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A BILL TO BE ENTITLED
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AN ACT
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relating to the exemption from ad valorem taxation of certain real |
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property leased to and used by certain educational organizations. |
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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 11.211 to read as follows: |
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Sec. 11.211. REAL PROPERTY LEASED TO CERTAIN EDUCATIONAL |
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ORGANIZATIONS. (a) In this section, "qualifying educational |
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organization" means: |
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(1) an open-enrollment charter school authorized by |
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Subchapter D, Chapter 12, Education Code, that is qualified as |
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provided by Section 11.21(d) of this code; or |
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(2) a public junior college, as defined by Section |
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61.003, Education Code. |
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(b) A person is entitled to an exemption from taxation of |
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the portion of the real property that the person owns and leases to |
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a qualifying educational organization if: |
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(1) the portion of the real property that is leased to |
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the organization is: |
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(A) used exclusively by the organization for the |
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operation or administration of the organization or the performance |
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of other educational functions by the organization; and |
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(B) reasonably necessary for a purpose described |
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by Paragraph (A); and |
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(2) the owner of the portion of the real property that |
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is leased to the organization certifies by affidavit to the |
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organization that: |
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(A) if the lease agreement requires the |
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organization to pay the taxes imposed on the real property as a |
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portion of the total consideration paid to the property owner under |
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the agreement, the owner will reduce the total consideration |
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required to be paid by the organization under the lease agreement by |
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an amount equal to the amount by which the taxes on the real |
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property are reduced as a result of the exemption by providing a |
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monthly or annual credit against the total consideration due under |
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the agreement; or |
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(B) if the lease agreement requires the |
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organization to pay the taxes imposed on the real property directly |
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to the collector for the applicable taxing unit or to the owner or |
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the property manager separately from the payment of rent to the |
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property owner under the agreement, the organization is no longer |
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required to pay the taxes to the collector, owner, or property |
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manager, as applicable, and the rent charged to the organization |
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under the agreement is not affected unless a term of the agreement |
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specifically provides for a change in the amount of the rent. |
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(c) A property owner required to provide an affidavit |
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described by Subsection (b)(2)(A) to a qualifying educational |
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organization shall: |
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(1) provide the organization with a disclosure |
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document stating the amount by which the taxes on the real property |
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are reduced as a result of the exemption and the method the owner |
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will implement to ensure that the total consideration for the lease |
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of the real property fully reflects the total amount of that |
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reduction; and |
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(2) reduce the total consideration for the lease of |
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the real property through a monthly or annual credit against the |
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total consideration to reflect the amount by which the taxes on the |
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real property are reduced as a result of the exemption. |
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(d) This section may not be construed as invalidating an |
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exemption from taxation of real property granted to a qualifying |
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educational organization described by Subsection (a)(1) of this |
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section on the basis of Section 12.128, Education Code, before |
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January 1, 2022. |
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(e) Section 25.07 does not apply to a leasehold interest in |
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real property for which the owner receives an exemption under this |
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section. |
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SECTION 2. 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 3. This Act takes effect January 1, 2022, but only |
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if the constitutional amendment proposed by the 87th Legislature, |
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Regular Session, 2021, authorizing the legislature to exempt from |
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ad valorem taxation certain real property leased to a public junior |
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college or an open-enrollment charter school is approved by the |
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voters. If that amendment is not approved by the voters, this Act |
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has no effect. |