S.B. No. 867 amends the Local Government Code in Texas to enhance the operations and accountability of housing finance corporations, specifically focusing on residential developments for low and moderate-income individuals. The bill stipulates that these developments must be occupied by the intended demographic and introduces new provisions to ensure compliance with open meetings and records laws. It also clarifies the powers of housing finance corporations, requiring local government resolutions for operations outside their jurisdiction. Additionally, the bill establishes conditions for property-based tax and fee treatment, mandating that a certain percentage of units be reserved for lower and moderate-income housing and that bonds can only finance developments within the sponsoring local government's boundaries.

Key changes include the introduction of audit requirements for housing finance corporations, which must submit annual compliance audits to the Texas Department of Housing and Community Affairs. The bill allows local governments to transfer property to housing finance corporations without voter approval and specifies conditions for tax and fee exemptions, including compliance with audit requirements. It also mandates the publication of development information on housing finance corporations' websites and prohibits discrimination against individuals using housing choice vouchers. The bill aims to improve transparency and accessibility in affordable housing management, with provisions for the Texas Department of Housing and Community Affairs to adopt necessary rules by January 1, 2026, and a timeline for initial audit report submissions. The Act will take effect immediately upon a two-thirds vote 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)