79R6919 MFC-D

By:  Bonnen                                                       H.B. No. 2095



A BILL TO BE ENTITLED

AN ACT

relating to exempting from ad valorem taxation property used by 
certain nonprofit community business organizations to provide 
services to aid in the economic development of local communities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by 
adding Section 11.231 to read as follows:
	Sec. 11.231.  NONPROFIT COMMUNITY BUSINESS ORGANIZATION 
PROVIDING ECONOMIC DEVELOPMENT SERVICES TO LOCAL COMMUNITY.  (a)  
In this section, "nonprofit community business organization" means 
an organization that:
		(1)  is organized as:                                                  
			(A)  a nonprofit corporation as defined by the 
Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 
Vernon's Texas Civil Statutes); or
			(B)  a nonprofit organization described by 
Section 501(c)(6), Internal Revenue Code of 1986;
		(2)  with respect to its activities in this state, is 
engaged primarily in performing functions listed in Subsection (d); 
and
		(3)  is primarily supported by membership dues and 
other income from activities substantially related to its primary 
functions.
	(b)  An association that qualifies as a nonprofit community 
business organization as provided by this section is entitled to an 
exemption from taxation of:
		(1)  the buildings and tangible personal property that:                
			(A)  are owned by the nonprofit community business 
organization; and
			(B)  except as permitted by Subsection (c), are 
used exclusively by qualified nonprofit community business 
organizations to perform their primary functions; and
		(2)  the real property owned by the nonprofit community 
business organization consisting of:
			(A)  an incomplete improvement that:                                  
				(i)  is under active construction or other 
physical preparation; and
				(ii)  is designed and intended to be used 
exclusively by qualified nonprofit community business 
organizations; and
			(B)  the land on which the incomplete improvement 
is located that will be reasonably necessary for the use of the 
improvement by qualified nonprofit community business 
organizations.
	(c)  Use of exempt property by persons who are not nonprofit 
community business organizations qualified as provided by this 
section does not result in the loss of an exemption authorized by 
this section if the use is incidental to use by qualified nonprofit 
community business organizations and limited to activities that 
benefit the beneficiaries of the nonprofit community business 
organizations that own or use the property.
	(d)  To qualify for an exemption under this section, a 
nonprofit community business organization must be engaged 
primarily in performing one or more of the following functions in 
the local community:
		(1)  promoting the common economic interests of 
commercial enterprises;
		(2)  improving the business conditions of one or more 
types of business; or
		(3)  otherwise providing services to aid in economic 
development.    
	(e)  In this section, "building" includes the land that is 
reasonably necessary for use of, access to, and ornamentation of 
the building.
	(f)  A property may not be exempted under Subsection (b)(2) 
for more than three years.
	(g)  For purposes of Subsection (b)(2), an incomplete 
improvement is under physical preparation if the nonprofit 
community business organization 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.  Section 11.42(d), Tax Code, is amended to read as 
follows:       
	(d)  A person who acquires property after January 1 of a tax 
year may receive an exemption authorized by Section 11.17, 11.18, 
11.19, 11.20, 11.21, 11.23, 11.231, or 11.30 for the applicable 
portion of that tax year immediately on qualification for the 
exemption.
	SECTION 3.  Section 11.43(c), Tax Code, is amended to read as 
follows:       
	(c)  An exemption provided by Section 11.13, 11.17, 11.18, 
11.182, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(h), (j), or 
(j-1), 11.231, 11.29, 11.30, or 11.31, once allowed, need not be 
claimed in subsequent years, and except as otherwise provided by 
Subsection (e), the exemption applies to the property until it 
changes ownership or the person's qualification for the exemption 
changes.  However, the chief appraiser may require a person allowed 
one of the exemptions in a prior year to file a new application to 
confirm the person's current qualification for the exemption by 
delivering a written notice that a new application is required, 
accompanied by an appropriate application form, to the person 
previously allowed the exemption.
	SECTION 4.  This Act applies only to an ad valorem tax year 
that begins on or after the effective date of this Act.
	SECTION 5.  This Act takes effect January 1, 2006.