Texas 2025 - 89th Regular

Texas House Bill HB1595 Compare Versions

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1	1	89R2681 JAM-F
2	2	By: Gates H.B. No. 1595
3	3
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5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to public housing authorities; authorizing a fee.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter A, Chapter 392, Local Government
12	12	Code, is amended by amending Section 392.005 and adding Sections
13	13	392.0051 and 392.0052 to read as follows:
14	14	Sec. 392.005. TAX EXEMPTION. (a) The property of an
15	15	authority is public property used for essential public and
16	16	governmental purposes. Subject to Section 392.0051, the [The]
17	17	authority and the authority's property are exempt from all taxes
18	18	and special assessments of a municipality, a county, another
19	19	political subdivision, or the state.
20	20	(b) If a municipality, county, or political subdivision
21	21	furnishes improvements, services, or facilities for a housing
22	22	project, an authority may, in lieu of paying taxes or special
23	23	assessments, agree to reimburse in payments to the municipality,
24	24	county, or political subdivision an amount not greater than the
25	25	estimated cost to the municipality, county, or political
26	26	subdivision for the improvements, services, or facilities.
27	27	Sec. 392.0051. CONDITIONS FOR BENEFICIAL PROPERTY-BASED
28	28	TAX AND SPECIAL ASSESSMENT TREATMENT RELATING TO CERTAIN
29	29	MULTIFAMILY RESIDENTIAL DEVELOPMENTS. (a) In this section:
30	30	(1) "Housing choice voucher program" means the housing
31	31	choice voucher program under Section 8, United States Housing Act
32	32	of 1937 (42 U.S.C. Section 1437f).
33	33	(2) "Lower income housing unit" means a residential
34	34	unit reserved for occupancy by an individual or family earning not
35	35	more than 60 percent of the area median income, adjusted for family
36	36	size, as defined by the United States Department of Housing and
37	37	Urban Development.
38	38	(3) "Moderate income housing unit" means a residential
39	39	unit reserved for occupancy by an individual or family earning not
40	40	more than 80 percent of the area median income, adjusted for family
41	41	size, as defined by the United States Department of Housing and
42	42	Urban Development.
43	43	(4) "Property-based exemption" means an exemption
44	44	from the taxes and special assessments imposed with respect to
45	45	property owned by an authority.
46	46	(5) "Public housing unit" means a residential unit for
47	47	which the landlord receives a public housing operating subsidy.
48	48	The term does not include a unit for which payments are made to the
49	49	landlord under the housing choice voucher program.
50	50	(6) "Rent" means any recurring fee or charge a tenant
51	51	is required to pay as a condition of occupancy, including a fee or
52	52	charge for the use of a common area or facility reasonably
53	53	associated with residential rental property.
54	54	(b) This section applies to [(c) An exemption under this
55	55	section for] a multifamily residential development which is owned
56	56	by an authority, a housing development corporation or a similar
57	57	entity created by a housing authority, and [other than] a public
58	58	facility corporation created by a housing authority under Chapter
59	59	303, except that this section does not apply to a multifamily
60	60	residential development that [and which does not have at least 20
61	61	percent of its residential units reserved for public housing units,
62	62	applies only if]:
63	63	(1) [the authority holds a public hearing, at a
64	64	regular meeting of the authority's governing body, to approve the
65	65	development; and
66	66	[(2) at least 50 percent of the units in the
67	67	multifamily residential development are reserved for occupancy by
68	68	individuals and families earning less than 80 percent of the area
69	69	median income, adjusted for family size.
70	70	[(c-1) An exemption under this section for a multifamily
71	71	residential development which is owned by a public facility
72	72	corporation created by a housing authority under Chapter 303
73	73	applies only if:
74	74	[(1) at least 50 percent of units in the multifamily
75	75	residential development are reserved for occupancy by individuals
76	76	and families earning not more than 80 percent of the area median
77	77	income, adjusted for family size; and
78	78	[(2) the development:
79	79	[(A)] has at least 20 percent of its residential
80	80	units reserved for public housing units;
81	81	(2) [(B)] participates in the Rental Assistance
82	82	Demonstration program administered by the United States Department
83	83	of Housing and Urban Development; or
84	84	(3) [(C) receives financial assistance administered
85	85	under Chapter 1372, Government Code, or receives financial
86	86	assistance from another type of tax-exempt bond; or
87	87	[(D)] receives financial assistance administered
88	88	under Subchapter DD, Chapter 2306, Government Code.
89	89	(c) Subject to Subsection (g) of this section, a
90	90	property-based exemption under Section 392.005(a) for a
91	91	multifamily residential development to which Subsection (b)
92	92	applies is available only if the development satisfies the other
93	93	requirements of this chapter and if:
94	94	(1) any applicable audit report requirements provided
95	95	by Section 392.0052 are satisfied, other than those imposed on a
96	96	multifamily residential development under the circumstances
97	97	described by Subsection (g);
98	98	(2) the authority submits to the Texas Department of
99	99	Housing and Community Affairs and to the county tax
100	100	assessor-collector for the applicable appraisal district in which
101	101	the exemption is sought a one-time exemption application on a form
102	102	promulgated by the comptroller;
103	103	(3) a portion of the units in the multifamily
104	104	residential development are reserved as follows:
105	105	(A) at least:
106	106	(i) 10 percent of the units are reserved for
107	107	occupancy as lower income housing units, as defined under Section
108	108	303.0425; and
109	109	(ii) 40 percent of the units are reserved
110	110	for occupancy as moderate income housing units, as defined under
111	111	Section 303.0425; or
112	112	(B) at least 20 percent of the units are reserved
113	113	for occupancy by:
114	114	(i) recipients of assistance administered
115	115	through a project-based rental assistance program; or
116	116	(ii) individuals or families earning not
117	117	more than 30 percent of the area median income, adjusted for family
118	118	size, as defined by the United States Department of Housing and
119	119	Urban Development;
120	120	(4) the authority delivers to the presiding officer of
121	121	the governing body of each taxing unit in which the development is
122	122	to be located written notice of the development, at least 30 days
123	123	before the date:
124	124	(A) the authority takes action to approve a new
125	125	multifamily residential development or the acquisition of an
126	126	occupied multifamily residential development; and
127	127	(B) of any public hearing required to be held
128	128	under Section 303.0421(c);
129	129	(5) a majority of the members of the board are not
130	130	elected representatives of the governing body of the political
131	131	subdivision or subdivisions that established the authority, the
132	132	development is approved by the governing body of the municipality
133	133	in which the development is located or, if the development is not
134	134	located in a municipality, the county in which the development is
135	135	located, except that the approval described by this subdivision is
136	136	not required for a multifamily residential development that
137	137	reserves a portion of units as described by Subdivision (3)(B);
138	138	(6) for a multifamily residential development that is
139	139	acquired by an authority, the development is occupied or was
140	140	occupied within the two-year period preceding the date of the
141	141	acquisition and is not otherwise subject to a land use restriction
142	142	agreement under Section 2306.185, Government Code, and:
143	143	(A) not less than 15 percent of the total gross
144	144	cost of the existing development, as shown in the settlement
145	145	statement, is expended on rehabilitating, renovating,
146	146	reconstructing, or repairing the development, with initial
147	147	expenditures and construction activities:
148	148	(i) beginning not later than the first
149	149	anniversary of the date of the acquisition; and
150	150	(ii) finishing not later than the third
151	151	anniversary of the date of the acquisition; or
152	152	(B) at least 25 percent of the units are reserved
153	153	for occupancy as lower income housing units;
154	154	(7) not less than 30 days before the date of final
155	155	approval of the development:
156	156	(A) the authority conducts, or obtains from a
157	157	professional entity that has experience underwriting affordable
158	158	multifamily residential developments and does not have a financial
159	159	interest in the applicable development, developer, or authority, an
160	160	underwriting assessment of the proposed development that allows the
161	161	authority to make a good faith determination that, for an occupied
162	162	multifamily residential development acquired by an authority or for
163	163	a newly constructed multifamily residential development owned by an
164	164	authority, the total annual amount of rent reduction on the
165	165	income-restricted residential units provided at the development
166	166	will be not less than 60 percent of the estimated amount of the
167	167	annual ad valorem taxes that would be imposed on the property
168	168	without an exemption from those taxes under Section 392.005(a) for
169	169	the second, third, and fourth years after the date of acquisition by
170	170	the authority or the date the certificate of occupancy is issued for
171	171	the development, as applicable; and
172	172	(B) the authority publishes on its Internet
173	173	website a copy of the underwriting assessment described by
174	174	Paragraph (A);
175	175	(8) the percentage of lower and moderate income
176	176	housing units reserved in each category of income-restricted
177	177	residential units in the development, based on the number of
178	178	bedrooms per unit, is the same as the percentage of each category of
179	179	income-restricted residential units reserved in the development as
180	180	a whole;
181	181	(9) the monthly rent charged per unit does not exceed:
182	182	(A) for a lower income housing unit, 30 percent
183	183	of 60 percent of the area median income, adjusted for family size,
184	184	as defined by the United States Department of Housing and Urban
185	185	Development; or
186	186	(B) for a moderate income housing unit, 30
187	187	percent of 80 percent of the area median income, adjusted for family
188	188	size, as defined by the United States Department of Housing and
189	189	Urban Development;
190	190	(10) the authority that owns the development does not:
191	191	(A) refuse to rent a residential unit to an
192	192	individual or family because the individual or family participates
193	193	in the housing choice voucher program; or
194	194	(B) use a financial or minimum income standard
195	195	that requires an individual or family participating in the housing
196	196	choice voucher program to have a monthly income of more than 250
197	197	percent of the individual's or family's share of the total monthly
198	198	rent payable for a unit;
199	199	(11) the authority publishes on its Internet website
200	200	information about the development's:
201	201	(A) compliance with the conditions prescribed by
202	202	this section; and
203	203	(B) policies regarding tenant participation in
204	204	the housing choice voucher program;
205	205	(12) the authority that owns the development:
206	206	(A) affirmatively markets available residential
207	207	units directly to individuals and families participating in the
208	208	housing choice voucher program; and
209	209	(B) notifies local housing authorities of the
210	210	development's acceptance of tenants in the housing choice voucher
211	211	program; and
212	212	(13) each lease agreement for a residential unit in
213	213	the development provides that:
214	214	(A) the landlord may not retaliate against the
215	215	tenant or the tenant's guests by taking an action because the tenant
216	216	established, attempted to establish, or participated in a tenant
217	217	organization;
218	218	(B) the landlord may only choose to not renew the
219	219	lease if the tenant:
220	220	(i) committed one or more substantial
221	221	violations of the lease;
222	222	(ii) failed to provide required information
223	223	on the income, composition, or eligibility of the tenant's
224	224	household; or
225	225	(iii) committed repeated minor violations
226	226	of the lease that disrupt the livability of the property, adversely
227	227	affect the health and safety of any person or the right to quiet
228	228	enjoyment of the leased premises and related development
229	229	facilities, interfere with the management of the development, or
230	230	have an adverse financial effect on the development, including the
231	231	failure of the tenant to pay rent in a timely manner; and
232	232	(C) to not renew the lease, the landlord must
233	233	serve a written notice of proposed nonrenewal on the tenant not
234	234	later than the 30th day before the effective date of nonrenewal.
235	235	(d) In calculating the income of an individual or family for
236	236	a lower or moderate income housing unit, the authority must use the
237	237	definition of annual income described in 24 C.F.R. Section 5.609,
238	238	as implemented by the United States Department of Housing and Urban
239	239	Development. If the income of a tenant exceeds an applicable limit
240	240	at the time of the renewal of a lease agreement for a residential
241	241	unit, the provisions of Section 42(g)(2)(D), Internal Revenue Code
242	242	of 1986, apply in determining whether the unit may still qualify as
243	243	a lower or moderate income housing unit.
244	244	(e) An authority may require an individual or family
245	245	participating in the housing choice voucher program to pay the
246	246	difference between the monthly rent for the applicable unit and the
247	247	amount of the monthly voucher if the amount of the voucher is less
248	248	than the rent.
249	249	(f) A tenant may not waive the protections provided by
250	250	Subsection (c)(13). An authority may adopt tenant protections that
251	251	are more protective of tenants than the tenant protections provided
252	252	by Subsection (c)(13).
253	253	(g) Notwithstanding Subsection (c), a multifamily
254	254	residential development that is acquired by an authority, that is
255	255	occupied or was occupied within the two-year period preceding the
256	256	date of the acquisition, and that is not otherwise subject to a land
257	257	use restriction agreement under Section 2306.185, Government Code,
258	258	is eligible for a property-based exemption under Section 392.005(a)
259	259	for:
260	260	(1) the one-year period following the date of the
261	261	acquisition, regardless of whether the development complies with
262	262	the conditions prescribed by Subsection (c); and
263	263	(2) a year following the year described by Subdivision
264	264	(1) only if the development comes into compliance with the
265	265	conditions prescribed by Subsection (c) not later than the first
266	266	anniversary of the date of the acquisition.
267	267	Sec. 392.0052. AUDIT REQUIREMENTS FOR CERTAIN MULTIFAMILY
268	268	RESIDENTIAL DEVELOPMENTS. (a) In this section:
269	269	(1) "Department" means the Texas Department of Housing
270	270	and Community Affairs.
271	271	(2) "Property-based exemption" has the meaning
272	272	assigned by Section 392.0051.
273	273	(b) An authority that claims a property-based exemption for
274	274	a multifamily residential development under Section 392.005(a)
275	275	must annually submit to the department and the chief appraiser of
276	276	the appraisal district in which the development is located an audit
277	277	report for a compliance audit, prepared at the expense of the
278	278	authority and conducted by an independent auditor or compliance
279	279	expert with an established history of providing similar audits on
280	280	housing compliance matters, to:
281	281	(1) determine whether the authority is in compliance
282	282	with the conditions imposed for the exemption by Section 392.0051;
283	283	and
284	284	(2) identify the difference in the rent charged for
285	285	income-restricted residential units and the estimated maximum
286	286	market rents that could be charged for those units without the rent
287	287	or income restrictions.
288	288	(c) Not later than the 60th day after the date of receipt of
289	289	the audit conducted under Subsection (b), the department shall
290	290	examine the audit report and publish a report summarizing the
291	291	findings of the audit. The report must:
292	292	(1) be made available on the department's Internet
293	293	website;
294	294	(2) be issued to an authority that has an interest in a
295	295	development that is the subject of an audit, the comptroller, and
296	296	the governing body of the political subdivision or subdivisions
297	297	that established the authority; and
298	298	(3) describe in detail the nature of any failure to
299	299	comply with the conditions imposed for the property-based exemption
300	300	by Section 392.0051.
301	301	(d) If an audit report submitted under Subsection (b)
302	302	indicates noncompliance with Section 392.0051, an authority:
303	303	(1) must be given:
304	304	(A) written notice from the department or
305	305	appropriate appraisal district that:
306	306	(i) is provided not later than the 90th day
307	307	after the date a report has been submitted under Subsection (b);
308	308	(ii) specifies the reasons for
309	309	noncompliance;
310	310	(iii) contains at least one option for a
311	311	corrective action to resolve the noncompliance; and
312	312	(iv) informs the authority that failure to
313	313	resolve the noncompliance will result in the loss of the
314	314	property-based exemption under Section 392.005(a);
315	315	(B) a period of 60 days after the date notice is
316	316	received under this subdivision to resolve the matter that is the
317	317	subject of the notice; and
318	318	(C) if a matter that is the subject of a notice
319	319	provided under this subdivision is not resolved to the satisfaction
320	320	of the department and appropriate taxing authority during the
321	321	period provided by Paragraph (B), a second notice that informs the
322	322	authority of the loss of the property-based exemption due to
323	323	noncompliance with Section 392.0051; and
324	324	(2) is considered to be in compliance with Section
325	325	392.0051 if notice under Subdivision (1)(A) is not provided as
326	326	specified by Subparagraph (i) of that paragraph.
327	327	(e) Except as provided by Section 392.0051(g), a
328	328	property-based exemption under Section 392.005(a) does not apply
329	329	for a tax year in which the department determines that an authority
330	330	established under this chapter:
331	331	(1) has not submitted the audit report required by
332	332	this section; or
333	333	(2) based on an audit conducted under Subsection (b),
334	334	is not in compliance with the conditions imposed for the exemption
335	335	by Section 392.0051.
336	336	(f) The initial audit report required by Subsection (b) is
337	337	due not later than June 1 of the year following the first
338	338	anniversary of:
339	339	(1) the date of acquisition for an occupied
340	340	multifamily residential development that is acquired by an
341	341	authority; or
342	342	(2) the date a new multifamily residential development
343	343	owned by an authority first becomes occupied by one or more tenants.
344	344	(g) Subsequent audit reports following the issuance of the
345	345	initial audit report under Subsection (f) are due not later than
346	346	June 1 of each year.
347	347	(h) An independent auditor or compliance expert may not
348	348	prepare an audit under Subsection (b) for more than three
349	349	consecutive years for the same authority. After the third
350	350	consecutive audit, the independent auditor or compliance expert may
351	351	prepare an audit only after the second anniversary of the
352	352	preparation of the third consecutive audit.
353	353	(i) The department:
354	354	(1) shall adopt forms and reporting standards for the
355	355	auditing process;
356	356	(2) may charge a fee for the submission of an audit
357	357	report under this section in a reasonable amount necessary to cover
358	358	the expenses of administering this section; and
359	359	(3) may adopt rules necessary to implement this
360	360	section.
361	361	(j) An audit conducted under Subsection (b) is subject to
362	362	disclosure under Chapter 552, Government Code, except that
363	363	information containing tenant names, unit numbers, or other tenant
364	364	identifying information may be redacted.
365	365	[(d) For the purposes of Subsections (c) and (c-1), a
366	366	"public housing unit" is a residential unit for which the owner
367	367	receives a public housing operating subsidy. It does not include a
368	368	unit for which payments are made to the landlord under the federal
369	369	Section 8 Housing Choice Voucher Program.]
370	370	SECTION 2. (a) Subject to Subsections (b), (c), and (d) of
371	371	this section, Section 392.005, Local Government Code, as amended by
372	372	this Act, and Section 392.0051, Local Government Code, as added by
373	373	this Act, apply only to a tax or special assessment imposed for a
374	374	tax year or calendar year, respectively, that begins on or after the
375	375	effective date of this Act.
376	376	(b) Subject to Subsections (c) and (d) of this section,
377	377	Section 392.005, Local Government Code, as amended by this Act, and
378	378	Section 392.0051, Local Government Code, as added by this Act,
379	379	apply only to a tax or special assessment to be imposed on a housing
380	380	authority with respect to an occupied multifamily residential
381	381	development that is acquired by the authority on or after the
382	382	effective date of this Act or with respect to a newly built
383	383	multifamily residential development for which a certificate of
384	384	occupancy is issued on or after the effective date of this Act.
385	385	(c) Section 392.0051(g), Local Government Code, as added by
386	386	this Act, applies only to an occupied multifamily residential
387	387	development that is acquired by a housing authority on or after the
388	388	effective date of this Act. An occupied multifamily residential
389	389	development that is acquired by a housing authority before the
390	390	effective date of this Act is governed by the law in effect on the
391	391	date the development was acquired by the housing authority, and the
392	392	former law is continued in effect for that purpose.
393	393	(d) Sections 392.0051(c)(10), (11), (12), and (13) and (f),
394	394	Local Government Code, as added by this Act, apply to a multifamily
395	395	residential development owned by a housing authority on or after
396	396	the effective date of this Act, regardless of the date the
397	397	development was acquired by the housing authority.
398	398	(e) Notwithstanding Section 392.0052(f), Local Government
399	399	Code, as added by this Act, the initial audit report required to be
400	400	submitted under Section 392.0052(b), Local Government Code, as
401	401	added by this Act, for an occupied multifamily residential
402	402	development that was acquired or for a newly built multifamily
403	403	residential development that first became occupied, as applicable,
404	404	before the effective date of this Act must be submitted by the later
405	405	of:
406	406	(1) the date established by Section 392.0052(f), Local
407	407	Government Code, as added by this Act; or
408	408	(2) June 1, 2026.
409	409	(f) Not later than January 1, 2026, the Texas Department of
410	410	Housing and Community Affairs shall adopt rules necessary to
411	411	implement Section 392.0052(i), Local Government Code, as added by
412	412	this Act.
413	413	SECTION 3. This Act takes effect immediately if it receives
414	414	a vote of two-thirds of all the members elected to each house, as
415	415	provided by Section 39, Article III, Texas Constitution. If this
416	416	Act does not receive the vote necessary for immediate effect, this
417	417	Act takes effect September 1, 2025.