Texas 2025 - 89th Regular

Texas Senate Bill SB1492 Compare Versions

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1	1	89R2688 JAM-D
2	2	By: Parker S.B. No. 1492
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5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to housing finance corporations.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter E, Chapter 341, Finance Code, is
12	12	amended by adding Section 341.407 to read as follows:
13	13	Sec. 341.407. LOANS TO HOUSING FINANCE CORPORATION. An
14	14	authorized lender, credit union, or other person involved in a
15	15	transaction subject to this title may not make a loan to a housing
16	16	finance corporation unless the corporation presents proof of
17	17	compliance with Section 394.031(c) or (d), Local Government Code,
18	18	as applicable.
19	19	SECTION 2. The heading to Section 394.031, Local Government
20	20	Code, is amended to read as follows:
21	21	Sec. 394.031. EXERCISE OF POWERS; AREA OF OPERATION.
22	22	SECTION 3. Section 394.031, Local Government Code, is
23	23	amended by adding Subsections (c) and (d) to read as follows:
24	24	(c) Subject to Subsection (d), the area in which a housing
25	25	finance corporation may exercise its powers is limited to:
26	26	(1) for a housing finance corporation sponsored by a
27	27	municipality under Section 394.011, the jurisdictional boundaries
28	28	of the municipality that sponsored the corporation;
29	29	(2) for a housing finance corporation sponsored by a
30	30	county under Section 394.011, the unincorporated areas of the
31	31	county that sponsored the corporation; or
32	32	(3) for a housing finance corporation sponsored by
33	33	more than one local government under Section 394.012:
34	34	(A) the jurisdictional boundaries of each
35	35	municipal sponsor of the corporation; and
36	36	(B) the unincorporated areas of each county
37	37	sponsor of the corporation.
38	38	(d) A housing finance corporation may exercise its powers
39	39	outside an area described by Subsection (c) only if a resolution or
40	40	order, as applicable, approving that exercise of power in the
41	41	outside area is adopted by the governing body of each sponsoring
42	42	local government and by the governing bodies of:
43	43	(1) each municipality that contains any part of the
44	44	outside area in which the corporation proposes to operate; and
45	45	(2) if proposing to operate in the unincorporated area
46	46	of a county, each county that contains any part of the outside area
47	47	in which the corporation proposes to operate.
48	48	SECTION 4. Sections 394.032(a) and (e), Local Government
49	49	Code, are amended to read as follows:
50	50	(a) Subject to the limitations of Sections 394.031(c) and
51	51	(d), a [A] housing finance corporation may:
52	52	(1) make contracts and other instruments as necessary
53	53	or convenient to the exercise of powers under this chapter;
54	54	(2) incur liabilities;
55	55	(3) borrow money at rates determined by the
56	56	corporation;
57	57	(4) issue notes, bonds, and other obligations; and
58	58	(5) secure any of its obligations by the mortgage or
59	59	pledge of all or part of the corporation's property, franchises,
60	60	and income.
61	61	(e) A housing finance corporation may delegate to the Texas
62	62	Department of Housing and Community Affairs the authority to act on
63	63	its behalf in the financing, refinancing, acquisition, leasing,
64	64	ownership, improvement, and disposal of home mortgages or
65	65	residential developments, within [and outside] the jurisdiction of
66	66	the housing finance corporation, including its authority to issue
67	67	bonds for those purposes.
68	68	SECTION 5. Section 394.039, Local Government Code, is
69	69	amended to read as follows:
70	70	Sec. 394.039. SPECIFIC POWERS RELATING TO FINANCIAL AND
71	71	PROPERTY TRANSACTIONS. A housing finance corporation may:
72	72	(1) lend money for its corporate purposes, invest and
73	73	reinvest its funds, and take and hold real or personal property as
74	74	security for the payment of the loaned or invested funds;
75	75	(2) mortgage, pledge, or grant security interests in
76	76	any residential development, home mortgage, note, or other property
77	77	in favor of the holders of bonds issued for those items;
78	78	(3) purchase, receive, lease, or otherwise acquire,
79	79	own, hold, improve, use, or deal in and with real or personal
80	80	property or interests in that property, [wherever the property is
81	81	located,] as required by the purposes of the corporation or as
82	82	donated to the corporation; and
83	83	(4) sell, convey, mortgage, pledge, lease, exchange,
84	84	transfer, and otherwise dispose of all or part of its property and
85	85	assets.
86	86	SECTION 6. Section 394.9025(b), Local Government Code, is
87	87	amended to read as follows:
88	88	(b) Following a public hearing by the governing body of the
89	89	applicable local government, a housing finance corporation may
90	90	issue bonds to finance a multifamily residential development to be
91	91	owned by the housing finance corporation in accordance with the
92	92	requirements of this chapter [Section 394.004] if the housing
93	93	finance corporation receives approval of the governing body of that
94	94	[the] local government.
95	95	SECTION 7. Subchapter Z, Chapter 394, Local Government
96	96	Code, is amended by adding Section 394.9026 to read as follows:
97	97	Sec. 394.9026. AUDIT REQUIREMENTS FOR MULTIFAMILY
98	98	RESIDENTIAL DEVELOPMENTS OWNED BY HOUSING FINANCE CORPORATIONS.
99	99	(a) In this section, "department" means the Texas Department of
100	100	Housing and Community Affairs.
101	101	(b) A housing finance corporation that owns a multifamily
102	102	residential development and claims an exemption for the development
103	103	under Section 394.905(a) must annually submit to the department and
104	104	the chief appraiser of the appraisal district in which the
105	105	development is located an audit report for a compliance audit,
106	106	prepared at the expense of the housing finance corporation and
107	107	conducted by an independent auditor or compliance expert with an
108	108	established history of providing similar audits on housing
109	109	compliance matters, to determine whether the housing finance
110	110	corporation is in compliance with the conditions imposed for the
111	111	exemption by this chapter.
112	112	(c) Not later than the 60th day after the date of receipt of
113	113	the audit conducted under Subsection (b), the department shall
114	114	examine the audit report and publish a report summarizing the
115	115	findings of the audit. The report must:
116	116	(1) be made available on the department's Internet
117	117	website;
118	118	(2) be issued to the housing finance corporation that
119	119	owns the development that is the subject of an audit, the
120	120	comptroller, and the governing body of the housing finance
121	121	corporation's sponsoring local government or governments; and
122	122	(3) describe in detail the nature of any failure to
123	123	comply with the conditions imposed for the exemption by this
124	124	chapter.
125	125	(d) If an audit report submitted under Subsection (b)
126	126	indicates noncompliance with the conditions imposed by this
127	127	chapter, a housing finance corporation:
128	128	(1) must be given:
129	129	(A) written notice from the department or
130	130	appropriate appraisal district that:
131	131	(i) is provided not later than the 90th day
132	132	after the date a report has been submitted under Subsection (b);
133	133	(ii) specifies the reasons for
134	134	noncompliance;
135	135	(iii) contains at least one option for a
136	136	corrective action to resolve the noncompliance; and
137	137	(iv) informs the housing finance
138	138	corporation that failure to resolve the noncompliance will result
139	139	in the loss of the exemption under Section 394.905(a);
140	140	(B) a period of 60 days after the date notice is
141	141	received under this subdivision to resolve the matter that is the
142	142	subject of the notice; and
143	143	(C) if a matter that is the subject of a notice
144	144	provided under this subdivision is not resolved to the satisfaction
145	145	of the department and appropriate taxing authority during the
146	146	period provided by Paragraph (B), a second notice that informs the
147	147	housing finance corporation of the loss of the exemption due to
148	148	noncompliance with the conditions imposed by this chapter; and
149	149	(2) is considered to be in compliance with those
150	150	conditions if notice under Subdivision (1)(A) is not provided as
151	151	specified by Subparagraph (i) of that paragraph.
152	152	(e) An exemption under Section 394.905(a) does not apply for
153	153	a tax year in which the department determines that, based on an
154	154	audit conducted under Subsection (b), a multifamily residential
155	155	development that is owned by a housing finance corporation created
156	156	under this chapter is not in compliance with the conditions imposed
157	157	for that exemption by this chapter.
158	158	(f) The initial audit report required by Subsection (b) is
159	159	due not later than June 1 of the year following the first
160	160	anniversary of:
161	161	(1) the date of acquisition for an occupied
162	162	multifamily residential development that is acquired by a housing
163	163	finance corporation; or
164	164	(2) the date a newly built multifamily residential
165	165	development first becomes occupied by one or more tenants.
166	166	(g) Subsequent audit reports following the issuance of the
167	167	initial audit report under Subsection (f) are due not later than
168	168	June 1 of each year.
169	169	(h) An independent auditor or compliance expert may not
170	170	prepare an audit under Subsection (b) for more than three
171	171	consecutive years for the same housing finance corporation. After
172	172	the third consecutive audit, the independent auditor or compliance
173	173	expert may prepare an audit only after the second anniversary of the
174	174	preparation of the third consecutive audit.
175	175	(i) The department shall adopt forms and reporting
176	176	standards for the auditing process.
177	177	(j) An audit conducted under Subsection (b) is subject to
178	178	disclosure under Chapter 552, Government Code, except that
179	179	information containing tenant names, unit numbers, or other tenant
180	180	identifying information may be redacted.
181	181	SECTION 8. Section 394.903, Local Government Code, is
182	182	amended to read as follows:
183	183	Sec. 394.903. TRANSFER [LOCATION] OF [RESIDENTIAL
184	184	DEVELOPMENT;] RESIDENTIAL DEVELOPMENT SITES. A [(a) A
185	185	residential development covered by this chapter must be located
186	186	within the local government.
187	187	[(b) The] local government may transfer any residential
188	188	development site to a housing finance corporation by sale or lease.
189	189	The governing body of the local government may authorize the
190	190	transfer by resolution without submitting the issue to the voters
191	191	and without regard to the requirements, restrictions, limitations,
192	192	or other provisions contained in any other general, special, or
193	193	local law. The site location is subject to the requirements of this
194	194	chapter [may be located wholly or partly inside or outside the local
195	195	government].
196	196	SECTION 9. Section 394.905, Local Government Code, is
197	197	amended to read as follows:
198	198	Sec. 394.905. EXEMPTION FROM TAXES AND FEES [TAXATION].
199	199	(a) Notwithstanding any other law, the [The] housing finance
200	200	corporation, all property owned by it, the income from the
201	201	property, all bonds issued by it, the income from the bonds, and the
202	202	transfer of the bonds are exempt, as public property used for public
203	203	purposes, from license fees, recording fees, and all other taxes
204	204	imposed by this state or any political subdivision of this state
205	205	only if the property is located in an area in which the housing
206	206	finance corporation is authorized to exercise its powers as
207	207	described by Section 394.031(c) or the exemption is approved by
208	208	each applicable governing body described by Section 394.031(d).
209	209	(b) The corporation is exempt from the franchise tax imposed
210	210	by Chapter 171, Tax Code, only if the corporation is exempted by
211	211	that chapter.
212	212	SECTION 10. (a) Sections 394.031(c) and (d), Local
213	213	Government Code, as added by this Act, apply only to the exercise of
214	214	power by a housing finance corporation made on or after the
215	215	effective date of this Act. An exercise of power made before the
216	216	effective date of this Act is governed by the law in effect on the
217	217	date the power was exercised, and the former law is continued in
218	218	effect for that purpose.
219	219	(b) Subject to Subsection (c) of this section, Section
220	220	394.905(a), Local Government Code, as added by this Act, applies
221	221	only to a tax or fee imposed for a tax year or calendar year,
222	222	respectively, that begins on or after the effective date of this
223	223	Act.
224	224	(c) Section 394.905(a), Local Government Code, as added by
225	225	this Act, applies only to a tax or fee to be imposed on a housing
226	226	finance corporation with respect to an occupied residential
227	227	development that is acquired by the corporation on or after the
228	228	effective date of this Act or with respect to a newly built
229	229	residential development for which a certificate of occupancy is
230	230	issued on or after the effective date of this Act.
231	231	(d) Notwithstanding Section 394.9026(f), Local Government
232	232	Code, as added by this Act, the initial audit report required to be
233	233	submitted under Section 394.9026(b), Local Government Code, as
234	234	added by this Act, for an occupied multifamily residential
235	235	development that was acquired or for a newly built multifamily
236	236	residential development that first became occupied, as applicable,
237	237	before the effective date of this Act must be submitted by the later
238	238	of:
239	239	(1) the date established by Section 394.9026(f), Local
240	240	Government Code, as added by this Act; or
241	241	(2) June 1, 2026.
242	242	SECTION 11. This Act takes effect immediately if it
243	243	receives a vote of two-thirds of all the members elected to each
244	244	house, as provided by Section 39, Article III, Texas Constitution.
245	245	If this Act does not receive the vote necessary for immediate
246	246	effect, this Act takes effect September 1, 2025.