H.B. No. 2416
AN ACT
relating to the extension of the period for which an incomplete
improvement on property owned by certain nonprofit organizations
may be exempted from ad valorem taxation and exempting from
additional taxes open-space land converted by certain nonprofit
organizations for certain charitable purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. CHANGES EFFECTIVE BEGINNING WITH 2003 TAX YEAR
SECTION 1.01. Section 11.18(m), Tax Code, is amended to
read as follows:
(m) A property may not be exempted under Subsection (a)(2)
for more than five [three] years.
SECTION 1.02. Section 11.184(i), Tax Code, as added by
Chapter 1040, Acts of the 77th Legislature, Regular Session, 2001,
is amended to read as follows:
(i) A property may not be exempted under Subsection (c)(2)
for more than five [three] years.
SECTION 1.03. Section 11.19(e), Tax Code, is amended to
read as follows:
(e) A property may not be exempted under Subsection (a)(2)
for more than five [three] years.
SECTION 1.04. Section 11.20(f), Tax Code, is amended to
read as follows:
(f) A property may not be exempted under Subsection (a)(5)
for more than five [three] years.
SECTION 1.05. Section 11.21(g), Tax Code, is amended to
read as follows:
(g) A property may not be exempted under Subsection (a)(2)
for more than five [three] years.
SECTION 1.06. Section 11.23(l), Tax Code, is amended to
read as follows:
(l) Incomplete Improvements. A person described by
Subsection (a)-(e), (g), or (i)-(k) is entitled to an exemption
from taxation of the real property owned by the person consisting of
an incomplete improvement that is under active construction or
other physical preparation and that is designed and intended to be
used by the person for a purpose described by that subsection when
complete and the land on which the incomplete improvement is
located that will be reasonably necessary for the person's use of
the improvement for that purpose. A property may not be exempted
under this subsection for more than five [three] years. For
purposes of this subsection, an incomplete improvement is under
physical preparation if the person has:
(1) engaged in architectural or engineering work, soil
testing, land clearing activities, or site improvement work
necessary for the construction of the improvement; or
(2) conducted an environmental or land use study
relating to the construction of the improvement.
SECTION 1.07. Section 11.30(b), Tax Code, is amended to
read as follows:
(b) A property may not be exempted under Subsection (a)(2)
for more than five [three] years.
SECTION 1.08. Section 23.55, Tax Code, is amended by adding
Subsection (m) to read as follows:
(m) The sanctions provided by Subsection (a) do not apply to
land owned by an organization that qualifies as a charitable
organization under Section 11.18(c), is organized exclusively to
perform religious or charitable purposes, and engages in performing
the charitable functions described by Section 11.18(d)(19), if the
organization converts the land to a use for which the land is
eligible for an exemption under Section 11.18(d)(19) within five
years.
ARTICLE 2. CHANGES EFFECTIVE BEGINNING WITH 2006 TAX YEAR
SECTION 2.01. Section 11.18(m), Tax Code, is amended to
read as follows:
(m) A property may not be exempted under Subsection (a)(2)
for more than three years.
SECTION 2.02. Section 11.184(i), Tax Code, as added by
Chapter 1040, Acts of the 77th Legislature, Regular Session, 2001,
is amended to read as follows:
(i) A property may not be exempted under Subsection (c)(2)
for more than three years.
SECTION 2.03. Section 11.19(e), Tax Code, is amended to
read as follows:
(e) A property may not be exempted under Subsection (a)(2)
for more than three years.
SECTION 2.04. Section 11.20(f), Tax Code, is amended to
read as follows:
(f) A property may not be exempted under Subsection (a)(5)
for more than three years.
SECTION 2.05. Section 11.21(g), Tax Code, is amended to
read as follows:
(g) A property may not be exempted under Subsection (a)(2)
for more than three years.
SECTION 2.06. Section 11.23(l), Tax Code, is amended to
read as follows:
(l) Incomplete Improvements. A person described by
Subsection (a)-(e), (g), or (i)-(k) is entitled to an exemption
from taxation of the real property owned by the person consisting of
an incomplete improvement that is under active construction or
other physical preparation and that is designed and intended to be
used by the person for a purpose described by that subsection when
complete and the land on which the incomplete improvement is
located that will be reasonably necessary for the person's use of
the improvement for that purpose. A property may not be exempted
under this subsection for more than three years. For purposes of
this subsection, an incomplete improvement is under physical
preparation if the person has:
(1) engaged in architectural or engineering work, soil
testing, land clearing activities, or site improvement work
necessary for the construction of the improvement; or
(2) conducted an environmental or land use study
relating to the construction of the improvement.
SECTION 2.07. Section 11.30(b), Tax Code, is amended to
read as follows:
(b) A property may not be exempted under Subsection (a)(2)
for more than three years.
ARTICLE 3. EFFECTIVE DATE; TRANSITION
SECTION 3.01. (a) Except as provided by Subsection (b) of
this section:
(1) this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution; and
(2) if this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2003.
(b) Article 2 of this Act takes effect January 1, 2006.
SECTION 3.02. (a) Article 1 of this Act applies only to a
tax year beginning on or after January 1, 2003.
(b) Notwithstanding Section 11.43, Tax Code, property that
was exempted from taxation under Section 11.18(a)(2), Tax Code,
Section 11.184(c)(2), Tax Code, as added by Chapter 1040, Acts of
the 77th Legislature, Regular Session, 2001, or Section
11.19(a)(2), 11.20(a)(5), 11.21(a)(2), 11.23(l), or 11.30(a)(2),
Tax Code, for the three years preceding the 2003 tax year is
entitled to an exemption under the applicable provision for the
2003 tax year regardless of whether the owner of the property
applies for the exemption for the 2003 tax year if the property
otherwise qualifies for the exemption. The chief appraiser of the
appraisal district in which the property is located may require the
owner of the property to file an application for the exemption to
confirm the owner's qualification for the exemption for the 2003
tax year.
(c) Article 2 of this Act applies only to a tax year
beginning on or after January 1, 2006.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2416 was passed by the House on May
10, 2003, by the following vote: Yeas 143, Nays 0, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2416 was passed by the Senate on May
28, 2003, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor