By: West S.B. No. 1931
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. Section 373B.003, Local Government Code, is
amended to read as follows:
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) organized as:
(A) a nonprofit corporation that is exempt from
federal income taxation under Section 501(a), Internal Revenue Code
of 1986, by being listed [certified] as an exempt organization
under Section 501(c)(3) of that code;
(B) a limited partnership of which a nonprofit
corporation described by Paragraph (A) controls 100 percent of the
general partner interest; or
(C) a limited liability company for which a
nonprofit corporation described by Paragraph (A) serves as the only
member.
SECTION 2. Section 11.182, Tax Code, is amended by adding
Subsection (l) to read as follows:
(l) An exemption under Subsection (b) or (f) does not
terminate because the organization receiving the exemption
qualifies for an exemption for the same property under Section
11.1827.
SECTION 3. Section 11.1827, Tax Code, is amended by
amending Subsection (b) and adding Subsection (g) to read as
follows:
(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
(B) [(C)] engages exclusively in the sale or
lease of housing as described by Paragraph (A) [(B)] and related
activities, except that the trust may also engage in the
development of low-income and moderate-income housing; 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.
(g) Once adopted by the governing body of a taxing unit, the
exemption provided by this section continues to apply to property
located in the taxing unit until the governing body rescinds the
exemption in the manner provided by law for official action by the
body.
SECTION 4. Section 11.436(a), Tax Code, is amended to read
as follows:
(a) An organization that acquires property that qualifies
for an exemption under Section 11.181(a), [or] 11.1825, or 11.1827
may apply for the exemption for the year of acquisition not later
than the 30th day after the date the organization acquires the
property, and the deadline provided by Section 11.43(d) does not
apply to the application for that year.
SECTION 5. Sections 23.21(c) and (d), Tax Code, are amended
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 use the income method of appraisal as
described by Section 23.012 to determine the appraised value of the
property. The chief appraiser shall use that method regardless of
whether the chief appraiser considers that method to be the most
appropriate method of appraising the property. In appraising the
property, the chief appraiser shall:
(1) take into account the [extend to which that] use
and limitation applicable to the property for purposes of computing
the actual rental income from the property and projecting future
rental income; and
(2) use the same capitalization rate that the chief
appraiser uses to appraise other rent-restricted properties
[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. If sale of the housing unit is subject to an eligible land use
restriction, the chief appraiser may not appraise the housing unit
in a tax year for an amount that exceeds the price for which the
housing unit may be sold under the eligible land use restriction in
that tax year. For purposes of this subsection, "eligible land use
restriction" means an agreement or restrictive covenant applicable
to a housing unit that:
(1) is recorded in the real property records;
(2) has a term of at least 40 years;
(3) restricts the price for which the housing unit may
be sold to a price that is or may be less than the market value of
the housing unit; and
(4) restricts the sale of the housing unit to a family
meeting the income-eligibility standards established by Section
373B.006, Local Government Code.
SECTION 6. This Act applies only to ad valorem taxes imposed
for a tax year that begins on or after the effective date of this
Act.
SECTION 7. This Act takes effect September 1, 2017.