By: West S.B. No. 1205
A BILL TO BE ENTITLED
AN ACT
relating to community land trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 373B to read as follows:
CHAPTER 373B. COMMUNITY LAND TRUSTS
Sec. 373B.001. DEFINITION. In this chapter, "community
housing development organization" has the meaning assigned by 42
U.S.C. Section 12704.
Sec. 373B.002. CREATION OR DESIGNATION. The governing body
of a municipality or county by ordinance or order may create or
designate one or more community land trusts, including a housing
finance corporation established under Chapter 394 or a land trust
operated by a community housing development organization certified
by the municipality or county, to operate in the municipality or
county.
Sec. 373B.003. NATURE OF TRUST. A community land trust
created or designated under Section 373B.002 must be a nonprofit
organization that is:
(1) created to acquire and hold land for the benefit of
developing and preserving long-term affordable housing in the
municipality or county; and
(2) exempt from federal income taxation under Section
501(a), Internal Revenue Code of 1986, by being certified as an
exempt organization under Section 501(c)(3) of that code.
Sec. 373B.004. PURPOSES OF TRUST. The purposes of a trust
are to:
(1) provide affordable housing for low-income and
moderate-income residents in the community;
(2) promote resident ownership of housing;
(3) keep housing affordable for future residents; and
(4) capture the value of public investment for
long-term community benefit.
Sec. 373B.005. OWNERSHIP OF LAND AND HOUSING UNITS. A
community land trust may retain title to land it acquires and may:
(1) sell housing units located on the land and lease
the land under ground leases with terms of at least 50 years; or
(2) lease housing units located on the land.
Sec. 373B.006. QUALIFICATIONS OF PURCHASERS OR LESSEES OF
HOUSING UNITS. (a) A community land trust may sell housing units
only to families with a yearly income at the time of sale at or below
80 percent of the area median family income, adjusted for family
size.
(b) Notwithstanding Subsection (a), if the housing units
are located on tracts of land owned by the community land trust that
constitute a contiguous geographic area, the trust may sell not
more than 20 percent of the housing units to families with a yearly
income at the time of sale at or below 120 percent of the area median
family income, adjusted for family size.
(c) At least 25 percent of the housing units sold by the
trust must be sold to families with a yearly income at the time of
sale at or below 60 percent of the area median family income,
adjusted for family size.
(d) A community land trust may lease housing units only to
families with a yearly income at the time of lease at or below 60
percent of the area median family income, adjusted for family size.
Sec. 373B.007. RELATION TO OTHER LAW. This chapter does not
preclude the creation of a land trust by a nonprofit organization,
including a community housing development organization, under
other statutory or common law or the operation of that land trust
inside or outside a municipality or county that has created or
designated a trust under Section 373B.002.
Sec. 373B.008. APPLICABILITY OF CHAPTER TO TRUST OPERATED
BY HOUSING FINANCE CORPORATION. Section 373B.003 does not apply to
a community land trust operated in the municipality or county by a
housing finance corporation established under Chapter 394.
SECTION 2. Subchapter B, Chapter 11, Tax Code, is amended by
adding Sections 11.1827 and 11.1828 to read as follows:
Sec. 11.1827. COMMUNITY LAND TRUST. (a) In this section,
"community land trust" means a community land trust created or
designated under Section 373B.002, Local Government Code.
(b) In addition to any other exemption to which the trust
may be entitled, a community land trust is entitled to an exemption
from taxation by a taxing unit of land owned by the trust, together
with the housing units located on the land if they are owned by the
trust, if:
(1) the trust:
(A) meets the requirements of a charitable
organization provided by Sections 11.18(e) and (f);
(B) owns the land for the purpose of leasing the
land and selling or leasing the housing units located on the land as
provided by Chapter 373B, Local Government Code; and
(C) engages exclusively in the sale or lease of
housing as described by Paragraph (B) and related activities; and
(2) the exemption is adopted by the governing body of
the taxing unit before July 1 in the manner provided by law for
official action by the body.
(c) Property owned by a community land trust may not be
exempted under Subsection (b) after the third anniversary of the
date the trust acquires the property unless the trust is offering to
sell or lease or is leasing the property as provided by Chapter
373B, Local Government Code.
(d) A community land trust entitled to an exemption from
taxation by a taxing unit under Subsection (b) is also entitled to
an exemption from taxation by the taxing unit of any building or
tangible personal property the trust owns and uses in the
administration of its acquisition, construction, repair, sale, or
leasing of property. To qualify for an exemption under this
subsection, property must be used exclusively by the organization,
except that another person may use the property for activities
incidental to the trust's use that benefit the beneficiaries of the
trust.
Sec. 11.1828. MONITORING OF COMPLIANCE BY COMMUNITY LAND
TRUST WITH AFFORDABLE HOUSING EXEMPTION. (a) To receive an
exemption under Section 11.1827, a community land trust must
annually have an audit prepared by an independent auditor. The
audit must include:
(1) a detailed report on the trust's sources and uses
of funds; and
(2) any other information required by the governing
body of the municipality or county that created or designated the
trust under Section 373B.002, Local Government Code.
(b) A copy of the audit must be delivered to:
(1) the governing body of the municipality or county
or an entity designated by the governing body; and
(2) the chief appraiser of the appraisal district in
which the property subject to the exemption is located.
SECTION 3. Subsection (c), Section 11.43, Tax Code, is
amended to read as follows:
(c) An exemption provided by Section 11.13, 11.17, 11.18,
11.182, 11.1827, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(h), (j),
or (j-1), 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 4. Section 23.21, Tax Code, is amended by adding
Subsections (c) and (d) to read as follows:
(c) In appraising land or a housing unit that is leased by a
community land trust created or designated under Section 373B.002,
Local Government Code, to a family meeting the income-eligibility
standards established by Section 373B.006 of that code under
regulations or restrictions limiting the amount that the family may
be required to pay for the rental or lease of the property, the
chief appraiser shall take into account the extent to which that use
and limitation reduce the market value of the property.
(d) In appraising a housing unit that the owner or a
predecessor of the owner acquired from a community land trust
created or designated under Section 373B.002, Local Government
Code, and that is located on land owned by the trust and leased by
the owner of the housing unit, the chief appraiser shall take into
account the extent to which any regulations or restrictions
limiting the right of the owner of the housing unit to sell the
housing unit, including any limitation on the price for which the
housing unit may be sold, reduce the market value of the housing
unit.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 6. This Act takes effect January 1, 2010.