80R9795 SMH-D

By: Menendez H.B. No. 3875

A BILL TO BE ENTITLED

AN ACT

relating to the exemption from ad valorem taxation for certain organizations constructing or rehabilitating low-income housing.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 11.1825(c), (s), (v), (w), (x), and (y), Tax Code, are amended to read as follows:

(c) Notwithstanding Subsection (b), an owner of real property that is not an organization described by that subsection is entitled to an exemption from taxation of property under this section if the property otherwise qualifies for the exemption and:

(1) the owner is:

(A) [(1)] a limited partnership of which an organization that meets the requirements of Subsection (b) controls 100 percent of the general partner interest; or

(B) [(2)] an entity the parent of which is an organization that meets the requirements of Subsection (b); or

(2) the Bond Review Board approved an allocation of private activity bonds to finance in whole or in part the construction or rehabilitation of the property and the property is located:

(A) in a county with a population of less than 75,000; or

(B) in an area that:

(i) is not located in a standard metropolitan statistical area; and

(ii) has an area median family income, as established by the United States Department of Housing and Urban Development, that is less than the statewide area median family income, as established by that department.

(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), if applicable, the amount of the exemption under this section from taxation is 50 percent of the appraised value of the property.

(v) Notwithstanding any other provision of this section:

(1) [,] an organization may not receive an exemption from taxation by a taxing unit any part of which is located in a county with a population of at least 1.4 million unless the exemption is approved by the governing body of the taxing unit in the manner provided by law for official action; and

(2) an organization may not receive an exemption from taxation by a taxing unit for property described by Subsection (c)(2) unless the exemption is approved by the governing body of the taxing unit in the manner provided by law for official action.

(w) To receive an exemption under this section from taxation by a taxing unit for which the approval of the governing body of the taxing unit is required by Subsection (v), an organization must submit to the governing body of the taxing unit a written request for approval of the exemption from taxation of the property described in the request. If the request is for approval of an exemption for property described by Subsection (c)(2), the request must state the term for which the exemption is requested, which may not exceed the term of the bonds described by that subsection.

(x) Not later than the 60th day after the date the governing body of the taxing unit receives a written request under Subsection (w) for an exemption under this section, the governing body shall:

(1) if the request is for approval of an exemption for property other than property described by Subsection (c)(2):

(A) approve the exemption in the amount provided by Subsection (s);

(B) [(2)] approve the exemption in a reasonable amount other than the amount provided by Subsection (s); or

(C) [(3)] deny the exemption if the governing body determines that:

(i) [(A)] the taxing unit cannot afford the loss of ad valorem tax revenue that would result from approving the exemption; or

(ii) [(B)] additional housing for individuals or families meeting the income eligibility requirements of this section is not needed in the territory of the taxing unit; or

(2) if the request is for approval of an exemption for property described by Subsection (c)(2):

(A) approve the exemption for a specified term in a fixed amount or in variable amounts in each tax year of the term and may impose additional qualifications for receiving the exemption in any tax year; or

(B) deny the exemption if the governing body determines that:

(i) the taxing unit cannot afford the loss of ad valorem tax revenue that would result from approving the exemption; or

(ii) additional housing for individuals or families meeting the income eligibility requirements of this section is not needed in the territory of the taxing unit.

(y) Not later than the fifth day after the date the governing body of the taxing unit takes action under Subsection (x), the taxing unit shall issue a letter to the organization stating the governing body's action and, if the governing body denied the exemption, stating whether the denial was based on a determination under Subsection (x)(1)(C)(i) or (ii) or (x)(2)(B)(i) or (ii), as applicable, [(x)(3)(A) or (B)] and the basis for the determination. The taxing unit shall send a copy of the letter by regular mail to the chief appraiser of each appraisal district that appraises the property for the taxing unit. The governing body may charge the organization a fee not to exceed the administrative costs of processing the request of the organization, approving or denying the exemption, and issuing the letter required by this subsection. If the chief appraiser determines that the property qualifies for an exemption under this section and the governing body of the taxing unit approves the exemption, the chief appraiser shall grant the exemption in the amount approved by the governing body.

SECTION 2. This Act applies only to ad valorem taxes imposed for a tax year beginning on or after the effective date of this Act.

SECTION 3. This Act takes effect January 1, 2008.