78(R) HB 2416 - Senate Committee Report version


                                                                                


By:  Hochberg, Krusee, Hunter                                     H.B. No. 2416
 
    (Senate Sponsor - Janek)                                                 
	(In the Senate - Received from the House May 12, 2003; 
May 13, 2003, read first time and referred to Committee on Finance; 
May 24, 2003, reported favorably by the following vote:  Yeas 11, 
Nays 0; May 24, 2003, sent to printer.)


A BILL TO BE ENTITLED

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.



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