Texas 2023 - 88th Regular

Texas Senate Bill SB1255 Compare Versions

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1	1	88R1655 RDS-F
2	2	By: Hughes, Perry S.B. No. 1255
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the exemption from ad valorem taxation of certain
8	8	property owned by a charitable organization that is engaged in
9	9	providing housing and related facilities and services to persons
10	10	who are at least 62 years of age.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 11.18(d), Tax Code, is amended to read as
13	13	follows:
14	14	(d) A charitable organization must be organized exclusively
15	15	to perform religious, charitable, scientific, literary, or
16	16	educational purposes and, except as permitted by Subsections (h)
17	17	and (l), engage exclusively in performing one or more of the
18	18	following charitable functions:
19	19	(1) providing medical care without regard to the
20	20	beneficiaries' ability to pay, which in the case of a nonprofit
21	21	hospital or hospital system means providing charity care and
22	22	community benefits in accordance with Section 11.1801;
23	23	(2) providing support or relief to orphans, delinquent
24	24	or [,] dependent[, or handicapped] children in need of residential
25	25	care, children with disabilities in need of residential care,
26	26	abused or battered spouses or children in need of temporary
27	27	shelter, the impoverished, or victims of natural disaster without
28	28	regard to the beneficiaries' ability to pay;
29	29	(3) providing support without regard to the
30	30	beneficiaries' ability to pay to:
31	31	(A) elderly persons, including the provision of:
32	32	(i) recreational or social activities; and
33	33	(ii) facilities designed to address the
34	34	special needs of elderly persons; or
35	35	(B) persons with disabilities [the handicapped],
36	36	including training and employment:
37	37	(i) in the production of commodities; or
38	38	(ii) in the provision of services under 41
39	39	U.S.C. Sections 8501-8506;
40	40	(4) preserving a historical landmark or site;
41	41	(5) promoting or operating a museum, zoo, library,
42	42	theater of the dramatic or performing arts, or symphony orchestra
43	43	or choir;
44	44	(6) promoting or providing humane treatment of
45	45	animals;
46	46	(7) acquiring, storing, transporting, selling, or
47	47	distributing water for public use;
48	48	(8) answering fire alarms and extinguishing fires with
49	49	no compensation or only nominal compensation to the members of the
50	50	organization;
51	51	(9) promoting the athletic development of boys or
52	52	girls under the age of 18 years;
53	53	(10) preserving or conserving wildlife;
54	54	(11) promoting educational development through loans
55	55	or scholarships to students;
56	56	(12) providing halfway house services pursuant to a
57	57	certification as a halfway house by the parole division of the Texas
58	58	Department of Criminal Justice;
59	59	(13) providing permanent housing and related social,
60	60	health care, and educational facilities for persons who are 62
61	61	years of age or older:
62	62	(A) without regard to the residents' ability to
63	63	pay; or
64	64	(B) as an organization described by Section
65	65	11.1802;
66	66	(14) promoting or operating an art gallery, museum, or
67	67	collection, in a permanent location or on tour, that is open to the
68	68	public;
69	69	(15) providing for the organized solicitation and
70	70	collection for distributions through gifts, grants, and agreements
71	71	to nonprofit charitable, education, religious, and youth
72	72	organizations that provide direct human, health, and welfare
73	73	services;
74	74	(16) performing biomedical or scientific research or
75	75	biomedical or scientific education for the benefit of the public;
76	76	(17) operating a television station that produces or
77	77	broadcasts educational, cultural, or other public interest
78	78	programming and that receives grants from the Corporation for
79	79	Public Broadcasting under 47 U.S.C. Section 396, as amended;
80	80	(18) providing housing for low-income and
81	81	moderate-income families, for unmarried individuals 62 years of age
82	82	or older, for [handicapped] individuals with disabilities, and for
83	83	families displaced by urban renewal, through the use of trust
84	84	assets that are irrevocably and, pursuant to a contract entered
85	85	into before December 31, 1972, contractually dedicated on the sale
86	86	or disposition of the housing to a charitable organization that
87	87	performs charitable functions described by Subdivision (9);
88	88	(19) providing housing and related services to persons
89	89	who are 62 years of age or older in a retirement community, if the
90	90	retirement community provides independent living services,
91	91	assisted living services, and nursing services to its residents on
92	92	a single campus:
93	93	(A) without regard to the residents' ability to
94	94	pay; [or]
95	95	(B) in which at least four percent of the
96	96	retirement community's combined net resident revenue is provided in
97	97	charitable care to its residents; or
98	98	(C) as an organization described by Section
99	99	11.1802;
100	100	(20) providing housing on a cooperative basis to
101	101	students of an institution of higher education if:
102	102	(A) the organization is exempt from federal
103	103	income taxation under Section 501(a), Internal Revenue Code of
104	104	1986, as amended, by being listed as an exempt entity under Section
105	105	501(c)(3) of that code;
106	106	(B) membership in the organization is open to all
107	107	students enrolled in the institution and is not limited to those
108	108	chosen by current members of the organization;
109	109	(C) the organization is governed by its members;
110	110	and
111	111	(D) the members of the organization share the
112	112	responsibility for managing the housing;
113	113	(21) acquiring, holding, and transferring unimproved
114	114	real property under an urban land bank demonstration program
115	115	established under Chapter 379C, Local Government Code, as or on
116	116	behalf of a land bank;
117	117	(22) acquiring, holding, and transferring unimproved
118	118	real property under an urban land bank program established under
119	119	Chapter 379E, Local Government Code, as or on behalf of a land bank;
120	120	(23) providing housing and related services to
121	121	individuals who:
122	122	(A) are unaccompanied and homeless and have a
123	123	disabling condition; and
124	124	(B) have been continuously homeless for a year or
125	125	more or have had at least four episodes of homelessness in the
126	126	preceding three years;
127	127	(24) operating a radio station that broadcasts
128	128	educational, cultural, or other public interest programming,
129	129	including classical music, and that in the preceding five years has
130	130	received or been selected to receive one or more grants from the
131	131	Corporation for Public Broadcasting under 47 U.S.C. Section 396, as
132	132	amended; or
133	133	(25) providing, without regard to the beneficiaries'
134	134	ability to pay, tax return preparation services and assistance with
135	135	other financial matters.
136	136	SECTION 2. Subchapter B, Chapter 11, Tax Code, is amended by
137	137	adding Section 11.1802 to read as follows:
138	138	Sec. 11.1802. REQUIREMENTS FOR CERTAIN CHARITABLE
139	139	ORGANIZATIONS PROVIDING HOUSING AND SERVICES TO THE ELDERLY. (a)
140	140	In this section:
141	141	(1) "Charitable housing and services" means the
142	142	following provided by a charitable organization to a person 62
143	143	years of age or older in financial need:
144	144	(A) housing, including as an independent living
145	145	facility, assisted living facility, or nursing facility; and
146	146	(B) any service designed to meet the unique needs
147	147	of a person 62 years of age or older, including:
148	148	(i) independent living services;
149	149	(ii) assisted living services;
150	150	(iii) nursing facility services;
151	151	(iv) social services;
152	152	(v) health services, including subsidized
153	153	health services;
154	154	(vi) services provided through a
155	155	government-sponsored program, including through Medicaid or
156	156	another federal, state, or local indigent health care program based
157	157	on financial need;
158	158	(vii) educational services; and
159	159	(viii) donations.
160	160	(2) "Net resident revenue" means a charitable
161	161	organization's total revenue from providing housing and services to
162	162	residents of a facility operated by the organization who are 62
163	163	years of age or older, less all allowances and discounts on
164	164	residents' accounts, including:
165	165	(A) debts that are in default;
166	166	(B) contractual adjustments;
167	167	(C) teaching allowances;
168	168	(D) policy discounts;
169	169	(E) administrative adjustments; and
170	170	(F) other deductions from revenue.
171	171	(3) "Very low-income" has the meaning assigned by 12
172	172	U.S.C. Section 1701q(k)(8).
173	173	(b) To qualify as a charitable organization under Section
174	174	11.18(d)(13)(B) or (19)(C), an organization must:
175	175	(1) except as provided by Subsection (c), provide
176	176	charitable housing and services in an unreimbursed amount that is
177	177	not less than four percent of the charitable organization's net
178	178	resident revenue;
179	179	(2) be located in a county with a population of less
180	180	than 58,000 in which the entire county or the population of the
181	181	entire county has been designated a health professionals shortage
182	182	area; or
183	183	(3) operate a housing development restricted to very
184	184	low-income persons who are 62 years of age or older.
185	185	(c) A charitable organization described by Subsection
186	186	(b)(1) of this section that qualified for an exemption under
187	187	Section 11.18(d)(13)(B) or (19)(C) in the preceding tax year and
188	188	otherwise qualifies for the exemption in the current tax year is
189	189	entitled to the exemption if the organization demonstrates that:
190	190	(1) a reduction in the amount of charitable housing
191	191	and services prescribed by Subsection (b)(1) is necessary:
192	192	(A) to maintain financial reserves at a level
193	193	required by a debt obligation;
194	194	(B) to prevent the organization from endangering
195	195	its ability to continue operating; or
196	196	(C) in response to a natural or other disaster;
197	197	or
198	198	(2) subject to Subsection (e), through unintended
199	199	miscalculation, the organization failed in the preceding tax year
200	200	to provide charitable housing and services in the amount prescribed
201	201	by Subsection (b)(1).
202	202	(d) Subject to Subsection (e), a charitable organization
203	203	that failed to provide charitable housing and services in the
204	204	preceding tax year in the amount prescribed by Subsection (b)(1) of
205	205	this section as described by Subsection (c)(2) of this section is
206	206	entitled to an exemption under Section 11.18(d)(13)(B) or (19)(C)
207	207	for the current tax year, but not for more than one tax year in each
208	208	five tax years.
209	209	(e) A charitable organization to which Subsection (d)
210	210	applies is not entitled to an exemption under Section
211	211	11.18(d)(13)(B) or (19)(C) in the tax year following the current
212	212	tax year unless the organization in the current tax year provides
213	213	charitable housing and services in an amount at least equal to the
214	214	sum of:
215	215	(1) the amount prescribed by Subsection (b)(1) for the
216	216	current tax year; and
217	217	(2) the amount for the preceding tax year by which the
218	218	organization failed to meet the requirement prescribed by
219	219	Subsection (b)(1).
220	220	(f) A charitable organization that fails to satisfy the
221	221	requirements prescribed by Subsection (e) for the current tax year
222	222	is liable for the amount of the tax, plus penalties and interest,
223	223	that would have otherwise been imposed for both the preceding and
224	224	current tax years, calculated as if the taxes were delinquent on
225	225	February 1 of the tax year following the tax year for which the tax
226	226	would otherwise have been imposed.
227	227	SECTION 3. The changes in law made by this Act apply only to
228	228	an ad valorem tax year that begins on or after the effective date of
229	229	this Act.
230	230	SECTION 4. This Act takes effect January 1, 2024.