89R15638 DRS-F
By: Gutierrez S.B. No. 2517
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from ad valorem taxation of real property
leased to certain local public entities for use as a hospital and
related health care services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.1802 to read as follows:
Sec. 11.1802. REAL PROPERTY LEASED FOR CERTAIN HOSPITAL
USE. (a) A person is entitled to an exemption from taxation of the
portion of the real property that the person owns and leases to a
governmental entity established under Subchapter B, Chapter 265,
Health and Safety Code, for use as a hospital and the provision of
related health care services if:
(1) the portion of the real property that is leased to
the entity is:
(A) used exclusively by the entity for the
operation or administration of the hospital and the provision of
related health care services by the hospital; and
(B) reasonably necessary for a purpose described
by Paragraph (A); and
(2) the owner of the portion of the real property that
is leased to the entity certifies by affidavit to the entity that:
(A) if the lease agreement requires the entity to
pay the taxes imposed on the real property as a portion of the total
consideration paid to the property owner under the agreement, the
owner will reduce the total consideration required to be paid by the
entity under the lease agreement by an amount equal to the amount by
which the taxes on the real property are reduced as a result of the
exemption by providing a monthly or annual credit against the total
consideration due under the agreement; or
(B) if the lease agreement requires the entity to
pay the taxes imposed on the real property directly to the collector
for the applicable taxing unit or to the owner or the property
manager separately from the payment of rent to the property owner
under the agreement, the entity is no longer required to pay the
taxes to the collector, owner, or property manager, as applicable,
and the rent charged to the entity under the agreement is not
affected unless a term of the agreement specifically provides for a
change in the amount of the rent.
(b) A property owner required to provide an affidavit
described by Subsection (a)(2)(A) to a governmental entity shall:
(1) annually provide the entity with a disclosure
document stating the amount by which the taxes on the real property
are reduced as a result of the exemption and the method the owner
will implement to ensure that the total consideration for the lease
of the real property fully reflects the total amount of that
reduction; and
(2) reduce the total consideration for the lease of
the real property through a monthly or annual credit against the
total consideration to reflect the amount by which the taxes on the
real property are reduced as a result of the exemption.
(c) Section 25.07 does not apply to a leasehold interest in
real property for which the owner receives an exemption under this
section.
SECTION 2. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, authorizing the legislature to exempt from
ad valorem taxation real property leased to certain local public
entities for use as a hospital and related health care services is
approved by the voters. If that amendment is not approved by the
voters, this Act has no effect.