By McCall                                             H.B. No. 2821
         76R9253 T                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to property tax exemptions for charitable organizations.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subsection (h), Section 11.18, Tax Code, is
 1-5     amended to read as follows:
 1-6           (h)  Performance of noncharitable functions by a charitable
 1-7     organization that owns or uses exempt property does not result in
 1-8     loss of an exemption authorized by this section if those other
 1-9     functions are incidental to the organization's charitable
1-10     functions.  The division of responsibilities between an
1-11     organization that qualifies as a charitable organization under
1-12     Subsection (c) and another organization will not jeopardize the
1-13     exemption of property or properties owned or used by either
1-14     organization if the collaboration furthers the provision of one or
1-15     more of the charitable functions described in Subsection (d) and if
1-16     the other organization:
1-17                 (1)  is exempt from federal income taxation under
1-18     Section 501(a), Internal Revenue Code of 1986, as an organization
1-19     described by Section 501(c)(3) of that code;
1-20                 (2)  meets the criteria for a charitable organization
1-21     under Subsections (e) and (f); and
1-22                 (3)  is under common control with the charitable
1-23     organization described in this subsection.
1-24           SECTION 2.  Subchapter B, Chapter 42, Tax Code, is amended by
 2-1     adding Section 42.27 to read as follows:
 2-2           Sec. 42.27.  REMEDY FOR EXEMPTION DENIAL.  If the court
 2-3     determines that a charitable organization providing the services
 2-4     described in Section 11.18(d)(1), (2), (3), (15), or (16) or a
 2-5     commonly controlled organization that meets the criteria described
 2-6     by Section 11.18(h) has been improperly denied an exemption, the
 2-7     court shall grant the exemption and order the removal of the
 2-8     property from the taxable portion of the appraisal roll.
 2-9           SECTION 3.  Subsection (a), Section 42.29, Tax Code, is
2-10     amended to read as follows:
2-11           (a)  A property owner who prevails in an appeal to the court
2-12     under Section 42.25, [or] 42.26, or 42.27 may be awarded reasonable
2-13     attorney's fees.  The amount of the award may not exceed the
2-14     greater of:
2-15                 (1)  $15,000; or
2-16                 (2)  20 percent of the total amount by which the
2-17     property owner's tax liability is reduced as a result of the
2-18     appeal.
2-19           SECTION 4.  This Act takes effect September 1, 1999.  The
2-20     change in law made by Section 3 of this Act applies to an appeal
2-21     filed under Chapter 42, Tax Code, as amended by this Act, on or
2-22     after the effective date of this Act.  An appeal filed under
2-23     Chapter 42, Tax Code, before the effective date of this Act is
2-24     governed by the law in effect when the appeal was filed, and that
2-25     law is continued in effect for that purpose.
2-26           SECTION 5.  The importance of this legislation and the
2-27     crowded condition of the calendars in both houses create an
 3-1     emergency and an imperative public necessity that the
 3-2     constitutional rule requiring bills to be read on three several
 3-3     days in each house be suspended, and this rule is hereby suspended.
 3-4                          COMMITTEE AMENDMENT NO. 1
 3-5           Amend HB 2821 as follows:
 3-6     1.  Strike Section 2 and Section 3.
 3-7     2.  Strike Section 4 and replace with the following:
 3-8           This Act takes effect September 1, 1999.
 3-9     3.  Renumber subsequent sections accordingly.
3-10                                                                 Hilbert