81R6792 SMH-F
By: Davis of Dallas H.B. No. 3164
A BILL TO BE ENTITLED
AN ACT
relating to qualifications for an ad valorem tax exemption for
property used to provide low-income or moderate-income housing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.182, Tax Code, is amended by amending
Subsections (b), (e), (h), (j), and (k) and adding Subsections
(b-1) and (b-2) to read as follows:
(b) An organization is entitled to an exemption from
taxation of improved or unimproved real property it owns if the
organization:
(1) is organized as a community housing development
organization;
(2) meets the requirements of a charitable
organization provided by Sections 11.18(e) and (f);
(3) owns the property for the purpose of building or
repairing housing on the property to sell without profit to a
low-income or moderate-income individual or family satisfying the
organization's eligibility requirements or to rent without profit
to such an individual or family; and
(4) engages [exclusively] in the building, repair, and
sale or rental of housing as described by Subdivision (3) and
related activities.
(b-1) Notwithstanding Subsections (b)(1) and (2), an owner
of improved or unimproved real property that is not an organization
described by those subdivisions is entitled to an exemption from
taxation of the property under Subsection (b) if the owner
otherwise qualifies for the exemption and the owner is:
(1) a limited partnership 100 percent of the interest
of the general partner in which is owned or controlled by an
organization described by Subsections (b)(1) and (2); or
(2) an entity 100 percent of the interest in which is
owned or controlled by an organization described by Subsections
(b)(1) and (2).
(b-2) A reference in this section to an organization
includes a limited partnership or other entity described by
Subsection (b-1).
(e) In addition to meeting the applicable requirements of
Subsections (b) and (c), to receive an exemption under Subsection
(b) for improved real property that is [includes a housing project
constructed after December 31, 2001, and] financed with qualified
501(c)(3) bonds issued under Section 145 of the Internal Revenue
Code of 1986, tax-exempt private activity bonds subject to volume
cap, or low-income housing tax credits, the organization must:
(1) [control 100 percent of the interest in the
general partner if the project is owned by a limited partnership;
[(2)] comply with all rules of and laws administered
by the Texas Department of Housing and Community Affairs applicable
to community housing development organizations; and
(2) [(3)] submit annually to the Texas Department of
Housing and Community Affairs and to the governing body of each
taxing unit for which the project receives an exemption for the
housing project evidence demonstrating that the organization spent
an amount equal to at least 90 percent of the project's cash flow in
the preceding fiscal year as determined by the audit required by
Subsection (g), for eligible persons in the county in which the
property is located, on social, educational, or economic
development services, capital improvement projects, or rent
reduction.
(h) Subsections (d) and (e)(2) [(e)(3)] do not apply to
property owned by an organization if:
(1) the entity that provided the financing for the
acquisition or construction of the property:
(A) requires the organization to make payments in
lieu of taxes to the school district in which the property is
located; or
(B) restricts the amount of rent the organization
may charge for dwelling units on the property; or
(2) the organization has entered into an agreement
with each taxing unit for which the property receives an exemption
to spend in each tax year for the purposes provided by Subsection
(d) or (e)(2) [(e)(3)] an amount equal to the total amount of taxes
imposed on the property in the tax year preceding the year in which
the organization acquired the property.
(j) An organization may not receive an exemption under
Subsection (b) or (f) for property for a tax year unless the
organization applied for or received an exemption under that
subsection for the property for any part of the 2003 tax year.
(k) Notwithstanding Subsection (j) of this section and
Sections 11.43(a) and (c), an exemption under Subsection (b) or (f)
does not terminate because of a change in the ownership of the
property if the property is sold at a foreclosure sale and, not
later than the 30th day after the date of the sale, the owner of the
property submits to the chief appraiser evidence that the property
is owned by an organization that meets the requirements of
Subsections (b)(1), (2), and (4) or is owned by a limited
partnership described by Subsection (b-1)(1) or an entity described
by Subsection (b-1)(2) that meets the requirements of Subsection
(b)(4). If the owner of the property submits the evidence required
by this subsection, the exemption continues to apply to the
property for the remainder of the current tax year and for
subsequent tax years until the owner ceases to qualify the property
for the exemption. This subsection does not prohibit the chief
appraiser from requiring the owner to file a new application to
confirm the owner's current qualification for the exemption as
provided by Section 11.43(c).
SECTION 2. Sections 11.1825(c) and (t), Tax Code, are
amended to read as follows:
(c) Notwithstanding Subsection (b), an owner of real
property that is not an organization described by that subsection
is entitled to an exemption from taxation of property under this
section if the property otherwise qualifies for the exemption and
the owner is:
(1) a limited partnership of which an organization
that meets the requirements of Subsection (b) controls 100 percent
of the general partner interest; [or]
(2) an entity the parent of which is an organization
that meets the requirements of Subsection (b); or
(3) an entity the parent of which is controlled by an
organization that meets the requirements of Subsection (b).
(t) Notwithstanding Section 11.43(c), an exemption under
this section does not terminate because of a change in ownership of
the property if:
(1) the property is foreclosed on for any reason and,
not later than the 30th day after the date of the foreclosure sale,
the owner of the property submits to the chief appraiser evidence
that the property is owned by:
(A) an organization that meets the requirements
of Subsection (b); or
(B) an entity that meets the requirements of
Subsections (c) and (d); or
(2) in the case of property owned by an entity
described by Subsections (c) and (d), the organization meeting the
requirements of Subsection (b) that controls the general partner
interest of, [or] is the parent of, or controls the parent of the
entity as described by Subsection (c) ceases to serve in that
capacity and, not later than the 30th day after the date the
cessation occurs, the owner of the property submits evidence to the
chief appraiser that the organization has been succeeded in that
capacity by another organization that meets the requirements of
Subsection (b).
SECTION 3. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 4. This Act takes effect January 1, 2010.