89R8197 JAM-D
By: Cook S.B. No. 2258
A BILL TO BE ENTITLED
AN ACT
relating to housing finance corporations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 394.003, Local Government Code, is
amended by adding Subdivisions (10-a) and (10-b) to read as
follows:
(10-a) "Low income" means an individual or family
whose annual median income is not more than the greater of:
(A) 60 percent of the area median income for the
household's place of residence, as adjusted for family size and as
established by the United States Department of Housing and Urban
Development; or
(B) 60 percent of the statewide median income, as
adjusted for family size and as established by the United States
Department of Housing and Urban Development.
(10-b) "Moderate income" means an individual or family
whose annual median income is not more than the greater of:
(A) 80 percent of the area median income for the
household's place of residence, as adjusted for family size and as
established by the United States Department of Housing and Urban
Development; or
(B) 80 percent of the statewide median income, as
adjusted for family size and as established by the United States
Department of Housing and Urban Development.
SECTION 2. The heading to Section 394.031, Local Government
Code, is amended to read as follows:
Sec. 394.031. EXERCISE OF POWERS; AREA OF OPERATION.
SECTION 3. Section 394.031, Local Government Code, is
amended by adding Subsections (c) and (d) to read as follows:
(c) Subject to Subsection (d), the area in which a housing
finance corporation may exercise its powers is limited to:
(1) for a housing finance corporation sponsored by a
municipality under Section 394.011, the jurisdictional boundaries
of the municipality that sponsored the corporation;
(2) for a housing finance corporation sponsored by a
county under Section 394.011, the unincorporated areas of the
county that sponsored the corporation; or
(3) for a housing finance corporation sponsored by
more than one local government under Section 394.012:
(A) the jurisdictional boundaries of each
municipal sponsor of the corporation; and
(B) the unincorporated areas of each county
sponsor of the corporation.
(d) A housing finance corporation may exercise its powers
outside an area described by Subsection (c) only if:
(1) a resolution or order, as applicable, approving
that exercise of power in the outside area is adopted by the
governing body of each sponsoring local government and by the
governing bodies of:
(A) each municipality that contains any part of
the outside area in which the corporation proposes to operate; and
(B) if proposing to operate in the unincorporated
area of a county, each county that contains any part of the outside
area in which the corporation proposes to operate; and
(2) that exercise of power is approved by each housing
finance corporation that is sponsored by a local government
described by Subdivision (1)(A) or (B) and that is already
exercising power in the outside area under the authority of
Subsection (c).
SECTION 4. Sections 394.032(a) and (e), Local Government
Code, are amended to read as follows:
(a) Subject to the limitations of Sections 394.031(c) and
(d), a [A] housing finance corporation may:
(1) make contracts and other instruments as necessary
or convenient to the exercise of powers under this chapter;
(2) incur liabilities;
(3) borrow money at rates determined by the
corporation;
(4) issue notes, bonds, and other obligations; and
(5) secure any of its obligations by the mortgage or
pledge of all or part of the corporation's property, franchises,
and income.
(e) A housing finance corporation may delegate to the Texas
Department of Housing and Community Affairs the authority to act on
its behalf in the financing, refinancing, acquisition, leasing,
ownership, improvement, and disposal of home mortgages or
residential developments, within [and outside] the jurisdiction of
the housing finance corporation, including its authority to issue
bonds for those purposes.
SECTION 5. Section 394.039, Local Government Code, is
amended to read as follows:
Sec. 394.039. SPECIFIC POWERS RELATING TO FINANCIAL AND
PROPERTY TRANSACTIONS. A housing finance corporation may:
(1) lend money for its corporate purposes, invest and
reinvest its funds, and take and hold real or personal property as
security for the payment of the loaned or invested funds;
(2) mortgage, pledge, or grant security interests in
any residential development, home mortgage, note, or other property
in favor of the holders of bonds issued for those items;
(3) purchase, receive, lease, or otherwise acquire,
own, hold, improve, use, or deal in and with real or personal
property or interests in that property, [wherever the property is
located,] as required by the purposes of the corporation or as
donated to the corporation; and
(4) sell, convey, mortgage, pledge, lease, exchange,
transfer, and otherwise dispose of all or part of its property and
assets.
SECTION 6. Section 394.903, Local Government Code, is
amended to read as follows:
Sec. 394.903. TRANSFER [LOCATION] OF [RESIDENTIAL
DEVELOPMENT;] RESIDENTIAL DEVELOPMENT SITES. A [(a) A
residential development covered by this chapter must be located
within the local government.
[(b) The] local government may transfer any residential
development site to a housing finance corporation by sale or lease.
The governing body of the local government may authorize the
transfer by resolution without submitting the issue to the voters
and without regard to the requirements, restrictions, limitations,
or other provisions contained in any other general, special, or
local law. The site location is subject to the requirements of this
chapter [may be located wholly or partly inside or outside the local
government].
SECTION 7. Section 394.905, Local Government Code, is
amended to read as follows:
Sec. 394.905. EXEMPTION FROM TAXES AND FEES [TAXATION].
(a) Notwithstanding any other law, the [The] housing finance
corporation, all property owned by it, the income from the
property, all bonds issued by it, the income from the bonds, and the
transfer of the bonds are exempt, as public property used for public
purposes, from license fees, recording fees, and all other taxes
imposed by this state or any political subdivision of this state
only if the property is located in an area in which the housing
finance corporation is authorized to exercise its powers as
described by Section 394.031(c) or the exemption is approved by
each applicable governing body described by Section 394.031(d).
(b) The corporation is exempt from the franchise tax imposed
by Chapter 171, Tax Code, only if the corporation is exempted by
that chapter.
SECTION 8. (a) Sections 394.031(c) and (d), Local
Government Code, as added by this Act, apply only to the exercise of
power by a housing finance corporation made on or after the
effective date of this Act. An exercise of power made before the
effective date of this Act is governed by the law in effect on the
date the power was exercised, and the former law is continued in
effect for that purpose.
(b) Subject to Subsection (c) of this section, Section
394.905(a), Local Government Code, as added by this Act, applies
only to a tax or fee imposed for a tax year or calendar year,
respectively, that begins on or after the effective date of this
Act.
(c) Section 394.905(a), Local Government Code, as added by
this Act, applies only to a tax or fee to be imposed on a housing
finance corporation with respect to an occupied residential
development that is acquired by the corporation on or after the
effective date of this Act or with respect to a newly built
residential development for which a certificate of occupancy is
issued on or after the effective date of this Act.
SECTION 9. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.