H.B. No. 21 amends the Local Government Code to improve the governance and operations of housing finance corporations in Texas. The bill mandates that at least 90 percent of residential developments must be designated for low and moderate-income households, as defined by the housing finance corporation's rules. It introduces provisions to ensure transparency by applying open meetings and records laws to these corporations and clarifies the geographic limitations for property ownership, requiring local governing body resolutions for developments outside designated areas. Additionally, the bill allows housing finance corporations to issue bonds for financing residential developments only within specified local government boundaries or with appropriate approvals for developments outside those boundaries.

The bill also establishes new compliance requirements for ad valorem tax exemptions for multifamily residential developments owned by housing finance corporations, including conditions for income-restricted units and mandates for tenant protections. It requires annual compliance audits conducted by independent auditors, with findings reviewed by the Texas Department of Housing and Community Affairs. The bill outlines processes for appealing noncompliance findings and specifies that certain exemptions will only apply to properties acquired after the act's effective date. The act will take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if not.

Statutes affected:
Introduced: Local Government Code 394.004, Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)
House Committee Report: Local Government Code 394.004, Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)
Engrossed: Local Government Code 394.004, Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)
Senate Committee Report: Local Government Code 394.004, Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)
Enrolled: Local Government Code 394.004, Local Government Code 394.031, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.039, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)