| 1 | 1 | | 87R3972 CJC-F |
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| 2 | 2 | | By: Murphy H.B. No. 1022 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the exemption from ad valorem taxation of real property |
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| 8 | 8 | | leased to and used by certain schools. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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| 11 | 11 | | adding Section 11.211 to read as follows: |
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| 12 | 12 | | Sec. 11.211. REAL PROPERTY LEASED TO CERTAIN SCHOOLS. (a) |
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| 13 | 13 | | A person is entitled to an exemption from taxation of the portion of |
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| 14 | 14 | | the real property that the person owns and leases to an |
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| 15 | 15 | | open-enrollment charter school authorized by Subchapter D, Chapter |
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| 16 | 16 | | 12, Education Code, that is qualified as provided by Section |
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| 17 | 17 | | 11.21(d) of this code if: |
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| 18 | 18 | | (1) the portion of the real property that is leased to |
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| 19 | 19 | | the school is: |
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| 20 | 20 | | (A) used exclusively by the school for the |
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| 21 | 21 | | operation or administration of the school or the performance of |
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| 22 | 22 | | other educational functions by the school; and |
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| 23 | 23 | | (B) reasonably necessary for a purpose described |
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| 24 | 24 | | by Paragraph (A); and |
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| 25 | 25 | | (2) the owner of the portion of the real property that |
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| 26 | 26 | | is leased to the school certifies by affidavit to the school that: |
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| 27 | 27 | | (A) if the lease agreement requires the school to |
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| 28 | 28 | | pay the taxes imposed on the real property as a portion of the total |
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| 29 | 29 | | consideration paid to the property owner under the agreement, the |
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| 30 | 30 | | owner will reduce the total consideration required to be paid by the |
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| 31 | 31 | | school under the lease agreement by an amount equal to the amount by |
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| 32 | 32 | | which the taxes on the real property are reduced as a result of the |
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| 33 | 33 | | exemption by providing a monthly or annual credit against the total |
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| 34 | 34 | | consideration due under the agreement; or |
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| 35 | 35 | | (B) if the lease agreement requires the school to |
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| 36 | 36 | | pay the taxes imposed on the real property directly to the collector |
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| 37 | 37 | | for the applicable taxing unit or to the owner or the property |
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| 38 | 38 | | manager separately from the payment of rent to the property owner |
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| 39 | 39 | | under the agreement, the school is no longer required to pay the |
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| 40 | 40 | | taxes to the collector, owner, or property manager, as applicable, |
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| 41 | 41 | | and the rent charged to the school under the agreement is not |
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| 42 | 42 | | affected unless a term of the agreement specifically provides for a |
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| 43 | 43 | | change in the amount of the rent. |
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| 44 | 44 | | (b) A property owner required to provide an affidavit |
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| 45 | 45 | | described by Subsection (a)(2)(A) to an open-enrollment charter |
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| 46 | 46 | | school shall: |
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| 47 | 47 | | (1) provide the school with a disclosure document |
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| 48 | 48 | | stating the amount by which the taxes on the real property are |
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| 49 | 49 | | reduced as a result of the exemption and the method the owner will |
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| 50 | 50 | | implement to ensure that the total consideration for the lease of |
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| 51 | 51 | | the real property fully reflects the total amount of that |
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| 52 | 52 | | reduction; and |
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| 53 | 53 | | (2) reduce the total consideration for the lease of |
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| 54 | 54 | | the real property through a monthly or annual credit against the |
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| 55 | 55 | | total consideration to reflect the amount by which the taxes on the |
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| 56 | 56 | | real property are reduced as a result of the exemption. |
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| 57 | 57 | | (c) This section may not be construed as invalidating an |
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| 58 | 58 | | exemption from taxation of real property granted to an |
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| 59 | 59 | | open-enrollment charter school on the basis of Section 12.128, |
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| 60 | 60 | | Education Code, before January 1, 2022. |
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| 61 | 61 | | (d) Section 25.07 does not apply to a leasehold interest in |
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| 62 | 62 | | real property for which the owner receives an exemption under this |
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| 63 | 63 | | section. |
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| 64 | 64 | | SECTION 2. This Act applies only to ad valorem taxes imposed |
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| 65 | 65 | | for a tax year beginning on or after the effective date of this Act. |
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| 66 | 66 | | SECTION 3. This Act takes effect January 1, 2022, but only |
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| 67 | 67 | | if the constitutional amendment proposed by the 87th Legislature, |
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| 68 | 68 | | Regular Session, 2021, authorizing the legislature to exempt from |
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| 69 | 69 | | ad valorem taxation real property leased to certain schools |
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| 70 | 70 | | organized and operated primarily for the purpose of engaging in |
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| 71 | 71 | | educational functions is approved by the voters. If that amendment |
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| 72 | 72 | | is not approved by the voters, this Act has no effect. |
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