1-1 AN ACT
1-2 relating to an exemption from ad valorem taxation for property of
1-3 certain nonprofit organizations while improvements are under
1-4 construction.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 11.18, Tax Code, is amended by amending
1-7 Subsection (a) and adding Subsections (l) and (m) to read as
1-8 follows:
1-9 (a) An organization that qualifies as a charitable
1-10 organization as provided by this section is entitled to an
1-11 exemption from taxation of:
1-12 (1) the buildings and tangible personal property that:
1-13 (A) [(1)] are owned by the charitable
1-14 organization; and
1-15 (B) [(2)] except as permitted by Subsection (b)
1-16 [of this section], are used exclusively by qualified charitable
1-17 organizations; and
1-18 (2) the real property owned by the charitable
1-19 organization consisting of:
1-20 (A) an incomplete improvement that:
1-21 (i) is under active construction or other
1-22 physical preparation; and
1-23 (ii) is designed and intended to be used
1-24 exclusively by qualified charitable organizations; and
2-1 (B) the land on which the incomplete improvement
2-2 is located that will be reasonably necessary for the use of the
2-3 improvement by qualified charitable organizations.
2-4 (l) A property may not be exempted under Subsection (a)(2)
2-5 for more than three years.
2-6 (m) For purposes of Subsection (a)(2), an incomplete
2-7 improvement is under physical preparation if the charitable
2-8 organization has:
2-9 (1) engaged in architectural or engineering work, soil
2-10 testing, land clearing activities, or site improvement work
2-11 necessary for the construction of the improvement; or
2-12 (2) conducted an environmental or land use study
2-13 relating to the construction of the improvement.
2-14 SECTION 2. Section 11.19, Tax Code, is amended by amending
2-15 Subsection (a) and adding Subsections (e) and (f) to read as
2-16 follows:
2-17 (a) An association that qualifies as a youth development
2-18 association as provided by Subsection (d) [of this section] is
2-19 entitled to an exemption from taxation of:
2-20 (1) the tangible property that:
2-21 (A) [(1)] is owned by the association;
2-22 (B) [(2)] except as permitted by Subsection (b)
2-23 [of this section], is used exclusively by qualified youth
2-24 development associations; and
2-25 (C) [(3)] is reasonably necessary for the
2-26 operation of the association; and
2-27 (2) the real property owned by the youth development
3-1 association consisting of:
3-2 (A) an incomplete improvement that:
3-3 (i) is under active construction or other
3-4 physical preparation; and
3-5 (ii) is designed and intended to be used
3-6 exclusively by qualified youth development associations when
3-7 complete; and
3-8 (B) the land on which the incomplete improvement
3-9 is located that will be reasonably necessary for the use of the
3-10 improvement by qualified youth development associations.
3-11 (e) A property may not be exempted under Subsection (a)(2)
3-12 for more than three years.
3-13 (f) For purposes of Subsection (a)(2), an incomplete
3-14 improvement is under physical preparation if the youth development
3-15 association has:
3-16 (1) engaged in architectural or engineering work, soil
3-17 testing, land clearing activities, or site improvement work
3-18 necessary for the construction of the improvement; or
3-19 (2) conducted an environmental or land use study
3-20 relating to the construction of the improvement.
3-21 SECTION 3. Section 11.20(f), Tax Code, is amended to read as
3-22 follows:
3-23 (f) A property may not be exempted under Subsection (a)(5)
3-24 [of this section] for more than three [two] years.
3-25 SECTION 4. Section 11.21, Tax Code, is amended by amending
3-26 Subsection (a) and adding Subsections (g) and (h) to read as
3-27 follows:
4-1 (a) A person is entitled to an exemption from taxation of:
4-2 (1) the buildings and tangible personal property that
4-3 the person [he] owns and that are used for a school that is
4-4 qualified as provided by Subsection (d) [of this section] if:
4-5 (A) [(1)] the school is operated exclusively by
4-6 the person owning the property;
4-7 (B) [(2)] except as permitted by Subsection (b)
4-8 [of this section], the buildings and tangible personal property are
4-9 used exclusively for educational functions; and
4-10 (C) [(3)] the buildings and tangible personal
4-11 property are reasonably necessary for the operation of the school;
4-12 and
4-13 (2) the real property owned by the person consisting
4-14 of:
4-15 (A) an incomplete improvement that:
4-16 (i) is under active construction or other
4-17 physical preparation; and
4-18 (ii) is designed and intended to be used
4-19 for a school that is qualified as provided by Subsection (d); and
4-20 (B) the land on which the incomplete improvement
4-21 is located that will be reasonably necessary for the use of the
4-22 improvement for a school that is qualified as provided by
4-23 Subsection (d).
4-24 (g) A property may not be exempted under Subsection (a)(2)
4-25 for more than three years.
4-26 (h) For purposes of Subsection (a)(2), an incomplete
4-27 improvement is under physical preparation if the person has:
5-1 (1) engaged in architectural or engineering work, soil
5-2 testing, land clearing activities, or site improvement work
5-3 necessary for the construction of the improvement; or
5-4 (2) conducted an environmental or land use study
5-5 relating to the construction of the improvement.
5-6 SECTION 5. Section 11.23, Tax Code, is amended by adding
5-7 Subsection (l) to read as follows:
5-8 (l) Incomplete Improvements. A person described by
5-9 Subsection (a)-(e), (g), or (i)-(k) is entitled to an exemption
5-10 from taxation of the real property owned by the person consisting
5-11 of an incomplete improvement that is under active construction or
5-12 other physical preparation and that is designed and intended to be
5-13 used by the person for a purpose described by that subsection when
5-14 complete and the land on which the incomplete improvement is
5-15 located that will be reasonably necessary for the person's use of
5-16 the improvement for that purpose. A property may not be exempted
5-17 under this subsection for more than three years. For purposes of
5-18 this subsection, an incomplete improvement is under physical
5-19 preparation if the person has:
5-20 (1) engaged in architectural or engineering work, soil
5-21 testing, land clearing activities, or site improvement work
5-22 necessary for the construction of the improvement; or
5-23 (2) conducted an environmental or land use study
5-24 relating to the construction of the improvement.
5-25 SECTION 6. Section 11.30, Tax Code, is amended to read as
5-26 follows:
5-27 Sec. 11.30. NONPROFIT WATER SUPPLY OR WASTEWATER SERVICE
6-1 CORPORATION. (a) A corporation organized under Chapter 67, Water
6-2 Code [76, Acts of the 43rd Legislature, 1st Called Session, 1933
6-3 (Article 1434a, Vernon's Texas Civil Statutes)], that provides in
6-4 the bylaws of the corporation that on dissolution of the
6-5 corporation the assets of the corporation remaining after discharge
6-6 of the corporation's indebtedness shall be transferred to an entity
6-7 that provides a water supply or wastewater service, or both, that
6-8 is exempt from ad valorem taxation is entitled to an exemption from
6-9 taxation of:
6-10 (1) property that the corporation owns and that is
6-11 reasonably necessary for and used in the operation of the
6-12 corporation:
6-13 (A) [(1)] to acquire, treat, store, transport,
6-14 sell, or distribute water; or
6-15 (B) [(2)] to provide wastewater service; and
6-16 (2) the real property owned by the corporation
6-17 consisting of:
6-18 (A) an incomplete improvement that:
6-19 (i) is under active construction or other
6-20 physical preparation; and
6-21 (ii) is designed and intended to be used
6-22 in the operation of the corporation for a purpose described by
6-23 Subdivision (1) when complete; and
6-24 (B) the land on which the incomplete improvement
6-25 is located that will be reasonably necessary for the use of the
6-26 improvement in the operation of the corporation for a purpose
6-27 described by Subdivision (1).
7-1 (b) A property may not be exempted under Subsection (a)(2)
7-2 for more than three years.
7-3 (c) For purposes of Subsection (a)(2), an incomplete
7-4 improvement is under physical preparation if the corporation has:
7-5 (1) engaged in architectural or engineering work, soil
7-6 testing, land clearing activities, or site improvement work
7-7 necessary for the construction of the improvement; or
7-8 (2) conducted an environmental or land use study
7-9 relating to the construction of the improvement.
7-10 SECTION 7. The importance of this legislation and the
7-11 crowded condition of the calendars in both houses create an
7-12 emergency and an imperative public necessity that the
7-13 constitutional rule requiring bills to be read on three several
7-14 days in each house be suspended, and this rule is hereby suspended,
7-15 and that this Act take effect and be in force from and after its
7-16 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 873 was passed by the House on April
16, 1999, by the following vote: Yeas 136, Nays 0, 2 present, not
voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 873 was passed by the Senate on May
6, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor