H.B. No. 21 amends the Local Government Code to improve the governance and operations of housing finance corporations in Texas, particularly focusing on affordable housing initiatives. The bill mandates that at least 90 percent of residential developments financed by these corporations must be designated for low and moderate-income households. It introduces provisions to ensure transparency by applying open meetings and records laws to housing finance corporations and clarifies the geographic limitations for property ownership, requiring local governing body resolutions for developments outside designated areas. Additionally, the bill allows these corporations to issue bonds for financing residential projects, contingent upon reserving a percentage of units for low-income families and meeting specific conditions for ad valorem tax exemptions.

The legislation also establishes new compliance requirements for housing finance corporations to maintain tax exemptions, including annual audits by independent auditors and the publication of audit findings. It specifies eligibility for ad valorem tax exemptions for multifamily residential developments acquired by these corporations, provided they meet certain conditions within two tax years. The bill outlines requirements for income-restricted units, including rent limits and tenant participation in housing choice voucher programs, while ensuring equal access to amenities. Furthermore, it repeals a previous section of the Local Government Code and sets deadlines for compliance with new regulations for developments acquired before the Act's effective date, ensuring a smooth transition to the updated framework. The Act will take effect immediately upon a two-thirds vote or on September 1, 2025, if not passed.

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)