Bill Text: TX SB591 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to certain public facilities used to provide affordable housing.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Engrossed - Dead) 2021-05-17 - Committee report sent to Calendars [SB591 Detail]
Download: Texas-2021-SB591-Comm_Sub.html
By: Bettencourt | S.B. No. 591 | |
(Murphy) | ||
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relating to certain public facilities used to provide affordable | ||
housing. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 303.021, Local Government Code, is | ||
amended by adding Subsection (c) to read as follows: | ||
(c) A corporation or a sponsor may finance, own, or operate | ||
a multifamily residential development if the corporation or sponsor | ||
complies with all applicable provisions of this chapter. | ||
SECTION 2. Section 303.042, Local Government Code, is | ||
amended by amending Subsections (d) and (f) and adding Subsections | ||
(d-1) and (d-2) to read as follows: | ||
(d) This subsection applies only to a multifamily | ||
residential development that is owned by a corporation created | ||
under this chapter by a housing authority and that does not have at | ||
least 20 percent of its units reserved for public housing units, | ||
participate in the Rental Assistance Demonstration program | ||
administered by the United States Department of Housing and Urban | ||
Development, or receive financial assistance administered under | ||
Chapter 1372, Government Code, or Subchapter DD, Chapter 2306, | ||
Government Code. Notwithstanding Subsections (a) and (b), an [ |
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exemption under this section for a multifamily residential | ||
development [ |
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(1) the housing authority holds a public hearing, at a | ||
[ |
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development; [ |
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(2) at least 50 percent of the units in the multifamily | ||
residential development are reserved for occupancy by individuals | ||
and families earning less than 80 percent of the area median | ||
[ |
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(3) the requirements under Sections 303.0425 and | ||
303.0426 are met; and | ||
(4) for an occupied multifamily residential | ||
development that is acquired by a corporation: | ||
(A) the governing body of each municipality or | ||
county for which the sponsor of the corporation was created | ||
approves a resolution of "no objection" for the development; and | ||
(B) a sum of not less than 50 percent of the total | ||
gross cost of the existing project in its entirety is expended on | ||
rehabilitating, renovating, reconstructing, or repairing the | ||
project. | ||
(d-1) This subsection applies only to a multifamily | ||
residential development that is owned by a corporation created | ||
under this chapter by a sponsor other than a housing authority and | ||
that does not have at least 20 percent of its units reserved for | ||
public housing units, participate in the Rental Assistance | ||
Demonstration program administered by the United States Department | ||
of Housing and Urban Development, or receive financial assistance | ||
administered under Chapter 1372, Government Code, or Subchapter DD, | ||
Chapter 2306, Government Code. Notwithstanding Subsections (a) and | ||
(b), an exemption under this section for a multifamily residential | ||
development applies only if: | ||
(1) at least 50 percent of the units in the multifamily | ||
residential development are reserved for occupancy by individuals | ||
and families earning less than 80 percent of the area median income; | ||
and | ||
(2) the requirements under Section 303.0426 are met. | ||
(d-2) This subsection applies to a multifamily residential | ||
development that is owned by a corporation created by any sponsor | ||
under this chapter. Notwithstanding Subsections (a), (b), (d), and | ||
(d-1), an exemption under this section for an occupied multifamily | ||
residential development that is acquired by the corporation applies | ||
only if the development comes into compliance with the requirements | ||
of Subsection (d) or (d-1), as applicable, not later than the first | ||
anniversary of the date of the acquisition. | ||
(f) Notwithstanding Subsections (a) and (b), during | ||
the period [ |
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facility that provides multifamily housing: | ||
(1) [ |
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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); and | ||
(2) the materials used by a person granted a | ||
possessory interest described by Subdivision (1) to improve the | ||
real property of the public facility shall be exempt from all sales | ||
and use taxes because the materials are for the benefit of the | ||
corporation. | ||
SECTION 3. Subchapter B, Chapter 303, Local Government | ||
Code, is amended by adding Sections 303.0425 and 303.0426 to read as | ||
follows: | ||
Sec. 303.0425. ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX | ||
TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY | ||
CORPORATIONS CREATED BY HOUSING AUTHORITIES. (a) In this section: | ||
(1) "Developer" means a private entity that constructs | ||
a development. | ||
(2) "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). | ||
(3) "Lower income housing unit" means a residential | ||
unit reserved for occupancy by an individual or family earning not | ||
more than 60 percent of the area median income, adjusted for family | ||
size. | ||
(4) "Public facility user" means a public-private | ||
partnership entity or a developer or other private entity that has | ||
an ownership interest or a leasehold or other possessory interest | ||
in a public facility used to provide multifamily housing. | ||
(b) The requirements prescribed by this section do not apply | ||
to a multifamily residential development that is: | ||
(1) owned by a corporation that was not created by a | ||
housing authority; or | ||
(2) owned by a corporation created by a housing | ||
authority and: | ||
(A) in which at least 20 percent of the units are | ||
reserved for public housing units; | ||
(B) that participates in the Rental Assistance | ||
Demonstration program administered by the United States Department | ||
of Housing and Urban Development; or | ||
(C) that receives financial assistance | ||
administered under Chapter 1372, Government Code, or Subchapter DD, | ||
Chapter 2306, Government Code. | ||
(c) A corporation must use an open, transparent, and | ||
competitive process for selecting a developer for the purpose of | ||
constructing a housing development. | ||
(d) At least 10 percent of the units in the development must | ||
be reserved as lower income housing units. A unit may not be used to | ||
satisfy the reservation required under this subsection if every | ||
tenant in the unit is: | ||
(1) a part-time or full-time student at an institution | ||
of higher education; | ||
(2) under the age of 24; and | ||
(3) ineligible for housing assistance under Section 8, | ||
United States Housing Act of 1937 (42 U.S.C. Section 1437f). | ||
(e) The percentage of lower income 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 lower income housing units reserved in the housing | ||
development as a whole. | ||
(f) The monthly rent charged for a lower income housing unit | ||
may not exceed: | ||
(1) 30 percent of 60 percent of the area median income, | ||
adjusted for family size; or | ||
(2) if the unit is occupied by a participant in the | ||
housing choice voucher program, the payment standard used by the | ||
housing authority that administers the voucher for the unit. | ||
(g) In calculating the income of an individual or family for | ||
a lower income housing unit, the public facility user must consider | ||
the income of every individual who will be living in the unit. | ||
Sec. 303.0426. ADDITIONAL REQUIREMENTS FOR BENEFICIAL TAX | ||
TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES OWNED BY | ||
CORPORATIONS CREATED BY ANY SPONSOR. (a) In this section, "housing | ||
choice voucher program," "lower income housing unit," and "public | ||
facility user" have the meanings assigned by Section 303.0425. | ||
(b) The requirements prescribed by this section do not apply | ||
to a multifamily residential development owned by a corporation: | ||
(1) in which at least 20 percent of the units are | ||
reserved for public housing units; | ||
(2) that participates in the Rental Assistance | ||
Demonstration program administered by the United States Department | ||
of Housing and Urban Development; or | ||
(3) that receives financial assistance administered | ||
under Chapter 1372, Government Code, or Subchapter DD, Chapter | ||
2306, Government Code. | ||
(c) A public facility user may not: | ||
(1) refuse to rent a residential 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 a unit. | ||
(d) A corporation that owns or leases to a public facility | ||
user a public facility used as a multifamily residential | ||
development shall publish on its Internet website information about | ||
the development's: | ||
(1) compliance with the requirements of this section; | ||
and | ||
(2) policies regarding tenant participation in the | ||
housing choice voucher program. | ||
(e) A public facility user shall: | ||
(1) affirmatively market available residential units | ||
directly to individuals and families participating in the housing | ||
choice voucher program; and | ||
(2) notify local housing authorities of any available | ||
units in the development. | ||
(f) Not later than April 1 of each year, a public facility | ||
user of a multifamily residential development must: | ||
(1) submit to the chief appraiser of the appraisal | ||
district in which the development is located an audit report for a | ||
compliance audit conducted by an independent auditor or compliance | ||
expert to determine whether the public facility user is in | ||
compliance with the requirements of this section; and | ||
(2) submit to the comptroller a report that includes, | ||
for each housing development: | ||
(A) the name of the development; | ||
(B) the street address and municipality or county | ||
in which the development is located; | ||
(C) the name of the developer; | ||
(D) the total number of residential units, | ||
reported by bedroom size; | ||
(E) the total number of lower income housing | ||
units, reported by bedroom size, level of income restriction, and | ||
rent; | ||
(F) the total number of residential units, | ||
reported by bedroom size, level of income restriction, and rent, | ||
that are not lower income housing units but that are reserved for | ||
occupancy by an individual or family earning less than 80 percent of | ||
the area median income; | ||
(G) the number of residential units rented by | ||
individuals and families who participate in the housing choice | ||
voucher program, reported by bedroom size; | ||
(H) the race, ethnicity, and age of all | ||
occupants, if available; and | ||
(I) if not previously submitted in a report to | ||
the comptroller, or if amended since the previous submission: | ||
(i) a copy of the ground lease; and | ||
(ii) a copy of the partnership agreement | ||
for the public facility. | ||
(g) The reports submitted under Subsection (f) are public | ||
information and subject to disclosure under Chapter 552, Government | ||
Code, except that information containing tenant names, unit | ||
numbers, or other identifying information may be redacted. The | ||
comptroller shall post a copy of the report received under | ||
Subsection (f)(2) on its Internet website. | ||
(h) Each lease agreement for a unit in a multifamily | ||
residential development subject to this section must provide that: | ||
(1) the landlord may not retaliate against the tenant | ||
or the tenant's guests by taking an action because the tenant | ||
established, attempted to establish, or participated in a tenant | ||
organization; | ||
(2) the landlord may only choose to not renew the lease | ||
if the tenant: | ||
(A) is in material noncompliance with the lease, | ||
including nonpayment of rent after the required cure period; | ||
(B) committed one or more substantial violations | ||
of the lease; | ||
(C) failed to provide required information on the | ||
income, composition, or eligibility of the tenant's household; or | ||
(D) committed repeated minor violations of the | ||
lease that: | ||
(i) disrupt the livability of the property; | ||
(ii) adversely affect the health and safety | ||
of any person or the right to quiet enjoyment of the leased premises | ||
and related project facilities; | ||
(iii) interfere with the management of the | ||
project; or | ||
(iv) have an adverse financial effect on | ||
the project, including the repeated failure of the tenant to pay | ||
rent in a timely manner; | ||
(3) to not renew the lease, the landlord must serve a | ||
written notice of proposed nonrenewal on the tenant at least 30 days | ||
before the effective date of nonrenewal; and | ||
(4) any written notice of a proposed nonrenewal that | ||
is required to be provided under Subdivision (3) must specify the | ||
date of the proposed nonrenewal. | ||
(i) A tenant may not waive the protections provided by | ||
Subsection (h). | ||
(j) A public facility corporation must be given: | ||
(1) written notice of an instance of noncompliance | ||
with this section; and | ||
(2) 90 days after the day notice is received under | ||
Subdivision (1) to cure the matter that is the subject of the | ||
notice. | ||
(k) Notwithstanding any other law, an occupied multifamily | ||
residential development that is acquired by a public facility | ||
corporation is eligible for an exemption under Section 303.042(d-2) | ||
for the one-year period following the date of the acquisition | ||
regardless of whether the development complies with the other | ||
requirements of that section or with this section, as applicable. | ||
SECTION 4. Section 392.005(c), Local Government Code, is | ||
amended to read as follows: | ||
(c) An exemption under this section for a multifamily | ||
residential development which is owned by [ |
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a housing development corporation[ |
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created by a housing authority, other than a public facility | ||
corporation created by a housing authority under Chapter 303, and | ||
which does not have at least 20 percent of its units reserved for | ||
public housing units, applies only if: | ||
(1) the authority holds a public hearing, at a regular | ||
meeting of the authority's governing body, to approve the | ||
development; and | ||
(2) at least 50 percent of the units in the multifamily | ||
residential development are reserved for occupancy by individuals | ||
and families earning less than 80 percent of the area median family | ||
income. | ||
SECTION 5. (a) Section 303.042(d), Local Government Code, | ||
as amended by this Act, applies only to a multifamily residential | ||
development that is approved by a housing authority on or after the | ||
effective date of this Act. A multifamily residential development | ||
that is approved by a housing authority before the effective date of | ||
this Act is governed by the law in effect on the date the | ||
development was approved by the housing authority, and the former | ||
law is continued in effect for that purpose. | ||
(b) Section 303.042(d-1), Local Government Code, as added | ||
by this Act, applies only to a multifamily residential development | ||
that is approved by a public facility corporation on or after the | ||
effective date of this Act. A multifamily residential development | ||
that is approved by a public facility corporation before the | ||
effective date of this Act is governed by the law in effect on the | ||
date the development was approved by the public facility | ||
corporation, and the former law is continued in effect for that | ||
purpose. | ||
(c) Section 303.042(d-2), Local Government Code, as added | ||
by this Act, applies only to a multifamily residential development | ||
that is acquired by a public facility corporation on or after the | ||
effective date of this Act. A multifamily residential development | ||
that is acquired by a public facility corporation before the | ||
effective date of this Act is governed by the law in effect on the | ||
date the development was acquired by the public facility | ||
corporation, and the former law is continued in effect for that | ||
purpose. | ||
SECTION 6. This Act takes effect September 1, 2021. |