S.B. No. 867 amends the Local Government Code to enhance the operations and regulations of housing finance corporations in Texas, focusing on improving housing accessibility and accountability. The bill mandates that residential developments must be at least 90 percent occupied or intended for low and moderate-income individuals, with income limits set by the housing finance corporation's rules. It introduces provisions for transparency by ensuring that the actions and records of these corporations are subject to open meetings and open records laws. Additionally, the bill allows housing finance corporations to issue bonds for developments within their local government boundaries and outlines specific powers related to financial transactions and property management.

The bill also establishes conditions for ad valorem tax treatment for multifamily residential developments, requiring a percentage of units to be reserved for lower and moderate-income housing. It includes provisions for annual compliance audit reports to be submitted to the Texas Department of Housing and Community Affairs, detailing adherence to tax exemption requirements. The bill clarifies tax exemptions for properties owned or financed by housing finance corporations and repeals Section 394.005 of the Local Government Code, with new regulations applying only to bonds issued and tax years beginning after the Act's effective date. The Texas Department of Housing and Community Affairs is tasked with adopting necessary rules by January 1, 2026, to implement these changes.

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)
Senate Committee Report: Local Government Code 394.004, Local Government Code 394.032, Local Government Code 394.037, Local Government Code 394.011, Local Government Code 394.9025, Local Government Code 394.903, Local Government Code 394.905, Local Government Code 394.005 (Local Government Code 394)