BILL ANALYSIS

Senate Research Center	C.S.H.B. 2525
89R23407 RDS-F	By: Darby et al. (Paxton)
	Local Government
	4/30/2025
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

H.B. 2525 clarifies the wording of the property tax exemption statute for charitable organizations to preserve the tax-exempt status of a charitable organization that is engaged in providing housing and related facilities and services to elderly Texans.

These property tax exemptions are critical for the operations and functions of the charitable organizations. Without the exemption, the charitable organizations' abilities to provide their services are reduced as funds that would go to supporting elderly Texans instead must be diverted to cover property tax payments.  

(Original Author's/Sponsor's Statement of Intent)

C.S.H.B. 2525 amends current law 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.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.18, Tax Code, by amending Subsection (d) and adding Subsection (k-1), as follows:

(d) Requires a charitable organization to be organized exclusively to perform certain purposes and, except as permitted by certain provisions, engage exclusively in performing one or more of following charitable functions:

(1)-(12) makes no changes to these subdivisions;

(13) providing permanent housing and related social, health care, and educational facilities for persons who are 62 years of age or older without regard to the residents' ability to pay or as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue;

(14)-(18) makes no changes to these subdivisions;

(19) providing housing and related services to persons who are 62 years of age or older in a retirement community that provides certain services meeting certain criteria, including as an organization that provides charitable housing in an amount that is not less than four percent of the charitable organization's net resident revenue; or

(20)-(26) makes no changes to these subdivisions.

Makes nonsubstantive changes to this subsection.

(k-1) Requires a charitable organization, notwithstanding any other provision of Section 11.18 (Charitable Organization), to be entitled to an exemption from taxation under this section as an organization that performs a chartable function described by certain provisions in the manner described by certain provisions, respectively, to:

(1) have been in existence for at least 20 years; or

(2) be under common control with an organization that is described by Subdivision (1) and performs a charitable function described by Subsection (d).

SECTION 2. Amends Section 11.18(k), Tax Code, by adding Subdivision (1-a) and amending Subdivision (2), as follows:

(1-a) Defines "charitable housing and services."

(2) Provides that "charity care," "government-sponsored indigent health care," and "net resident revenue" are determined in the same manner for a retirement community or nursing home as "charity care," "government-sponsored indigent health care," and "net patient revenue," respectively, are determined for a hospital under Section 11.1801(a)(2) (relating to requiring that charity care and government-sponsored indigent health care be provided in a certain amount to the hospital's or hospital system's net patient revenue).

SECTION 3. Makes application of this Act prospective.

SECTION 4. Effective date: January 1, 2026.