Bill Text: TX HB739 | 2023-2024 | 88th Legislature | Introduced

---

Bill Title: Relating to provisions applicable to affordable housing located in a reinvestment zone in certain areas of the state; authorizing a fee.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2023-02-28 - Referred to Urban Affairs [HB739 Detail]

Download: Texas-2023-HB739-Introduced.html

---

88R1009 CJC-D
By: González of Dallas H.B. No. 739

A BILL TO BE ENTITLED
AN ACT
relating to provisions applicable to affordable housing located in
a reinvestment zone in certain areas of the state; authorizing a
fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 311.003, Tax Code, is amended by adding
Subsection (e) to read as follows:
(e) Before adopting an ordinance designating a reinvestment
zone described by Section 311.0112, a municipality must prepare or
have prepared an affordable housing impact statement. The
statement must be made available to the public and posted on the
municipality's Internet website on or before the 60th day before
the date the municipality holds the hearing required under
Subsection (c). The statement must include estimates of the impact
on the availability of affordable housing in the area of the
proposed zone for the 30-year period following designation of the
proposed zone.
SECTION 2. Section 311.006(e), Tax Code, is amended to read
as follows:
(e) Subsection (a)(1) does not apply to a reinvestment zone:
(1) designated under Section 311.005(a)(4); or
(2) described by Section 311.0112.
SECTION 3. Chapter 311, Tax Code, is amended by adding
Section 311.0112 to read as follows:
Sec. 311.0112. PROVISIONS APPLICABLE IN CERTAIN ZONES. (a)
This section applies only to a reinvestment zone:
(1) designated by a municipality:
(A) with a population of 1.18 million or more;
and
(B) that is located predominantly in a county
that has a total area of less than 1,000 square miles; and
(2) any part of which is located in an area that:
(A) has fewer than 75,000 residents;
(B) is contiguous to a central business district;
and
(C) is composed of census tracts:
(i) that form a spatially compact area; and
(ii) in each of which the median family
income is at or below 80 percent of the area median family income,
adjusted for household size, as determined annually by the United
States Department of Housing and Urban Development.
(b) For purposes of this section, an area adjacent to a
reinvestment zone means any area within two miles of the zone's
boundaries in any direction that is not located within the
boundaries of another reinvestment zone.
(c) Subject to Subsection (d), at least 20 percent of the
revenue from the tax increment fund of the reinvestment zone spent
annually must be for the development, construction, and
preservation of affordable housing in the zone and in the area
adjacent to the zone. Of that amount:
(1) at least 75 percent must be spent to benefit
families that have a yearly income at or below 80 percent of the
area median family income, adjusted for household size, as
determined annually by the United States Department of Housing and
Urban Development; and
(2) not more than 10 percent may be used to pay
administrative costs.
(d) Subsection (c) does not apply if the use of the revenue
in the tax increment fund in the manner required by that subsection
would materially impair the security for bonds or notes issued
under Section 311.015 before September 1, 2023.
(e) A project or reinvestment zone financing plan for a
reinvestment zone that is approved or amended on or after September
1, 2023, must require the developer of a residential housing
development located in the zone and funded wholly or partly with
money from the tax increment fund for the zone to:
(1) subject to Subsection (f), set aside at least 20
percent of the planned dwelling units in each residential housing
development as affordable housing with an affordability period of
at least 40 years; and
(2) enter into a contract with the municipality that
designated the zone to pay the costs of relocating residents of the
zone and the area adjacent to the zone who are displaced as a direct
result of the residential housing development.
(f) As an alternative to the set-aside requirement under
Subsection (e)(1), the municipality that designated the
reinvestment zone may allow a developer to pay a fee to the
municipality. The amount of the fee is determined by the
municipality. The municipality shall deposit the fee in an
affordable housing fund administered by the governing body of the
municipality. Money in the fund may be used only to:
(1) subsidize the cost to the municipality of tax
abatement agreements entered into under Section 311.0125 with the
owners of real property located in the zone if:
(A) the real property subject to the tax
abatement agreement is the owner's residence homestead; and
(B) the owner, at the time the tax abatement
agreement is entered into, has:
(i) resided in the zone for 10 or more
years; and
(ii) a yearly income at or below 80 percent
of the median family income in the zone, adjusted for household
size, as determined annually by the United States Department of
Housing and Urban Development; and
(2) pay to a qualified for-profit entity or a
nonprofit entity for the purpose of developing, constructing, or
preserving affordable housing in the zone and in the area adjacent
to the zone for families that have a yearly income at or below 80
percent of the area median family income, adjusted for household
size, as determined annually by the United States Department of
Housing and Urban Development.
(g) Section 311.0125(b) does not apply to a tax abatement
agreement described by Subsection (f)(1).
(h) Notwithstanding any other law, a project or
reinvestment zone financing plan for a reinvestment zone that is
approved or amended on or after September 1, 2023, shall provide
that when money is spent from the tax increment fund for the zone
for the purpose of making infrastructure improvements in the zone,
a proportionate amount of money in the fund equal to not more than
20 percent of that amount must be spent from the fund to provide
necessary infrastructure improvements in the area adjacent to the
zone. The plan shall provide that the governing body of the
municipality that designated the zone determines:
(1) the proportionate amount to be spent in the area
adjacent to the zone, subject to the limitation provided by this
subsection; and
(2) the infrastructure improvements that are
necessary in the area adjacent to the zone.
(i) Notwithstanding Section 1.04(7), in determining the
market value of a residence homestead that is more than 30 years old
and located in a reinvestment zone or in the area adjacent to the
zone, the chief appraiser for the appraisal district in which the
property is located may exclude from consideration the value of new
or substantially remodeled residential properties that are located
in the same neighborhood as the residence homestead being appraised
and that would otherwise be considered in appraising the residence
homestead.
(j) If the municipality that designated the reinvestment
zone has adopted minimum habitability standards for residential
housing units in the municipality, the municipality shall develop
and adopt a plan to provide for the relocation of tenants displaced
as a result of the enforcement of those standards. The plan must
provide that the municipality may use any penalties received from
the owner of the housing unit from which tenants were displaced to
pay the tenant's relocation costs.
SECTION 4. Section 311.016, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c) In addition to the information required under
Subsection (a), the annual report for a reinvestment zone described
by Section 311.0112 must include the following information,
specific to each neighborhood located in the zone:
(1) a detailed explanation of each expenditure from
the tax increment fund established by the zone for affordable
housing in the neighborhood; and
(2) an analysis of:
(A) the effect of each expenditure from the fund
on the availability of affordable housing in the neighborhood; and
(B) whether any expenditure from the fund had a
disparate impact on minority or low-income neighborhood residents.
SECTION 5. This Act takes effect September 1, 2023.