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A BILL TO BE ENTITLED
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AN ACT
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relating to the eligibility of a charitable organization for an |
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exemption from ad valorem taxation of the organization's property |
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if the organization provides for the organized solicitation and |
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collection for distributions through gifts, grants, and agreements |
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to nonprofit charitable, education, religious, and youth |
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organizations that provide direct human, health, and welfare |
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services. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.18(g), Tax Code, is amended to read as |
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follows: |
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(g) A charitable organization that performs a charitable |
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function specified by Subsection (d)(15) must: |
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(1) [be affiliated with a state or national |
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organization that authorizes, approves, or sanctions volunteer |
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charitable fundraising organizations; |
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[(2)] qualify for exemption under Section 501(c)(3), |
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Internal Revenue Code of 1986, as amended; |
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(2) [(3)] be governed by a volunteer board of |
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directors; and |
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(3) [(4)] distribute contributions to at least five |
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other associations to be used for general charitable purposes, with |
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all recipients meeting the following criteria: |
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(A) be governed by a volunteer board of |
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directors; |
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(B) qualify for exemption from federal income tax |
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under Section 501(c)(3), Internal Revenue Code of 1986, as amended, |
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or be a public institution of higher education; |
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(C) receive a majority of annual revenue from |
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private or corporate charitable gifts and government agencies; and |
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(D) provide services without regard to the |
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ability of persons receiving the services to pay for the services. |
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SECTION 2. The change in law made by this Act applies only |
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to an ad valorem tax year that begins on or after the effective date |
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of this Act. |
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SECTION 3. This Act takes effect January 1, 2026. |