H.B. No. 1096
    1-1                                AN ACT
    1-2  relating to exempting from ad valorem taxation property owned by
    1-3  certain charitable organizations.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by
    1-6  adding Section 11.181 to read as follows:
    1-7        Sec. 11.181.  CHARITABLE ORGANIZATIONS IMPROVING PROPERTY FOR
    1-8  LOW-INCOME HOUSING.  (a)  An organization is entitled to an
    1-9  exemption from taxation of improved or unimproved real property it
   1-10  owns if the organization:
   1-11              (1)  meets the requirements of a charitable
   1-12  organization provided by Sections 11.18(e) and (f);
   1-13              (2)  owns the property for the purpose of building or
   1-14  repairing housing on the property primarily with volunteer labor to
   1-15  sell without profit to an individual or family satisfying the
   1-16  organization's low-income and other eligibility requirements; and
   1-17              (3)  engages exclusively in the building, repair, and
   1-18  sale of housing as described by Subdivision (2), and related
   1-19  activities.
   1-20        (b)  Property may not be exempted under Subsection (a) after
   1-21  the third anniversary of the date the organization acquires the
   1-22  property.
   1-23        (c)  An organization entitled to an exemption under
   1-24  Subsection (a) is also entitled to an exemption from taxation of
    2-1  any building or tangible personal property the organization owns
    2-2  and uses in the administration of its acquisition, building,
    2-3  repair, or sale of property.  To qualify for an exemption under
    2-4  this subsection, property must be used exclusively by the
    2-5  charitable organization, except that another individual or
    2-6  organization may use the property for activities incidental to the
    2-7  charitable organization's use that benefit the beneficiaries of the
    2-8  charitable organization.
    2-9        (d)  For the purposes of Subsection (e), the chief appraiser
   2-10  shall determine the market value of property exempted under
   2-11  Subsection (a) and shall record the market value in the appraisal
   2-12  records.
   2-13        (e)  If the organization that owns improved or unimproved
   2-14  real property that has been exempted under Subsection (a) sells the
   2-15  property to a person other than an individual or family satisfying
   2-16  the organization's low-income or other eligibility requirements, a
   2-17  penalty is imposed on the property equal to the amount of the taxes
   2-18  that would have been imposed on the property in each tax year that
   2-19  the property was exempted from taxation under Subsection (a), plus
   2-20  interest at an annual rate of 12 percent calculated from the dates
   2-21  on which the taxes would have become due.
   2-22        (f)  The charitable organization and the purchaser of the
   2-23  property from that organization are jointly and severally liable
   2-24  for the penalty and interest imposed under Subsection (e).  A tax
   2-25  lien in favor of all taxing units for which the penalty is imposed
   2-26  attaches to the property to secure payment of the penalty and
   2-27  interest.
    3-1        (g)  The chief appraiser shall make an entry in the appraisal
    3-2  records for the property against which a penalty under Subsection
    3-3  (e) is imposed and shall deliver written notice of the imposition
    3-4  of the penalty and interest to the charitable organization and to
    3-5  the person who purchased the property from that organization.
    3-6        SECTION 2.  Section 11.42(a), Tax Code, is amended to read as
    3-7  follows:
    3-8        (a)  Except as provided by Subsection (b) <of this section>
    3-9  and by Sections 11.421, 11.422, 11.434, <and> 11.435, and 11.436
   3-10  <of this code>, eligibility for and amount of an exemption
   3-11  authorized by this chapter for any tax year are determined by a
   3-12  claimant's qualifications on January 1.  A person who does not
   3-13  qualify for an exemption on January 1 of any year may not receive
   3-14  the exemption that year.
   3-15        SECTION 3.  Subchapter C, Chapter 11, Tax Code, is amended by
   3-16  adding Section 11.436 to read as follows:
   3-17        Sec. 11.436.  APPLICATION FOR EXEMPTION OF CERTAIN PROPERTY
   3-18  USED FOR LOW-INCOME HOUSING.  (a)  An organization that acquires
   3-19  property that qualifies for an exemption under Section 11.181(a)
   3-20  may apply for the exemption for the year of acquisition not later
   3-21  than the 30th day after the date the organization acquires the
   3-22  property, and the deadline provided by Section 11.43(d) does not
   3-23  apply to the application for that year.
   3-24        (b)  If the application is granted, the exemption for that
   3-25  year applies only to the portion of the year in which the property
   3-26  qualifies for the exemption, as provided by Section 26.111.  If the
   3-27  application is granted after approval of the appraisal records by
    4-1  the appraisal review board, the chief appraiser shall notify the
    4-2  collector for each taxing unit in which the property is located.
    4-3  The collector shall calculate the amount of tax due on the property
    4-4  in that year as provided by Section 26.111 and shall refund any
    4-5  amount paid in excess of that amount.
    4-6        SECTION 4.  Chapter 26, Tax Code, is amended by adding
    4-7  Section 26.111 to read as follows:
    4-8        Sec. 26.111.  PRORATING TAXES--ACQUISITION BY CHARITABLE
    4-9  ORGANIZATION.  (a)  If an organization acquires taxable property
   4-10  that qualifies for and is granted an exemption under
   4-11  Section 11.181(a) for the year in which the property was acquired,
   4-12  the amount of tax due on the property for that year is calculated
   4-13  by multiplying the amount of taxes imposed on the property for the
   4-14  entire year as provided by Section 26.09 by a fraction, the
   4-15  denominator of which is 365 and the numerator of which is the
   4-16  number of days in that year before the date the charitable
   4-17  organization acquired the property.
   4-18        (b)  If the exemption terminates during the year of
   4-19  acquisition, the tax due is calculated by multiplying the taxes
   4-20  imposed for the entire year as provided by Section 26.09 by a
   4-21  fraction, the denominator of which is 365 and the numerator of
   4-22  which is the number of days the property does not qualify for the
   4-23  exemption.
   4-24        SECTION 5.  This Act takes effect January 1, 1994.
   4-25        SECTION 6.  The importance of this legislation and the
   4-26  crowded condition of the calendars in both houses create an
   4-27  emergency and an imperative public necessity that the
    5-1  constitutional rule requiring bills to be read on three several
    5-2  days in each house be suspended, and this rule is hereby suspended.