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.