HB5478 - Relating to the exemption from ad valorem taxation of property owned by an organization engaged primarily in performing charitable functions.

  89R23534 DRS-F     By: Kerwin H.B. No. 5478     Substitute the following for H.B. No. 5478:     By:  Capriglione C.S.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   Subsections (k) and (n) 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, 2025, 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).          (n)  Notwithstanding Subsection (k) of this section and   Section 11.43(c) , in order for a corporation to continue to receive   an exemption under Subsection (l) after the fifth tax year after the   year in which the exemption is granted, the qualified charitable   organization for which the corporation holds title to property must   obtain a new determination letter and the corporation must reapply   for the exemption.          SECTION 2.  Sections 11.43(b) and (c), Tax Code, are amended   to read as follows:          (b)  Except as provided by Subsection (c) and by Section   [ Sections 11.184 and ] 11.437, a person required to apply for an   exemption must apply each year the person claims entitlement to the   exemption.          (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, 11.35,   or 11.36, 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.  It is the intent of the 89th Legislature, Regular   Session, 2025, that the amendments made by this Act be harmonized   with another Act of the 89th Legislature, Regular Session, 2025,   relating to nonsubstantive additions to and corrections in enacted   codes.          SECTION 4.  This Act takes effect January 1, 2026.