By: Cain S.B. No. 523
99S0355/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to property tax exemptions for charitable organizations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subsection (h), Section 11.18, Tax Code, is
1-4 amended to read as follows:
1-5 (h) Performance of noncharitable functions by a charitable
1-6 organization that owns or uses exempt property does not result in
1-7 loss of an exemption authorized by this section if those other
1-8 functions are incidental to the organization's charitable
1-9 functions. The division of responsibilities between an
1-10 organization that qualifies as a charitable organization under
1-11 Subsection (c) and another organization will not jeopardize the
1-12 exemption of property or properties owned or used by either
1-13 organization if the collaboration furthers the provision of one or
1-14 more of the charitable functions described in Subsection (d) and if
1-15 the other organization:
1-16 (1) is exempt from federal income taxation under
1-17 Section 501(a), Internal Revenue Code of 1986, as an organization
1-18 described by Section 501(c)(3) of that code;
1-19 (2) meets the criteria for a charitable organization
1-20 under Subsections (e) and (f); and
1-21 (3) is under common control with the charitable
1-22 organization described in this subsection.
1-23 SECTION 2. Subchapter B, Chapter 42, Tax Code, is amended by
1-24 adding Section 42.27 to read as follows:
2-1 Sec. 42.27. REMEDY FOR EXEMPTION DENIAL. If the court
2-2 determines that a charitable organization providing the services
2-3 described in Section 11.18(d)(1), (2), (3), (15), or (16) or a
2-4 commonly controlled organization that meets the criteria described
2-5 by Section 11.18(h) has been improperly denied an exemption, the
2-6 court shall grant the exemption and order the removal of the
2-7 property from the taxable portion of the appraisal roll.
2-8 SECTION 3. Subsection (a), Section 42.29, Tax Code, is
2-9 amended to read as follows:
2-10 (a) A property owner who prevails in an appeal to the court
2-11 under Section 42.25, [or] 42.26, or 42.27 may be awarded reasonable
2-12 attorney's fees. The amount of the award may not exceed the
2-13 greater of:
2-14 (1) $15,000; or
2-15 (2) 20 percent of the total amount by which the
2-16 property owner's tax liability is reduced as a result of the
2-17 appeal.
2-18 SECTION 4. This Act takes effect September 1, 1999. The
2-19 change in law made by Section 3 of this Act applies to an appeal
2-20 filed under Chapter 42, Tax Code, as amended by this Act, on or
2-21 after the effective date of this Act. An appeal filed under
2-22 Chapter 42, Tax Code, before the effective date of this Act is
2-23 governed by the law in effect when the appeal was filed, and that
2-24 law is continued in effect for that purpose.
2-25 SECTION 5. The importance of this legislation and the
2-26 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.