Bill Text: TX HB1556 | 2023-2024 | 88th Legislature | Introduced
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
| 88R5950 DRS-D | ||
| By: Rosenthal | H.B. No. 1556 | |
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| 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. | ||
