79R1087 SMH-D

By:  Nelson                                                       S.B. No. 58 



A BILL TO BE ENTITLED

AN ACT

relating to the exemption from ad valorem taxation of certain 
property used to provide low-income or moderate-income housing.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 11.182, Tax Code, is amended by adding 
Subsections (b-1) and (i-1) and amending Subsections (c) and (e) to 
read as follows:
	(b-1)  To receive an exemption under Subsection (b) for 
improved real property that includes a housing project, the 
organization must reserve:
		(1)  at least 50 percent of the total number of dwelling 
units in the housing project for low-income or moderate-income 
individuals or families satisfying the organization's eligibility 
requirements; and
		(2)  at least 50 percent of the total square footage of 
the dwelling units in the housing project for low-income or 
moderate-income individuals or families satisfying the 
organization's eligibility requirements.
	(c)  Property owned by the organization that includes a 
housing project may not be exempted under Subsection (b) after the 
third anniversary of the date the organization acquires the 
property unless the organization is offering to rent or is renting 
the applicable number and square footage of dwelling units in the
project [property] without profit to [a] low-income or 
moderate-income individuals [individual] or families [family] 
satisfying the organization's eligibility requirements.
	(e)  In addition to meeting the applicable requirements of 
Subsections (b), (b-1), and (c), to receive an exemption under 
Subsection (b) for improved real property that includes a housing 
project constructed after December 31, 2001, and financed with 
qualified 501(c)(3) bonds issued under Section 145 of the Internal 
Revenue Code of 1986, tax-exempt private activity bonds subject to 
volume cap, or low-income housing tax credits, the organization 
must:
		(1)  control 100 percent of the interest in the general 
partner if the project is owned by a limited partnership;
		(2)  comply with all rules of and laws administered by 
the Texas Department of Housing and Community Affairs applicable to 
community housing development organizations; and
		(3)  submit annually to the Texas Department of Housing 
and Community Affairs and to the governing body of each taxing unit 
for which the project receives an exemption for the housing project 
evidence demonstrating that the organization spent an amount equal 
to at least 90 percent of the project's cash flow in the preceding 
fiscal year as determined by the audit required by Subsection (g), 
for eligible persons in the county in which the property is located, 
on social, educational, or economic development services, capital 
improvement projects, or rent reduction.
	(i-1)  The amount of an exemption under Subsection (b) for 
improved real property that includes a housing project is 50 
percent of the appraised value of the property multiplied by a 
fraction the numerator of which is the square footage of the 
dwelling units in the housing project that are reserved for 
low-income or moderate-income individuals or families satisfying 
the organization's eligibility requirements and the denominator of 
which is the total square footage of the dwelling units in the 
project.
	SECTION 2.  Sections 11.1825(g), (p), and (s), Tax Code, are 
amended to read as follows:
	(g)  Property may not receive an exemption under this section 
unless: 
		(1)  at least 50 percent of the total number of dwelling 
units in the housing project are reserved for individuals or 
families described by Subsection (f); and
		(2)  at least 50 percent of the total square footage of 
the dwelling units in the housing project is reserved for 
individuals or families described by Subsection (f).
	(p)  If the organization acquires the property for the 
purpose of constructing or rehabilitating a housing project on the 
property, the organization must be renting or offering to rent the 
applicable number and square footage of dwelling units in the 
property to individuals or families described by Subsection (f) not 
later than the third anniversary of the date the organization 
acquires the property.
	(s)  Unless otherwise provided by the governing body of a 
taxing unit any part of which is located in a county with a 
population of at least 1.4 million under Subsection (x), the amount 
of the exemption under this section from taxation is 50 percent of 
the appraised value of the property multiplied by a fraction the 
numerator of which is the square footage of the dwelling units in 
the housing project that are reserved for individuals or families 
described by Subsection (f) and the denominator of which is the 
total square footage of the dwelling units in the project.
	SECTION 3.  This Act applies only to ad valorem taxes imposed 
for a tax year beginning on or after the effective date of this Act.
	SECTION 4.  This Act takes effect January 1, 2006.