charity property tax exemption stops expiring every five years

The text as introduced · 736 words

By: Kerwin
H.B. No. 5478

A BILL TO BE ENTITLED

AN ACT

relating to the exemption from ad valorem taxation of property

owned by an organization engaged primarily in performing charitable

functions.

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

SECTION 1. Section 11.184, Tax Code, is amended by amending

Subsection (k) and adding Subsections (k-1), (k-2), (k-3), and

(k-4) to read as follows:

(k) An exemption under this section expires when:

(1) the organization no longer owns the property

described by Subsection (c); or

(2) the comptroller determines based on the factors

provided by Subsection (e) that the organization no longer

qualifies for an exemption [ at the end of the fifth tax year after

the year in which the exemption is granted. To continue to receive

an exemption under this section after that year, the organization

must obtain a new determination letter and reapply for the

exemption ].

(k-1) An organization receiving an exemption under this

section shall notify the comptroller and the chief appraiser of the

appraisal district established for the county in which the exempt

property is located of each of the following material changes not

later than the 30th day after the date the material change occurs:

(1) the organization sells or otherwise disposes of

the property that is subject to the exemption;

(2) the Internal Revenue Service determines that the

organization is no longer an exempt entity under Section 501(c)(3),

Internal Revenue Code of 1986; or

(3) the organization no longer qualifies for an

exemption under Section 151.310.

(k-2) Notwithstanding Subsection (k), an organization that

received an exemption granted under this section that expired

before September 1, 2023, is entitled to an automatic reinstatement

of the expired exemption under this section for each tax year

following the tax year in which the exemption expired if the

organization:

(1) still owns the property that was exempt from

taxation under this section;

(2) has a valid determination letter issued by the

comptroller under Subsection (f); and

(3) submits a written request to the chief appraiser

of the appraisal district established for the county in which the

exempt property is located that includes:

(A) proof that the organization was previously

granted an exemption under this section for the property that is

the subject of the request; and

(B) a copy of the determination letter issued by

the comptroller under Subsection (f).

(k-3) If an organization is entitled to continue to receive

an exemption under Subsection (k-2), the exemption remains in

effect until it expires as provided by Subsection (k).

(k-4) An organization that is entitled to continue to

receive an exemption under Subsection (k-2) does not owe any tax on

the exempt property for the period starting on the date the

exemption expired under Subsection (k) and ending on the date the

organization is entitled to continue to receive the exemption under

Subsection (k-2). If the organization paid taxes on the property

during that period, the collector shall refund to the organization

the amount of tax imposed on the property. The collector shall pay

the refund not later than the 30th day after the date the chief

appraiser notifies the collector of the approval of the continued

exemption under Subsection (k-2).

SECTION 2. Section 11.43(c), Tax Code, is amended to read as

follows:

(c) An exemption provided by Section 11.13, 11.131, 11.132,

11.133, 11.134, 11.17, 11.18, 11.182, 11.1827, 11.183, 11.184,

11.19, 11.20, 11.21, 11.22, 11.23(a), (h), (j), (j-1), or (m),

11.231, 11.254, 11.27, 11.271, 11.29, 11.30, 11.31, 11.315, or

11.35, once allowed, need not be claimed in subsequent years, and

except as otherwise provided by Subsection (e), the exemption

applies to the property until it changes ownership or the person's

qualification for the exemption changes. However, except as

provided by Subsection (r), the chief appraiser may require a

person allowed one of the exemptions in a prior year to file a new

application to confirm the person's current qualification for the

exemption by delivering a written notice that a new application is

required, accompanied by an appropriate application form, to the

person previously allowed the exemption. If the person previously

allowed the exemption is 65 years of age or older, the chief

appraiser may not cancel the exemption due to the person's failure

to file the new application unless the chief appraiser complies

with the requirements of Subsection (q), if applicable.

SECTION 3. This Act takes effect January 1, 2026.