| 2 | 4 | | |
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| 3 | 5 | | |
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| 4 | 6 | | A BILL TO BE ENTITLED |
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| 5 | 7 | | AN ACT |
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| 6 | 8 | | relating to the eligibility of a charitable organization for an |
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| 7 | 9 | | exemption from ad valorem taxation of the organization's property |
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| 8 | 10 | | if the organization provides for the organized solicitation and |
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| 9 | 11 | | collection for distributions through gifts, grants, and agreements |
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| 10 | 12 | | to nonprofit charitable, education, religious, and youth |
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| 11 | 13 | | organizations that provide direct human, health, and welfare |
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| 12 | 14 | | services. |
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| 13 | 15 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 16 | | SECTION 1. Section 11.18(g), Tax Code, is amended to read as |
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| 15 | 17 | | follows: |
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| 16 | 18 | | (g) A charitable organization that performs a charitable |
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| 17 | 19 | | function specified by Subsection (d)(15) must: |
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| 18 | 20 | | (1) [be affiliated with a state or national |
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| 19 | 21 | | organization that authorizes, approves, or sanctions volunteer |
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| 20 | 22 | | charitable fundraising organizations; |
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| 21 | 23 | | [(2)] qualify for exemption under Section 501(c)(3), |
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| 22 | 24 | | Internal Revenue Code of 1986, as amended; |
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| 23 | 25 | | (2) [(3)] be governed by a volunteer board of |
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| 24 | 26 | | directors; and |
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| 25 | 27 | | (3) [(4)] distribute contributions to at least five |
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| 26 | 28 | | other associations to be used for general charitable purposes, with |
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| 27 | 29 | | all recipients meeting the following criteria: |
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| 28 | 30 | | (A) be governed by a volunteer board of |
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| 29 | 31 | | directors; |
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| 30 | 32 | | (B) qualify for exemption from federal income tax |
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| 31 | 33 | | under Section 501(c)(3), Internal Revenue Code of 1986, as amended, |
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| 32 | 34 | | or be a public institution of higher education; |
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| 33 | 35 | | (C) receive a majority of annual revenue from |
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| 34 | 36 | | private or corporate charitable gifts and government agencies; and |
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| 35 | 37 | | (D) provide services without regard to the |
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| 36 | 38 | | ability of persons receiving the services to pay for the services. |
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| 37 | 39 | | SECTION 2. The change in law made by this Act applies only |
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| 38 | 40 | | to an ad valorem tax year that begins on or after the effective date |
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| 39 | 41 | | of this Act. |
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| 40 | 42 | | SECTION 3. This Act takes effect January 1, 2026. |
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