BILL ANALYSIS
Senate Research Center S.B. 1113
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Nonprofit developers presently pay at least 50 percent of the taxes assessed on real estate acquisitions for their construction or rehabilitation programs that provide affordable single-family homeownership. Property taxes paid by the nonprofit must be passed on to low-income homebuyers either in closing costs or as a price increase on the home.
The 78th Legislature rolled back the original 100 percent exemption in addition to the long-term exemption once granted to nonprofit developers of multi-family housing. The purpose for the change was to address abuses among nonprofit developers of multi-family properties; however, the same problem was not taking place within the single-family housing homeownership program.
As proposed, S.B. 1113 provides that a 100 percent exemption applies to property owned by an organization for the purpose of constructing or rehabilitating a housing project on the property and selling single-family dwellings to individuals or families whose median income is below a certain amount.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to any state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 11.1825, Tax Code, by amending Subsections (s) and (v) and adding Subsection (s-1), as follows:
(s) Provides that this subsection is regarding property described by Subsection (f)(1) (regarding property owned by an organization for the purpose of constructing or rehabilitating a housing project on the property and renting the housing to individuals or families whose median income is below a certain amount).
(s-1) Provides that the amount of the exemption under this section from taxation for property described by Subsection (f)(2) (regarding property owned by an organization for the purpose of constructing or rehabilitating a housing project on the property and selling single-family dwellings to individuals or families whose median income is below a certain amount) is 100 percent of the appraised value of the property.
(v) Prohibits an organization from receiving an exemption from certain taxation of property described by Subsection (f)(1) (regarding property owned by an organization for the purpose of constructing or rehabilitating a housing project on the property and renting the housing to individuals or families whose median income is below a certain amount).
SECTION 2. Makes application of this Act prospective.
SECTION 3. Effective date: January 1, 2008.