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A BILL TO BE ENTITLED
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AN ACT
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relating to community land trusts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 373B.003, Local Government Code, is |
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amended to read as follows: |
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Sec. 373B.003. NATURE OF TRUST. A community land trust |
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created or designated under Section 373B.002 must be a nonprofit |
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organization that is: |
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(1) created to acquire and hold land for the benefit of |
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developing and preserving long-term affordable housing in the |
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municipality or county; and |
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(2) organized as: |
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(A) a nonprofit corporation that is exempt from |
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federal income taxation under Section 501(a), Internal Revenue Code |
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of 1986, by being listed [certified] as an exempt organization |
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under Section 501(c)(3) of that code; |
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(B) a limited partnership of which a nonprofit |
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corporation described by Paragraph (A) controls 100 percent of the |
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general partner interest; or |
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(C) a limited liability company for which a |
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nonprofit corporation described by Paragraph (A) serves as the only |
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member. |
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SECTION 2. Section 23.21, Tax Code, is amended by amending |
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Subsections (c) and (d) and adding Subsection (c-1) to read as |
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follows: |
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(c) In appraising land [or a housing unit] that is leased by |
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a community land trust created or designated under Section |
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373B.002, Local Government Code, to a family meeting the |
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income-eligibility standards established by Section 373B.006 of |
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that code under regulations or restrictions limiting the amount |
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that the family may be required to pay for the rental or lease of the |
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property, the chief appraiser shall use the income method of |
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appraisal as described by Section 23.012 to determine the appraised |
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value of the property. The chief appraiser shall use that method |
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regardless of whether the chief appraiser considers that method to |
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be the most appropriate method of appraising the property. In |
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appraising the property, the chief appraiser shall: |
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(1) take into account the uses and limitations |
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applicable to the property, including the terms of the lease |
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applicable to the property, for purposes of computing the actual |
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rental income from the property and projecting future rental |
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income; and |
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(2) use the same capitalization rate that the chief |
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appraiser uses to appraise other rent-restricted properties |
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[extent to which that use and limitation reduce the market value of |
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the property]. |
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(c-1) In appraising a housing unit that is leased by a |
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community land trust created or designated under Section 373B.002, |
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Local Government Code, to a family meeting the income-eligibility |
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standards established by Section 373B.006 of that code under |
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regulations or restrictions limiting the amount that the family may |
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be required to pay for the rental or lease of the property, the |
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chief appraiser shall use the income method of appraisal as |
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described by Section 23.012 to determine the appraised value of the |
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property. The chief appraiser shall use that method regardless of |
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whether the chief appraiser considers that method to be the most |
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appropriate method of appraising the property. In appraising the |
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property, the chief appraiser shall: |
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(1) take into account the uses and limitations |
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applicable to the property, including the terms of the lease |
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applicable to the property, for purposes of computing the actual |
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rental income from the property and projecting future rental |
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income; and |
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(2) use the same capitalization rate that the chief |
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appraiser uses to appraise other rent-restricted properties. |
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(d) In appraising a housing unit that the owner or a |
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predecessor of the owner acquired from a community land trust |
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created or designated under Section 373B.002, Local Government |
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Code, and that is located on land owned by the trust and leased by |
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the owner of the housing unit, the chief appraiser shall take into |
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account the extent to which any regulations or restrictions |
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limiting the right of the owner of the housing unit to sell the |
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housing unit, including any limitation on the price for which the |
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housing unit may be sold, reduce the market value of the housing |
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unit. If the sale of the housing unit is subject to an eligible land |
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use restriction, the chief appraiser may not appraise the housing |
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unit in a tax year for an amount that exceeds the price for which the |
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housing unit may be sold under the eligible land use restriction in |
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that tax year. For purposes of this subsection, "eligible land use |
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restriction" means an agreement, deed restriction, or restrictive |
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covenant applicable to the housing unit that: |
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(1) is recorded in the real property records; |
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(2) has a term of at least 40 years; |
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(3) restricts the price for which the housing unit may |
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be sold to a price that is equal to or less than the market value of |
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the housing unit; and |
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(4) restricts the sale of the housing unit to a family |
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meeting the income-eligibility standards established by Section |
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373B.006, Local Government Code. |
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SECTION 3. Section 26.10, Tax Code, is amended by amending |
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Subsection (a) and adding Subsection (d) to read as follows: |
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(a) If the appraisal roll shows that a property is eligible |
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for taxation for only part of a year because an exemption, other |
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than a residence homestead exemption or an exemption described by |
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Subsection (d), applicable on January 1 of that year terminated |
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during the year, the tax due against the property is calculated by |
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multiplying the tax due for the entire year as determined as |
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provided by Section 26.09 [of this code] by a fraction, the |
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denominator of which is 365 and the numerator of which is the number |
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of days the exemption is not applicable. |
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(d) Subsection (a) does not apply to an exemption for land |
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received by an organization under Section 11.181, 11.182, or |
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11.1825 that terminated during the year because of the sale by the |
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organization of a housing unit located on the land if: |
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(1) the housing unit is sold to a family meeting the |
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income-eligibility standards established by Section 373B.006, |
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Local Government Code; |
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(2) the organization retains title to the land on |
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which the housing unit is located; and |
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(3) before the date on which the housing unit is sold, |
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the organization is designated a community land trust by the |
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governing body of a municipality or county as provided by Section |
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373B.002, Local Government Code. |
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SECTION 4. This Act applies only to ad valorem taxes imposed |
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for a tax year that begins on or after the effective date of this |
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Act. |
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SECTION 5. This Act takes effect September 1, 2021. |