| 1 | 1 | | 81R4824 SMH-D |
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| 2 | 2 | | By: Hughes H.B. No. 1269 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the exemption from ad valorem taxation of property |
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| 8 | 8 | | owned by certain organizations engaged primarily in performing |
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| 9 | 9 | | charitable functions. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Section 11.184, Tax Code, is amended by amending |
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| 12 | 12 | | Subsection (c) and adding Subsections (l), (m), and (n) to read as |
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| 13 | 13 | | follows: |
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| 14 | 14 | | (c) A [If approved under Subsection (b), a] qualified |
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| 15 | 15 | | charitable organization is entitled to an exemption from taxation |
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| 16 | 16 | | of: |
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| 17 | 17 | | (1) the buildings and other real property and the |
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| 18 | 18 | | tangible personal property that: |
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| 19 | 19 | | (A) are owned by the organization; and |
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| 20 | 20 | | (B) except as permitted by Subsection (d), are |
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| 21 | 21 | | used exclusively by the organization and other organizations |
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| 22 | 22 | | eligible for an exemption from taxation under this section or |
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| 23 | 23 | | Section 11.18; and |
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| 24 | 24 | | (2) the real property owned by the organization |
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| 25 | 25 | | consisting of: |
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| 26 | 26 | | (A) an incomplete improvement that: |
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| 27 | 27 | | (i) is under active construction or other |
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| 28 | 28 | | physical preparation; and |
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| 29 | 29 | | (ii) is designed and intended to be used |
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| 30 | 30 | | exclusively by the organization and other organizations eligible |
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| 31 | 31 | | for an exemption from taxation under this section or Section 11.18; |
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| 32 | 32 | | and |
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| 33 | 33 | | (B) the land on which the incomplete improvement |
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| 34 | 34 | | is located that will be reasonably necessary for the use of the |
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| 35 | 35 | | improvement by the organization and other organizations eligible |
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| 36 | 36 | | for an exemption from taxation under this section or Section 11.18. |
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| 37 | 37 | | (l) Notwithstanding the other provisions of this section, a |
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| 38 | 38 | | corporation that is not a qualified charitable organization is |
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| 39 | 39 | | entitled to an exemption from taxation of property under this |
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| 40 | 40 | | section if: |
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| 41 | 41 | | (1) the corporation is exempt from federal income |
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| 42 | 42 | | taxation under Section 501(a), Internal Revenue Code of 1986, by |
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| 43 | 43 | | being listed as an exempt entity under Section 501(c)(2) of that |
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| 44 | 44 | | code; |
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| 45 | 45 | | (2) the corporation holds title to the property for, |
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| 46 | 46 | | collects income from the property for, and turns over the entire |
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| 47 | 47 | | amount of that income, less expenses, to a qualified charitable |
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| 48 | 48 | | organization; and |
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| 49 | 49 | | (3) the qualified charitable organization would |
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| 50 | 50 | | qualify for an exemption from taxation of the property under this |
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| 51 | 51 | | section if the qualified charitable organization owned the |
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| 52 | 52 | | property. |
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| 53 | 53 | | (m) Before a corporation described by Subsection (l) may |
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| 54 | 54 | | submit an application for an exemption under this section, the |
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| 55 | 55 | | qualified charitable organization for which the corporation holds |
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| 56 | 56 | | title to the property must apply to the comptroller for the |
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| 57 | 57 | | determination described by Subsection (e) with regard to the |
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| 58 | 58 | | qualified charitable organization. The application for the |
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| 59 | 59 | | determination must also include an application to the comptroller |
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| 60 | 60 | | for a determination of whether the corporation meets the |
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| 61 | 61 | | requirements of Subsections (l)(1) and (2). The corporation shall |
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| 62 | 62 | | submit with the application for an exemption under this section a |
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| 63 | 63 | | copy of the determination letter issued by the comptroller. The |
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| 64 | 64 | | chief appraiser shall accept the copy of the letter as conclusive |
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| 65 | 65 | | evidence of the matters described by Subsection (h) as well as of |
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| 66 | 66 | | whether the corporation meets the requirements of Subsections |
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| 67 | 67 | | (l)(1) and (2). |
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| 68 | 68 | | (n) Notwithstanding Subsection (k), in order for a |
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| 69 | 69 | | corporation to continue to receive an exemption under Subsection |
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| 70 | 70 | | (l) after the fifth tax year after the year in which the exemption |
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| 71 | 71 | | is granted, the qualified charitable organization for which the |
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| 72 | 72 | | corporation holds title to property must obtain a new determination |
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| 73 | 73 | | letter and the corporation must reapply for the exemption. |
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| 74 | 74 | | SECTION 2. Section 11.184(b), Tax Code, is repealed. |
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| 75 | 75 | | SECTION 3. This Act applies only to ad valorem taxes imposed |
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| 76 | 76 | | for a tax year that begins on or after the effective date of this |
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| 77 | 77 | | Act. |
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| 78 | 78 | | SECTION 4. This Act takes effect January 1, 2010. |
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