bill limiting where land trusts claim property tax exemptions

The text as introduced · 651 words

89R5145 JBD-D

By: Morales of Maverick
H.B. No. 4650

A BILL TO BE ENTITLED

AN ACT

relating to the exemption from ad valorem taxation of property

owned by a community land trust or housing finance corporation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.1827, Tax Code, is amended by

amending Subsections (b) and (d) and adding Subsection (g) to read

as follows:

(b) Subject to Subsection (g), in [ In ] addition to any other

exemption to which the trust may be entitled, a community land trust

is entitled to an exemption from taxation by a taxing unit of land

owned by the trust, together with the housing units located on the

land if they are owned by the trust, if:

(1) the trust:

(A) meets the requirements of a charitable

organization provided by Sections 11.18(e) and (f);

(B) owns the land for the purpose of leasing the

land and selling or leasing the housing units located on the land as

provided by Chapter 373B, Local Government Code; and

(C) engages exclusively in the sale or lease of

housing as described by Paragraph (B) and related activities,

except that the trust may also engage in the development of

low-income and moderate-income housing; and

(2) the exemption is adopted by the governing body of

the taxing unit before July 1 in the manner provided by law for

official action by the body.

(d) Subject to Subsection (g), a [ A ] community land trust

entitled to an exemption from taxation by a taxing unit under

Subsection (b) is also entitled to an exemption from taxation by the

taxing unit of any real or tangible personal property the trust owns

and uses in the administration of its acquisition, construction,

repair, sale, or leasing of property. To qualify for an exemption

under this subsection, property must be used exclusively by the

trust, except that another person may use the property for

activities incidental to the trust's use that benefit the

beneficiaries of the trust.

(g) A community land trust may receive an exemption under

this section for property owned by the trust only if the property is

located:

(1) in the municipality or county that created or

designated the trust; or

(2) if the commissioners court of the county agrees in

the manner provided by law for official action to allow the

exemption, in a county adjacent to:

(A) the county that created or designated the

trust; or

(B) the county in which the municipality that

created or designated the trust is located.

SECTION 2. Section 394.905, Local Government Code, is

amended to read as follows:

Sec. 394.905. EXEMPTION FROM TAXATION. (a) Subject to

Subsection (c), the [ The ] housing finance corporation, all property

owned by it, the income from the property, all bonds issued by it,

the income from the bonds, and the transfer of the bonds are exempt,

as public property used for public purposes, from license fees,

recording fees, and all other taxes imposed by this state or any

political subdivision of this state.

(b) The corporation is exempt from the franchise tax imposed

by Chapter 171, Tax Code, only if the corporation is exempted by

that chapter.

(c) The corporation may receive an exemption under this

section for property owned by the corporation only if the property

is located:

(1) in the municipality or county that sponsored the

corporation; or

(2) if the commissioners court of the county agrees in

the manner provided by law for official action to allow the

exemption, in a county adjacent to:

(A) the county that sponsored the corporation; or

(B) the county in which the municipality that

sponsored the corporation is located.

SECTION 3. This Act applies only to ad valorem taxes imposed

for a tax year beginning on or after the effective date of this Act.

SECTION 4. This Act takes effect January 1, 2026.