By: Creighton S.B. No. 2345
(In the Senate - Filed March 8, 2019; March 21, 2019, read
first time and referred to Committee on Property Tax;
April 30, 2019, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 5, Nays 0; April 30, 2019,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 2345 By: Creighton
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from ad valorem taxation of real property
leased to and used by certain schools.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.211 to read as follows:
Sec. 11.211. REAL PROPERTY LEASED TO CERTAIN SCHOOLS.
(a) A person is entitled to an exemption from taxation of the
portion of the real property that the person owns and leases to an
open-enrollment charter school authorized by Subchapter D, Chapter
12, Education Code, that is qualified as provided by Section
11.21(d) of this code if:
(1) the portion of the real property that is leased to
the school is:
(A) used exclusively by the school for the
operation or administration of the school or the performance of
other educational functions by the school; and
(B) reasonably necessary for a purpose described
by Paragraph (A); and
(2) the owner of the portion of the real property that
is leased to the school certifies by affidavit to the school that:
(A) if the lease agreement requires the school to
pay the taxes imposed on the real property as a portion of the total
consideration paid to the property owner under the agreement, the
owner will reduce the total consideration required to be paid by the
school under the lease agreement by an amount equal to the amount by
which the taxes on the real property are reduced as a result of the
exemption by providing a monthly or annual credit against the total
consideration due under the agreement; or
(B) if the lease agreement requires the school to
pay the taxes imposed on the real property directly to the collector
for the applicable taxing unit or to the owner or the property
manager separately from the payment of rent to the property owner
under the agreement, the school is no longer required to pay the
taxes to the collector, owner, or property manager, as applicable,
and the rent charged to the school under the agreement is not
affected unless a term of the agreement specifically provides for a
change in the amount of the rent.
(b) A property owner required to provide an affidavit
described by Subsection (a)(2)(A) to an open-enrollment charter
school shall:
(1) provide the school with a disclosure document
stating the amount by which the taxes on the real property are
reduced as a result of the exemption and the method the owner will
implement to ensure that the total consideration for the lease of
the real property fully reflects the total amount of that
reduction; and
(2) reduce the total consideration for the lease of
the real property through a monthly or annual credit against the
total consideration to reflect the amount by which the taxes on the
real property are reduced as a result of the exemption.
(c) This section may not be construed as invalidating an
exemption from taxation of real property granted to an
open-enrollment charter school on the basis of Section 12.128,
Education Code, before January 1, 2020.
(d) Section 25.07 does not apply to a leasehold interest in
real property for which the owner receives an exemption under this
section.
SECTION 2. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2020, but only
if the constitutional amendment proposed by the 86th Legislature,
Regular Session, 2019, authorizing the legislature to exempt from
ad valorem taxation real property leased to certain schools
organized and operated primarily for the purpose of engaging in
educational functions is approved by the voters. If that amendment
is not approved by the voters, this Act has no effect.
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