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A BILL TO BE ENTITLED
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AN ACT
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relating to exempting from ad valorem taxation property used by |
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certain nonprofit community business organizations to provide |
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services to aid in the economic development of local communities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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adding Section 11.231 to read as follows: |
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Sec. 11.231. NONPROFIT COMMUNITY BUSINESS ORGANIZATION |
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PROVIDING ECONOMIC DEVELOPMENT SERVICES TO LOCAL COMMUNITY. (a) |
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In this section, "nonprofit community business organization" means |
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an organization that meets the following requirements: |
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(1) the organization has been in existence for at |
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least the preceding five years; |
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(2) the organization: |
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(A) is a nonprofit corporation organized under |
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the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., |
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Vernon's Texas Civil Statutes) or a nonprofit corporation formed |
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under the Texas Nonprofit Corporation Law, as described by Section |
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1.008, Business Organizations Code; |
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(B) is a nonprofit organization described by |
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Section 501(c)(6), Internal Revenue Code of 1986; and |
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(C) is not a statewide organization; |
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(3) for at least the preceding three years, the |
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organization has maintained a dues-paying membership of at least 50 |
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members; and |
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(4) the organization: |
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(A) has a board of directors elected by the |
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members; |
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(B) does not compensate members of the board of |
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directors for service on the board; |
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(C) with respect to its activities in this state, |
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is engaged primarily in performing functions listed in Subsection |
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(d); |
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(D) is primarily supported by membership dues and |
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other income from activities substantially related to its primary |
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functions; and |
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(E) is not, has not formed, and does not |
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financially support a political committee as defined by Section |
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251.001, Election Code. |
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(b) An association that qualifies as a nonprofit community |
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business organization as provided by this section is entitled to an |
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exemption from taxation of: |
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(1) the buildings and tangible personal property that: |
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(A) are owned by the nonprofit community business |
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organization; and |
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(B) except as permitted by Subsection (c), are |
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used exclusively by qualified nonprofit community business |
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organizations to perform their primary functions; and |
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(2) the real property owned by the nonprofit community |
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business organization consisting of: |
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(A) an incomplete improvement that: |
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(i) is under active construction or other |
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physical preparation; and |
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(ii) is designed and intended to be used |
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exclusively by qualified nonprofit community business |
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organizations; and |
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(B) the land on which the incomplete improvement |
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is located that will be reasonably necessary for the use of the |
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improvement by qualified nonprofit community business |
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organizations. |
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(c) Use of exempt property by persons who are not nonprofit |
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community business organizations qualified as provided by this |
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section does not result in the loss of an exemption authorized by |
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this section if the use is incidental to use by qualified nonprofit |
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community business organizations and limited to activities that |
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benefit the beneficiaries of the nonprofit community business |
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organizations that own or use the property. |
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(d) To qualify for an exemption under this section, a |
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nonprofit community business organization must be engaged |
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primarily in performing one or more of the following functions in |
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the local community: |
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(1) promoting the common economic interests of |
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commercial enterprises; |
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(2) improving the business conditions of one or more |
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types of business; or |
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(3) otherwise providing services to aid in economic |
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development. |
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(e) In this section, "building" includes the land that is |
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reasonably necessary for use of, access to, and ornamentation of |
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the building. |
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(f) A property may not be exempted under Subsection (b)(2) |
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for more than three years. |
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(g) For purposes of Subsection (b)(2), an incomplete |
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improvement is under physical preparation if the nonprofit |
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community business organization has: |
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(1) engaged in architectural or engineering work, soil |
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testing, land clearing activities, or site improvement work |
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necessary for the construction of the improvement; or |
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(2) conducted an environmental or land use study |
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relating to the construction of the improvement. |
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(h) Sections 11.42(d) and 11.43(c) apply to an exemption |
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under this section in the same manner as those subsections apply to |
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the exemptions described by those subsections. |
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(i) This section expires December 31, 2011. |
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SECTION 2. This Act applies only to an ad valorem tax year |
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that begins on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2010. |