By Naishtat H.B. No. 1851
75R6990 JD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the exemption from ad valorem taxation of property
1-3 owned by certain charitable organizations operating public radio
1-4 stations.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 11.18(d), Tax Code, is amended to read as
1-7 follows:
1-8 (d) A charitable organization must be organized exclusively
1-9 to perform religious, charitable, scientific, literary, or
1-10 educational purposes and, except as permitted by Subsection (h) of
1-11 this section, engage exclusively in performing one or more of the
1-12 following charitable functions:
1-13 (1) providing medical care without regard to the
1-14 beneficiaries' ability to pay, which in the case of a nonprofit
1-15 hospital or hospital system means providing charity care and
1-16 community benefits as set forth in Paragraph (A), (B), (C), (D),
1-17 (E), (F), (G), or (H):
1-18 (A) charity care and government-sponsored
1-19 indigent health care are provided at a level which is reasonable in
1-20 relation to the community needs, as determined through the
1-21 community needs assessment, the available resources of the hospital
1-22 or hospital system, and the tax-exempt benefits received by the
1-23 hospital or hospital system;
1-24 (B) charity care and government-sponsored
2-1 indigent health care are provided in an amount equal to at least
2-2 four percent of the hospital's or hospital system's net patient
2-3 revenue;
2-4 (C) charity care and government-sponsored
2-5 indigent health care are provided in an amount equal to at least
2-6 100 percent of the hospital's or hospital system's tax-exempt
2-7 benefits, excluding federal income tax;
2-8 (D) a nonprofit hospital that has been
2-9 designated as a disproportionate share hospital under the state
2-10 Medicaid program in the current year or in either of the previous
2-11 two fiscal years shall be considered to have provided a reasonable
2-12 amount of charity care and government-sponsored indigent health
2-13 care and shall be deemed in compliance with the standards in this
2-14 subsection;
2-15 (E) for tax years before 1996, charity care and
2-16 community benefits are provided in a combined amount equal to at
2-17 least five percent of the hospital's or hospital system's net
2-18 patient revenue, provided that charity care and
2-19 government-sponsored indigent health care are provided in an amount
2-20 equal to at least three percent of net patient revenue;
2-21 (F) beginning with the hospital's or hospital
2-22 system's tax year starting after 1995, charity care and community
2-23 benefits are provided in a combined amount equal to at least five
2-24 percent of the hospital's or hospital system's net patient revenue,
2-25 provided that charity care and government-sponsored indigent health
2-26 care are provided in an amount equal to at least four percent of
2-27 net patient revenue;
3-1 (G) a hospital operated on a nonprofit basis
3-2 that is located in a county with a population of less than 50,000
3-3 and in which the entire county or the population of the entire
3-4 county has been designated as a health professionals shortage area
3-5 is considered to be in compliance with the standards provided by
3-6 this subsection; or
3-7 (H) a hospital providing health care services to
3-8 inpatients or outpatients without receiving any payment for
3-9 providing those services from any source, including the patient or
3-10 person legally obligated to support the patient, third-party
3-11 payors, Medicare, Medicaid, or any other state or local indigent
3-12 care program but excluding charitable donations, legacies,
3-13 bequests, or grants or payments for research, is considered to be
3-14 in compliance with the standards provided by this subsection;
3-15 (2) providing support or relief to orphans,
3-16 delinquent, dependent, or handicapped children in need of
3-17 residential care, abused or battered spouses or children in need of
3-18 temporary shelter, the impoverished, or victims of natural disaster
3-19 without regard to the beneficiaries' ability to pay;
3-20 (3) providing support to elderly persons or the
3-21 handicapped without regard to the beneficiaries' ability to pay;
3-22 (4) preserving a historical landmark or site;
3-23 (5) promoting or operating a museum, zoo, library,
3-24 theater of the dramatic or performing arts, or symphony orchestra
3-25 or choir;
3-26 (6) promoting or providing humane treatment of
3-27 animals;
4-1 (7) acquiring, storing, transporting, selling, or
4-2 distributing water for public use;
4-3 (8) answering fire alarms and extinguishing fires with
4-4 no compensation or only nominal compensation to the members of the
4-5 organization;
4-6 (9) promoting the athletic development of boys or
4-7 girls under the age of 18 years;
4-8 (10) preserving or conserving wildlife;
4-9 (11) promoting educational development through loans
4-10 or scholarships to students;
4-11 (12) providing halfway house services pursuant to a
4-12 certification as a halfway house by the Board of Pardons and
4-13 Paroles;
4-14 (13) providing permanent housing and related social,
4-15 health care, and educational facilities for persons who are 62
4-16 years of age or older without regard to the residents' ability to
4-17 pay;
4-18 (14) promoting or operating an art gallery, museum, or
4-19 collection, in a permanent location or on tour, that is open to the
4-20 public;
4-21 (15) providing for the organized solicitation and
4-22 collection for distributions through gifts, grants, and agreements
4-23 to nonprofit charitable, education, religious, and youth
4-24 organizations that provide direct human, health, and welfare
4-25 services;
4-26 (16) performing biomedical or scientific research or
4-27 biomedical or scientific education for the benefit of the public;
5-1 [or]
5-2 (17) operating a television station that produces or
5-3 broadcasts educational, cultural, or other public interest
5-4 programming and that receives grants from the Corporation for
5-5 Public Broadcasting under 47 U.S.C. Section 396; or
5-6 (18) operating in a municipality with a population of
5-7 more than 470,000 a noncommercial educational Class C FM station
5-8 that broadcasts educational, cultural, or other public interest
5-9 programming and does not receive grants from the Corporation for
5-10 Public Broadcasting.
5-11 For purposes of satisfying Paragraph (F) of Subdivision (1),
5-12 a hospital or hospital system may not change its existing fiscal
5-13 year unless the hospital or hospital system changes its ownership
5-14 or corporate structure as a result of a sale or merger.
5-15 For purposes of this subsection, a hospital that satisfies
5-16 Paragraph (A), (D), (G), or (H) of Subdivision (1) shall be
5-17 excluded in determining a hospital system's compliance with the
5-18 standards provided by Paragraph (B), (C), (E), or (F) of
5-19 Subdivision (1).
5-20 For purposes of this subsection, the terms "charity care,"
5-21 "government-sponsored indigent health care," "health care
5-22 organization," "hospital system," "net patient revenue," "nonprofit
5-23 hospital," and "tax-exempt benefits" have the meanings set forth in
5-24 Sections 311.031 and 311.042, Health and Safety Code. A
5-25 determination of the amount of community benefits and charity care
5-26 and government-sponsored indigent health care provided by a
5-27 hospital or hospital system and the hospital's or hospital system's
6-1 compliance with the requirements of Section 311.045, Health and
6-2 Safety Code, shall be based on the most recently completed and
6-3 audited prior fiscal year of the hospital or hospital system.
6-4 The providing of charity care and government-sponsored
6-5 indigent health care in accordance with Paragraph (A) of
6-6 Subdivision (1) shall be guided by the prudent business judgment of
6-7 the hospital which will ultimately determine the appropriate level
6-8 of charity care and government-sponsored indigent health care based
6-9 on the community needs, the available resources of the hospital,
6-10 the tax-exempt benefits received by the hospital, and other factors
6-11 that may be unique to the hospital, such as the hospital's volume
6-12 of Medicare and Medicaid patients. These criteria shall not be
6-13 determinative factors, but shall be guidelines contributing to the
6-14 hospital's decision along with other factors which may be unique to
6-15 the hospital. The formulas contained in Paragraphs (B), (C), (E),
6-16 and (F) of Subdivision (1) shall also not be considered
6-17 determinative of a reasonable amount of charity care and
6-18 government-sponsored indigent health care.
6-19 The requirements of this subsection shall not apply to the
6-20 extent a hospital or hospital system demonstrates that reductions
6-21 in the amount of community benefits, charity care, and
6-22 government-sponsored indigent health care are necessary to maintain
6-23 financial reserves at a level required by a bond covenant, are
6-24 necessary to prevent the hospital or hospital system from
6-25 endangering its ability to continue operations, or if the hospital
6-26 or hospital system, as a result of a natural or other disaster, is
6-27 required substantially to curtail its operations.
7-1 In any fiscal year that a hospital or hospital system,
7-2 through unintended miscalculation, fails to meet any of the
7-3 standards in Subdivision (1), the hospital or hospital system shall
7-4 not lose its tax-exempt status without the opportunity to cure the
7-5 miscalculation in the fiscal year following the fiscal year the
7-6 failure is discovered by both meeting one of the standards and
7-7 providing an additional amount of charity care and
7-8 government-sponsored indigent health care that is equal to the
7-9 shortfall from the previous fiscal year. A hospital or hospital
7-10 system may apply this provision only once every five years.
7-11 SECTION 2. This Act takes effect January 1, 1998.
7-12 SECTION 3. The importance of this legislation and the
7-13 crowded condition of the calendars in both houses create an
7-14 emergency and an imperative public necessity that the
7-15 constitutional rule requiring bills to be read on three several
7-16 days in each house be suspended, and this rule is hereby suspended.