(a) This section applies to a multifamily residential development that is owned by a corporation created under this chapter, except that this section does not apply to a multifamily residential development that:
(1) has at least 20 percent of its residential units reserved for public housing units;
(2) participates in the Rental Assistance Demonstration program administered by the United States Department of Housing and Urban Development;
(3) receives financial assistance administered under Chapter 1372, Government Code, or receives financial assistance from another type of tax-exempt bond; or
(4) receives financial assistance administered under Subchapter DD, Chapter 2306, Government Code.
(b) Notwithstanding § 303.042(c) and subject to Subsections (c) and (d) of this section, an exemption under § 303.042(c) for a multifamily residential development to which Subsection (a) applies is available only if:
(1) the requirements under § 303.0425 are met;
(2) at least:
(A) 10 percent of the units in the multifamily residential development are reserved for occupancy as lower income housing units, as defined under § 303.0425; and
(B) 40 percent of the units in the multifamily residential development are reserved for occupancy as moderate income housing units, as defined under § 303.0425;
(3) the corporation delivers to the presiding officer of the governing body of each taxing unit in which the development is to be located written notice of the development, at least 30 days before the date:
(A) the corporation takes action to approve a new multifamily residential development or the acquisition of an occupied multifamily residential development; and
(B) of any public hearing required to be held under this section;
(4) if a majority of the members of the board are not elected officials, the development is approved by the governing body of the municipality in which the development is located or, if the development is not located in a municipality, the county in which the development is located;
(5) for an occupied multifamily residential development that is acquired by a corporation and not otherwise subject to a land use restriction agreement under § 2306.185, Government Code:
(A) not less than 15 percent of the total gross cost of the existing development, as shown in the settlement statement, is expended on rehabilitating, renovating, reconstructing, or repairing the development, with initial expenditures and construction activities:
(i) beginning not later than the first anniversary of the date of the acquisition; and
(ii) finishing not later than the third anniversary of the date of the acquisition; or
(B) at least 25 percent of the units are reserved for occupancy as lower income housing units, as defined under § 303.0425, and the development is approved by the governing body of the municipality in which the development is located or, if the development is not located in a municipality, the county in which the development is located; and
(6) not less than 30 days before final approval of the development:
(A) the corporation or corporation’s sponsor conducts, or obtains from a professional entity that has experience underwriting affordable multifamily residential developments and does not have a financial interest in the applicable development, developer, or public facility user, an underwriting assessment of the proposed development that allows the corporation to make a good faith determination that:
(i) for an occupied multifamily residential development acquired by a corporation, the total annual amount of rent reduction on the income-restricted units provided at the development will be not less than 60 percent of the estimated amount of the annual ad valorem taxes that would be imposed on the property without an exemption under § 303.042(c) for the second, third, and fourth years after the date of acquisition by the corporation; and
(ii) for a newly constructed multifamily residential development, the development would not be feasible without the participation of the corporation; and
(B) the corporation publishes on its Internet website a copy of the underwriting assessment described by Paragraph (A).

(c) A multifamily residential development that is owned by a corporation created under this chapter by a housing authority and to which Subsection (a) applies must hold a public hearing, at a meeting of the authority’s governing body, to approve the development.
(d) Notwithstanding Subsection (b), an occupied multifamily residential development that is acquired by a corporation and to which Subsection (a) applies is eligible for an exemption under § 303.042(c) for:
(1) the one-year period following the date of the acquisition, regardless of whether the development complies with the requirements of Subsection (b); and
(2) a year following the year described by Subdivision (1) only if the development comes into compliance with the requirements of Subsection (b) not later than the first anniversary of the date of the acquisition.
(e) For the purposes of Subsection (a), a “public housing unit” is a residential unit for which the landlord receives a public housing operating subsidy. It does not include a unit for which payments are made to the landlord under the federal Section 8 Housing Choice Voucher Program.
(f) Notwithstanding Sections 303.042(a) and (b) and except as otherwise provided by this section, during the period that a corporation owns a particular public facility that is a multifamily residential development:
(1) a leasehold or other possessory interest in the real property of the public facility granted by the corporation shall be treated in the same manner as a leasehold or other possessory interest in real property granted by an authority under Section 379B.011(b); and
(2) the materials used by a person granted a possessory interest described by Subdivision (1) to improve the real property of the public facility shall be exempt from all sales and use taxes because the materials are for the benefit of the corporation.
(g) Subsection (f) does not apply to taxes imposed on a multifamily residential development by a conservation and reclamation district created under § 52, Article III, or § 59, Article XVI, Texas Constitution, that provides water, sewer, or drainage services 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.
(h) Subject to Subsection (i), an exemption under § 303.042(c) for a multifamily residential development to which Subsection (a) applies expires:
(1) for an occupied multifamily residential development that is acquired by a corporation, on the 30th anniversary of the date of the acquisition by the corporation; and
(2) for a multifamily residential development not described by Subdivision (1), on the 60th anniversary of the date the development receives, from the corporation or the corporation’s sponsor, the final approval under this chapter that is necessary to obtain the exemption.
(i) An exemption under § 303.042(c) for a multifamily residential development to which Subsection (a) applies may be extended for the same term of years applicable to the length of the development’s exemption under Subsection (h) if:
(1) in the five-year period preceding the expiration of the exemption under Subsection (h), the corporation provides notice of the extension to the governing body of the municipality in which the development is located or, if the development is not located in a municipality, the county in which the development is located;
(2) the extension is approved in the same manner as was required for the preceding approval of the exemption; and
(3) the development is in compliance with, and maintains compliance with, this section and § 303.0425.