SB867 - Relating to housing finance corporations; authorizing a fee.

      By: Bettencourt, et al.  S.B. No. 867          (In the Senate - Filed January 22, 2025; February 13, 2025,   read first time and referred to Committee on Local Government;   May 5, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 6, Nays 0; May 5, 2025, sent   to printer.)     COMMITTEE SUBSTITUTE FOR S.B. No. 867 By:  Paxton     A BILL TO BE ENTITLED   AN ACT     relating to housing finance corporations; authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 394.004, Local Government Code, is   amended to read as follows:          Sec. 394.004.  APPLICATION OF CHAPTER TO CERTAIN RESIDENTIAL   DEVELOPMENTS. This chapter applies only to a residential   development  at least 90 percent of which is occupied  [ for use ] by   or is intended to be occupied by persons of low and moderate income   whose adjusted gross income, together with the adjusted gross   income of all persons who intend to reside with those persons in one   dwelling unit, did not for the preceding tax year exceed the maximum   amount constituting moderate income under the housing finance   corporation's rules, resolutions relating to the issuance of bonds,   or financing documents relating to the issuance of bonds.          SECTION 2.  Subchapter A, Chapter 394, Local Government   Code, is amended by adding Section 394.0045 to read as follows:           Sec.   394.0045.     APPLICABILITY OF OPEN MEETINGS AND OPEN   RECORDS LAWS.   (a)   Chapter 551, Government Code, applies to actions   and proceedings under this chapter.           (b)     Chapter 552, Government Code, applies to all records of   a housing finance corporation.          SECTION 3.  Section 394.032(d), Local Government Code, is   amended to read as follows:          (d)   Subject to Sections 394.9026, 394.903(a), and   394.905(c), a  [ A ] housing finance corporation may enter into   contracts to perform services for any other housing finance   corporation or any individual or entity acting on behalf of any   other housing finance corporation or, with respect to residential   development, any housing authority, nonprofit enterprise, or   similar entity.          SECTION 4.  Section 394.037, Local Government Code, is   amended by adding Subsection (a-1) to read as follows:           (a-1)     A housing finance corporation may only issue bonds   under this chapter for a purpose described by Subsection (a) to   finance or support a residential development or home that is   located or will be constructed   within the boundaries of the local   government that formed the corporation under Section 394.011 or   394.012.          SECTION 5.  Section 394.039, Local Government Code, is   amended to read as follows:          Sec. 394.039.  SPECIFIC POWERS RELATING TO FINANCIAL AND   PROPERTY TRANSACTIONS. A housing finance corporation may:                (1)  lend money for its corporate purposes, invest and   reinvest its funds, and take and hold real or personal property as   security for the payment of the loaned or invested funds;                (2)  mortgage, pledge, or grant security interests in   any residential development, home mortgage, note, or other property   in favor of the holders of bonds issued for those items;                (3)   subject to Sections 394.9026, 394.903(a), and   394.905(c),  purchase, receive, lease, or otherwise acquire, own,   hold, improve, use, or deal in and with real or personal property or   interests in that property, wherever the property is located, as   required by the purposes of the corporation or as donated to the   corporation; and                (4)  sell, convey, mortgage, pledge, lease, exchange,   transfer, and otherwise dispose of all or part of its property and   assets.          SECTION 6.  Section 394.9025, Local Government Code, is   amended to read as follows:          Sec. 394.9025.  MULTIFAMILY RESIDENTIAL DEVELOPMENT.  (a)     Following a public hearing, a housing finance corporation may ,   subject to the geographic limitations of Section 394.037(a-1),   issue bonds to finance a multifamily residential development to be   owned , financed, or supported by the housing finance corporation if   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.          (b)  Following a public hearing by the governing body of the   applicable local government, a housing finance corporation may ,   subject to the geographic limitations of Section 394.037(a-1),   issue bonds to finance a multifamily residential development to be   owned , financed, or supported by the housing finance corporation in   accordance with Section 394.004 if the housing finance corporation   receives approval of the governing body of the local government.          SECTION 7.  Subchapter Z, Chapter 394, Local Government   Code, is amended by adding Sections 394.9026 and 394.9027 to read as   follows:           Sec.   394.9026.     ADDITIONAL CONDITIONS FOR BENEFICIAL AD   VALOREM TAX TREATMENT RELATING TO CERTAIN MULTIFAMILY RESIDENTIAL   DEVELOPMENTS. (a)   In this section:                 (1)     "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).                 (2)     "Housing finance corporation 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 multifamily residential development   owned, financed, or supported by a housing finance corporation.                 (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, as defined by the United States Department of Housing and   Urban Development.                 (4)     "Moderate income 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, as defined by the United States Department of Housing and   Urban Development.                 (5)     "Multifamily residential development" means any   residential development consisting of four or more residential   units intended for occupancy as rentals, regardless of whether the   units are attached or detached.                 (6)     "Rent" means any recurring fee or charge a tenant   is required to pay as a condition of occupancy, including a fee or   charge for the use of a common area or facility reasonably   associated with residential rental property. The term does not   include fees and charges for services or amenities that are   optional for a tenant, such as pet fees and fees for storage or   covered parking.           (b)     This section does not apply to a multifamily residential   development that receives financial assistance administered under   Subchapter DD, Chapter 2306, Government Code.           (c)     Subject to Subsection (g), an ad valorem tax exemption   under Section 394.905 for a multifamily residential development   owned, financed, or supported by a housing finance corporation is   available only if the other requirements of this chapter are   satisfied and if:                 (1)  subject to Subdivision (2), at least:                       (A)     10 percent of the units in the development   are reserved for occupancy as lower income housing units; and                       (B)     40 percent of the units in the development   are reserved for occupancy as moderate income housing units;                 (2)     for a development that is acquired by a housing   finance corporation and that is occupied at acquisition or was   occupied at any time within the two-year period preceding the date   of the acquisition:                       (A)  at least:                             (i)     10 percent of the units in the   development are reserved for occupancy as lower income housing   units and at least 40 percent of the units in the development are   reserved for occupancy as moderate income housing units; and                             (ii)     unless a resolution waiving this   requirement is received from the governing body of the local   government within the boundaries of which the development is   located, 15 percent of the total gross cost of the existing   development, as shown in the settlement statement related to the   acquisition, is expended on rehabilitating, renovating,   reconstructing, or repairing the development, with initial   expenditures and construction activities:                                   (a)     beginning not later than the first   anniversary of the date of the acquisition; and                                   (b)     finishing not later than the third   anniversary of the date of the acquisition; or                       (B)     the development is approved by the governing   body of the local government within the boundaries of which the   development is located and at least:                             (i)     25 percent of the units are reserved for   occupancy as lower income housing units; and                             (ii)     25 percent of the units are reserved   for occupancy as moderate income housing units;                 (3)     the income-restricted residential units in the   development have the same access to community amenities and   programs as residential units that are not income-restricted;                 (4)     the percentage of lower and moderate income   housing units reserved in each category of income-restricted   residential units in the development, based on the number of   bedrooms per unit, is the same as the percentage of each category of   income-restricted residential units reserved in the development as   a whole;                 (5)  the monthly rent charged per unit does not exceed:                       (A)     for a lower income housing unit, 30 percent   of 60 percent of the area median income, adjusted for family size,   as defined by the United States Department of Housing and Urban   Development; or                       (B)   [Text truncated for display. 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