1-1 By: Davis of Dallas (Senate Sponsor - Lucio) H.B. No. 3383
1-2 (In the Senate - Received from the House April 30, 2001;
1-3 May 1, 2001, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 11, 2001, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 5, Nays
1-6 0; May 11, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3383 By: Lindsay
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the exemption from ad valorem taxation for certain
1-11 community housing development organizations.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 11.182, Tax Code, is amended to read as
1-14 follows:
1-15 Sec. 11.182. Community Housing Development Organizations
1-16 Improving Property for Low-Income and Moderate-Income Housing. (a)
1-17 In this section:
1-18 (1) "Cash flow" means the amount of money received by
1-19 a community housing development organization from a housing project
1-20 for a fiscal year less the organization's disbursements for that
1-21 fiscal year associated with the project, including disbursements
1-22 for:
1-23 (A) standard property maintenance;
1-24 (B) debt service;
1-25 (C) employee compensation;
1-26 (D) fees required by government agencies;
1-27 (E) reserves required by lenders;
1-28 (F) insurance; and
1-29 (G) other justifiable expenses related to the
1-30 operation and maintenance of the project.
1-31 (2) "Community housing development organization" has
1-32 the meaning assigned by 42 U.S.C. Section 12704.
1-33 (b) An organization is entitled to an exemption from
1-34 taxation of improved or unimproved real property it owns if the
1-35 organization:
1-36 (1) is organized as a community housing development
1-37 organization;
1-38 (2) meets the requirements of a charitable
1-39 organization provided by Sections 11.18(e) and (f);
1-40 (3) owns the property for the purpose of building or
1-41 repairing housing on the property to sell without profit to a
1-42 low-income or moderate-income individual or family satisfying the
1-43 organization's eligibility requirements or to rent without profit
1-44 to such an individual or family; and
1-45 (4) engages exclusively in the building, repair, and
1-46 sale or rental of housing as described by Subdivision (3) and
1-47 related activities.
1-48 (c) [(b)] Property owned by the organization may not be
1-49 exempted under Subsection (b) [(a)] after the third anniversary of
1-50 the date the organization acquires the property unless the
1-51 organization is offering to rent or is renting the property without
1-52 profit to a low-income or moderate-income individual or family
1-53 satisfying the organization's eligibility requirements.
1-54 (d) A multi-family rental property consisting of 36 or more
1-55 dwelling units owned by the organization that is exempted under
1-56 Subsection (b) may not be exempted in a subsequent tax year unless
1-57 in the preceding tax year the organization spent an amount equal to
1-58 at least 50 percent of the total amount of taxes that would have
1-59 been imposed on the property without the exemption in that year on
1-60 social, educational, or economic development services for eligible
1-61 persons in the county in which the property is located. This
1-62 subsection does not apply to property acquired by the organization
1-63 using tax-exempt bond financing after January 1, 1997, and before
1-64 December 31, 2001.
2-1 (e) In addition to meeting the applicable requirements of
2-2 Subsections (b) and (c), to receive an exemption under Subsection
2-3 (b) for improved real property that includes a housing project the
2-4 construction of which was financed with private activity tax-exempt
2-5 bonds or low-income housing tax credits, the organization must:
2-6 (1) control 100 percent of the interest in the general
2-7 partner if the project is owned by a limited partnership;
2-8 (2) make available not less than 10 percent of the
2-9 rental units to persons whose median income is at or below 30
2-10 percent of the area median family income;
2-11 (3) comply with all rules of and laws administered by
2-12 the Texas Department of Housing and Community Affairs applicable to
2-13 community housing development organizations; and
2-14 (4) submit annually to the Texas Department of Housing
2-15 and Community Affairs and to the governing body of each taxing unit
2-16 for which the project receives an exemption for the housing project
2-17 evidence demonstrating that not less than 90 percent of the
2-18 project's annual cash flow in the preceding fiscal year as
2-19 determined by the audit required by Subsection (g) was spent by the
2-20 organization on social, educational, or economic development
2-21 services for eligible persons in the county in which the property
2-22 is located.
2-23 (f) [(c) A person claiming an exemption for property
2-24 described under this section must comply with the requirements of
2-25 Sections 11.43(a) and (b).]
2-26 [(d)] An organization entitled to an exemption under
2-27 Subsection (b) [(a)] is also entitled to an exemption from taxation
2-28 of any building or tangible personal property the organization owns
2-29 and uses in the administration of its acquisition, building,
2-30 repair, sale, or rental of property. To qualify for an exemption
2-31 under this subsection, property must be used exclusively by the
2-32 organization, except that another person may use the property for
2-33 activities incidental to the organization's use that benefit the
2-34 beneficiaries of the organization.
2-35 (g) To receive an exemption under Subsection (b) or (f), an
2-36 organization must annually have an audit prepared by an independent
2-37 certified public accountant. The audit must include a detailed
2-38 report on the organization's sources and uses of funds. A copy of
2-39 the audit must be delivered to the Texas Department of Housing and
2-40 Community Affairs and to the chief appraiser of the appraisal
2-41 district in which the property subject to the exemption is located.
2-42 [(e) In this section "community housing development
2-43 organization" has the meaning assigned that term by 42 U.S.C.
2-44 Section 12704.]
2-45 SECTION 2. This Act takes effect January 1, 2002, and
2-46 applies only to ad valorem taxes imposed on or after that date.
2-47 * * * * *