By Hochberg H.B. No. 873
76R3185 SMH-D
A BILL TO BE ENTITLED
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 11.17, Tax Code, is amended to read as
1-7 follows:
1-8 Sec. 11.17. CEMETERIES. (a) A person is entitled to an
1-9 exemption from taxation of:
1-10 (1) the property the person [he] owns and uses
1-11 exclusively for human burial and does not hold for profit; and
1-12 (2) the real property owned by the person consisting
1-13 of:
1-14 (A) an incomplete improvement that:
1-15 (i) is under active construction or other
1-16 physical preparation;
1-17 (ii) is designed and intended to be used
1-18 by the person for human burial when complete; and
1-19 (iii) is not held for profit; and
1-20 (B) the land on which the incomplete improvement
1-21 is located that:
1-22 (i) will be reasonably necessary for the
1-23 person's use of the improvement for human burial; and
1-24 (ii) is not held for profit.
2-1 (b) A property may not be exempted under Subsection (a)(2)
2-2 for more than three years.
2-3 (c) For purposes of Subsection (a)(2), an incomplete
2-4 improvement is under physical preparation if the person has:
2-5 (1) engaged in architectural or engineering work, soil
2-6 testing, land clearing activities, or site improvement work
2-7 necessary for the construction of the improvement; or
2-8 (2) conducted an environmental or land use study
2-9 relating to the construction of the improvement.
2-10 SECTION 2. Section 11.18, Tax Code, is amended by amending
2-11 Subsection (a) and adding Subsections (l) and (m) to read as
2-12 follows:
2-13 (a) An organization that qualifies as a charitable
2-14 organization as provided by this section is entitled to an
2-15 exemption from taxation of:
2-16 (1) the buildings and tangible personal property that:
2-17 (A) [(1)] are owned by the charitable
2-18 organization; and
2-19 (B) [(2)] except as permitted by Subsection (b)
2-20 [of this section], are used exclusively by qualified charitable
2-21 organizations; and
2-22 (2) the real property owned by the charitable
2-23 organization consisting of:
2-24 (A) an incomplete improvement that:
2-25 (i) is under active construction or other
2-26 physical preparation; and
2-27 (ii) is designed and intended to be used
3-1 exclusively by qualified charitable organizations; and
3-2 (B) the land on which the incomplete improvement
3-3 is located that will be reasonably necessary for the use of the
3-4 improvement by qualified charitable organizations.
3-5 (l) A property may not be exempted under Subsection (a)(2)
3-6 for more than three years.
3-7 (m) For purposes of Subsection (a)(2), an incomplete
3-8 improvement is under physical preparation if the charitable
3-9 organization has:
3-10 (1) engaged in architectural or engineering work, soil
3-11 testing, land clearing activities, or site improvement work
3-12 necessary for the construction of the improvement; or
3-13 (2) conducted an environmental or land use study
3-14 relating to the construction of the improvement.
3-15 SECTION 3. Section 11.19, Tax Code, is amended by amending
3-16 Subsection (a) and adding Subsections (e) and (f) to read as
3-17 follows:
3-18 (a) An association that qualifies as a youth development
3-19 association as provided by Subsection (d) [of this section] is
3-20 entitled to an exemption from taxation of:
3-21 (1) the tangible property that:
3-22 (A) [(1)] is owned by the association;
3-23 (B) [(2)] except as permitted by Subsection (b)
3-24 [of this section], is used exclusively by qualified youth
3-25 development associations; and
3-26 (C) [(3)] is reasonably necessary for the
3-27 operation of the association; and
4-1 (2) the real property owned by the youth development
4-2 association consisting of:
4-3 (A) an incomplete improvement that:
4-4 (i) is under active construction or other
4-5 physical preparation; and
4-6 (ii) is designed and intended to be used
4-7 exclusively by qualified youth development associations when
4-8 complete; and
4-9 (B) the land on which the incomplete improvement
4-10 is located that will be reasonably necessary for the use of the
4-11 improvement by qualified youth development associations.
4-12 (e) A property may not be exempted under Subsection (a)(2)
4-13 for more than three years.
4-14 (f) For purposes of Subsection (a)(2), an incomplete
4-15 improvement is under physical preparation if the youth development
4-16 association has:
4-17 (1) engaged in architectural or engineering work, soil
4-18 testing, land clearing activities, or site improvement work
4-19 necessary for the construction of the improvement; or
4-20 (2) conducted an environmental or land use study
4-21 relating to the construction of the improvement.
4-22 SECTION 4. Section 11.20(f), Tax Code, is amended to read as
4-23 follows:
4-24 (f) A property may not be exempted under Subsection (a)(5)
4-25 [of this section] for more than three [two] years.
4-26 SECTION 5. Section 11.21, Tax Code, is amended by amending
4-27 Subsection (a) and adding Subsections (g) and (h) to read as
5-1 follows:
5-2 (a) A person is entitled to an exemption from taxation of:
5-3 (1) the buildings and tangible personal property that
5-4 the person [he] owns and that are used for a school that is
5-5 qualified as provided by Subsection (d) [of this section] if:
5-6 (A) [(1)] the school is operated exclusively by
5-7 the person owning the property;
5-8 (B) [(2)] except as permitted by Subsection (b)
5-9 [of this section], the buildings and tangible personal property are
5-10 used exclusively for educational functions; and
5-11 (C) [(3)] the buildings and tangible personal
5-12 property are reasonably necessary for the operation of the school;
5-13 and
5-14 (2) the real property owned by the person consisting
5-15 of:
5-16 (A) an incomplete improvement that:
5-17 (i) is under active construction or other
5-18 physical preparation; and
5-19 (ii) is designed and intended to be used
5-20 for a school that is qualified as provided by Subsection (d); and
5-21 (B) the land on which the incomplete improvement
5-22 is located that will be reasonably necessary for the use of the
5-23 improvement for a school that is qualified as provided by
5-24 Subsection (d).
5-25 (g) A property may not be exempted under Subsection (a)(2)
5-26 for more than three years.
5-27 (h) For purposes of Subsection (a)(2), an incomplete
6-1 improvement is under physical preparation if the person has:
6-2 (1) engaged in architectural or engineering work, soil
6-3 testing, land clearing activities, or site improvement work
6-4 necessary for the construction of the improvement; or
6-5 (2) conducted an environmental or land use study
6-6 relating to the construction of the improvement.
6-7 SECTION 6. Section 11.23, Tax Code, is amended by adding
6-8 Subsection (l) to read as follows:
6-9 (l) Incomplete Improvements. A person described by
6-10 Subsection (a)-(e), (g), or (i)-(k) is entitled to an exemption
6-11 from taxation of the real property owned by the person consisting
6-12 of an incomplete improvement that is under active construction or
6-13 other physical preparation and that is designed and intended to be
6-14 used by the person for a purpose described by that subsection when
6-15 complete and the land on which the incomplete improvement is
6-16 located that will be reasonably necessary for the person's use of
6-17 the improvement for that purpose. A property may not be exempted
6-18 under this subsection for more than three years. For purposes of
6-19 this subsection, an incomplete improvement is under physical
6-20 preparation if the person has:
6-21 (1) engaged in architectural or engineering work, soil
6-22 testing, land clearing activities, or site improvement work
6-23 necessary for the construction of the improvement; or
6-24 (2) conducted an environmental or land use study
6-25 relating to the construction of the improvement.
6-26 SECTION 7. Section 11.30, Tax Code, is amended to read as
6-27 follows:
7-1 Sec. 11.30. NONPROFIT WATER SUPPLY OR WASTEWATER SERVICE
7-2 CORPORATION. (a) A corporation organized under Chapter 67, Water
7-3 Code [76, Acts of the 43rd Legislature, 1st Called Session, 1933
7-4 (Article 1434a, Vernon's Texas Civil Statutes)], that provides in
7-5 the bylaws of the corporation that on dissolution of the
7-6 corporation the assets of the corporation remaining after discharge
7-7 of the corporation's indebtedness shall be transferred to an entity
7-8 that provides a water supply or wastewater service, or both, that
7-9 is exempt from ad valorem taxation is entitled to an exemption from
7-10 taxation of:
7-11 (1) property that the corporation owns and that is
7-12 reasonably necessary for and used in the operation of the
7-13 corporation:
7-14 (A) [(1)] to acquire, treat, store, transport,
7-15 sell, or distribute water; or
7-16 (B) [(2)] to provide wastewater service; and
7-17 (2) the real property owned by the corporation
7-18 consisting of:
7-19 (A) an incomplete improvement that:
7-20 (i) is under active construction or other
7-21 physical preparation; and
7-22 (ii) is designed and intended to be used
7-23 in the operation of the corporation for a purpose described by
7-24 Subdivision (1) when complete; and
7-25 (B) the land on which the incomplete improvement
7-26 is located that will be reasonably necessary for the use of the
7-27 improvement in the operation of the corporation for a purpose
8-1 described by Subdivision (1).
8-2 (b) A property may not be exempted under Subsection (a)(2)
8-3 for more than three years.
8-4 (c) For purposes of Subsection (a)(2), an incomplete
8-5 improvement is under physical preparation if the corporation has:
8-6 (1) engaged in architectural or engineering work, soil
8-7 testing, land clearing activities, or site improvement work
8-8 necessary for the construction of the improvement; or
8-9 (2) conducted an environmental or land use study
8-10 relating to the construction of the improvement.
8-11 SECTION 8. The importance of this legislation and the
8-12 crowded condition of the calendars in both houses create an
8-13 emergency and an imperative public necessity that the
8-14 constitutional rule requiring bills to be read on three several
8-15 days in each house be suspended, and this rule is hereby suspended,
8-16 and that this Act take effect and be in force from and after its
8-17 passage, and it is so enacted.