Texas 2017 - 85th Regular

Texas House Bill HB3752 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R14860 TYPED
2	2	By: Johnson of Dallas H.B. No. 3752
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the appraisal for ad valorem tax purposes of certain
8	8	nonexempt property used for low-income or moderate-income housing.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 1.07(d), Tax Code, is amended to read as
11	11	follows:
12	12	(d) A notice required by Section 11.43(q), 11.45(d),
13	13	23.215(g), 23.44(d), 23.46(c) or (f), 23.54(e), 23.541(c),
14	14	23.55(e), 23.551(a), 23.57(d), 23.76(e), 23.79(d), or 23.85(d)
15	15	must be sent by certified mail.
16	16	SECTION 2. Section 23.215, Tax Code, is amended to read as
17	17	follows:
18	18	Sec. 23.215. APPRAISAL OF CERTAIN NONEXEMPT PROPERTY USED
19	19	FOR LOW-INCOME OR MODERATE-INCOME HOUSING. (a) This section
20	20	applies only to real property owned by an organization:
21	21	(1) for the purpose of renting the property [that on
22	22	the effective date of this section was rented] to a low-income or
23	23	moderate-income individual or family satisfying the organization's
24	24	income eligibility requirements [and that continues to be used for
25	25	that purpose];
26	26	(2) that was financed under the low income housing tax
27	27	credit program under Subchapter DD, Chapter 2306, Government Code,
28	28	and is subject to a land use restriction agreement under that
29	29	subchapter that has not expired or been terminated;
30	30	(3) that does not receive an exemption under Section
31	31	11.182 or 11.1825; and
32	32	(4) the owner of which has not entered into an
33	33	agreement with any taxing unit to make payments to the taxing unit
34	34	instead of taxes on the property.
35	35	(b) In appraising property that is under active
36	36	construction or lease up on January 1 of the tax year in which the
37	37	property is appraised, the [The] chief appraiser shall determine
38	38	the appraised value of [appraise] the property in the manner
39	39	provided by Section 11.1825(q), provided that the chief appraiser
40	40	shall estimate the property's gross income potential and operating
41	41	expenses based on the property's projected income and expenses for
42	42	the first full year of operation as contained in the underwriting
43	43	report pertaining to the property prepared by the Texas Department
44	44	of Housing and Community Affairs under Subchapter DD, Chapter 2306,
45	45	Government Code, as adjusted to reflect the percentage of
46	46	construction of the property that is complete as of January 1
47	47	calculated as the total construction cost expended as of January 1
48	48	divided by the construction budget for a property under active
49	49	construction and, for properties undergoing lease up, as adjusted
50	50	to reflect the actual occupancy.
51	51	(c) In appraising property for the first tax year following
52	52	the completion of active construction and stabilization of the
53	53	property, the chief appraiser shall determine the appraised value
54	54	of the property in the manner provided by Section 11.1825(q).
55	55	(d)
56	56	(d) In appraising property for any subsequent tax year after
57	57	the first year following completion of active construction and
58	58	stabilization of the property, the chief appraiser shall determine
59	59	the appraised value of the property by adjusting the appraised
60	60	value of the property for the preceding tax year by the percentage
61	61	change in the net income of the property in the preceding year as
62	62	compared to the year preceding that year.
63	63	(d-1) Notwithstanding Subsection (d), for the 2018 tax
64	64	year, in appraising property that was not under active construction
65	65	in 2017, the chief appraiser shall determine the appraised value of
66	66	the property by adjusting the average appraised value of the
67	67	property for the preceding three-year period by the percentage
68	68	change in the net income of the property in the 2017 tax year as
69	69	compared to the 2016 tax year. This subsection expires January 1,
70	70	2019.
71	71	(e) If property appraised under this section is sold and is
72	72	no longer subject to a land use restriction agreement described by
73	73	Subsection (a)(2) after the sale, the property is no longer
74	74	eligible for appraisal under this section and an additional tax is
75	75	imposed on the property. The additional tax due is an amount equal
76	76	to the difference between the taxes imposed on the property for each
77	77	of the three years preceding the year in which the property is sold
78	78	that the property was appraised as provided by this section and the
79	79	taxes that would have been imposed had the property been appraised
80	80	at the sale price in each of those years, indexed using each year's
81	81	net income percentage change derived from subsection (d). A tax
82	82	lien attaches to the property on the date the property is sold to
83	83	secure payment of the additional tax imposed by this subsection.
84	84	The lien exists in favor of all taxing units for which the
85	85	additional tax is imposed. The additional tax imposed by this
86	86	subsection does not apply to a year for which the tax has already
87	87	been paid off of the sale price.
88	88	(f) A determination that property is no longer eligible for
89	89	appraisal under this section is made by the chief appraiser. The
90	90	chief appraiser shall deliver a notice of the determination to the
91	91	owner of the property as soon as possible after making the
92	92	determination and shall include in the notice an explanation of the
93	93	owner's right to protest the determination. If the owner does not
94	94	file a timely protest or if the final determination of the protest
95	95	is that the additional taxes are due, the assessor for each taxing
96	96	unit shall prepare and deliver a bill for the additional taxes as
97	97	soon as practicable. The taxes are due and become delinquent and
98	98	incur penalties and interest as provided by law for ad valorem taxes
99	99	imposed by the taxing unit if not paid before the next February 1
100	100	that is at least 20 days after the date the bill is delivered to the
101	101	owner of the property.
102	102	(g) Notwithstanding any other law, a property owner may not
103	103	bring a protest under Section 41.43(b)(3) for any tax year in which
104	104	the appraised value of the owner's property is determined by
105	105	adjusting the property's appraised value by the percentage change
106	106	in the net income of the property as provided by this section.
107	107	(g-1) Notwithstanding any other law, a property appraised
108	108	under this section may not be utilized as a comparable property for
109	109	any property that is not appraised under this section.
110	110	(h) For purposes of this section, the chief appraiser shall
111	111	determine the percentage change in the net income of property using
112	112	generally accepted appraisal standards for expenses, based on
113	113	information contained in:
114	114	(1) an audit of the organization that owns the
115	115	property prepared by an independent auditor covering the relevant
116	116	fiscal period; or
117	117	(2) the most recent annual owner's compliance report
118	118	filed by the organization that owns the property with the Texas
119	119	Department of Housing and Community Affairs.
120	120	(i) Not later than May 1 of each year, an owner shall deliver
121	121	to the chief appraiser the audit or annual owner's compliance
122	122	report for the preceding year. The chief appraiser may extend the
123	123	deadline for good cause shown.
124	124	SECTION 3. The change in law made by this Act applies only
125	125	to an ad valorem tax year that begins on or after January 1, 2018.
126	126	SECTION 4. This Act takes effect January 1, 2018.