1-1 By: Ogden (Senate Sponsor - Turner) H.B. No. 1096
1-2 (In the Senate - Received from the House April 19, 1993;
1-3 April 19, 1993, read first time and referred to Committee on
1-4 Finance; May 5, 1993, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 13, Nays 0; May 5, 1993,
1-6 sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Montford x
1-10 Turner x
1-11 Armbrister x
1-12 Barrientos x
1-13 Bivins x
1-14 Ellis x
1-15 Haley x
1-16 Moncrief x
1-17 Parker x
1-18 Ratliff x
1-19 Sims x
1-20 Truan x
1-21 Zaffirini x
1-22 COMMITTEE SUBSTITUTE FOR H.B. No. 1096 By: Turner
1-23 A BILL TO BE ENTITLED
1-24 AN ACT
1-25 relating to exempting from ad valorem taxation property owned by
1-26 certain charitable organizations.
1-27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-28 SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
1-29 adding Section 11.181 to read as follows:
1-30 Sec. 11.181. CHARITABLE ORGANIZATIONS IMPROVING PROPERTY FOR
1-31 LOW-INCOME HOUSING. (a) An organization is entitled to an
1-32 exemption from taxation of improved or unimproved real property it
1-33 owns if the organization:
1-34 (1) meets the requirements of a charitable
1-35 organization provided by Sections 11.18(e) and (f);
1-36 (2) owns the property for the purpose of building or
1-37 repairing housing on the property primarily with volunteer labor to
1-38 sell without profit to an individual or family satisfying the
1-39 organization's low-income and other eligibility requirements; and
1-40 (3) engages exclusively in the building, repair, and
1-41 sale of housing as described by Subdivision (2), and related
1-42 activities.
1-43 (b) Property may not be exempted under Subsection (a) after
1-44 the third anniversary of the date the organization acquires the
1-45 property.
1-46 (c) An organization entitled to an exemption under
1-47 Subsection (a) is also entitled to an exemption from taxation of
1-48 any building or tangible personal property the organization owns
1-49 and uses in the administration of its acquisition, building,
1-50 repair, or sale of property. To qualify for an exemption under
1-51 this subsection, property must be used exclusively by the
1-52 charitable organization, except that another individual or
1-53 organization may use the property for activities incidental to the
1-54 charitable organization's use that benefit the beneficiaries of the
1-55 charitable organization.
1-56 (d) For the purposes of Subsection (e), the chief appraiser
1-57 shall determine the market value of property exempted under
1-58 Subsection (a) and shall record the market value in the appraisal
1-59 records.
1-60 (e) If the organization that owns improved or unimproved
1-61 real property that has been exempted under Subsection (a) sells the
1-62 property to a person other than an individual or family satisfying
1-63 the organization's low-income or other eligibility requirements, a
1-64 penalty is imposed on the property equal to the amount of the taxes
1-65 that would have been imposed on the property in each tax year that
1-66 the property was exempted from taxation under Subsection (a), plus
1-67 interest at an annual rate of 12 percent calculated from the dates
1-68 on which the taxes would have become due.
2-1 (f) The charitable organization and the purchaser of the
2-2 property from that organization are jointly and severally liable
2-3 for the penalty and interest imposed under Subsection (e). A tax
2-4 lien in favor of all taxing units for which the penalty is imposed
2-5 attaches to the property to secure payment of the penalty and
2-6 interest.
2-7 (g) The chief appraiser shall make an entry in the appraisal
2-8 records for the property against which a penalty under Subsection
2-9 (e) is imposed and shall deliver written notice of the imposition
2-10 of the penalty and interest to the charitable organization and to
2-11 the person who purchased the property from that organization.
2-12 SECTION 2. Section 11.42(a), Tax Code, is amended to read as
2-13 follows:
2-14 (a) Except as provided by Subsection (b) <of this section>
2-15 and by Sections 11.421, 11.422, 11.434, <and> 11.435, and 11.436
2-16 <of this code>, eligibility for and amount of an exemption
2-17 authorized by this chapter for any tax year are determined by a
2-18 claimant's qualifications on January 1. A person who does not
2-19 qualify for an exemption on January 1 of any year may not receive
2-20 the exemption that year.
2-21 SECTION 3. Subchapter C, Chapter 11, Tax Code, is amended by
2-22 adding Section 11.436 to read as follows:
2-23 Sec. 11.436. APPLICATION FOR EXEMPTION OF CERTAIN PROPERTY
2-24 USED FOR LOW-INCOME HOUSING. (a) An organization that acquires
2-25 property that qualifies for an exemption under Section 11.181(a)
2-26 may apply for the exemption for the year of acquisition not later
2-27 than the 30th day after the date the organization acquires the
2-28 property, and the deadline provided by Section 11.43(d) does not
2-29 apply to the application for that year.
2-30 (b) If the application is granted, the exemption for that
2-31 year applies only to the portion of the year in which the property
2-32 qualifies for the exemption, as provided by Section 26.111. If the
2-33 application is granted after approval of the appraisal records by
2-34 the appraisal review board, the chief appraiser shall notify the
2-35 collector for each taxing unit in which the property is located.
2-36 The collector shall calculate the amount of tax due on the property
2-37 in that year as provided by Section 26.111 and shall refund any
2-38 amount paid in excess of that amount.
2-39 SECTION 4. Chapter 26, Tax Code, is amended by adding
2-40 Section 26.111 to read as follows:
2-41 Sec. 26.111. PRORATING TAXES--ACQUISITION BY CHARITABLE
2-42 ORGANIZATION. (a) If an organization acquires taxable property
2-43 that qualifies for and is granted an exemption under
2-44 Section 11.181(a) for the year in which the property was acquired,
2-45 the amount of tax due on the property for that year is calculated
2-46 by multiplying the amount of taxes imposed on the property for the
2-47 entire year as provided by Section 26.09 by a fraction, the
2-48 denominator of which is 365 and the numerator of which is the
2-49 number of days in that year before the date the charitable
2-50 organization acquired the property.
2-51 (b) If the exemption terminates during the year of
2-52 acquisition, the tax due is calculated by multiplying the taxes
2-53 imposed for the entire year as provided by Section 26.09 by a
2-54 fraction, the denominator of which is 365 and the numerator of
2-55 which is the number of days the property does not qualify for the
2-56 exemption.
2-57 SECTION 5. This Act takes effect January 1, 1994.
2-58 SECTION 6. The importance of this legislation and the
2-59 crowded condition of the calendars in both houses create an
2-60 emergency and an imperative public necessity that the
2-61 constitutional rule requiring bills to be read on three several
2-62 days in each house be suspended, and this rule is hereby suspended.
2-63 * * * * *
2-64 Austin,
2-65 Texas
2-66 May 5, 1993
2-67 Hon. Bob Bullock
2-68 President of the Senate
2-69 Sir:
2-70 We, your Committee on Finance to which was referred H.B. No. 1096,
3-1 have had the same under consideration, and I am instructed to
3-2 report it back to the Senate with the recommendation that it do not
3-3 pass, but that the Committee Substitute adopted in lieu thereof do
3-4 pass and be printed.
3-5 Montford,
3-6 Chairman
3-7 * * * * *
3-8 WITNESSES
3-9 No witnesses appeared on H.B. No. 1096.