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.