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A BILL TO BE ENTITLED
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AN ACT
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relating to community land trusts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle A, Title 12, Local Government Code, is |
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amended by adding Chapter 373B to read as follows: |
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CHAPTER 373B. COMMUNITY LAND TRUSTS |
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Sec. 373B.001. DEFINITION. In this chapter, "community |
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housing development organization" has the meaning assigned by 42 |
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U.S.C. Section 12704. |
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Sec. 373B.002. CREATION OR DESIGNATION. The governing body |
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of a municipality or county by ordinance or order may create or |
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designate one or more community land trusts, including a housing |
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finance corporation established under Chapter 394 or a land trust |
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operated by a community housing development organization certified |
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by the municipality or county, to operate in the municipality or |
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county. |
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Sec. 373B.003. NATURE OF TRUST. A community land trust |
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created or designated under Section 373B.002 must be a nonprofit |
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organization that is: |
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(1) created to acquire and hold land for the benefit of |
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developing and preserving long-term affordable housing in the |
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municipality or county; and |
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(2) exempt from federal income taxation under Section |
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501(a), Internal Revenue Code of 1986, by being certified as an |
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exempt organization under Section 501(c)(3) of that code. |
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Sec. 373B.004. PURPOSES OF TRUST. The purposes of a |
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community land trust are to: |
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(1) provide affordable housing for low-income and |
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moderate-income residents in the community; |
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(2) promote resident ownership of housing; |
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(3) keep housing affordable for future residents; and |
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(4) capture the value of public investment for |
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long-term community benefit. |
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Sec. 373B.005. OWNERSHIP OF LAND AND HOUSING UNITS. A |
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community land trust may retain title to land it acquires and may: |
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(1) sell housing units located on the land and lease |
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the land under ground leases with terms of at least 99 years; or |
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(2) lease housing units located on the land. |
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Sec. 373B.006. QUALIFICATIONS OF PURCHASERS OR LESSEES OF |
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HOUSING UNITS. (a) A community land trust may sell housing units |
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only to families with a yearly income at the time of sale at or below |
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80 percent of the area median family income, adjusted for family |
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size. |
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(b) Notwithstanding Subsection (a), for housing units |
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located on one or more tracts of land owned by the community land |
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trust that constitute a contiguous geographic area or are located |
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in the same platted subdivision, the trust may sell not more than 20 |
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percent of the housing units to families with a yearly income at the |
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time of sale that exceeds the amount provided by Subsection (a) but |
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does not exceed 120 percent of the area median family income, |
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adjusted for family size. |
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(c) At least 25 percent of the housing units sold by the |
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trust must be sold to families with a yearly income at the time of |
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sale at or below 60 percent of the area median family income, |
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adjusted for family size. |
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(d) A community land trust may lease housing units only to |
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families with a yearly income at the time of lease at or below 60 |
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percent of the area median family income, adjusted for family size. |
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(e) Notwithstanding Subsection (d), for housing units |
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located on one or more tracts of land owned by the community land |
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trust that constitute a contiguous geographic area or are located |
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in the same platted subdivision, the trust may lease not more than |
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20 percent of the housing units to families with a yearly income at |
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the time of lease that exceeds the amount provided by Subsection (d) |
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but does not exceed 80 percent of the area median family income, |
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adjusted for family size. |
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Sec. 373B.007. RELATION TO OTHER LAW. This chapter does not |
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preclude the creation of a land trust by a nonprofit organization, |
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including a community housing development organization, under |
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other statutory or common law or the operation of that land trust |
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inside or outside a municipality or county that has created or |
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designated a community land trust under Section 373B.002. |
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Sec. 373B.008. APPLICABILITY OF CHAPTER TO TRUST OPERATED |
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BY HOUSING FINANCE CORPORATION. Section 373B.003 does not apply to |
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a community land trust operated in the municipality or county by a |
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housing finance corporation established under Chapter 394. |
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SECTION 2. Subchapter B, Chapter 11, Tax Code, is amended by |
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adding Section 11.1827 to read as follows: |
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Sec. 11.1827. COMMUNITY LAND TRUST. (a) In this section, |
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"community land trust" means a community land trust created or |
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designated under Section 373B.002, Local Government Code. |
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(b) In addition to any other exemption to which the trust |
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may be entitled, a community land trust is entitled to an exemption |
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from taxation by a taxing unit of land owned by the trust, together |
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with the housing units located on the land if they are owned by the |
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trust, if: |
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(1) the trust: |
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(A) meets the requirements of a charitable |
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organization provided by Sections 11.18(e) and (f); |
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(B) owns the land for the purpose of leasing the |
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land and selling or leasing the housing units located on the land as |
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provided by Chapter 373B, Local Government Code; and |
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(C) engages exclusively in the sale or lease of |
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housing as described by Paragraph (B) and related activities, |
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except that the trust may also engage in the development of |
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low-income and moderate-income housing; and |
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(2) the exemption is adopted by the governing body of |
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the taxing unit before July 1 in the manner provided by law for |
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official action by the body. |
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(c) Property owned by a community land trust may not be |
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exempted under Subsection (b) after the third anniversary of the |
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date the trust acquires the property unless the trust is offering to |
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sell or lease or is leasing the property as provided by Chapter |
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373B, Local Government Code. |
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(d) A community land trust entitled to an exemption from |
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taxation by a taxing unit under Subsection (b) is also entitled to |
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an exemption from taxation by the taxing unit of any real or |
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tangible personal property the trust owns and uses in the |
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administration of its acquisition, construction, repair, sale, or |
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leasing of property. To qualify for an exemption under this |
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subsection, property must be used exclusively by the trust, except |
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that another person may use the property for activities incidental |
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to the trust's use that benefit the beneficiaries of the trust. |
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(e) To receive an exemption under this section, a community |
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land trust must annually have an audit prepared by an independent |
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auditor. The audit must include: |
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(1) a detailed report on the trust's sources and uses |
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of funds; and |
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(2) any other information required by the governing |
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body of the municipality or county that created or designated the |
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trust under Section 373B.002, Local Government Code. |
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(f) Not later than the 180th day after the last day of the |
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community land trust's most recent fiscal year, the trust must |
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deliver a copy of the audit required by Subsection (e) to: |
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(1) the governing body of the municipality or county |
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or an entity designated by the governing body; and |
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(2) the chief appraiser of the appraisal district in |
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which the property subject to the exemption is located. |
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SECTION 3. Subsection (c), Section 11.43, Tax Code, is |
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amended to read as follows: |
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(c) An exemption provided by Section 11.13, 11.131, 11.17, |
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11.18, 11.182, 11.1827, 11.183, 11.19, 11.20, 11.21, 11.22, |
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11.23(h), (j), or (j-1), 11.231, 11.254, 11.29, 11.30, or 11.31, |
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once allowed, need not be claimed in subsequent years, and except as |
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otherwise provided by Subsection (e), the exemption applies to the |
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property until it changes ownership or the person's qualification |
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for the exemption changes. However, the chief appraiser may |
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require a person allowed one of the exemptions in a prior year to |
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file a new application to confirm the person's current |
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qualification for the exemption by delivering a written notice that |
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a new application is required, accompanied by an appropriate |
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application form, to the person previously allowed the exemption. |
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SECTION 4. Section 23.21, Tax Code, is amended by adding |
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Subsections (c) and (d) to read as follows: |
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(c) In appraising land or a housing unit that is leased by a |
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community land trust created or designated under Section 373B.002, |
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Local Government Code, to a family meeting the income-eligibility |
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standards established by Section 373B.006 of that code under |
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regulations or restrictions limiting the amount that the family may |
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be required to pay for the rental or lease of the property, the |
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chief appraiser shall take into account the extent to which that use |
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and limitation reduce the market value of the property. |
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(d) In appraising a housing unit that the owner or a |
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predecessor of the owner acquired from a community land trust |
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created or designated under Section 373B.002, Local Government |
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Code, and that is located on land owned by the trust and leased by |
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the owner of the housing unit, the chief appraiser shall take into |
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account the extent to which any regulations or restrictions |
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limiting the right of the owner of the housing unit to sell the |
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housing unit, including any limitation on the price for which the |
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housing unit may be sold, reduce the market value of the housing |
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unit. |
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SECTION 5. This Act applies only to ad valorem taxes imposed |
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for a tax year beginning on or after the effective date of this Act. |
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SECTION 6. This Act takes effect January 1, 2012. |