BILL ANALYSIS

H.B. 4463

By: Shine

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The Texas Constitution requires all real and tangible personal property to be subject to taxation unless specifically exempted. One of those exemptions is for property that is held by a charitable organization and used for charitable functions, including the provision of low-income housing. If an appraisal district grants an exemption but subsequently repeals the exemption retroactively, current law leaves charities without an opportunity to reapply, subjecting them to back taxes, penalties, and interest. This change in financial liability can completely disrupt a charity's business model, potentially forcing the charity to cease operations. H.B. 4463 seeks to address this issue by allowing a charitable low-income housing organization that had been approved for a property tax exemption to reapply after the appraisal district cancels approval of the exemption.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 4463 amends the Tax Code to authorize an organization to apply for the property tax exemptions for qualifying charitable organizations that improve property for low-income housing or that construct or rehabilitate low-income housing for a tax year, or for any subsequent prior tax year, in which the chief appraiser cancels such an exemption erroneously granted for property that the organization believes qualified for the exemption in that tax year instead of for the canceled exemption. The bill limits the duration of the application period to the seventh anniversary of the date the chief appraiser canceled the previously granted exemption. The bill applies to an exemption that is canceled on or after the bill's effective date or an exemption canceled before the bill's effective date for which a protest or appeal is pending on the bill's effective date.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2023.