HB 3792

relating to the identification, use, and taxation of surplus state
property suitable for the development of affordable housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter E, Chapter 31, Natural Resources
Code, is amended by adding Section 31.1555 to read as follows:
Sec. 31.1555.  SURPLUS STATE PROPERTY INVENTORY.  (a)  In
(1)  "Department" means the Texas Department of Housing
(2)  "Surplus state property" means unused or underused
state property, including unimproved real property, historic
buildings, residential buildings, and commercial buildings.
(b)  The land office shall establish a digitized inventory of
surplus state property located in:
(1)  municipalities with a population of 25,000 or
(2)  counties with a population of 50,000 or more.
(c)  The land office, in consultation with the department,
(1)  identify from the inventory established under
Subsection (b) any surplus state property that may feasibly be
developed to provide affordable housing; and
(2)  develop and make available a comprehensive map
(A)  contains the properties identified under
(B)  is overlaid with graphical representation of
the areas of the state where affordable housing is feasible and
impactful, where the relative degrees of feasibility and impact are
indicated by different colors on the map.
(d)  To identify suitable properties under Subsection
(c)(1), the land office and department jointly shall develop a
process that analyzes and ranks properties based on criteria
(1)  the economic feasibility of the potential
(A)  a property's size, shape, grading, and lack
(B)  a property's proximity to job centers,
education, high-frequency public transportation networks,
utilities, and other services and amenities; and
(C)  whether a property is adjacent to other
properties in a manner that would allow for consolidation of those
properties into a larger parcel of property considered appropriate
(2)  a property's location with respect to areas where
the underproduction of housing is having the greatest effect on
housing affordability as demonstrated by the lack of availability
of affordable housing, the gap between supply and demand for
affordable housing, and the rate of increase in rents.
(e)  The land office, in consultation with the department,
shall issue requests for proposals from developers of affordable
housing for long-term ground leases of surplus state property
identified under Subsection (c)(1) for the purpose of developing
affordable housing on those properties.  The proposals must
(1)  the number of residential rental units to be built
and  maintained for occupancy as affordable units;
(2)  the maximization of the natural resources of the
(3)  levels of affordability of residential rental
(A)  breaking ground not later than the second
anniversary of the date the developer enters the lease; and
(B)  completing the development not later than the
third anniversary of the date the developer enters the lease;
(5)  the cost of construction for each residential
(6)  the developer's demonstrated capacity to complete
(f)  Surplus state property identified under Subsection
(c)(1) may be exchanged for other real property of a local
governmental entity if the exchange:
(1)  facilitates the provision of affordable housing by
that local governmental entity; and
(2)  is conducted in accordance with rules jointly
adopted by the land office and the department governing an exchange
of real property under this subsection, including rules adopted to
ensure that the primary purpose of a property exchange is to provide
affordable housing in this state.
SECTION 2.  Section 25.07, Tax Code, is amended by amending
Subsection (b) and adding Subsection (f) to read as follows:
(b)  Except as provided by Sections 11.11(b) and (c), a
leasehold or other possessory interest in exempt property may not
(1)  the property is permanent university fund land;
(2)  the property is county public school fund
(3)  the property is a part of a public transportation
facility owned by a municipality or county and:
(A)  is an airport passenger terminal building or
a building used primarily for maintenance of aircraft or other
aircraft services, for aircraft equipment storage, or for air
(B)  is an airport fueling system facility;
(C)  is in a foreign-trade zone:
(i)  that has been granted to a joint airport
board under Subchapter C, Chapter 681, Business & Commerce Code;
(ii)  the area of which in the portion of the
zone located in the airport operated by the joint airport board does
(iii)  that is established and operating
(D)(i)  is in a foreign trade zone established
pursuant to federal law after June 1, 1991, that operates pursuant
(ii)  is contiguous to or has access via a
taxiway to an airport located in two counties, one of which has a
population of 500,000 or more according to the federal decennial
census most recently preceding the establishment of the foreign
(iii)  is owned, directly or through a
corporation organized under the Development Corporation Act
(Subtitle C1, Title 12, Local Government Code), by the same
municipality that owns the airport;
(4)  the interest is in a part of:
(A)  a park, market, fairground, or similar public
facility that is owned by a municipality; or
(B)  a convention center, visitor center, sports
facility with permanent seating, concert hall, arena, or stadium
that is owned by a municipality as such leasehold or possessory
interest serves a governmental, municipal, or public purpose or
function when the facility is open to the public, regardless of
whether a fee is charged for admission;
(5)  the interest involves only the right to use the
property for grazing or other agricultural purposes;
(A)  owned by a municipality, a public port, or a
navigation district created or operating under Section 59, Article
XVI, Texas Constitution, or under a statute enacted under Section
59, Article XVI, Texas Constitution; and
(B)  used as an aid or facility incidental to or
useful in the operation or development of a port or waterway or in
aid of navigation-related commerce; [or]
(7)  the property is part of a rail facility owned by a
rural rail transportation district operating under Chapter 172,
(8)  subject to Subsection (f), the property is surplus
state property identified by the General Land Office in
consultation with the Texas Department of Housing and Community
Affairs under Section 31.1555(c)(1), Natural Resources Code, as
suitable to be developed to provide affordable housing and the
owner of the possessory interest agrees in writing to:
(A)  develop affordable housing on the property
pursuant to the terms of a long-term ground lease with the General
(B)  rent at least 30 percent of the residential
rental units to individuals and families of low income or families
of moderate income as defined by Section 2306.004, Government Code.
(f)  The prohibition provided by Subsection (b)(8) on the
listing of a leasehold or other possessory interest in property to
be developed as affordable housing:
(1)  applies to the property for a single period of:
(A)  12 consecutive tax years if the owner of the
possessory interest agrees to rent at least 30 percent of the
residential rental units to individuals and families of low income
or families of moderate income as defined by Section 2306.004,
(B)  20 consecutive tax years if the owner of the
possessory interest agrees to rent at least 40 percent of the
residential rental units to individuals and families of low income
or families of moderate income as defined by Section 2306.004,
(2)  expires as to the property on the earliest of the
(A)  the period described by Subdivision (1)(A) or
(B)  the property changes ownership; or
(C)  the property is no longer used for affordable
housing as provided by an agreement under Subsection (b)(8); and
(3)  applies only to the portion of the property used
for residential purposes, including common areas.
SECTION 3.  (a)  Not later than November 30, 2025, the
General Land Office, in consultation with the Texas Department of
Housing and Community Affairs, shall establish the process required
under Section 31.1555(d), Natural Resources Code, as added by this
Act, to identify surplus state property suitable for development as
(b)  Not later than December 31, 2025, the General Land
Office shall establish the digitized inventory required by Section
31.1555(b), Natural Resources Code, as added by this Act.
(c)  Not later than April 30, 2026, the Texas Department of
Housing and Community Affairs shall provide a report describing the
(1)  the process described by Subsection (a) of this
(2)  the inventory described by Subsection (b) of this
(3)  the map required to be developed under Section
31.1555(c)(2), Natural Resources Code, as added by this Act.
SECTION 4.  This Act takes effect September 1, 2025.