Texas 2019 - 86th Regular

Texas Senate Bill SB1830 Compare Versions

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

Old	New	Differences
1	1	86R7076 CJC-F
2	2	By: Alvarado S.B. No. 1830
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 construction or
36	36	that has not reached stabilized occupancy on January 1 of the tax
37	37	year in which the property is appraised, the [The] chief appraiser
38	38	shall determine the appraised value of [appraise] the property in
39	39	the manner provided by Section 11.1825(q), provided that the chief
40	40	appraiser shall estimate the property's gross income potential and
41	41	operating expenses based on the property's projected income and
42	42	expenses for the first full year of operation as established and
43	43	utilized in the underwriting report pertaining to the property
44	44	prepared by the Texas Department of Housing and Community Affairs
45	45	under Subchapter DD, Chapter 2306, Government Code, adjusted as
46	46	provided by this subsection. For a property under construction on
47	47	January 1, the income and expenses contained in the underwriting
48	48	report shall be adjusted by multiplying those amounts by a
49	49	fraction, the denominator of which is the total construction budget
50	50	for the property and the numerator of which is the total amount
51	51	spent in constructing the property as of January 1. For a property
52	52	on which construction was completed but that has not reached
53	53	stabilized occupancy on January 1, the income and expenses
54	54	contained in the underwriting report shall be adjusted to reflect
55	55	the actual occupancy of the property on January 1.
56	56	(c) In appraising property for the first tax year following
57	57	the year in which construction on the property was completed and
58	58	occupancy of the property had stabilized, the chief appraiser shall
59	59	determine the appraised value of the property in the manner
60	60	provided by Section 11.1825(q).
61	61	(d) In appraising property for the second and subsequent tax
62	62	years following the year in which construction on the property was
63	63	completed and occupancy of the property had stabilized, the chief
64	64	appraiser shall determine the appraised value of the property by
65	65	adjusting the appraised value of the property for the preceding tax
66	66	year by the percentage change in the net income of the property in
67	67	the preceding year as compared to the year preceding that year.
68	68	(d-1) Notwithstanding Subsection (d), for the 2020 tax
69	69	year, in appraising property for which construction was completed
70	70	on January 1, 2019, the chief appraiser shall determine the
71	71	appraised value of the property by adjusting the average appraised
72	72	value of the property for the preceding three-year period by the
73	73	percentage change in the net income of the property in the 2019 tax
74	74	year as compared to the 2018 tax year. This subsection expires
75	75	January 1, 2021.
76	76	(e) If property appraised under this section is sold and is
77	77	no longer subject to a land use restriction agreement described by
78	78	Subsection (a)(2) after the sale, the property is no longer
79	79	eligible for appraisal under this section and an additional tax is
80	80	imposed on the property. The additional tax due is an amount equal
81	81	to the difference between the taxes imposed on the property for each
82	82	of the three years preceding the year in which the property is sold
83	83	that the property was appraised as provided by this section and the
84	84	taxes that would have been imposed had the property been appraised
85	85	in each of those years at the lesser of:
86	86	(1) the price for which the property is sold; or
87	87	(2) the price for which the property is sold, adjusted
88	88	by the percentage change in the net income of the property for the
89	89	applicable year in the manner provided by Subsection (d).
90	90	(f) A tax lien attaches to property to which Subsection (e)
91	91	applies on the date the property is sold to secure payment of the
92	92	additional tax imposed by that subsection. The lien exists in favor
93	93	of all taxing units for which the additional tax is imposed.
94	94	(g) A determination that property is no longer eligible for
95	95	appraisal under this section is made by the chief appraiser. The
96	96	chief appraiser shall deliver a notice of the determination to the
97	97	owner of the property as soon as possible after making the
98	98	determination and shall include in the notice an explanation of the
99	99	owner's right to protest the determination. If the owner does not
100	100	file a timely protest or if the final determination of the protest
101	101	is that the additional taxes are due, the assessor for each taxing
102	102	unit shall prepare and deliver a bill for the additional taxes as
103	103	soon as practicable. The taxes are due and become delinquent and
104	104	incur penalties and interest as provided by law for ad valorem taxes
105	105	imposed by the taxing unit if not paid before the next February 1
106	106	that is at least 20 days after the date the bill is delivered to the
107	107	owner of the property.
108	108	(h) Notwithstanding any other law:
109	109	(1) a property owner may not bring a protest under
110	110	Section 41.41(a)(2) alleging unequal appraisal of the owner's
111	111	property on the ground of the appraised value of the property being
112	112	greater than the median appraised value of a reasonable number of
113	113	comparable properties appropriately adjusted for any tax year in
114	114	which the appraised value of the property is determined as provided
115	115	by this section; and
116	116	(2) a property appraised as provided by this section
117	117	may not be used as a comparable property for the purpose of
118	118	determining whether another property that is not appraised as
119	119	provided by this section is unequally appraised.
120	120	(i) For purposes of this section, the chief appraiser, in
121	121	determining the percentage change in the net income of property:
122	122	(1) shall use generally accepted appraisal methods and
123	123	techniques to determine the property's operating expenses based on
124	124	information contained in:
125	125	(A) an audit of the organization that owns the
126	126	property prepared by an independent auditor covering the relevant
127	127	fiscal period; or
128	128	(B) the most recent annual owner's compliance
129	129	report filed by the organization that owns the property with the
130	130	Texas Department of Housing and Community Affairs; and
131	131	(2) may not consider the taxes imposed on the property
132	132	and paid by the organization that owns the property to be an
133	133	operating expense of the property.
134	134	(j) Not later than May 1 of each year, the owner of a
135	135	property appraised under this section shall provide to the chief
136	136	appraiser of the appraisal district that appraises the property a
137	137	copy of the document described by Subsection (i)(1)(A) or (B), as
138	138	applicable. The chief appraiser may extend the deadline provided
139	139	by this subsection for good cause shown.
140	140	SECTION 3. The change in law made by this Act applies only
141	141	to an ad valorem tax year that begins on or after January 1, 2020.
142	142	SECTION 4. This Act takes effect January 1, 2020.