Texas 2019 - 86th Regular

Texas Senate Bill SB335 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: West S.B. No. 335
2		-	(Rodriguez)
3	2
4	3
5	4		A BILL TO BE ENTITLED
6	5		AN ACT
7	6		relating to community land trusts.
8	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	8		SECTION 1. Section 373B.003, Local Government Code, is
10	9		amended to read as follows:
11	10		Sec. 373B.003. NATURE OF TRUST. A community land trust
12	11		created or designated under Section 373B.002 must be a nonprofit
13	12		organization that is:
14	13		(1) created to acquire and hold land for the benefit of
15	14		developing and preserving long-term affordable housing in the
16	15		municipality or county; and
17	16		(2) organized as:
18	17		(A) a nonprofit corporation that is exempt from
19	18		federal income taxation under Section 501(a), Internal Revenue Code
20	19		of 1986, by being listed [certified] as an exempt organization
21	20		under Section 501(c)(3) of that code;
22	21		(B) a limited partnership of which a nonprofit
23	22		corporation described by Paragraph (A) controls 100 percent of the
24	23		general partner interest; or
25	24		(C) a limited liability company for which a
26	25		nonprofit corporation described by Paragraph (A) serves as the only
27	26		member.
28	27		SECTION 2. Section 11.1827, Tax Code, is amended by adding
29	28		Subsection (g) to read as follows:
30	29		(g) Once adopted by the governing body of a taxing unit, the
31	30		exemption provided by this section continues to apply to property
32	31		located in the taxing unit until the governing body rescinds the
33	32		exemption in the manner provided by law for official action by the
34	33		body.
35	34		SECTION 3. Section 23.21, Tax Code, is amended by amending
36	35		Subsections (c) and (d) and adding Subsection (c-1) to read as
37	36		follows:
38	37		(c) In appraising land [or a housing unit] that is leased by
39	38		a community land trust created or designated under Section
40	39		373B.002, Local Government Code, to a family meeting the
41	40		income-eligibility standards established by Section 373B.006 of
42	41		that code under regulations or restrictions limiting the amount
43	42		that the family may be required to pay for the rental or lease of the
44	43		property, the chief appraiser shall use the income method of
45	44		appraisal as described by Section 23.012 to determine the appraised
46	45		value of the property. The chief appraiser shall use that method
47	46		regardless of whether the chief appraiser considers that method to
48	47		be the most appropriate method of appraising the property. In
49	48		appraising the property, the chief appraiser shall:
50	49		(1) take into account the uses and limitations
51	50		applicable to the property, including the terms of the lease
52	51		applicable to the property, for purposes of computing the actual
53	52		rental income from the property and projecting future rental
54	53		income; and
55	54		(2) use the same capitalization rate that the chief
56	55		appraiser uses to appraise other rent-restricted properties
57	56		[extent to which that use and limitation reduce the market value of
58	57		the property].
59	58		(c-1) In appraising a housing unit that is leased by a
60	59		community land trust created or designated under Section 373B.002,
61	60		Local Government Code, to a family meeting the income-eligibility
62	61		standards established by Section 373B.006 of that code under
63	62		regulations or restrictions limiting the amount that the family may
64	63		be required to pay for the rental or lease of the property, the
65	64		chief appraiser shall use the income method of appraisal as
66	65		described by Section 23.012 to determine the appraised value of the
67	66		property. The chief appraiser shall use that method regardless of
68	67		whether the chief appraiser considers that method to be the most
69	68		appropriate method of appraising the property. In appraising the
70	69		property, the chief appraiser shall:
71	70		(1) take into account the uses and limitations
72	71		applicable to the property, including the terms of the lease
73	72		applicable to the property, for purposes of computing the actual
74	73		rental income from the property and projecting future rental
75	74		income; and
76	75		(2) use the same capitalization rate that the chief
77	76		appraiser uses to appraise other rent-restricted properties.
78	77		(d) In appraising a housing unit that the owner or a
79	78		predecessor of the owner acquired from a community land trust
80	79		created or designated under Section 373B.002, Local Government
81	80		Code, and that is located on land owned by the trust and leased by
82	81		the owner of the housing unit, the chief appraiser shall take into
83	82		account the extent to which any regulations or restrictions
84	83		limiting the right of the owner of the housing unit to sell the
85	84		housing unit, including any limitation on the price for which the
86	85		housing unit may be sold, reduce the market value of the housing
87	86		unit. If the sale of the housing unit is subject to an eligible land
88	87		use restriction, the chief appraiser may not appraise the housing
89	88		unit in a tax year for an amount that exceeds the price for which the
90	89		housing unit may be sold under the eligible land use restriction in
91	90		that tax year. For purposes of this subsection, "eligible land use
92	91		restriction" means an agreement, deed restriction, or restrictive
93	92		covenant applicable to the housing unit that:
94	93		(1) is recorded in the real property records;
95	94		(2) has a term of at least 40 years;
96	95		(3) restricts the price for which the housing unit may
97	96		be sold to a price that is equal to or less than the market value of
98	97		the housing unit; and
99	98		(4) restricts the sale of the housing unit to a family
100	99		meeting the income-eligibility standards established by Section
101	100		373B.006, Local Government Code.
102	101		SECTION 4. Section 26.10, Tax Code, is amended by amending
103	102		Subsection (a) and adding Subsection (d) to read as follows:
104	103		(a) If the appraisal roll shows that a property is eligible
105	104		for taxation for only part of a year because an exemption, other
106	105		than a residence homestead exemption or an exemption described by
107	106		Subsection (d), applicable on January 1 of that year terminated
108	107		during the year, the tax due against the property is calculated by
109	108		multiplying the tax due for the entire year as determined as
110	109		provided by Section 26.09 [of this code] by a fraction, the
111	110		denominator of which is 365 and the numerator of which is the number
112	111		of days the exemption is not applicable.
113	112		(d) Subsection (a) does not apply to an exemption for land
114	113		received by an organization under Section 11.181, 11.182, or
115	114		11.1825 that terminated during the year because of the sale by the
116	115		organization of a housing unit located on the land if:
117	116		(1) the housing unit is sold to a family meeting the
118	117		income-eligibility standards established by Section 373B.006,
119	118		Local Government Code;
120	119		(2) the organization retains title to the land on
121	120		which the housing unit is located; and
122	121		(3) before the date on which the housing unit is sold,
123	122		the organization is designated a community land trust by the
124	123		governing body of a municipality or county as provided by Section
125	124		373B.002, Local Government Code.
126	125		SECTION 5. This Act applies only to ad valorem taxes imposed
127	126		for a tax year that begins on or after the effective date of this
128	127		Act.
129	128		SECTION 6. This Act takes effect September 1, 2019.