88R1655 RDS-F
 
  By: Hughes, Perry S.B. No. 1255
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the exemption from ad valorem taxation of certain
  property owned by a charitable organization that is engaged in
  providing housing and related facilities and services to persons
  who are at least 62 years of age.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 11.18(d), Tax Code, is amended to read as
  follows:
         (d)  A charitable organization must be organized exclusively
  to perform religious, charitable, scientific, literary, or
  educational purposes and, except as permitted by Subsections (h)
  and (l), engage exclusively in performing one or more of the
  following charitable functions:
               (1)  providing medical care without regard to the
  beneficiaries' ability to pay, which in the case of a nonprofit
  hospital or hospital system means providing charity care and
  community benefits in accordance with Section 11.1801;
               (2)  providing support or relief to orphans, delinquent
  or [,] dependent[, or handicapped] children in need of residential
  care, children with disabilities in need of residential care,
  abused or battered spouses or children in need of temporary
  shelter, the impoverished, or victims of natural disaster without
  regard to the beneficiaries' ability to pay;
               (3)  providing support without regard to the
  beneficiaries' ability to pay to:
                     (A)  elderly persons, including the provision of:
                           (i)  recreational or social activities; and
                           (ii)  facilities designed to address the
  special needs of elderly persons; or
                     (B)  persons with disabilities [the handicapped],
  including training and employment:
                           (i)  in the production of commodities; or
                           (ii)  in the provision of services under 41
  U.S.C. Sections 8501-8506;
               (4)  preserving a historical landmark or site;
               (5)  promoting or operating a museum, zoo, library,
  theater of the dramatic or performing arts, or symphony orchestra
  or choir;
               (6)  promoting or providing humane treatment of
  animals;
               (7)  acquiring, storing, transporting, selling, or
  distributing water for public use;
               (8)  answering fire alarms and extinguishing fires with
  no compensation or only nominal compensation to the members of the
  organization;
               (9)  promoting the athletic development of boys or
  girls under the age of 18 years;
               (10)  preserving or conserving wildlife;
               (11)  promoting educational development through loans
  or scholarships to students;
               (12)  providing halfway house services pursuant to a
  certification as a halfway house by the parole division of the Texas
  Department of Criminal Justice;
               (13)  providing permanent housing and related social,
  health care, and educational facilities for persons who are 62
  years of age or older:
                     (A)  without regard to the residents' ability to
  pay; or
                     (B)  as an organization described by Section
  11.1802;
               (14)  promoting or operating an art gallery, museum, or
  collection, in a permanent location or on tour, that is open to the
  public;
               (15)  providing for the organized solicitation and
  collection for distributions through gifts, grants, and agreements
  to nonprofit charitable, education, religious, and youth
  organizations that provide direct human, health, and welfare
  services;
               (16)  performing biomedical or scientific research or
  biomedical or scientific education for the benefit of the public;
               (17)  operating a television station that produces or
  broadcasts educational, cultural, or other public interest
  programming and that receives grants from the Corporation for
  Public Broadcasting under 47 U.S.C. Section 396, as amended;
               (18)  providing housing for low-income and
  moderate-income families, for unmarried individuals 62 years of age
  or older, for [handicapped] individuals with disabilities, and for
  families displaced by urban renewal, through the use of trust
  assets that are irrevocably and, pursuant to a contract entered
  into before December 31, 1972, contractually dedicated on the sale
  or disposition of the housing to a charitable organization that
  performs charitable functions described by Subdivision (9);
               (19)  providing housing and related services to persons
  who are 62 years of age or older in a retirement community, if the
  retirement community provides independent living services,
  assisted living services, and nursing services to its residents on
  a single campus:
                     (A)  without regard to the residents' ability to
  pay; [or]
                     (B)  in which at least four percent of the
  retirement community's combined net resident revenue is provided in
  charitable care to its residents; or
                     (C)  as an organization described by Section
  11.1802;
               (20)  providing housing on a cooperative basis to
  students of an institution of higher education if:
                     (A)  the organization is exempt from federal
  income taxation under Section 501(a), Internal Revenue Code of
  1986, as amended, by being listed as an exempt entity under Section
  501(c)(3) of that code;
                     (B)  membership in the organization is open to all
  students enrolled in the institution and is not limited to those
  chosen by current members of the organization;
                     (C)  the organization is governed by its members;
  and
                     (D)  the members of the organization share the
  responsibility for managing the housing;
               (21)  acquiring, holding, and transferring unimproved
  real property under an urban land bank demonstration program
  established under Chapter 379C, Local Government Code, as or on
  behalf of a land bank;
               (22)  acquiring, holding, and transferring unimproved
  real property under an urban land bank program established under
  Chapter 379E, Local Government Code, as or on behalf of a land bank;
               (23)  providing housing and related services to
  individuals who:
                     (A)  are unaccompanied and homeless and have a
  disabling condition; and
                     (B)  have been continuously homeless for a year or
  more or have had at least four episodes of homelessness in the
  preceding three years;
               (24)  operating a radio station that broadcasts
  educational, cultural, or other public interest programming,
  including classical music, and that in the preceding five years has
  received or been selected to receive one or more grants from the
  Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
  amended; or
               (25)  providing, without regard to the beneficiaries'
  ability to pay, tax return preparation services and assistance with
  other financial matters.
         SECTION 2.  Subchapter B, Chapter 11, Tax Code, is amended by
  adding Section 11.1802 to read as follows:
         Sec. 11.1802.  REQUIREMENTS FOR CERTAIN CHARITABLE
  ORGANIZATIONS PROVIDING HOUSING AND SERVICES TO THE ELDERLY. (a)  
  In this section:
               (1)  "Charitable housing and services" means the
  following provided by a charitable organization to a person 62
  years of age or older in financial need:
                     (A)  housing, including as an independent living
  facility, assisted living facility, or nursing facility; and
                     (B)  any service designed to meet the unique needs
  of a person 62 years of age or older, including:
                           (i)  independent living services;
                           (ii)  assisted living services;
                           (iii)  nursing facility services;
                           (iv)  social services;
                           (v)  health services, including subsidized
  health services;
                           (vi)  services provided through a
  government-sponsored program, including through Medicaid or
  another federal, state, or local indigent health care program based
  on financial need;
                           (vii)  educational services; and
                           (viii)  donations.
               (2)  "Net resident revenue" means a charitable
  organization's total revenue from providing housing and services to
  residents of a facility operated by the organization who are 62
  years of age or older, less all allowances and discounts on
  residents' accounts, including:
                     (A)  debts that are in default;
                     (B)  contractual adjustments;
                     (C)  teaching allowances;
                     (D)  policy discounts;
                     (E)  administrative adjustments; and
                     (F)  other deductions from revenue.
               (3)  "Very low-income" has the meaning assigned by 12
  U.S.C. Section 1701q(k)(8).
         (b)  To qualify as a charitable organization under Section
  11.18(d)(13)(B) or (19)(C), an organization must:
               (1)  except as provided by Subsection (c), provide
  charitable housing and services in an unreimbursed amount that is
  not less than four percent of the charitable organization's net
  resident revenue;
               (2)  be located in a county with a population of less
  than 58,000 in which the entire county or the population of the
  entire county has been designated a health professionals shortage
  area; or
               (3)  operate a housing development restricted to very
  low-income persons who are 62 years of age or older.
         (c)  A charitable organization described by Subsection
  (b)(1) of this section that qualified for an exemption under
  Section 11.18(d)(13)(B) or (19)(C) in the preceding tax year and
  otherwise qualifies for the exemption in the current tax year is
  entitled to the exemption if the organization demonstrates that:
               (1)  a reduction in the amount of charitable housing
  and services prescribed by Subsection (b)(1) is necessary:
                     (A)  to maintain financial reserves at a level
  required by a debt obligation;
                     (B)  to prevent the organization from endangering
  its ability to continue operating; or
                     (C)  in response to a natural or other disaster;
  or
               (2)  subject to Subsection (e), through unintended
  miscalculation, the organization failed in the preceding tax year
  to provide charitable housing and services in the amount prescribed
  by Subsection (b)(1).
         (d)  Subject to Subsection (e), a charitable organization
  that failed to provide charitable housing and services in the
  preceding tax year in the amount prescribed by Subsection (b)(1) of
  this section as described by Subsection (c)(2) of this section is
  entitled to an exemption under Section 11.18(d)(13)(B) or (19)(C)
  for the current tax year, but not for more than one tax year in each
  five tax years.
         (e)  A charitable organization to which Subsection (d)
  applies is not entitled to an exemption under Section
  11.18(d)(13)(B) or (19)(C) in the tax year following the current
  tax year unless the organization in the current tax year provides
  charitable housing and services in an amount at least equal to the
  sum of:
               (1)  the amount prescribed by Subsection (b)(1) for the
  current tax year; and
               (2)  the amount for the preceding tax year by which the
  organization failed to meet the requirement prescribed by
  Subsection (b)(1).
         (f)  A charitable organization that fails to satisfy the
  requirements prescribed by Subsection (e) for the current tax year
  is liable for the amount of the tax, plus penalties and interest,
  that would have otherwise been imposed for both the preceding and
  current tax years, calculated as if the taxes were delinquent on
  February 1 of the tax year following the tax year for which the tax
  would otherwise have been imposed.
         SECTION 3.  The changes in law made by this Act apply only to
  an ad valorem tax year that begins on or after the effective date of
  this Act.
         SECTION 4.  This Act takes effect January 1, 2024.