BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Public facility corporation (PFC) housing developments are eligible for tax exemptions including 100 percent exemption from state property taxes and 100 percent sales taxes exemption on materials. This exemption is delivering property tax breaks to apartment developers of close to $1 million a year.

PFCs used to provide multifamily housing may deny tenants solely based on their use of housing choice vouchers. Because PFCs receive full state tax exemptions, we should be working to ensure they are providing a public benefit. 

S.B. 199 would prohibit PFCs from denying tenants housing solely based on their use of housing choice vouchers.

As proposed, S.B. 199 amends current law relating to requirements for beneficial tax treatment related to a leasehold or other possessory interest in a public facility used to provide multifamily housing.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 303.042(f), Local Government Code, as follows:

(f) Requires a leasehold or other possessory interest in the real property of a public facility granted by a corporation, notwithstanding Subsections (a) (relating to taxing a public facility) and (b) (relating to the qualifications of an owner of a public facility), during the period of time that the corporation owns the particular public facility, to 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) (relating to the applications of taxing a leasehold, with an exception) if the requirements under Section 303.0425 are met.

SECTION 2. Amends Subchapter B, Chapter 303, Local Government Code, by adding Section 303.0425, as follows:

Sec. 303.0425. REQUIREMENTS FOR BENEFICIAL TAX TREATMENT RELATING TO CERTAIN PUBLIC FACILITIES. (a) Defines "developer," "housing choice voucher program," "housing development," and "public facility user."

(b) Provides that Section 303.042(f) (relating to certain tax exemption provisions relative to public facilities) applies to a leasehold or other possessory interest in a public facility only if the public facility user meets the requirements of this section. Provides that 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) Prohibits a public facility user from refusing to rent a residential unit in a housing development to an individual or family because the individual or family participates in the housing choice voucher program, or using 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 residential unit.

SECTION 3. Makes application of Section 303.0425, Local Government Code, as added by this Act, prospective.

SECTION 4. Effective date: September 1, 2023.