81R4479 UM-D
By: Jackson, Mike S.B. No. 564
A BILL TO BE ENTITLED
AN ACT
relating to exempting from ad valorem taxation property used by
certain nonprofit community business organizations to provide
services to aid in the economic development of local communities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 2. 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 3. 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 4. This Act applies only to an ad valorem tax year
that begins on or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2010.