By: Rodriguez of Travis H.B. No. 3447
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to community land trusts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 373B.003, Local Government Code, is
  amended to read as follows:
         Sec. 373B.003.  NATURE OF TRUST. A community land trust
  created or designated under Section 373B.002 must be a nonprofit
  organization that is:
               (1)  created to acquire and hold land for the benefit of
  developing and preserving long-term affordable housing in the
  municipality or county; and
               (2)  organized as:
                     (A)  a nonprofit corporation that is exempt from
  federal income taxation under Section 501(a), Internal Revenue Code
  of 1986, by being listed [certified] as an exempt organization
  under Section 501(c)(3) of that code;
                     (B)  a limited partnership of which a nonprofit
  corporation described by Paragraph (A) controls 100 percent of the
  general partner interest; or
                     (C)  a limited liability company for which a
  nonprofit corporation described by Paragraph (A) serves as the only
  member.
         SECTION 2.  Section 11.182, Tax Code, is amended by adding
  Subsection (l) to read as follows:
         (l)  An exemption under Subsection (b) or (f) does not
  terminate because the organization receiving the exemption
  qualifies for an exemption for the same property under Section
  11.1827.
         SECTION 3.  Section 11.1827, Tax Code, is amended by
  amending Subsection (b) and adding Subsection (g) to read as
  follows:
         (b)  In addition to any other exemption to which the trust
  may be entitled, a community land trust is entitled to an exemption
  from taxation by a taxing unit of land owned by the trust, together
  with the housing units located on the land if they are owned by the
  trust, if:
               (1)  the trust:
                     (A)  [meets the requirements of a charitable
  organization provided by Sections 11.18(e) and (f);
                     [(B)]  owns the land for the purpose of leasing
  the land and selling or leasing the housing units located on the
  land as provided by Chapter 373B, Local Government Code; and
                     (B) [(C)]  engages exclusively in the sale or
  lease of housing as described by Paragraph (A) [(B)] and related
  activities, except that the trust may also engage in the
  development of low-income and moderate-income housing; and
               (2)  the exemption is adopted by the governing body of
  the taxing unit [before July 1] in the manner provided by law for
  official action by the body.
         (g)  Once adopted by the governing body of a taxing unit, the
  exemption provided by this section continues to apply to property
  located in the taxing unit until the governing body rescinds the
  exemption in the manner provided by law for official action by the
  body.
         SECTION 4.  Section 11.436(a), Tax Code, is amended to read
  as follows:
         (a)  An organization that acquires property that qualifies
  for an exemption under Section 11.181(a), [or] 11.1825, or 11.1827
  may apply for the exemption for the year of acquisition not later
  than the 30th day after the date the organization acquires the
  property, and the deadline provided by Section 11.43(d) does not
  apply to the application for that year.
         SECTION 5.  Sections 23.21(c) and (d), Tax Code, are amended
  to read as follows:
         (c)  In appraising land or a housing unit that is leased by a
  community land trust created or designated under Section 373B.002,
  Local Government Code, to a family meeting the income-eligibility
  standards established by Section 373B.006 of that code under
  regulations or restrictions limiting the amount that the family may
  be required to pay for the rental or lease of the property, the
  chief appraiser shall use the income method of appraisal as
  described by Section 23.012 to determine the appraised value of the
  property. The chief appraiser shall use that method regardless of
  whether the chief appraiser considers that method to be the most
  appropriate method of appraising the property. In appraising the
  property, the chief appraiser shall:
               (1)  take into account the [extent to which that] use
  and limitation applicable to the property for purposes of computing
  the actual rental income from the property and projecting future
  rental income; and
               (2)  use the same capitalization rate that the chief
  appraiser uses to appraise other rent-restricted properties
  [reduce the market value of the property].
         (d)  In appraising a housing unit that the owner or a
  predecessor of the owner acquired from a community land trust
  created or designated under Section 373B.002, Local Government
  Code, and that is located on land owned by the trust and leased by
  the owner of the housing unit, the chief appraiser shall take into
  account the extent to which any regulations or restrictions
  limiting the right of the owner of the housing unit to sell the
  housing unit, including any limitation on the price for which the
  housing unit may be sold, reduce the market value of the housing
  unit. If sale of the housing unit is subject to an eligible land use
  restriction, the chief appraiser may not appraise the housing unit
  in a tax year for an amount that exceeds the price for which the
  housing unit may be sold under the eligible land use restriction in
  that tax year. For purposes of this subsection, "eligible land use
  restriction" means an agreement or restrictive covenant applicable
  to a housing unit that:
               (1)  is recorded in the real property records;
               (2)  has a term of at least 40 years;
               (3)  restricts the price for which the housing unit may
  be sold to a price that is or may be less than the market value of
  the housing unit; and
               
  (4)  restricts the sale of the housing unit to a family
  meeting the income-eligibility standards established by Section
  373B.006, Local Government Code.
         SECTION 6.  This Act applies only to ad valorem taxes imposed
  for a tax year that begins on or after the effective date of this
  Act.
         SECTION 7.  This Act takes effect September 1, 2017.