SB2517 - 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.

  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.