Texas 2025 - 89th Regular

Texas House Bill HB4307 Compare Versions

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Old	New	Differences
1	1	89R9609 JAM-D
2	2	By: Gates H.B. No. 4307
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to multifamily residential developments financed, owned,
10	10	or operated by public facility corporations.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 303.0421(b), Local Government Code, is
13	13	amended to read as follows:
14	14	(b) Notwithstanding Section 303.042(c) and subject to
15	15	Subsections (c) and (d) of this section, an exemption under Section
16	16	303.042(c) for a multifamily residential development to which
17	17	Subsection (a) applies is available only if:
18	18	(1) the requirements under Sections [Section]
19	19	303.0425 and 303.0426 are met;
20	20	(2) at least:
21	21	(A) 10 percent of the units in the multifamily
22	22	residential development are reserved for occupancy as lower income
23	23	housing units, as defined under Section 303.0425; and
24	24	(B) 40 percent of the units in the multifamily
25	25	residential development are reserved for occupancy as moderate
26	26	income housing units, as defined under Section 303.0425;
27	27	(3) the corporation delivers to the presiding officer
28	28	of the governing body of each taxing unit in which the development
29	29	is to be located written notice of the development, at least 30 days
30	30	before the date:
31	31	(A) the corporation takes action to approve a new
32	32	multifamily residential development or the acquisition of an
33	33	occupied multifamily residential development; and
34	34	(B) of any public hearing required to be held
35	35	under this section;
36	36	(4) if a majority of the members of the board are not
37	37	elected officials, the development is approved by the governing
38	38	body of the municipality in which the development is located or, if
39	39	the development is not located in a municipality, the county in
40	40	which the development is located;
41	41	(5) for an occupied multifamily residential
42	42	development that is acquired by a corporation and not otherwise
43	43	subject to a land use restriction agreement under Section 2306.185,
44	44	Government Code:
45	45	(A) not less than 15 percent of the total gross
46	46	cost of the existing development, as shown in the settlement
47	47	statement, is expended on rehabilitating, renovating,
48	48	reconstructing, or repairing the development, with initial
49	49	expenditures and construction activities:
50	50	(i) beginning not later than the first
51	51	anniversary of the date of the acquisition; and
52	52	(ii) finishing not later than the third
53	53	anniversary of the date of the acquisition; or
54	54	(B) at least 25 percent of the units are reserved
55	55	for occupancy as lower income housing units, as defined under
56	56	Section 303.0425, and the development is approved by the governing
57	57	body of the municipality in which the development is located or, if
58	58	the development is not located in a municipality, the county in
59	59	which the development is located; and
60	60	(6) not less than 30 days before final approval of the
61	61	development:
62	62	(A) the corporation or corporation's sponsor
63	63	conducts, or obtains from a professional entity that has experience
64	64	underwriting affordable multifamily residential developments and
65	65	does not have a financial interest in the applicable development,
66	66	developer, or public facility user, an underwriting assessment of
67	67	the proposed development that allows the corporation to make a good
68	68	faith determination that:
69	69	(i) for an occupied multifamily residential
70	70	development acquired by a corporation, the total annual amount of
71	71	rent reduction on the income-restricted units provided at the
72	72	development will be not less than 60 percent of the estimated amount
73	73	of the annual ad valorem taxes that would be imposed on the property
74	74	without an exemption under Section 303.042(c) for the second,
75	75	third, and fourth years after the date of acquisition by the
76	76	corporation; and
77	77	(ii) for a newly constructed multifamily
78	78	residential development, the development would not be feasible
79	79	without the participation of the corporation; and
80	80	(B) the corporation publishes on its Internet
81	81	website a copy of the underwriting assessment described by
82	82	Paragraph (A).
83	83	SECTION 2. The heading to Section 303.0426, Local
84	84	Government Code, is amended to read as follows:
85	85	Sec. 303.0426. AUDIT REQUIREMENTS APPLICABLE TO ALL [FOR
86	86	CERTAIN] MULTIFAMILY RESIDENTIAL DEVELOPMENTS.
87	87	SECTION 3. Sections 303.0426(b), (c), (d), (e), (f), and
88	88	(g), Local Government Code, are amended to read as follows:
89	89	(b) A public facility user of any [a] multifamily
90	90	residential development claiming an exemption under Section
91	91	303.042(c) [and to which Section 303.0421 applies] must annually
92	92	submit to the department and the chief appraiser of the appraisal
93	93	district in which the development is located an audit report for a
94	94	compliance audit, prepared at the expense of the public facility
95	95	user and conducted by an independent auditor or compliance expert
96	96	with an established history of providing similar audits on housing
97	97	compliance matters, to:
98	98	(1) determine whether the public facility user is in
99	99	compliance with Sections 303.0421 and 303.0425, if applicable; and
100	100	(2) identify the difference in the rent charged for
101	101	income-restricted residential units and the estimated maximum
102	102	market rents that could be charged for those units without the rent
103	103	or income restrictions.
104	104	(c) Not later than the 60th day after the date of receipt of
105	105	the audit conducted under Subsection (b), the department shall
106	106	examine the audit report and publish a report summarizing the
107	107	findings of the audit. The report must:
108	108	(1) be made available on the department's Internet
109	109	website;
110	110	(2) be issued to a public facility user that has an
111	111	interest in a development that is the subject of an audit, the
112	112	comptroller, the applicable corporation, the governing body of the
113	113	corporation's sponsor, and, if the corporation's sponsor is a
114	114	housing authority, the elected officials who appointed the housing
115	115	authority's governing board; and
116	116	(3) describe in detail the nature of any failure to
117	117	comply with the requirements in Sections 303.0421 and 303.0425, if
118	118	applicable.
119	119	(d) If an audit report submitted under Subsection (b)
120	120	indicates noncompliance with Sections 303.0421 and 303.0425 as
121	121	described by Subsection (c)(3), a public facility user:
122	122	(1) must be given:
123	123	(A) written notice from the department or
124	124	appropriate appraisal district that:
125	125	(i) is provided not later than the 45th day
126	126	after the date a report has been submitted under Subsection (b);
127	127	(ii) specifies the reasons for
128	128	noncompliance;
129	129	(iii) contains at least one option for a
130	130	corrective action to resolve the noncompliance; and
131	131	(iv) informs the public facility user that
132	132	failure to resolve the noncompliance will result in the loss of an
133	133	exemption under Section 303.042(c);
134	134	(B) 60 days after the date notice is received
135	135	under this subdivision, to resolve the matter that is the subject of
136	136	the notice; and
137	137	(C) if a matter that is the subject of a notice
138	138	provided under this subdivision is not resolved to the satisfaction
139	139	of the department and the appropriate appraisal district during the
140	140	period provided by Paragraph (B), a second notice that informs the
141	141	public facility user of the loss of the exemption under Section
142	142	303.042(c) due to noncompliance with Sections 303.0421 and
143	143	303.0425; and
144	144	(2) is considered to be in compliance with Sections
145	145	303.0421 and 303.0425 if notice under Subdivision (1)(A) is not
146	146	provided as specified by Subparagraph (i) of that paragraph.
147	147	(e) Except as provided by Section 303.0421(d), an [An]
148	148	exemption under Section 303.042(c) does not apply for a tax year in
149	149	which the department determines that a multifamily residential
150	150	development that is financed, owned, or operated by a public
151	151	facility corporation created under this chapter is not in
152	152	compliance with the audit report requirements of this section or,
153	153	as [determined by the department] based on the [an] audit conducted
154	154	under Subsection (b), [to] not [be] in compliance with the
155	155	requirements of Section 303.0421 or 303.0425, if applicable.
156	156	(f) Notwithstanding Subsection (g), the [The] initial audit
157	157	report required by Subsection (b) for a multifamily residential
158	158	development to which Section 303.0421 applies is due not later than
159	159	June 1 of the year following the first anniversary of:
160	160	(1) the date of acquisition for an occupied
161	161	multifamily residential development that is acquired by a
162	162	corporation; or
163	163	(2) the date a new multifamily residential development
164	164	first becomes occupied by one or more tenants.
165	165	(g) An audit report required by this section is [Subsequent
166	166	audit reports following the issuance of the initial audit report
167	167	under Subsection (f) are] due not later than June 1 of each year.
168	168	SECTION 4. Subchapter B, Chapter 303, Local Government
169	169	Code, is amended by adding Section 303.0427 to read as follows:
170	170	Sec. 303.0427. ADDITIONAL REQUIREMENT FOR BENEFICIAL TAX
171	171	TREATMENT APPLICABLE TO ALL MULTIFAMILY RESIDENTIAL DEVELOPMENTS.
172	172	(a) In this section, "public facility user" has the meaning
173	173	assigned by Section 303.0425.
174	174	(b) A public facility user of one or more multifamily
175	175	residential developments claiming an exemption under Section
176	176	303.042(c) must first submit to the Texas Department of Housing and
177	177	Community Affairs and to the county tax assessor-collector for each
178	178	appraisal district in which the exemption is sought a one-time
179	179	exemption application on a form promulgated by the comptroller.
180	180	SECTION 5. (a) Notwithstanding Section 10(d)(1), Chapter
181	181	1169 (H.B. 2071), Acts of the 88th Legislature, Regular Session,
182	182	2023, Section 303.0426, Local Government Code, as amended by this
183	183	Act, applies to all multifamily residential developments claiming
184	184	an exemption under Section 303.042(c), Local Government Code,
185	185	regardless of when the developments were approved or acquired and
186	186	regardless of whether Sections 303.0421 and 303.0425, Local
187	187	Government Code, apply to those developments.
188	188	(b) Section 303.0427, Local Government Code, as added by
189	189	this Act, applies to all multifamily residential developments
190	190	claiming an exemption under Section 303.042(c), Local Government
191	191	Code, regardless of when the developments were approved or acquired
192	192	and regardless of whether Sections 303.0421 and 303.0425, Local
193	193	Government Code, apply to those developments.
194	194	SECTION 6. This Act takes effect September 1, 2025.