89R24849 JAM-D     By: Gates H.B. No. 21     Substitute the following for H.B. No. 21:     By:  Bell of Montgomery C.S.H.B. No. 21       A BILL TO BE ENTITLED   AN ACT   relating to housing finance corporations; authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 394.004, Local Government Code, is   amended to read as follows:          Sec. 394.004.  APPLICATION OF CHAPTER TO CERTAIN RESIDENTIAL   DEVELOPMENTS. This chapter applies only to a residential   development that [at least 90 percent of which] is occupied [for   use] by or is intended to be occupied by persons of very low, low,   [and] moderate, and middle income in accordance with the   requirements of this chapter [whose adjusted gross income, together   with the adjusted gross income of all persons who intend to reside   with those persons in one dwelling unit, did not for the preceding   tax year exceed the maximum amount constituting moderate income   under the housing finance corporation's rules, resolutions   relating to the issuance of bonds, or financing documents relating   to the issuance of bonds].          SECTION 2.  Subchapter A, Chapter 394, Local Government   Code, is amended by adding Section 394.0045 to read as follows:          Sec. 394.0045.  APPLICABILITY OF OPEN MEETINGS AND OPEN   RECORDS LAWS.  (a)  Chapter 551, Government Code, applies to actions   and proceedings under this chapter.          (b)  Chapter 552, Government Code, applies to all records of   a housing finance corporation.          SECTION 3.  The heading to Section 394.031, Local Government   Code, is amended to read as follows:          Sec. 394.031.  EXERCISE OF POWERS; AREA OF OPERATION.          SECTION 4.  Section 394.031, Local Government Code, is   amended by adding Subsections (c), (d), and (e) to read as follows:          (c)  Subject to Subsection (d), the area in which a housing   finance corporation may own real property for residential   development or engage in residential development is limited to:                (1)  for a housing finance corporation sponsored by a   municipality under Section 394.011, the boundaries of the   municipality that sponsored the corporation;                 (2)  for a housing finance corporation sponsored by a   county under Section 394.011, the boundaries of the county that   sponsored the corporation; or                (3)  for a housing finance corporation sponsored by   more than one local government under Section 394.012:                      (A)  the boundaries of each municipal sponsor of   the corporation; and                       (B)  the boundaries of each county sponsor of the   corporation.          (d)  A housing finance corporation may own real property for   residential development or engage in residential development   outside an area described by Subsection (c) only if a resolution or   order, as applicable, approving that ownership or development in   the outside area is adopted by the governing bodies of:                (1)  each municipality that contains any part of the   outside area in which the corporation proposes to own real property   for residential development or engage in residential development;                (2)  for a residential development or home located in   the unincorporated area of a county, each county that contains any   part of the outside area in which the corporation proposes to own   real property for residential development or engage in residential   development; and                (3)  any housing finance corporation sponsored by a   municipality or county described by Subdivision (1) or (2), as   applicable.          (e)  This section does not prohibit or limit a housing   finance corporation from owning real property outside an area   described by Subsection (c) or (d) if the property is not owned for   purposes of residential development.          SECTION 5.  Section 394.032(e), Local Government Code, is   amended to read as follows:          (e)  A housing finance corporation may delegate to the Texas   Department of Housing and Community Affairs the authority to act on   its behalf in the financing, refinancing, acquisition, leasing,   ownership, improvement, and disposal of home mortgages or   residential developments, [within and outside the jurisdiction of   the housing finance corporation,] including its authority to issue   bonds for those purposes.          SECTION 6.  Section 394.037, Local Government Code, is   amended by adding Subsection (a-1) to read as follows:          (a-1)  A housing finance corporation may issue bonds under   this chapter for a purpose described by Subsection (a) only to   finance or support a residential development or home that is   located or will be constructed:                (1)  within the boundaries of a local government in   which a housing finance corporation is permitted to own real   property for residential development or engage in residential   development under Section 394.031(c); or                (2)  outside the boundaries of a local government   described by Subdivision (1) if a resolution or order, as   applicable, approving the issuance of bonds is adopted by the   governing body of:                       (A)  each municipality that contains any part of   the residential development or home; and                      (B)  for a residential development or home located   in the unincorporated area of a county, each county that contains   any part of the residential development or home.          SECTION 7.  Section 394.039, Local Government Code, is   amended to read as follows:          Sec. 394.039.  SPECIFIC POWERS RELATING TO FINANCIAL AND   PROPERTY TRANSACTIONS. Subject to Sections 394.031(c), (d), and   (e), a [A] housing finance corporation may:                (1)  lend money for its corporate purposes, invest and   reinvest its funds, and take and hold real or personal property as   security for the payment of the loaned or invested funds;                (2)  mortgage, pledge, or grant security interests in   any residential development, home mortgage, note, or other property   in favor of the holders of bonds issued for those items;                (3)  purchase, receive, lease, or otherwise acquire,   own, hold, improve, use, or deal in and with real or personal   property or interests in that property, [wherever the property is   located,] as required by the purposes of the corporation or as   donated to the corporation; and                (4)  sell, convey, mortgage, pledge, lease, exchange,   transfer, and otherwise dispose of all or part of its property and   assets.          SECTION 8.  Section 394.9025, Local Government Code, is   amended to read as follows:          Sec. 394.9025.  MULTIFAMILY RESIDENTIAL DEVELOPMENT.  (a)     Following a public hearing by the governing body of the applicable   local government, a housing finance corporation may, subject to the   geographic limitations of Section 394.037(a-1), issue bonds to   finance a multifamily residential development to be owned by the   housing finance corporation if at least 50 percent of the units in   the multifamily residential development are reserved for occupancy   by individuals and families earning less than 100 [80] percent of   the area median family income.          (b)  Following a public hearing by the governing body of the   applicable local government, a housing finance corporation may,   subject to the geographic limitations of Section 394.037(a-1),   issue bonds to finance a multifamily residential development to be   owned by the housing finance corporation in accordance with Section   394.004 if the housing finance corporation receives approval of the   governing body of the local government.          SECTION 9.  Subchapter Z, Chapter 394, Local Government   Code, is amended by adding Sections 394.9026 and 394.9027 to read as   follows:          Sec. 394.9026.  ADDITIONAL CONDITIONS FOR BENEFICIAL AD   VALOREM TAX TREATMENT RELATING TO CERTAIN MULTIFAMILY RESIDENTIAL   DEVELOPMENTS. (a)  In this section:                (1)  "Housing choice voucher program" means the housing   choice voucher program under Section 8, United States Housing Act   of 1937 (42 U.S.C. Section 1437f).                (2)  "Housing finance corporation user" means:                      (A)  a housing finance corporation; or                      (B)  for a multifamily residential development   that is not owned directly by a housing finance corporation, a   public-private partnership entity or a developer or other person or   entity that has an ownership interest or a leasehold or other   possessory interest in multifamily residential development   financed or supported by a housing finance corporation.                (3)  "Lower income housing unit" means a residential   unit reserved for occupancy by an individual or family earning not   more than 60 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development.                (4)  "Middle income housing unit" means a residential   unit reserved for occupancy by an individual or family earning not   more than 100 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development.                (5)  "Moderate income housing unit" means a residential   unit reserved for occupancy by an individual or family earning not   more than 80 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development.                (6)  "Multifamily residential development" means any   residential development consisting of four or more residential   units intended for occupancy as rentals, regardless of whether the   units are attached or detached.                (7)  "Rent" means any recurring fee or charge a tenant   is required to pay as a condition of occupancy, including a fee or   charge for the use of a common area or facility reasonably   associated with residential rental property. The term does not   include fees and charges for services or amenities that are   optional for a tenant, such as pet fees and fees for storage or   covered parking.                (8)  "Rent reduction" means the projected difference   between the rent charged for an income-restricted unit and the   maximum market rate rent that could be charged for that same unit   without the income restrictions.                (9)  "Very low income housing unit" means a residential   unit reserved for occupancy by an individual or family earning not   more than 50 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development.          (b)  This section does not apply to a multifamily residential   development that is the recipient of a low income housing tax credit   allocated under Subchapter DD, Chapter 2306, Government Code.          (c)  Subject to Subsection (g), an ad valorem tax exemption   under Section 394.905 for a multifamily residential development   owned by a housing finance corporation is available only if the   other requirements of this chapter are satisfied and if:                (1)  at least:                      (A)  10 percent of the units in the development   are reserved for occupancy as lower income housing units and at   least 40 percent of the units in the development are reserved for   occupancy as moderate income housing units; or                      (B)  10 percent of the units in the development   are reserved for occupancy as very low income housing units and at   least 40 percent of the units in the development are reserved for   occupancy as middle income housing units;                (2)  the rent reduction at the development in the   preceding tax year was:                      (A)  not less than 60 percent of the amount of the   estimated ad valorem taxes that would have been imposed on the   applicable property in the same preceding tax year if the property   did not receive an exemption from those taxes under Section   394.905, beginning with:                            (i)  for a multifamily residential   development that is acquired by the corporation, the third tax year   after the tax year that the corporation acquires the development;   and                            (ii)  for a newly constructed multifamily   residential development not described by Subparagraph (i), the   first tax year after the tax year in which the development first   achieves an occupancy rate of 90 percent; or                      (B)  less than 60 percent of the amount of the   estimated ad valorem taxes described by Paragraph (A) beginning   with the tax year specified by that paragraph, but the housing   finance corporation user paid to the Texas Permanent School Fund   Corporation for the applicable tax year an amount equal to the rent   reduction shortfall that exists based on the difference between the   amount described by this paragraph and the amount described by   Paragraph (A);                (3)  the income-restricted residential units in the   development have the same unit finishes and equipment and access to   community amenities and programs as residential units that are not   income-restricted;                (4)  the percentage of very low, lower, moderate, and   middle income housing units reserved in each category of   income-restricted residential units in the development, based on   the number of bedrooms per unit, is the same as the percentage of   each category of income-restricted residential units reserved in   the development as a whole;                (5)  the monthly rent charged per unit does not exceed:                      (A)  for a very low income housing unit, 30   percent of 50 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development;                      (B)  for a lower income housing unit, 30 percent   of 60 percent of the area median income, adjusted for family size,   as defined by the United States Department of Housing and Urban   Development;                      (C)  for a moderate income housing unit, 30   percent of 80 percent of the area median income, adjusted for family   size, as defined by the United States Department of Housing and   Urban Development; or                      (D)  for a middle income housing unit, 30 percent   of 100 percent of the area median income, adjusted for family size,   as defined by the United States Department of Housing and Urban   Development;                (6)  the housing finance corporation user and the   development do not:                      (A)  refuse to rent a residential unit in the   development to an individual or family because the individual or   family participates in the housing choice voucher program; or                      (B)  use a financial or minimum income standard   that requires an individual or family participating in the housing   choice voucher program to have a monthly income of more than 250   percent of the individual's or family's share of the total monthly   rent payable for a unit;                (7)  the housing finance corporation user causes to be   published on the Internet website of the development information   about the development's policies regarding tenant participation in   the housing choice voucher program;                (8)  the housing finance corporation user for the   development:                      (A)  affirmatively markets available residential   units directly to individuals and families participating in the   housing choice voucher program; and                      (B)  notifies local housing authorities of the   development's acceptance of tenants in the housing choice voucher   program; and                 (9)  each lease agreement for an income-restricted   residential unit in the development provides that:                      (A)  the landlord may not retaliate against the   tenant or the tenant's guests by taking an action because the tenant   established, attempted to establish, or participated in a tenant   organization;                      (B)  the landlord may only choose to not renew the   lease if the tenant:                            (i)  committed one or more substantial   violations of the lease;                            (ii)  failed to provide required information   on the income, composition, or eligibility of the tenant's   household; or                            (iii)  committed repeated minor violations   of the lease that disrupt the livability of the property, adversely   affect the health and safety of any person or the right to quiet   enjoyment of the leased premises and related development   facilities, interfere with the management of the development, or   have an adverse financial effect on the development, including the   failure of the tenant to pay rent in a timely manner; and                      (C)  to not renew the lease, the landlord must   serve a written notice of proposed nonrenewal on the tenant not   later than the 30th day before the effective date of nonrenewal.          (d)  In calculating the income of an individual or family for   a very low, lower, moderate, or middle income housing unit, the   housing finance corporation user must use the definition of annual   income described in 24 C.F.R. Section 5.609, as implemented by the   United States Department of Housing and Urban Development.  If the   income of a tenant exceeds an applicable limit at the time of the   renewal of a lease agreement for a residential unit, the provisions   of Section 42(g)(2)(D), Internal Revenue Code of 1986, apply in   determining whether the unit may still qualify as a very low, lower,   moderate, or middle income housing unit.          (e)  A housing finance corporation user may require an   individual or family participating in the housing choice voucher   program to pay the difference between the monthly rent for the   applicable unit and the amount of the monthly voucher if the amount   of the voucher is less than the rent.          (f)  A tenant may not waive the protections provided by   Subsection (c)(9). A housing finance corporation user may adopt   tenant protections that are more protective of tenants than the   tenant protections provided by Subsection (c)(9).          (g)  A multifamily residential development that is acquired   by a housing finance corporation and is occupied on the date of the   acquisition is eligible for an ad valorem exemption under Section   394.905 for the two tax years following the date of the acquisition,   regardless of whether the development complies with the conditions   prescribed by Subsection (c), if the development comes into   compliance with Subsection (c) not later than the end of the second   tax year after the date of the acquisition.          Sec. 394.9027.  AUDIT REQUIREMENTS FOR CERTAIN MULTIFAMILY   RESIDENTIAL DEVELOPMENTS.  (a)  In this section:                (1)  "Department" means the Texas Department of Housing   and Community Affairs.                (2)  "Housing finance corporation user" has the meaning   assigned by Section 394.9026.          (b)  A housing finance corporation or housing finance   corporation user that claims an ad valorem tax exemption for a   multifamily residential development under Section 394.905 must   annually submit to the department an audit report for a compliance   audit, prepared at the expense of the housing finance corporation   user and conducted by an independent auditor or compliance expert   with an established history of providing similar audits on housing   compliance matters, that:                (1)  states whether the corporation is in compliance   with the requirements imposed for the exemption by Section   394.9026; and                (2)  identifies the difference in the rent charged for   income-restricted residential units and the estimated maximum   market rents that could be charged for those units without the   income restrictions.          (c)  Not later than the 60th day after the date of receipt of   the audit conducted under Subsection (b), the department shall   examine the audit report and publish a report summarizing the   findings of the audit.  The report must:                (1)  be made available on the department's Internet   website;                (2)  be issued to the housing finance corporation that   owns or is associated with the development that is the subject of an   audit, the housing finance corporation user of the development, the   comptroller, and the governing body of the sponsoring local   government or governments of the housing finance corporation; and                (3)  describe in detail the nature of any failure to   comply with the requirements of Section 394.9026.          (d)  If an audit report submitted under Subsection (b)   indicates noncompliance with Section 394.9026, a housing finance   corporation user, the associated housing finance corporation, and   the chief appraiser of the appraisal district in which the   development is located must be given written notice from the   department that is provided not later than the 120th day after the   date a report has been submitted under Subsection (b) and specifies   the reasons for noncompliance. For a finding of noncompliance with   any provision of Section 394.9026(c), a housing finance corporation   user and the associated housing finance corporation must be given:                (1)  additional written notice that:                      (A)  otherwise complies with the notice   requirements of this section;                      (B)  contains at least one option for a corrective   action to resolve the noncompliance; and                      (C)  informs the housing finance corporation user   and associated housing finance corporation that failure to resolve   the noncompliance within the period provided by Subdivision (2)   will result in the loss of the ad valorem tax exemption under   Section 394.905;                (2)  a period of 180 days after the date notice is   received under Subdivision (1) to resolve the matter that is the   subject of the notice; and                (3)  if a matter that is the subject of a notice   provided under this subdivision is not resolved to the satisfaction   of the department during the period provided by Subdivision (2), a   second notice that informs the housing finance corporation of the   loss of the ad valorem tax exemption for the development due to   noncompliance with Section 394.9026.          (e)  The initial audit report required by Subsection (b) is   due not later than June 1 of the tax year following:                (1)  the date of acquisition for an existing   multifamily residential development that is acquired by a housing   finance corporation; or                (2)  the date a newly constructed multifamily   residential development first becomes occupied by one or more   tenants.          (f)  Subsequent audit reports following the issuance of the   initial audit report under Subsection (e) are due not later than   June 1 of each year.          (g)  The department may extend the deadline for submitting   any audit required under this section for good cause shown, as   determined by the department.          (h)  An independent auditor or compliance expert may not   prepare an audit under Subsection (b) for more than three   consecutive tax years for the same housing finance corporation.   After the third consecutive audit, the independent auditor or   compliance expert may prepare an audit only after the second   anniversary of the preparation of the third consecutive audit.          (i)  The department:                (1)  shall adopt forms and reporting standards for the   auditing process;                (2)  may charge a fee for the submission of an audit   report under this section in a reasonable amount necessary to cover   the expenses of administering this section; and                (3)  shall adopt rules necessary to implement this   section and Section 394.9026.          (j)  Rules adopted under Subsection (i)(3) must include   administrative processes and a process by which a housing finance   corporation user may appeal a finding of noncompliance made under   this section or a loss of a tax exemption due to a finding of   noncompliance with Section 394.9026 or any other provision of this   chapter.          (k)  An audit conducted under Subsection (b) is subject to   disclosure under Chapter 552, Government Code, except that   information containing tenant names, unit numbers, or other tenant   identifying information may be redacted.          (l)  This section does not apply to a multifamily residential   development during any period that the development is the recipient   of a low income housing tax credit allocated under Subchapter DD,   Chapter 2306, Government Code.          SECTION 10.  Section 394.903, Local Government Code, is   amended to read as follows:          Sec. 394.903.  TRANSFER [LOCATION] OF [RESIDENTIAL   DEVELOPMENT;] RESIDENTIAL DEVELOPMENT SITES. Subject to Sections   394.031(c) and (d), a [(a) A residential development covered by   this chapter must be located within the local government.          [(b)  The] local government may transfer any residential   development site to a housing finance corporation by sale or lease.   The governing body of the local government may authorize the   transfer by resolution without submitting the issue to the voters   and without regard to the requirements, restrictions, limitations,   or other provisions contained in any other general, special, or   local law. [The site may be located wholly or partly inside or   outside the local government.]          SECTION 11.  Section 394.905, Local Government Code, is   amended to read as follows:          Sec. 394.905.  EXEMPTION FROM TAXES AND FEES [TAXATION].     (a) Subject to compliance with the requirements of this chapter, a   [The] housing finance corporation and[,] all property owned by the   corporation [it], the income from that [the] property, all bonds   issued by the corporation [it], the income from those [the] bonds,   and the transfer of those [the] bonds are exempt, as public property   used for public purposes, from license fees, recording fees, and   all other taxes imposed by this state or any political subdivision   of this state.          (b)  A multifamily residential development owned by a   housing finance corporation is eligible for an exemption from ad   valorem taxes, and the materials used to improve the applicable   property are eligible for an exemption from sales and use taxes,   only if:                (1)  the property is located in an area in which the   housing finance corporation is authorized to own real property or   engage in residential development under Section 394.031(c) or (d);                (2)  the board of directors of the corporation has   adopted a resolution approving the multifamily residential   development;                (3)  before approval of the board of directors under   Subdivision (2), the housing finance corporation or a sponsoring   local government of the corporation:                      (A)  conducts, or obtains from a professional   entity that has experience underwriting affordable residential   developments and does not have a financial interest in the   corporation or the applicable development, developer, or   investors, an underwriting assessment of the proposed development   that is dated not earlier than 180 days before the date of the board   resolution;                      (B)  based on the underwriting assessment, makes a   good faith determination that the annual rent reduction at the   development, as defined by Section 394.9026(a), will be not less   than 60 percent of the amount of estimated ad valorem taxes that   would be imposed on the property in the same tax year if the   applicable property did not receive an exemption from those taxes   under this section:                            (i)  for a development that is acquired by   the corporation, each of the third, fourth, and fifth tax years   after the tax year that the corporation acquires the development;   and                            (ii)  for a newly constructed development   not described by Subparagraph (i), each of the first, second, and   third tax years after the tax year in which the development first   achieves an occupancy rate of 90 percent; and                      (C)  publishes on its Internet website a copy of   the underwriting assessment required by this subsection; and                (4)  the housing finance corporation submits to the   Texas Department of Housing and Community Affairs and to the chief   appraiser for each appraisal district in which the exemption is   sought a one-time exemption application on a form promulgated by   the comptroller.          (c)  Notwithstanding Subsections (a) and (b), and subject to   Section 394.9027, a multifamily residential development owned by a   housing finance corporation or a housing finance corporation user   is not entitled to an ad valorem tax exemption for any given tax   year in which:                (1)  the corporation or the housing finance corporation   user is not in compliance with any provisions of Section   394.9026(c) and:                      (A)  the notice requirements in Section   394.9027(d) have been fulfilled; and                      (B)  the noncompliance is not resolved to the   satisfaction of the department within the period provided by   Section 394.9027(d)(2); or                (2)  the corporation or the housing finance corporation   user has not timely submitted the audit report required by Section   394.9027.          (d)  Subsection (a) does not apply to ad valorem taxes   imposed on a multifamily residential development by a conservation   or reclamation district created under Section 52, Article III, or   Section 59, Article XVI, Texas Constitution, that provides water,   sewer, or drainage service to the development, unless the   applicable corporation has entered into a written agreement with   the district to make a payment to the district in lieu of taxation,   in the amount specified in the agreement.          (e)  Subsections (b)(3), (b)(4), and (c) do not apply to a   multifamily residential development that is:                (1)  owned by a housing finance corporation; and                (2)  the recipient of a low income housing tax credit   allocated under Subchapter DD, Chapter 2306, Government Code.          (f)  The corporation is exempt from the franchise tax imposed   by Chapter 171, Tax Code, only if the corporation is exempted by   that chapter.          SECTION 12.  Section 394.005, Local Government Code, is   repealed.          SECTION 13.  (a) Subject to Subsection (i) of this section,   Sections 394.031(c) and (d), Local Government Code, as added by   this Act, and Section 394.903, Local Government Code, as amended by   this Act, apply only to the ownership of real property that is   acquired by a housing finance corporation on or after the effective   date of this Act.  The ownership of real property acquired by a   housing finance corporation before the effective date of this Act,   and the authority of a housing finance corporation to own that   property or to engage in residential development with respect to   that real property in an area outside the areas authorized by   Sections 394.031(c) and (d), Local Government Code, as added by   this Act, are governed by the law in effect on the date the property   was acquired by the housing finance corporation, and the former law   is continued in effect for that purpose.          (b)  Section 394.037(a-1), Local Government Code, as added   by this Act, and Section 394.9025, Local Government Code, as   amended by this Act, apply only to bonds issued on or after the   effective date of this Act. Bonds issued before the effective date   of this Act are governed by the law in effect on the date the bonds   were issued, and the former law is continued in effect for that   purpose.          (c)  Section 394.9026, Local Government Code, as added by   this Act, and Section 394.905, Local Government Code, as amended by   this Act, apply only to a tax for a tax year that begins on or after   the effective date of this Act.          (d)  Subject to Subsections (e) and (f) of this section,   Sections 394.9026 and 394.9027, Local Government Code, as added by   this Act, apply to all multifamily residential developments   claiming an exemption under Section 394.905, Local Government Code,   regardless of when the developments were approved or acquired.          (e)  A multifamily residential development that was acquired   by a housing finance corporation before the effective date of this   Act must:                (1)  not later than January 1, 2026, come into   compliance with Sections 394.9026(c)(2), (6), (7), (8), and (9);   and                (2)  not later than January 1, 2027, come into   compliance with Sections 394.9026(c)(1), (3), (4), and (5).          (f)  Notwithstanding Section 394.9027(b) or (f), Local   Government Code, as added by this Act, the initial audit report   required to be submitted under Section 394.9027(b), Local   Government Code, as added by this Act, for a multifamily   residential development that was acquired by a housing finance   corporation before the effective date of this Act must be submitted   by the later of:                (1)  the date established by Section 394.9027(e), Local   Government Code, as added by this Act; or                (2)  June 1, 2026.          (g)  Subject to Subsections (e), (h), and (i) of this   section, Section 394.905, Local Government Code, as amended by this   Act, applies to all multifamily residential developments owned by a   housing finance corporation, regardless of when the developments   were approved or acquired.          (h)  Sections 394.905(b)(1), (2), and (3) and (d), Local   Government Code, as added by this Act, apply only to multifamily   residential developments that are acquired by a housing finance   corporation on or after the effective date of this Act.          (i)  A residential development that is owned by a housing   finance corporation on September 1, 2025, and is located outside an   area in which the corporation is authorized to own real property or   engage in residential development under Section 394.031(c), Local   Government Code, as added by this Act, is not eligible for an ad   valorem tax exemption under Section 394.905, Local Government Code,   as amended by this Act, after January 1, 2027, unless the   corporation obtains the appropriate resolutions or orders required   under Section 394.031(d), Local Government Code, as added by this   Act, before that date.          (j)  Not later than January 1, 2026, the Texas Department of   Housing and Community Affairs shall adopt rules necessary to   implement Section 394.9027(i), Local Government Code, as added by   this Act.          SECTION 14.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.   If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2025.