Bill Text: TX HB1556 | 2023-2024 | 88th 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) 2023-03-03 - Referred to Urban Affairs [HB1556 Detail]

Download: Texas-2023-HB1556-Introduced.html

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88R5950 DRS-D
By: Rosenthal H.B. No. 1556

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 Subchapter F are met.
SECTION 2. Chapter 303, Local Government Code, is amended
by adding Subchapter F to read as follows:
SUBCHAPTER F. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT RELATED TO
AFFORDABLE HOUSING
Sec. 303.201. DEFINITIONS. In this subchapter:
(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.
Sec. 303.202. COMPLIANCE WITH SUBCHAPTER REQUIRED FOR
BENEFICIAL TAX TREATMENT FOR CERTAIN PUBLIC FACILITIES. (a)
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 subchapter, as applicable.
(b) The requirements prescribed by this subchapter 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 subchapter.
Sec. 303.203. SPONSOR GOALS; REQUEST FOR PROPOSALS. (a) 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.
(b) 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.
Sec. 303.204. REHABILITATION REQUIREMENTS. 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.
Sec. 303.205. RESERVATION REQUIREMENTS. (a) 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 occupancy by 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.
(b) 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.
Sec. 303.206. RENT LIMITATIONS. 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.
Sec. 303.207. CALCULATION OF INCOME. 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.
Sec. 303.208. PUBLIC FACILITY PROHIBITIONS. 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.
Sec. 303.209. HOUSING AUTHORITY DUTIES. 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.
Sec. 303.210. REPORTS. (a) 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 subchapter.
(b) 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.
(c) The department and the comptroller shall each post a
copy of a report received under Subsection (b) on their respective
Internet websites.
(d) The governing board of the department shall adopt rules
and forms necessary to implement Subsection (b).
SECTION 3. Subchapter F, Chapter 303, 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
subchapter, 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 303.210(b), Local Government Code, as added by this Act.
SECTION 5. This Act takes effect September 1, 2023.