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.