Bill Text: TX HB1881 | 2021-2022 | 87th Legislature | Introduced

---

Bill Title: Relating to the exemption from ad valorem taxation of certain real property leased to and used by certain educational organizations.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2021-03-11 - Referred to Ways & Means [HB1881 Detail]

Download: Texas-2021-HB1881-Introduced.html

---

87R7418 CJC-D
By: Middleton H.B. No. 1881

A BILL TO BE ENTITLED
AN ACT
relating to the exemption from ad valorem taxation of certain real
property leased to and used by certain educational organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.211 to read as follows:
Sec. 11.211. REAL PROPERTY LEASED TO CERTAIN EDUCATIONAL
ORGANIZATIONS. (a) In this section, "qualifying educational
organization" means:
(1) an open-enrollment charter school authorized by
Subchapter D, Chapter 12, Education Code, that is qualified as
provided by Section 11.21(d) of this code; or
(2) a public junior college, as defined by Section
61.003, Education Code.
(b) A person is entitled to an exemption from taxation of
the portion of the real property that the person owns and leases to
a qualifying educational organization if:
(1) the portion of the real property that is leased to
the organization is:
(A) used exclusively by the organization for the
operation or administration of the organization or the performance
of other educational functions by the organization; 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 organization certifies by affidavit to the
organization that:
(A) if the lease agreement requires the
organization 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 organization 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
organization 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 organization is no longer
required to pay the taxes to the collector, owner, or property
manager, as applicable, and the rent charged to the organization
under the agreement is not affected unless a term of the agreement
specifically provides for a change in the amount of the rent.
(c) A property owner required to provide an affidavit
described by Subsection (b)(2)(A) to a qualifying educational
organization shall:
(1) provide the organization 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.
(d) This section may not be construed as invalidating an
exemption from taxation of real property granted to a qualifying
educational organization described by Subsection (a)(1) of this
section on the basis of Section 12.128, Education Code, before
January 1, 2022.
(e) 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, 2022, but only
if the constitutional amendment proposed by the 87th Legislature,
Regular Session, 2021, authorizing the legislature to exempt from
ad valorem taxation certain real property leased to a public junior
college or an open-enrollment charter school is approved by the
voters. If that amendment is not approved by the voters, this Act
has no effect.