HBA-CMT H.B. 2116 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2116
By: Ritter
Urban Affairs
4/11/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, municipalities and counties are allowed to set up housing
finance corporations which may  issue bonds for the construction,
ownership, and operation of housing.  Most cities and counties that have
exercised the power to create housing a finance corporation have imposed
requirements that the housing created by the corporation be primarily
limited to low-income housing, especially since the housing is financed
with low-interest local government bonds and is exempt from property taxes.
Some communities and real estate companies have used housing finance
corporations to create housing for middle and upper income residents.
These projects then compete with privately financed  housing projects that
do not receive the low-interest financing and no-property tax status of
housing finance corporation owned projects.  House Bill 2116 requires that
at least 50 percent of all units in a residence financed by a housing
finance corporation to be leased for the lifetime of the residential
development to tenants making less than 100 percent of the area median
income. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2116 amends the Local Government Code to prohibit a housing
finance corporation from financing a multifamily residential development
unless at least 50 percent of the units on the development are reserved for
the lifetime of the residential development for occupancy by individuals
and families earning less than 100 percent of the area median family
income. 

EFFECTIVE DATE

August 31, 2002.