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A BILL TO BE ENTITLED
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AN ACT
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relating to the appraisal for ad valorem tax purposes of property on |
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which housing is being or has been built or repaired for sale or |
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rent to a low-income individual or family. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.181(b), Tax Code, is amended to read |
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as follows: |
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(b) Property may not be exempted under Subsection (a) after |
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the fifth anniversary of the date the organization acquires the |
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property. Property that received an exemption under Section |
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11.1825 and that was subsequently transferred by the organization |
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described by that section that qualified for the exemption to an |
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organization described by this section may not be exempted under |
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Subsection (a) after the fifth anniversary of the date the |
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transferring organization acquired the property. |
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SECTION 2. Section 11.1825, Tax Code, is amended by |
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amending Subsections (f) and (q) and adding Subsection (p-1) to |
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read as follows: |
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(f) For property to be exempt under this section, the |
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organization must own the property for the purpose of constructing |
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or rehabilitating a housing project on the property and: |
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(1) renting the housing, regardless of whether the |
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housing project consists of multifamily or single-family |
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dwellings, to individuals or families whose median income is not |
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more than 60 percent of the greater of: |
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(A) the area median family income for the |
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household's place of residence, as adjusted for family size and as |
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established by the United States Department of Housing and Urban |
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Development; or |
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(B) the statewide area median family income, as |
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adjusted for family size and as established by the United States |
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Department of Housing and Urban Development; or |
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(2) selling single-family dwellings to individuals or |
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families whose median income is not more than the greater of: |
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(A) the area median family income for the |
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household's place of residence, as adjusted for family size and as |
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established by the United States Department of Housing and Urban |
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Development; or |
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(B) the statewide area median family income, as |
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adjusted for family size and as established by the United States |
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Department of Housing and Urban Development. |
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(p-1) Notwithstanding the other provisions of this section, |
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the transfer of property from an organization described by this |
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section to a nonprofit organization that claims an exemption for |
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the property under Section 11.181(a) is a proper use of and purpose |
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for owning the property under this section and does not affect the |
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eligibility of the property for an exemption under this section. |
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(q) If property qualifies for an exemption under this |
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section, the chief appraiser shall use the income method of |
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appraisal as described [provided] by Section 23.012 to determine |
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the appraised value of the property. The chief appraiser shall use |
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that method regardless of whether the chief appraiser considers |
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that method to be the most appropriate method of appraising the |
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property. In appraising the property, the chief appraiser shall: |
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(1) consider the restrictions provided by this section |
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on the income of the individuals or families to whom the dwelling |
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units of the housing project may be rented and the amount of rent |
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that may be charged for purposes of computing the actual rental |
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income from the property or projecting future rental income; and |
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(2) use the same capitalization rate that the chief |
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appraiser uses to appraise other rent-restricted properties. |
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SECTION 3. Section 23.21, Tax Code, is amended by adding |
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Subsection (c) to read as follows: |
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(c) In appraising real property that was previously owned by |
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an organization that received an exemption for the property under |
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Section 11.181(a) and that was sold to a low-income individual or |
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family meeting income eligibility standards established by the |
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organization under regulations or restrictions limiting to a |
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percentage of the individual's or the family's income the amount |
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that the individual or family was required to pay for purchasing the |
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property, the chief appraiser shall take into account the extent to |
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which that use and limitation and any resale restrictions or |
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conditions applicable to the property established by the |
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organization reduce the market value of the property. |
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SECTION 4. (a) The changes in law made by this Act to |
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Sections 11.181 and 11.1825, Tax Code, apply to the taxation of real |
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property beginning with the 2011 tax year. |
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(b) The change in law made by this Act to Section 23.21, Tax |
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Code, applies only to an appraisal of real property on or after the |
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effective date of this Act. An appraisal of real property before the |
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effective date of this Act is governed by the law in effect |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |
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