Texas 2009 - 81st Regular

Texas House Bill HB2980 Compare Versions

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1	1	81R7171 SMH-F
2	2	By: Hilderbran H.B. No. 2980
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the ad valorem taxation of property used to provide
8	8	low-income or moderate-income housing.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 11.182, Tax Code, is amended by amending
11	11	Subsections (b), (e), (h), and (k) and adding Subsections (b-1) and
12	12	(b-2) to read as follows:
13	13	(b) An organization is entitled to an exemption from
14	14	taxation of improved or unimproved real property it owns if the
15	15	organization:
16	16	(1) is organized as a community housing development
17	17	organization;
18	18	(2) meets the requirements of a charitable
19	19	organization provided by Sections 11.18(e) and (f);
20	20	(3) owns the property for the purpose of building or
21	21	repairing housing on the property to sell without profit to a
22	22	low-income or moderate-income individual or family satisfying the
23	23	organization's eligibility requirements or to rent without profit
24	24	to such an individual or family; and
25	25	(4) engages [exclusively] in the building, repair, and
26	26	sale or rental of housing as described by Subdivision (3) and
27	27	related activities.
28	28	(b-1) Notwithstanding Subsections (b)(1) and (2), an owner
29	29	of improved or unimproved real property that is not an organization
30	30	described by those subdivisions is entitled to an exemption from
31	31	taxation of the property under Subsection (b) if the owner
32	32	otherwise qualifies for the exemption and the owner is:
33	33	(1) a limited partnership 100 percent of the interest
34	34	of the general partner in which is owned or controlled by an
35	35	organization described by Subsections (b)(1) and (2); or
36	36	(2) an entity 100 percent of the interest in which is
37	37	owned or controlled by an organization described by Subsections
38	38	(b)(1) and (2).
39	39	(b-2) A reference in this section to an organization
40	40	includes a limited partnership or other entity described by
41	41	Subsection (b-1).
42	42	(e) In addition to meeting the applicable requirements of
43	43	Subsections (b) and (c), to receive an exemption under Subsection
44	44	(b) for improved real property that is [includes a housing project
45	45	constructed after December 31, 2001, and] financed with qualified
46	46	501(c)(3) bonds issued under Section 145 of the Internal Revenue
47	47	Code of 1986, tax-exempt private activity bonds subject to volume
48	48	cap, or low-income housing tax credits, the organization must:
49	49	(1) [control 100 percent of the interest in the
50	50	general partner if the project is owned by a limited partnership;
51	51	[(2)] comply with all rules of and laws administered
52	52	by the Texas Department of Housing and Community Affairs applicable
53	53	to community housing development organizations; and
54	54	(2) [(3)] submit annually to the Texas Department of
55	55	Housing and Community Affairs and to the governing body of each
56	56	taxing unit for which the project receives an exemption for the
57	57	housing project evidence demonstrating that the organization spent
58	58	an amount equal to at least 90 percent of the project's cash flow in
59	59	the preceding fiscal year as determined by the audit required by
60	60	Subsection (g), for eligible persons in the county in which the
61	61	property is located, on social, educational, or economic
62	62	development services, capital improvement projects, or rent
63	63	reduction.
64	64	(h) Subsections (d) and (e)(2) [(e)(3)] do not apply to
65	65	property owned by an organization if:
66	66	(1) the entity that provided the financing for the
67	67	acquisition or construction of the property:
68	68	(A) requires the organization to make payments in
69	69	lieu of taxes to the school district in which the property is
70	70	located; or
71	71	(B) restricts the amount of rent the organization
72	72	may charge for dwelling units on the property; or
73	73	(2) the organization has entered into an agreement
74	74	with each taxing unit for which the property receives an exemption
75	75	to spend in each tax year for the purposes provided by Subsection
76	76	(d) or (e)(2) [(e)(3)] an amount equal to the total amount of taxes
77	77	imposed on the property in the tax year preceding the year in which
78	78	the organization acquired the property.
79	79	(k) Notwithstanding Subsection (j) [of this section] and
80	80	Sections 11.43(a) and (c), an exemption under Subsection (b) or (f)
81	81	does not terminate because of a change in the ownership of the
82	82	property if the property is sold at a foreclosure sale and, not
83	83	later than the 30th day after the date of the sale, the owner of the
84	84	property submits to the chief appraiser evidence that the property
85	85	is owned by an organization that meets the requirements of
86	86	Subsections (b)(1), (2), and (4) or is owned by a limited
87	87	partnership described by Subsection (b-1)(1) or an entity described
88	88	by Subsection (b-1)(2) that meets the requirements of Subsection
89	89	(b)(4). If the owner of the property submits the evidence required
90	90	by this subsection, the exemption continues to apply to the
91	91	property for the remainder of the current tax year and for
92	92	subsequent tax years until the owner ceases to qualify the property
93	93	for the exemption. This subsection does not prohibit the chief
94	94	appraiser from requiring the owner to file a new application to
95	95	confirm the owner's current qualification for the exemption as
96	96	provided by Section 11.43(c).
97	97	SECTION 2. Section 23.215, Tax Code, is amended to read as
98	98	follows:
99	99	Sec. 23.215. APPRAISAL OF CERTAIN NONEXEMPT PROPERTY USED
100	100	FOR LOW-INCOME OR MODERATE-INCOME HOUSING. (a) This section
101	101	applies only to real property [owned by an organization]:
102	102	(1) that includes a development, as defined by Section
103	103	2306.6702, Government Code:
104	104	(A) the dwelling units in which are [on the
105	105	effective date of this section was] rented or offered for rent to
106	106	[a] low-income or moderate-income individuals [individual] or
107	107	families [family] satisfying the [organization's] income
108	108	eligibility requirements of Subchapter DD, Chapter 2306,
109	109	Government Code [and that continues to be used for that purpose];
110	110	and
111	111	(B) [(2)] that was financed under the low income
112	112	housing tax credit program under Subchapter DD, Chapter 2306,
113	113	Government Code;
114	114	(2) [(3)] that does not receive an exemption under
115	115	Section 11.182 or 11.1825; and
116	116	(3) [(4)] the owner of which has not entered into an
117	117	agreement with any taxing unit to make payments to the taxing unit
118	118	instead of taxes on the property.
119	119	(b) In appraising the property, the [The] chief appraiser
120	120	shall:
121	121	(1) estimate the gross income potential of the
122	122	property by:
123	123	(A) analyzing data on rental income of the
124	124	property for the preceding fiscal year contained in the audited
125	125	statement of income and expenses for the property provided under
126	126	Subsection (g) to the chief appraiser if the dwelling units in the
127	127	development were rented or offered for rent to individuals or
128	128	families described by Subsection (a)(1)(A) for the entire fiscal
129	129	year;
130	130	(B) analyzing the potential earnings capacity of
131	131	the property if the dwelling units in the development were not
132	132	rented or offered for rent to individuals or families described by
133	133	Subsection (a)(1)(A) during the preceding fiscal year; or
134	134	(C) if the dwelling units in the development were
135	135	rented or offered for rent to individuals or families described by
136	136	Subsection (a)(1)(A) for only part of the preceding fiscal year,
137	137	using the method prescribed by Paragraph (A) for the part of the
138	138	fiscal year in which the dwelling units were rented or offered for
139	139	rent and using the method prescribed by Paragraph (B) for the part
140	140	of the fiscal year in which the dwelling units were not rented or
141	141	offered for rent;
142	142	(2) estimate the operation and maintenance expenses of
143	143	the property by:
144	144	(A) analyzing data on operation and maintenance
145	145	expenses of the property for the preceding fiscal year contained in
146	146	the audited statement of income and expenses for the property
147	147	provided under Subsection (g) to the chief appraiser if the
148	148	dwelling units in the development were rented or offered for rent to
149	149	individuals or families described by Subsection (a)(1)(A) for the
150	150	entire fiscal year;
151	151	(B) analyzing data on operation and maintenance
152	152	expenses of comparable properties available to the chief appraiser
153	153	if the dwelling units in the development were not rented or offered
154	154	for rent to individuals or families described by Subsection
155	155	(a)(1)(A) during the preceding fiscal year; or
156	156	(C) if the dwelling units in the development were
157	157	rented or offered for rent to individuals or families described by
158	158	Subsection (a)(1)(A) for only part of the preceding fiscal year,
159	159	using the method prescribed by Paragraph (A) for the part of the
160	160	fiscal year in which the dwelling units were rented or offered for
161	161	rent and using the method prescribed by Paragraph (B) for the part
162	162	of the fiscal year in which the dwelling units were not rented or
163	163	offered for rent;
164	164	(3) determine the appropriate capitalization rate as
165	165	provided by Subsections (c) and (d); and
166	166	(4) compute the actual rental income from the property
167	167	or project the future rental income from the property by
168	168	considering the restrictions provided by Subchapter DD, Chapter
169	169	2306, Government Code, on:
170	170	(A) the income of the individuals or families to
171	171	whom the property may be rented; and
172	172	(B) the amount of rent that may be charged for the
173	173	property [appraise the property in the manner provided by Section
174	174	11.1825(q)].
175	175	(c) The chief appraiser shall appraise the property using a
176	176	capitalization rate of at least 13.5 percent, except as provided by
177	177	Subsection (d).
178	178	(d) The chief appraiser may conduct a study of sales of
179	179	comparable properties described by Subsection (a) that are located
180	180	in the appraisal district to determine the appropriate
181	181	capitalization rate to use in appraising the property. If as a
182	182	result of the study the chief appraiser determines that a
183	183	capitalization rate of less than 13.5 percent is more appropriate
184	184	for that purpose, the chief appraiser shall use that lesser rate.
185	185	(e) Not later than January 31 of each year, the appraisal
186	186	district shall give public notice in the manner determined by the
187	187	district, including by posting on the district's website if
188	188	applicable, of the capitalization rate to be used in that year to
189	189	appraise property described by Subsection (a) if that rate is a rate
190	190	of less than 13.5 percent.
191	191	(f) For purposes of determining the net operating income of
192	192	the property, the operating income of the property for the
193	193	preceding fiscal year is reduced by any disbursements made in that
194	194	fiscal year for the operation and maintenance of the property,
195	195	including disbursements for:
196	196	(1) standard property maintenance;
197	197	(2) debt service;
198	198	(3) ad valorem and franchise taxes;
199	199	(4) employee compensation;
200	200	(5) fees required by government agencies;
201	201	(6) expenses incurred in satisfaction of the
202	202	requirements of lenders, including reserve requirements;
203	203	(7) insurance; and
204	204	(8) any other justifiable expense related to the
205	205	operation and maintenance of the property.
206	206	(g) Not later than April 15 of each year, the property owner
207	207	must provide to the chief appraiser an audited statement of the
208	208	income and expenses for the property for the preceding fiscal year
209	209	that includes data on rental income and operation and maintenance
210	210	expenses for which disbursements described by Subsection (f) were
211	211	made. The chief appraiser shall use the audited statement of income
212	212	and expenses in appraising the property under this section. If the
213	213	property owner fails to timely provide the audited statement of
214	214	income and expenses, the chief appraiser shall appraise the
215	215	property in the manner provided by Section 23.012.
216	216	(h) An audited statement of income and expenses for property
217	217	provided to the chief appraiser under Subsection (g) is
218	218	confidential and not available for public inspection. The chief
219	219	appraiser may disclose information in the statement only to an
220	220	employee of the appraisal office who appraises property, except as
221	221	authorized by Subsection (i).
222	222	(i) Information made confidential by Subsection (h) may be
223	223	disclosed:
224	224	(1) in a criminal proceeding;
225	225	(2) in a hearing conducted by the appraisal review
226	226	board;
227	227	(3) on a judicial determination of good cause; or
228	228	(4) to a governmental agency, political subdivision,
229	229	or regulatory body if the disclosure is necessary or proper for the
230	230	enforcement of the laws of this or another state or of the United
231	231	States.
232	232	(j) In connection with an annual study conducted under
233	233	Section 403.302, Government Code, the value of a property described
234	234	by Subsection (a) that is selected for appraisal must be determined
235	235	in the manner required by this section.
236	236	SECTION 3. This Act applies only to ad valorem taxes imposed
237	237	for a tax year beginning on or after the effective date of this Act.
238	238	SECTION 4. This Act takes effect January 1, 2010.