H.B. No. 770
AN ACT
relating to ad valorem tax relief for an owner of certain property,
including a residence homestead that is rendered uninhabitable or
unusable by a casualty or by wind or water damage, and to a
restriction on the authority to bring an action to remove a house
that is partially located on a public beach as a result of a
meteorological event.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 61.018, Natural Resources Code, is
amended by amending Subsection (a) and adding Subsections (a-1),
(a-2), and (a-3) to read as follows:
(a) Except as provided by Subsection (a-1), any [Any] county
attorney, district attorney, or criminal district attorney, or the
attorney general at the request of the commissioner, shall file in a
district court of Travis County, or in the county in which the
property is located, a suit to obtain either a temporary or
permanent court order or injunction, either prohibitory or
mandatory, to remove or prevent any improvement, maintenance,
obstruction, barrier, or other encroachment on a public beach, or
to prohibit any unlawful restraint on the public's right of access
to and use of a public beach or other activity that violates this
chapter.
(a-1) A county attorney, district attorney, or criminal
district attorney or the attorney general may not file a suit under
Subsection (a) to obtain a temporary or permanent court order or
injunction, either prohibitory or mandatory, to remove a house from
a public beach if:
(1) the line of vegetation establishing the boundary
of the public beach moved as a result of a meteorological event that
occurred before January 1, 2009;
(2) the house was located landward of the natural line
of vegetation before the meteorological event;
(3) a portion of the house continues to be located
landward of the line of vegetation; and
(4) the house is located on a peninsula in a county
with a population of more than 250,000 and less than 251,000 that
borders the Gulf of Mexico.
(a-2) The owner of a house described by Subsection (a-1) may
repair or rebuild the house if the house was damaged or destroyed by
the meteorological event.
(a-3) Notwithstanding Subsection (a-1), a county attorney,
district attorney, or criminal district attorney or the attorney
general may file a suit under Subsection (a) to obtain a temporary
or permanent court order or injunction, either prohibitory or
mandatory, to remove a house described by Subsection (a-1) from a
public beach if the house was damaged or destroyed by the
meteorological event and the owner of the house fails to repair or
rebuild the house before September 1, 2013.
SECTION 2. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.135 to read as follows:
Sec. 11.135. CONTINUATION OF RESIDENCE HOMESTEAD EXEMPTION
WHILE REPLACEMENT STRUCTURE IS CONSTRUCTED; SALE OF PROPERTY. (a)
If a qualified residential structure for which the owner receives
an exemption under Section 11.13 is rendered uninhabitable or
unusable by a casualty or by wind or water damage, the owner may
continue to receive the exemption for the structure and the land and
improvements used in the residential occupancy of the structure
while the owner constructs a replacement qualified residential
structure on the land if the owner does not establish a different
principal residence for which the owner receives an exemption under
Section 11.13 during that period and intends to return and occupy
the structure as the owner's principal residence. To continue to
receive the exemption, the owner must begin active construction of
the replacement qualified residential structure or other physical
preparation of the site on which the structure is to be located not
later than the first anniversary of the date the owner ceases to
occupy the former qualified residential structure as the owner's
principal residence. The owner may not receive the exemption for
that property under the circumstances described by this subsection
for more than two years.
(b) For purposes of Subsection (a), the site of a
replacement qualified residential structure is under physical
preparation if the owner has engaged in architectural or
engineering work, soil testing, land clearing activities, or site
improvement work necessary for the construction of the structure or
has conducted an environmental or land use study relating to the
construction of the structure.
(c) If an owner receives an exemption for property under
Section 11.13 under the circumstances described by Subsection (a)
and sells the property before the owner completes construction of a
replacement qualified residential structure on the property, an
additional tax is imposed on the property equal to the difference
between the taxes imposed on the property for each of the years in
which the owner received the exemption and the tax that would have
been imposed had the owner not received the exemption in each of
those years, plus interest at an annual rate of seven percent
calculated from the dates on which the differences would have
become due.
(d) A tax lien attaches to property on the date a sale under
the circumstances described by Subsection (c) occurs to secure
payment of the additional tax and interest imposed by that
subsection and any penalties incurred. The lien exists in favor of
all taxing units for which the additional tax is imposed.
(e) A determination that a sale of property under the
circumstances described by Subsection (c) has occurred is made by
the chief appraiser. The chief appraiser shall deliver a notice of
the determination to the owner of the property as soon as possible
after making the determination and shall include in the notice an
explanation of the owner's right to protest the determination. If
the owner does not file a timely protest or if the final
determination of the protest is that the additional taxes are due,
the assessor for each taxing unit shall prepare and deliver a bill
for the additional taxes plus interest as soon as practicable. The
taxes and interest are due and become delinquent and incur
penalties and interest as provided by law for ad valorem taxes
imposed by the taxing unit if not paid before the next February 1
that is at least 20 days after the date the bill is delivered to the
owner of the property.
(f) The sanctions provided by Subsection (c) do not apply if
the sale is:
(1) for right-of-way; or
(2) to this state or a political subdivision of this
state to be used for a public purpose.
(g) The comptroller shall adopt rules and forms to implement
this section.
SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.231 to read as follows:
Sec. 11.231. NONPROFIT COMMUNITY BUSINESS ORGANIZATION
PROVIDING ECONOMIC DEVELOPMENT SERVICES TO LOCAL COMMUNITY. (a)
In this section, "nonprofit community business organization" means
an organization that meets the following requirements:
(1) the organization has been in existence for at
least the preceding five years;
(2) the organization:
(A) is a nonprofit corporation organized under
the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
Vernon's Texas Civil Statutes) or a nonprofit corporation formed
under the Texas Nonprofit Corporation Law, as described by Section
1.008, Business Organizations Code;
(B) is a nonprofit organization described by
Section 501(c)(6), Internal Revenue Code of 1986; and
(C) is not a statewide organization;
(3) for at least the preceding three years, the
organization has maintained a dues-paying membership of at least 50
members; and
(4) the organization:
(A) has a board of directors elected by the
members;
(B) does not compensate members of the board of
directors for service on the board;
(C) with respect to its activities in this state,
is engaged primarily in performing functions listed in Subsection
(d);
(D) is primarily supported by membership dues and
other income from activities substantially related to its primary
functions; and
(E) is not, has not formed, and does not
financially support a political committee as defined by Section
251.001, Election Code.
(b) An association that qualifies as a nonprofit community
business organization as provided by this section is entitled to an
exemption from taxation of:
(1) the buildings and tangible personal property that:
(A) are owned by the nonprofit community business
organization; and
(B) except as permitted by Subsection (c), are
used exclusively by qualified nonprofit community business
organizations to perform their primary functions; and
(2) the real property owned by the nonprofit community
business organization consisting of:
(A) an incomplete improvement that:
(i) is under active construction or other
physical preparation; and
(ii) is designed and intended to be used
exclusively by qualified nonprofit community business
organizations; and
(B) the land on which the incomplete improvement
is located that will be reasonably necessary for the use of the
improvement by qualified nonprofit community business
organizations.
(c) Use of exempt property by persons who are not nonprofit
community business organizations qualified as provided by this
section does not result in the loss of an exemption authorized by
this section if the use is incidental to use by qualified nonprofit
community business organizations and limited to activities that
benefit the beneficiaries of the nonprofit community business
organizations that own or use the property.
(d) To qualify for an exemption under this section, a
nonprofit community business organization must be engaged
primarily in performing one or more of the following functions in
the local community:
(1) promoting the common economic interests of
commercial enterprises;
(2) improving the business conditions of one or more
types of business; or
(3) otherwise providing services to aid in economic
development.
(e) In this section, "building" includes the land that is
reasonably necessary for use of, access to, and ornamentation of
the building.
(f) A property may not be exempted under Subsection (b)(2)
for more than three years.
(g) For purposes of Subsection (b)(2), an incomplete
improvement is under physical preparation if the nonprofit
community business organization has:
(1) engaged in architectural or engineering work, soil
testing, land clearing activities, or site improvement work
necessary for the construction of the improvement; or
(2) conducted an environmental or land use study
relating to the construction of the improvement.
SECTION 4. Section 11.26, Tax Code, is amended by adding
Subsections (n) and (o) to read as follows:
(n) Notwithstanding Subsection (c), the limitation on tax
increases required by this section does not expire if the owner of
the structure qualifies for an exemption under Section 11.13 under
the circumstances described by Section 11.135(a).
(o) Notwithstanding Subsections (a), (a-3), and (b), an
improvement to property that would otherwise constitute an
improvement under Subsection (b) is not treated as an improvement
under that subsection if the improvement is a replacement structure
for a structure that was rendered uninhabitable or unusable by a
casualty or by wind or water damage. For purposes of appraising the
property in the tax year in which the structure would have
constituted an improvement under Subsection (b), the replacement
structure is considered to be an improvement under that subsection
only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
SECTION 5. Section 11.261, Tax Code, is amended by adding
Subsections (l) and (m) to read as follows:
(l) Notwithstanding Subsection (d), a limitation on county,
municipal, or junior college district tax increases provided by
this section does not expire if the owner of the structure qualifies
for an exemption under Section 11.13 under the circumstances
described by Section 11.135(a).
(m) Notwithstanding Subsections (b) and (c), an improvement
to property that would otherwise constitute an improvement under
Subsection (c) is not treated as an improvement under that
subsection if the improvement is a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind or water damage. For purposes of appraising the property
in the tax year in which the structure would have constituted an
improvement under Subsection (c), the replacement structure is
considered to be an improvement under that subsection only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
SECTION 6. Section 11.42(d), Tax Code, is amended to read as
follows:
(d) A person who acquires property after January 1 of a tax
year may receive an exemption authorized by Section 11.17, 11.18,
11.19, 11.20, 11.21, 11.23, 11.231, or 11.30 for the applicable
portion of that tax year immediately on qualification for the
exemption.
SECTION 7. Section 11.43(c), Tax Code, is amended to read as
follows:
(c) An exemption provided by Section 11.13, 11.17, 11.18,
11.182, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(h), (j), or
(j-1), 11.231, 11.29, 11.30, or 11.31, once allowed, need not be
claimed in subsequent years, and except as otherwise provided by
Subsection (e), the exemption applies to the property until it
changes ownership or the person's qualification for the exemption
changes. However, the chief appraiser may require a person allowed
one of the exemptions in a prior year to file a new application to
confirm the person's current qualification for the exemption by
delivering a written notice that a new application is required,
accompanied by an appropriate application form, to the person
previously allowed the exemption.
SECTION 8. Section 23.23(f), Tax Code, is amended to read as
follows:
(f) Notwithstanding Subsections (a) and (e) and except as
provided by Subdivision (2), an improvement to property that would
otherwise constitute a new improvement is not treated as a new
improvement if the improvement is a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind [mold] or water damage. For purposes of appraising the
property under Subsection (a) in the tax year in which the structure
would have constituted a new improvement:
(1) the appraised value the property would have had in
the preceding tax [last] year if the casualty or damage had not
occurred [in which the property was appraised for taxation before
the casualty or damage occurred] is considered to be the appraised
value of the property for that year, regardless of whether that
appraised value exceeds the actual appraised value of the property
for that year as limited by Subsection (a) [last year in which the
property was appraised for taxation for purposes of Subsection
(a)(2)(A)]; and
(2) the replacement structure is considered to be a
new improvement only if:
(A) the square footage of the replacement
structure exceeds that of [to the extent it is a significant
improvement over] the replaced structure as that structure existed
before the casualty or damage occurred; or
(B) the exterior of the replacement structure is
of higher quality construction and composition than that of the
replaced structure.
SECTION 9. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 10. This Act takes effect January 1, 2010.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 770 was passed by the House on May 7,
2009, by the following vote: Yeas 141, Nays 1, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 770 on May 29, 2009, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 770 on May 31, 2009, by the following vote: Yeas 144,
Nays 0, 1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 770 was passed by the Senate, with
amendments, on May 27, 2009, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
770 on May 31, 2009, by the following vote: Yeas 30, Nays 1.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor