BILL ANALYSIS

C.S.H.B. 4752

By: Landgraf

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

In 2023, the 88th Texas Legislature enacted legislation that entitled certain charitable organizations to an exemption from property taxation of certain real property owned by the charitable organization consisting of an interest in a mineral in place, including a royalty interest. The bill author has informed the committee that, following the enactment of this legislation, a charitable organization based in West Texas with substantial royalty interests applied for the exemption in multiple counties, and while the organization was granted the exemption in some jurisdictions, it was denied the exemption in one county based on that county's interpretation of state law relating to certain requirements certain charitable organizations must satisfy to qualify for the exemption. The bill author has also informed the committee that one of the reasons the organization's application for the exemption was denied was because the organization was not affiliated with a state or national organization that authorizes, approves, or sanctions volunteer charitable fundraising organizations. C.S.H.B. 4752 seeks to address this issue, clarify the law, and ensure consistent application of the property tax exemption for charitable organizations by removing the requirement for certain charitable organizations to be affiliated with certain state or national organizations to qualify for 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

C.S.H.B. 4752 amends the Tax Code to revise the requirements that an otherwise eligible charitable organization that provides 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 must satisfy to qualify for an exemption from property taxation of certain land, buildings, and property owned or used by the organization by removing the requirement for such a charitable organization to be affiliated with a state or national organization that authorizes, approves, or sanctions volunteer charitable fundraising organizations. The bill also establishes that such an otherwise eligible charitable organization is not ineligible for the exemption because the organization also distributes contributions to public institutions of higher education.

C.S.H.B. 4752 applies only to a property tax year that begins on or after the bill's effective date.

EFFECTIVE DATE

January 1, 2026.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 4752 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The introduced revised the requirements that an otherwise eligible applicable charitable organization must satisfy to qualify for an exemption from property taxation of certain land, buildings, and property owned or used by the organization by giving such a charitable organization the option of distributing contributions to an eligible public institution of higher education as an alternative to distributing contributions to an eligible 501(c)(3) tax-exempt organization for purposes of satisfying the requirement that the charitable organization distribute contributions to at least five other associations to be used for general charitable purposes, with all recipients meeting certain criteria, whereas the substitute does not. Instead, the substitute includes a provision absent from the introduced establishing that such an otherwise eligible charitable organization is not ineligible for the exemption because the organization also distributes contributions to public institutions of higher education.