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.