Bill Text: TX HB1286 | 2021-2022 | 87th Legislature | Introduced

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Bill Title: Relating to requirements for beneficial tax treatment related to a leasehold or other possessory interest in a public facility used to provide affordable housing.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2021-03-24 - Left pending in committee [HB1286 Detail]

Download: Texas-2021-HB1286-Introduced.html

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87R2511 SMT-D
By: Rosenthal H.B. No. 1286

A BILL TO BE ENTITLED
AN ACT
relating to requirements for beneficial tax treatment related to a
leasehold or other possessory interest in a public facility used to
provide affordable housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 303.042(f), Local Government Code, is
amended to read as follows:
(f) Notwithstanding Subsections (a) and (b), during the
period of time that a corporation owns a particular public
facility, a leasehold or other possessory interest in the real
property of the public facility granted by the corporation shall
be treated in the same manner as a leasehold or other possessory
interest in real property granted by an authority under Section
379B.011(b) if the requirements under Section 303.0425 are met.
SECTION 2. Subchapter B, Chapter 303, Local Government
Code, is amended by adding Section 303.0425 to read as follows:
Sec. 303.0425. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT
RELATING TO CERTAIN PUBLIC FACILITIES. (a) In this section:
(1) "Affordable housing unit" means a residential unit
reserved for occupancy by an individual or family earning not more
than 80 percent of the area median income, adjusted for family size.
(2) "Department" means the Texas Department of Housing
and Community Affairs.
(3) "Developer" means a private entity that constructs
or rehabilitates a development.
(4) "Housing choice voucher program" means the housing
choice voucher program under Section 8, United States Housing Act
of 1937 (42 U.S.C. Section 1437f).
(5) "Housing development" means a development
constructed or rehabilitated to provide multifamily housing that
includes affordable housing units.
(6) "Public facility user" means a developer or other
private entity that has a leasehold or other possessory interest in
a public facility used to provide multifamily housing.
(b) Section 303.042(f) applies to a leasehold or other
possessory interest in a public facility only if the sponsor, the
corporation, the public facility user, and the housing development
meet the requirements of this section, as applicable. The
requirements prescribed by this section apply only to the
application of taxes related to a leasehold or other possessory
interest in a public facility under Section 303.042(f) and do not
restrict the authority of a corporation to lease a public facility
to a private entity under terms other than the terms described by
this section.
(c) A sponsor shall identify goals for public facilities
used for housing developments and establish selection criteria
based on the goals to be used by corporations for scoring proposals
from developers of housing developments. A corporation must issue a
request for proposals from developers before the corporation enters
into a lease agreement for a public facility with a developer for
the purpose of constructing or rehabilitating a housing
development.
(d) If a developer substantially rehabilitates an existing
multifamily residential property that is a public facility leased
by the developer, the original construction of the property must
have been completed at least 10 years before the date the developer
begins rehabilitation of the property.
(e) A public facility user must reserve:
(1) at least 50 percent of the total units in a housing
development as affordable housing units;
(2) at least 50 percent of the affordable housing
units in the development for occupancy by individuals or families
earning not more than 60 percent of area median income, adjusted for
family size; and
(3) at least 20 percent of the affordable housing
units in the development for individuals or families participating
in the housing choice voucher program if the development is
located:
(A) in the attendance zone of an elementary
school that has passed accountability standards adopted by the
Texas Education Agency for the most recent school year available;
(B) in the attendance zone of a high school with a
graduation rate of at least 85 percent; and
(C) in a census tract in which:
(i) fewer than 10 percent of the households
have a household income equal to or less than the federal poverty
line; and
(ii) the median income for households is
equal to or greater than 80 percent of area median income.
(f) The percentage of affordable housing units reserved in
each category of units in the housing development, based on the
number of bedrooms and bathrooms per unit, must be the same as the
percentage of affordable housing units reserved in the housing
development as a whole.
(g) The monthly rent charged by a public facility user for
an affordable housing unit may not exceed:
(1) 30 percent of 80 percent of area median income,
minus an allowance for utility costs, if the individual or family
renting the unit earns more than 60 percent but not more than 80
percent of the area median income, adjusted for family size; and
(2) 30 percent of 60 percent of area median income,
minus an allowance for utility costs, if the individual or family
renting the unit earns not more than 60 percent of the area median
income, adjusted for family size.
(h) In calculating the income of an individual or family for
an affordable housing unit, the public facility user must consider
the income of every individual who will be living in the unit.
(i) A public facility user may not:
(1) refuse to rent an affordable housing unit to an
individual or family because the individual or family participates
in the housing choice voucher program; or
(2) use a financial or minimum income standard that
requires an individual or family participating in the housing
choice voucher program to have a monthly income of more than 250
percent of the individual's or family's share of the total monthly
rent payable for an affordable housing unit.
(j) A housing authority that sponsors a corporation that
leases a public facility used as a housing development to a public
facility user shall:
(1) publish information about the affordable housing
units in the housing development on its Internet website, if the
authority maintains a website; and
(2) provide information about the affordable housing
units directly to individuals and families participating in the
authority's housing choice voucher program.
(k) Not later than February 1 of each year, a public
facility user of a housing development must submit to the chief
appraiser of the appraisal district in which the housing
development is located an audit report for a compliance audit
conducted by an independent auditor to determine whether the public
facility user is in compliance with:
(1) all contracts and other agreements between the
public facility user and the sponsor or corporation relating to the
housing development; and
(2) all applicable state and local laws, including the
requirements of this section.
(l) The sponsor of a corporation that leases a public
facility used as a housing development to a public facility user
shall submit an annual report to the department and to the
comptroller. The report must include:
(1) a copy of all contracts and other agreements
between the public facility user and the sponsor or corporation
relating to the housing development; and
(2) statistics describing the demographics of the
residents of the housing development, including incomes and family
sizes.
(m) The department and the comptroller shall each post a
copy of a report received under Subsection (l) on its respective
Internet website.
(n) The governing board of the department shall adopt rules
and forms necessary to implement Subsection (l).
SECTION 3. Section 303.0425, Local Government Code, as
added by this Act, applies only to a leasehold or other possessory
interest in a public facility granted by a public facility
corporation to a public facility user, as defined by that section,
on or after the effective date of this Act.
SECTION 4. As soon as practicable after the effective date
of this Act, the governing board of the Texas Department of Housing
and Community Affairs shall adopt rules as necessary to implement
Section 303.0425(l), Local Government Code, as added by this Act.
SECTION 5. This Act takes effect September 1, 2021.