amended to
62	62	read as follows:
63	63	(b) Notwithstanding Section 303.042(c) and subject to
64	64	Subsections (c) and (d), an [(d) An] exemption under Section
65	65	303.042(c) [this section] for a multifamily residential
66	66	development to which Subsection (a) applies is available [which is
67	67	owned by a public facility corporation created by a housing
68	68	authority under this chapter and which does not have at least 20
69	69	percent of its units reserved for public housing units, applies]
70	70	only if:
71	71	(1) the requirements under Section 303.0425 are met
72	72	[housing authority holds a public hearing, at a regular meeting of
73	73	the authority's governing body, to approve the development]; [and]
74	74	(2) at least 50 percent of the units in the multifamily
75	75	residential development are reserved for occupancy by individuals
76	76	and families earning not more [less] than 80 percent of the area
77	77	median [family] income, adjusted for family size; and
78	78	(3) for an occupied multifamily residential
79	79	development that is acquired by a corporation and not otherwise
80	80	subject to a land use restriction agreement under Section 2306.185,
81	81	Government Code:
82	82	(A) the mayor of any municipality or county judge
83	83	of any county for which the sponsor of the corporation was created,
84	84	as applicable, and the presiding officer of the board of trustees of
85	85	the school district in which the development is located are given
86	86	written notice not later than the 60th day before the date of the
87	87	acquisition of the property; and
88	88	(B) either:
89	89	(i) not less than 15 percent of the total
90	90	gross cost of the existing development in its entirety is expended
91	91	on rehabilitating, renovating, reconstructing, or repairing the
92	92	development, with initial expenditures and construction activities
93	93	beginning not later than the first anniversary of the date of the
94	94	acquisition and diligently continued until completed; or
95	95	(ii) at least 50 percent of the units are
96	96	reserved for occupancy as lower income housing units, as defined
97	97	under Section 303.0425.
98	98	(e) For the purposes of Subsection (a) [(d)], a "public
99	99	housing unit" is a residential [dwelling] unit for which the
100	100	landlord receives a public housing operating subsidy. It does not
101	101	include a unit for which payments are made to the landlord under the
102	102	federal Section 8 Housing Choice Voucher Program.
103	103	(f) Notwithstanding Sections 303.042(a) and (b)
104	104	[Subsections (a) and (b)], during the period [of time] that a
105	105	corporation owns a particular public facility that is a
106	106	multifamily residential development:
107	107	(1) [,] a leasehold or other possessory interest in
108	108	the real property of the public facility granted by the corporation
109	109	shall be treated in the same manner as a leasehold or other
110	110	possessory interest in real property granted by an authority under
111	111	Section 379B.011(b); and
112	112	(2) the materials used by a person granted a
113	113	possessory interest described by Subdivision (1) to improve the
114	114	real property of the public facility shall be exempt from all sales
115	115	and use taxes because the materials are for the benefit of the
116	116	corporation.
117	117	SECTION 6. Subchapter B, Chapter 303, Local Government
118	118	Code, is amended by adding Section 303.0425 to read as follows:
119	119	Sec. 303.0425. ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX
120	120	TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES. (a) In this
121	121	section:
122	122	(1) "Developer" means a private entity that constructs
123	123	a development, including the rehabilitation, renovation,
124	124	reconstruction, or repair of a development.
125	125	(2) "Housing choice voucher program" means the housing
126	126	choice voucher program under Section 8, United States Housing Act
127	127	of 1937 (42 U.S.C. Section 1437f).
128	128	(3) "Lower income housing unit" means a residential
129	129	unit reserved for occupancy by an individual or family earning not
130	130	more than 60 percent of the area median income, adjusted for family
131	131	size.
132	132	(4) "Public facility user" means a public-private
133	133	partnership entity or a developer or other private entity that has
134	134	an ownership interest or a leasehold or other possessory interest
135	135	in a public facility that is a multifamily residential development.
136	136	(b) Not less than 10 percent of the residential units in a
137	137	development must be reserved as lower income housing units unless:
138	138	(1) a majority of the members of the board of the
139	139	corporation are elected officials; or
140	140	(2) the development is approved by the governing body
141	141	of the municipality in which the development is located or, if the
142	142	development is not located in a municipality, the county in which
143	143	the development is located.
144	144	(c) The percentage of lower income housing units reserved in
145	145	each category of units in the development, based on the number of
146	146	bedrooms and bathrooms per unit, must be the same as the percentage
147	147	of lower income housing units reserved in the development as a
148	148	whole.
149	149	(d) The monthly rent charged for a lower income housing unit
150	150	may not exceed:
151	151	(1) 30 percent of 60 percent of the area median income,
152	152	adjusted for family size; or
153	153	(2) if the unit is occupied by a participant in the
154	154	housing choice voucher program, the payment standard used by the
155	155	housing authority that administers the voucher for the unit.
156	156	(e) In calculating the income of an individual or family for
157	157	a lower income housing unit, the public facility user must consider
158	158	the income of each individual who will be living in the unit. If the
159	159	income of a tenant exceeds an applicable limit, the provisions of
160	160	Section 42(g)(2)(D), Internal Revenue Code of 1986, apply in
161	161	determining whether the unit may still qualify as a lower income
162	162	housing unit.
163	163	(f) A public facility user may not:
164	164	(1) refuse to rent a residential unit to an individual
165	165	or family because the individual or family participates in the
166	166	housing choice voucher program; or
167	167	(2) use a financial or minimum income standard that
168	168	requires an individual or family participating in the housing
169	169	choice voucher program to have a monthly income of more than 250
170	170	percent of the individual's or family's share of the total monthly
171	171	rent payable for a unit.
172	172	(g) A corporation that owns or leases to a public facility
173	173	user a public facility used as a multifamily residential
174	174	development shall publish on its Internet website information about
175	175	the development's:
176	176	(1) compliance with the requirements of this section;
177	177	and
178	178	(2) policies regarding tenant participation in the
179	179	housing choice voucher program.
180	180	(h) A public facility user shall:
181	181	(1) affirmatively market available residential units
182	182	directly to individuals and families participating in the housing
183	183	choice voucher program; and
184	184	(2) notify local housing authorities of the
185	185	multifamily residential development's acceptance of tenants in the
186	186	housing choice voucher program.
187	187	(i) A public facility user of a multifamily residential
188	188	development must:
189	189	(1) not later than April 1 of each year, submit to the
190	190	chief appraiser of the appraisal district in which the development
191	191	is located an audit report for a compliance audit conducted by an
192	192	independent auditor or compliance expert to determine whether the
193	193	public facility user is in compliance with the requirements of this
194	194	section; and
195	195	(2) before the initial occupancy of an unoccupied
196	196	development or not later than the 30th day after the date of
197	197	acquisition of an occupied development, submit to the comptroller a
198	198	report that includes, for each development:
199	199	(A) the name of the development;
200	200	(B) the street address and municipality or county
201	201	in which the development is located;
202	202	(C) the name of the developer;
203	203	(D) the total number of residential units,
204	204	reported by number of bedrooms;
205	205	(E) the total number of lower income housing
206	206	units, reported by number of bedrooms, by level of income
207	207	restriction, and by initial rent;
208	208	(F) the total number of residential units that
209	209	are not lower income housing units but that are reserved for
210	210	occupancy by an individual or family earning not more than 80
211	211	percent of the area median income, adjusted for family size,
212	212	reported by number of bedrooms, by level of income restriction, and
213	213	by initial rent;
214	214	(G) the number of residential units rented by
215	215	individuals and families who participate in the housing choice
216	216	voucher program, reported by number of bedrooms;
217	217	(H) a copy of the ground lease; and
218	218	(I) a copy of the partnership agreement or other
219	219	governing agreement executed by the corporation for the public
220	220	facility, if any.
221	221	(j) The reports submitted under Subsection (i) are public
222	222	information and subject to disclosure under Chapter 552, Government
223	223	Code, except that information containing tenant names, unit
224	224	numbers, or other tenant identifying information may be redacted.
225	225	The comptroller shall post a copy of the report received under
226	226	Subsection (i)(2) on its Internet website.
227	227	(k) Each lease agreement for a residential unit in a
228	228	multifamily residential development subject to this section must
229	229	provide that:
230	230	(1) the landlord may not retaliate against the tenant
231	231	or the tenant's guests by taking an action because the tenant
232	232	established, attempted to establish, or participated in a tenant
233	233	organization;
234	234	(2) the landlord may only choose to not renew the lease
235	235	if the tenant:
236	236	(A) is in material noncompliance with the lease,
237	237	including nonpayment of rent after the required cure period;
238	238	(B) committed one or more substantial violations
239	239	of the lease;
240	240	(C) failed to provide required information on the
241	241	income, composition, or eligibility of the tenant's household; or
242	242	(D) committed repeated minor violations of the
243	243	lease that:
244	244	(i) disrupt the livability of the property;
245	245	(ii) adversely affect the health and safety
246	246	of any person or the right to quiet enjoyment of the leased premises
247	247	and related development facilities;
248	248	(iii) interfere with the management of the
249	249	development; or
250	250	(iv) have an adverse financial effect on
251	251	the development, including the repeated failure of the tenant to
252	252	pay rent in a timely manner; and
253	253	(3) to not renew the lease, the landlord must serve a
254	254	written notice of proposed nonrenewal on the tenant not later than
255	255	the 30th day before the effective date of nonrenewal.
256	256	(l) A tenant may not waive the protections provided by
257	257	Subsection (k).
258	258	(m) A public facility corporation must be given:
259	259	(1) written notice from the comptroller or appropriate
260	260	appraisal district of an instance of noncompliance with this
261	261	section; and
262	262	(2) 120 days after the day notice is received under
263	263	Subdivision (1) to cure the matter that is the subject of the
264	264	notice.
265	265	SECTION 7. Sections 392.005(c) and (d), Local Government
266	266	Code, are amended to read as follows:
267	267	(c) An exemption under this section for a multifamily
268	268	residential development which is owned by [(i) a public facility
269	269	corporation created by a housing authority under Chapter 303, (ii)]
270	270	a housing development corporation[,] or [(iii)] a similar entity
271	271	created by a housing authority, other than a public facility
272	272	corporation created by a housing authority under Chapter 303, and
273	273	which does not have at least 20 percent of its residential units
274	274	reserved for public housing units, applies only if:
275	275	(1) the authority holds a public hearing, at a regular
276	276	meeting of the authority's governing body, to approve the
277	277	development; and
278	278	(2) at least 50 percent of the units in the multifamily
279	279	residential development are reserved for occupancy by individuals
280	280	and families earning less than 80 percent of the area median
281	281	[family] income, adjusted for family size.
282	282	(d) For the purposes of Subsection (c), a "public housing
283	283	unit" is a residential [dwelling] unit for which the owner receives
284	284	a public housing operating subsidy. It does not include a unit for
285	285	which payments are made to the landlord under the federal Section 8
286	286	Housing Choice Voucher Program.
287	287	SECTION 8. (a) Subject to Subsections (b) and (c) of this
288	288	section, Section 303.0421, Local Government Code, as added by this
289	289	Act, applies only to a tax imposed for a tax year beginning on or
290	290	after the effective date of this Act.
291	291	(b) Section 303.0421(c), Local Government Code, as added by
292	292	this Act, applies only to a multifamily residential development
293	293	that is approved by a housing authority on or after the effective
294	294	date of this Act. A multifamily residential development that is
295	295	approved by a housing authority before the effective date of this
296	296	Act is governed by the law in effect on the date the development was
297	297	approved by the housing authority, and the former law is continued
298	298	in effect for that purpose.
299	299	(c) Section 303.0421(d), Local Government Code, as added by
300	300	this Act, applies only to an occupied multifamily residential
301	301	development that is acquired by a public facility corporation on or
302	302	after the effective date of this Act. An occupied multifamily
303	303	residential development that is acquired by a public facility
304	304	corporation before the effective date of this Act is governed by the
305	305	law in effect on the date the development was acquired by the public
306	306	facility corporation, and the former law is continued in effect for
307	307	that purpose.
308	308	SECTION 9. This Act takes effect immediately if it receives
309	309	a vote of two-thirds of all the members elected to each house, as
310	310	provided by Section 39, Article III, Texas Constitution. If this
311	311	Act does not receive the vote necessary for immediate effect, this
312	312	Act takes effect September 1, 2023.