Texas House Bill HB131

Texas 2025 - 89th 1st C.S.

• Filed: 7/18/25

Caption

Relating to the exemption from ad valorem taxation of property owned by an organization engaged primarily in performing charitable functions.

Impact

The implications of HB 131 are significant for charitable organizations in Texas. By allowing automatic reinstatement of expired exemptions for properties owned by eligible organizations, the bill aims to relieve the administrative burden placed on these entities while enhancing their operational stability. This move is generally seen as beneficial for non-profits, providing them with clarity concerning their tax responsibilities and helping them avoid unexpected tax liabilities based on changes in property ownership or operational status.

Summary

House Bill 131 focuses on amending provisions related to the ad valorem tax exemptions for properties owned by organizations primarily engaged in charitable functions. The bill introduces amendments to Section 11.184 of the Texas Tax Code, detailing circumstances under which exemptions may expire and the processes necessary for organizations to retain their exemptions. This includes new guidelines on reporting material changes regarding property ownership and tax-exempt status, ensuring that organizations maintain compliance with legal requirements to retain their tax-exempt status.

Contention

Nevertheless, discussions surrounding HB 131 could remain contentious due to the potential fiscal implications for local governments. Critics may argue that broadening the exemption criteria could reduce property tax revenues needed for local services and infrastructure, leading to a governance dilemma about how to balance support for charitable organizations with the financial health of local budgets. The bill raises questions about the long-term sustainability of tax policies affecting public services funded by local taxes, prompting concerns among some lawmakers regarding the potential for overreach in exempting certain properties from taxation.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 11. Taxable Property And Exemptions
  • Section: New Section
  • Section: 43