H.B. No. 1590 amends the Local Government Code to establish new definitions and requirements for multifamily residential developments owned by public facility corporations. The bill introduces definitions for "Rent" and "Rent reduction," clarifying the calculation of rent for income-restricted units, and modifies the definition of "Sponsor" by removing references to school districts. It outlines specific conditions for exemptions related to multifamily developments, including the requirement to reserve a percentage of units for lower and moderate-income housing. Additionally, the bill mandates that rent reductions must meet certain thresholds compared to estimated market rents to qualify for beneficial tax treatment, and it requires annual compliance audits for public facility users claiming exemptions.

The bill also specifies compliance and audit requirements, including the submission of an initial audit report by June 1 of the year following a development's acquisition or occupancy, with subsequent reports due annually. It introduces Section 303.0427, stating that multifamily residential developments are ineligible for certain tax exemptions unless a one-time exemption application is submitted to the Texas Department of Housing and Community Affairs and relevant appraisal districts. The provisions apply to tax years beginning after the effective date of the Act and to developments approved on or after that date, while previously approved developments will follow the laws in effect at the time of their approval. The Act is set to take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

Statutes affected:
Introduced: Local Government Code 303.003, Local Government Code 303.0421, Local Government Code 303.0426 (Local Government Code 303)