BILL ANALYSIS H.B. 2525 By: Darby Ways & Means Committee Report (Unamended) BACKGROUND AND PURPOSE For an organization to qualify for a property tax exemption as a charitable organization, the organization must be engaged exclusively in performing one or more of the charitable functions listed in Tax Code provisions relating to the exemption. As one such type of charitable organization, charitable senior housing providers and retirement communities, in addition to providing permanent housing for older Texans, can often offer various social, healthcare, and educational services that can improve the lives of residents, families, and caregivers. Unfortunately, as the author has informed the committee, some of these organizations have had their property tax exemptions challenged or revoked despite the substantial benefits these organizations provide to seniors. The lack of clarity regarding property tax exemptions can place qualified charitable organizations serving seniors at greater risk of losing their exemptions, which can threaten their ability to provide vital services to a vulnerable population. H.B. 2525 seeks to provide certainty to charitable senior housing organizations that their exemptions will not be arbitrarily revoked by appraisal districts by providing for an exemption for certain organizations engaged in charitable functions involving the provision of charitable housing and services to individuals 62 years of age or older. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS H.B. 2525 amends the Tax Code to revise provisions establishing the charitable functions that qualify an otherwise eligible charitable organization for a property tax exemption for certain property owned or used by the charitable organization. The bill includes among such functions the provision of permanent housing and related social, health care, and educational facilities for persons who are 62 years of age or older as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue. The bill also makes the following changes with respect to organizations providing housing and related services to persons who are 62 years of age or older in a retirement community: removes the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus in which at least four percent of the retirement community's combined net resident revenue is provided in charitable care to its residents; and includes instead the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue. H.B. 2525 defines "charitable housing and services" as the following provided by a charitable organization to a person 62 years of age or older in financial need: housing, including as an independent living facility, assisted living facility, or nursing facility; and any service designed to meet the unique needs of a person 62 years of age or older, including ministerial services, government-sponsored indigent health care, social services, health services, educational services, and donations to an organization that qualifies for an exemption for providing for persons 62 years of age or older permanent housing and related social, health care, and educational facilities or housing and related services in a retirement community, as applicable. H.B. 2525 applies only to a property tax year that begins on or after the bill's effective date. EFFECTIVE DATE January 1, 2026.
BILL ANALYSIS
# BILL ANALYSIS
H.B. 2525
By: Darby
Ways & Means
Committee Report (Unamended)
H.B. 2525
By: Darby
Ways & Means
Committee Report (Unamended)
BACKGROUND AND PURPOSE For an organization to qualify for a property tax exemption as a charitable organization, the organization must be engaged exclusively in performing one or more of the charitable functions listed in Tax Code provisions relating to the exemption. As one such type of charitable organization, charitable senior housing providers and retirement communities, in addition to providing permanent housing for older Texans, can often offer various social, healthcare, and educational services that can improve the lives of residents, families, and caregivers. Unfortunately, as the author has informed the committee, some of these organizations have had their property tax exemptions challenged or revoked despite the substantial benefits these organizations provide to seniors. The lack of clarity regarding property tax exemptions can place qualified charitable organizations serving seniors at greater risk of losing their exemptions, which can threaten their ability to provide vital services to a vulnerable population. H.B. 2525 seeks to provide certainty to charitable senior housing organizations that their exemptions will not be arbitrarily revoked by appraisal districts by providing for an exemption for certain organizations engaged in charitable functions involving the provision of charitable housing and services to individuals 62 years of age or older.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS H.B. 2525 amends the Tax Code to revise provisions establishing the charitable functions that qualify an otherwise eligible charitable organization for a property tax exemption for certain property owned or used by the charitable organization. The bill includes among such functions the provision of permanent housing and related social, health care, and educational facilities for persons who are 62 years of age or older as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue. The bill also makes the following changes with respect to organizations providing housing and related services to persons who are 62 years of age or older in a retirement community: removes the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus in which at least four percent of the retirement community's combined net resident revenue is provided in charitable care to its residents; and includes instead the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue. H.B. 2525 defines "charitable housing and services" as the following provided by a charitable organization to a person 62 years of age or older in financial need: housing, including as an independent living facility, assisted living facility, or nursing facility; and any service designed to meet the unique needs of a person 62 years of age or older, including ministerial services, government-sponsored indigent health care, social services, health services, educational services, and donations to an organization that qualifies for an exemption for providing for persons 62 years of age or older permanent housing and related social, health care, and educational facilities or housing and related services in a retirement community, as applicable. H.B. 2525 applies only to a property tax year that begins on or after the bill's effective date.
EFFECTIVE DATE January 1, 2026.
BACKGROUND AND PURPOSE
For an organization to qualify for a property tax exemption as a charitable organization, the organization must be engaged exclusively in performing one or more of the charitable functions listed in Tax Code provisions relating to the exemption. As one such type of charitable organization, charitable senior housing providers and retirement communities, in addition to providing permanent housing for older Texans, can often offer various social, healthcare, and educational services that can improve the lives of residents, families, and caregivers. Unfortunately, as the author has informed the committee, some of these organizations have had their property tax exemptions challenged or revoked despite the substantial benefits these organizations provide to seniors. The lack of clarity regarding property tax exemptions can place qualified charitable organizations serving seniors at greater risk of losing their exemptions, which can threaten their ability to provide vital services to a vulnerable population. H.B. 2525 seeks to provide certainty to charitable senior housing organizations that their exemptions will not be arbitrarily revoked by appraisal districts by providing for an exemption for certain organizations engaged in charitable functions involving the provision of charitable housing and services to individuals 62 years of age or older.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 2525 amends the Tax Code to revise provisions establishing the charitable functions that qualify an otherwise eligible charitable organization for a property tax exemption for certain property owned or used by the charitable organization. The bill includes among such functions the provision of permanent housing and related social, health care, and educational facilities for persons who are 62 years of age or older as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue. The bill also makes the following changes with respect to organizations providing housing and related services to persons who are 62 years of age or older in a retirement community:
removes the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus in which at least four percent of the retirement community's combined net resident revenue is provided in charitable care to its residents; and
includes instead the function of providing housing and related services to such persons in a retirement community that provides independent living services, assisted living services, and nursing services to its residents on a single campus as an organization that provides charitable housing and services in an amount that is not less than four percent of the charitable organization's net resident revenue.
H.B. 2525 defines "charitable housing and services" as the following provided by a charitable organization to a person 62 years of age or older in financial need:
housing, including as an independent living facility, assisted living facility, or nursing facility; and
any service designed to meet the unique needs of a person 62 years of age or older, including ministerial services, government-sponsored indigent health care, social services, health services, educational services, and donations to an organization that qualifies for an exemption for providing for persons 62 years of age or older permanent housing and related social, health care, and educational facilities or housing and related services in a retirement community, as applicable.
H.B. 2525 applies only to a property tax year that begins on or after the bill's effective date.
EFFECTIVE DATE
January 1, 2026.