All Roll Calls
Yes: 287 • No: 54
TexasHB 2189th Legislature Regular SessionHouseWALLET
Relating to housing finance corporations; authorizing a fee.
Sponsored By: Cecil Bell Jr., Paul Bettencourt (Republican), Giovanni Capriglione, Gary Gates, Trey Martinez Fischer, Carl H. Tepper
Signed by Governor
City Government--Land Use & ZoningCounty Government--Land Use & ZoningHousing--FinanceHousing--GeneralProperty Interests--Landlord & TenantTaxation--Property-ExemptionsAUDITS & AUDITORSHOUSING & COMMUNITY AFFAIRS, TEXAS DEPARTMENT OF
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
8 provisions identified: 2 benefits, 3 costs, 3 mixed.
Rent limits and stronger renter protections
Covered housing finance corporation developments must reserve units using one of two income mixes. One requires 10% for households at or below 60% of area median income and 40% at or below 80%. The other requires 10% at or below 50% and 40% for middle-income households above 100%. Rent caps use 30% of income limits set at 50%, 60%, 80%, or 100% of area median income, adjusted for family size. Restricted units must have equal finishes, equipment, and amenity access, with income groups spread proportionately across bedroom counts. Developments cannot reject voucher users for using vouchers or require income above 250% of their share of rent. They must post voucher policies, market to voucher holders, and notify local housing authorities that they accept voucher tenants. Restricted-unit leases limit nonrenewal to specified lease violations or missing household information, require 30 days’ notice, and protect tenant organizing. Tenants cannot waive these lease protections, and operators can provide stronger safeguards. When income rises above a limit at renewal, federal tax rules determine whether the unit still counts as income-restricted. These conditions exclude developments receiving the specified state-allocated low-income housing tax credit.
Public access to housing corporation decisions
Housing finance corporation actions and proceedings must follow Texas open-meeting law. All corporation records are subject to Texas public-records law. These laws give the public access rights concerning covered meetings and records.
Voucher renters can owe rent gaps
Housing finance corporation operators can require voucher households to pay rent above the monthly voucher amount. This authority applies when the voucher is less than the unit’s rent. The law does not automatically impose a rent-gap payment on every voucher household.
Housing operators face annual audit costs
Operators claiming the covered housing exemption must pay for annual audits by qualified independent auditors or compliance experts. Reports check exemption compliance and compare restricted rents with estimated market rents. The first report is due June 1 of the tax year after acquisition or first tenant occupancy; later reports are due each June 1. The Texas housing department can extend deadlines for good cause and provides notice and 180 days to cure noncompliance. Auditors cannot serve the same corporation for more than three consecutive tax years and cannot return before the third audit’s second anniversary. The department reviews and publishes findings, with tenant-identifying information removed, and administrative appeals are available. It can charge a reasonable report-submission fee no higher than its audit-program administration costs. These audit rules exclude developments while they receive the specified state-allocated low-income housing tax credit.
Outside-area housing risks losing tax breaks
The law targets developments owned by housing finance corporations on September 1, 2025, outside their authorized areas. These developments lose property-tax exemption eligibility after January 1, 2027, unless the corporation obtains the required local resolutions or orders. The law does not set a rent increase or household tax payment.
Housing tax breaks require rent savings
Qualifying housing finance corporations, property, property income, bonds, bond income, and bond transfers receive state and local tax and fee exemptions. Franchise-tax relief requires separate eligibility under Texas franchise-tax law. Covered multifamily property and improvement-material tax breaks require an authorized location, board approval, and qualified independent underwriting dated within 180 days before approval. Underwriting must show annual rent savings of at least 50% of estimated property taxes without the exemption. The forecast covers tax years 3–5 after acquisition, or years 1–3 after new housing reaches 90% occupancy. Actual rent savings compare restricted rents with average rents for comparable unrestricted units; required shortfalls must be paid proportionately to taxing units. Corporations must publish underwriting and file a one-time application with the Texas housing department and each relevant chief appraiser. Conservation or reclamation district and emergency services district taxes remain payable without a written payment-in-lieu agreement. Unresolved violations after notice and a 180-day cure period, or late audits, can remove the exemption for a tax year. Specified requirements do not apply while a development receives the stated low-income housing tax credit.
Housing tax rules phase in
The amended property-tax exemption rules cover corporation-owned multifamily developments regardless of their approval or acquisition date, with transition exceptions. An occupied development acquired by a corporation can receive the exemption for the two tax years after acquisition. It must meet Section 394.9026(c)(1), (3), (4), and (5) by the end of that second tax year. Earlier acquisitions must meet specified tenant-related requirements by January 1, 2026. Their remaining specified requirements are due by the earlier of two deadlines: the end of the tenth tax year after the law takes effect, or the end of the first tax year after a covered refinancing, title transfer, or majority-ownership change. Separately, new Section 394.905(b)(1)–(3) and (d) requirements apply only to developments acquired on or after the law’s effective date.
Local limits on affordable housing financing
The housing finance corporation chapter covers developments with at least 90% intended for low- and moderate-income households. Their prior-year adjusted gross income cannot exceed the applicable moderate-income limit in corporation rules or financing documents. Residential development and housing bonds are generally limited to sponsors’ areas. Outside-area activity requires approval from affected municipalities, counties for unincorporated areas, and applicable locally sponsored housing corporations; outside-area bonds also need local approval. Nonresidential property ownership is not subject to this geographic rule. Bonds for corporation-owned multifamily housing require a local public hearing and at least 50% of units reserved for households earning below 80% of area median family income, or the alternative statutory unit mix. Financing under Section 394.004 also requires local governing-body approval.
Sponsors & Cosponsors
Sponsors
Cecil Bell Jr.
House
Paul Bettencourt
Republican • Senate
Giovanni Capriglione
House
Gary Gates
House
Trey Martinez Fischer
House
Carl H. Tepper
House
Cosponsors
Daniel Alders
House
Alma A. Allen
House
Jeff Barry
House
Keith Bell
House
Salman Bhojani
House
Greg Bonnen
House
Brad Buckley
House
Benjamin Bumgarner
House
Angie Chen Button
House
Briscoe Cain
House
Donna Campbell
Republican • Senate
David Cook
House
Philip Cortez
House
Tom Craddick
House
Charles Cunningham
House
Pat Curry
House
Drew Darby
House
Jay Dean
House
Paul Dyson
House
Caroline Fairly
House
Pete Flores
Republican • Senate
Cassandra Garcia Hernandez
House
Josey Garcia
House
Charlie Geren
House
Vikki Goodwin
House
Ryan Guillen
House
Erin Gámez
House
Sam Harless
House
Cody Harris
House
Caroline Harris Davila
House
Brian Harrison
House
Richard Hayes
House
Cole Hefner
House
Hillary Hickland
House
Adam Hinojosa
Republican • Senate
Juan "Chuy" Hinojosa
Democratic • Senate
Janis Holt
House
Andy Hopper
House
Donna Howard
House
Lacey Hull
House
Todd Hunter
House
Carrie Isaac
House
Helen Kerwin
House
Ken King
House
Stan Kitzman
House
Lois Kolkhorst
Republican • Senate
Marc LaHood
House
Suleman Lalani
House
Stan Lambert
House
Brooks Landgraf
House
Jeff Leach
House
Terri Leo Wilson
House
Mitch Little
House
Oscar Longoria
House
Janie Lopez
House
Ray Lopez
House
AJ Louderback
House
David Lowe
House
J. M. Lozano
House
John Lujan
House
Shelley Luther
House
Don McLaughlin
House
John McQueeney
House
Terry Meza
House
Mayes Middleton
Republican • Senate
Brent Money
House
Eddie Morales
House
Matt Morgan
House
Sergio Muñoz Jr.
House
Candy Noble
House
Mike Olcott
House
Tom Oliverson
House
Claudia Ordaz
House
Angelia Orr
House
Jared Patterson
House
Dennis Paul
House
Vincent Perez
House
Dade Phelan
House
Katrina Pierson
House
Mihaela Plesa
House
Richard Peña Raymond
House
Keresa Richardson
House
Schatzline
Affiliation unavailable
Alan Schoolcraft
House
Matt Shaheen
House
Joanne Shofner
House
John T. Smithee
House
David Spiller
House
Valoree Swanson
House
James Talarico
House
Tony Tinderholt
House
Steve Toth
House
Ellen Troxclair
House
VanDeaver
Affiliation unavailable
Cody Vasut
House
Denise Villalobos
House
Wes Virdell
House
Royce West
Democratic • Senate
Trey Wharton
House
Terry M. Wilson
House
Erin Zwiener
House
Roll Call Votes
Senate vote • 5/14/2025
Record vote
Yes: 30 • No: 1
Senate vote • 5/14/2025
Record vote
Yes: 30 • No: 1
House vote • 5/10/2025
Record vote
Yes: 113 • No: 15
House vote • 5/9/2025
Record vote
Yes: 100 • No: 35
Senate vote • Unknown
Committee vote: Local Government
Yes: 6 • No: 0
House vote • Unknown
Committee vote: Intergovernmental Affairs
Yes: 8 • No: 2
Bill Text
Engrossed
Enrolled
House Committee Report
Introduced
Senate Committee Report
Related Bills
SB 785, Relating to the regulation of new HUD-code manufactured housing.
SB 646, Relating to repayment of certain mental health professional education loans.
SB 650, Relating to requiring the use of electronically readable information to verify a purchaser's age in the retail sale of alcoholic beverages.
SB 25, Relating to health and nutrition standards to promote healthy living, including requirements for food labeling, primary and secondary education, higher education, and continuing education for certain health care professionals; authorizing a civil penalty.
HB 762, Relating to severance pay for political subdivision employees and independent contractors.
HB 500, Relating to making supplemental appropriations and reductions in appropriations and giving direction and adjustment authority regarding appropriations.