Bill Text: TX SB335 | 2019-2020 | 86th Legislature | Comm Sub

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Bill Title: Relating to community land trusts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2019-05-21 - Placed on General State Calendar [SB335 Detail]

Download: Texas-2019-SB335-Comm_Sub.html

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By: West S.B. No. 335
(Rodriguez)

A BILL TO BE ENTITLED
AN ACT
relating to community land trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 373B.003, Local Government Code, is
amended to read as follows:
Sec. 373B.003. NATURE OF TRUST. A community land trust
created or designated under Section 373B.002 must be a nonprofit
organization that is:
(1) created to acquire and hold land for the benefit of
developing and preserving long-term affordable housing in the
municipality or county; and
(2) organized as:
(A) a nonprofit corporation that is exempt from
federal income taxation under Section 501(a), Internal Revenue Code
of 1986, by being listed [certified] as an exempt organization
under Section 501(c)(3) of that code;
(B) a limited partnership of which a nonprofit
corporation described by Paragraph (A) controls 100 percent of the
general partner interest; or
(C) a limited liability company for which a
nonprofit corporation described by Paragraph (A) serves as the only
member.
SECTION 2. Section 11.1827, Tax Code, is amended by adding
Subsection (g) to read as follows:
(g) Once adopted by the governing body of a taxing unit, the
exemption provided by this section continues to apply to property
located in the taxing unit until the governing body rescinds the
exemption in the manner provided by law for official action by the
body.
SECTION 3. Section 23.21, Tax Code, is amended by amending
Subsections (c) and (d) and adding Subsection (c-1) to read as
follows:
(c) In appraising land [or a housing unit] that is leased by
a community land trust created or designated under Section
373B.002, Local Government Code, to a family meeting the
income-eligibility standards established by Section 373B.006 of
that code under regulations or restrictions limiting the amount
that the family may be required to pay for the rental or lease of the
property, the chief appraiser shall use the income method of
appraisal as described by Section 23.012 to determine the appraised
value of the property. The chief appraiser shall use that method
regardless of whether the chief appraiser considers that method to
be the most appropriate method of appraising the property. In
appraising the property, the chief appraiser shall:
(1) take into account the uses and limitations
applicable to the property, including the terms of the lease
applicable to the property, for purposes of computing the actual
rental income from the property and projecting future rental
income; and
(2) use the same capitalization rate that the chief
appraiser uses to appraise other rent-restricted properties
[extent to which that use and limitation reduce the market value of
the property].
(c-1) In appraising a housing unit that is leased by a
community land trust created or designated under Section 373B.002,
Local Government Code, to a family meeting the income-eligibility
standards established by Section 373B.006 of that code under
regulations or restrictions limiting the amount that the family may
be required to pay for the rental or lease of the property, the
chief appraiser shall use the income method of appraisal as
described by Section 23.012 to determine the appraised value of the
property. The chief appraiser shall use that method regardless of
whether the chief appraiser considers that method to be the most
appropriate method of appraising the property. In appraising the
property, the chief appraiser shall:
(1) take into account the uses and limitations
applicable to the property, including the terms of the lease
applicable to the property, for purposes of computing the actual
rental income from the property and projecting future rental
income; and
(2) use the same capitalization rate that the chief
appraiser uses to appraise other rent-restricted properties.
(d) In appraising a housing unit that the owner or a
predecessor of the owner acquired from a community land trust
created or designated under Section 373B.002, Local Government
Code, and that is located on land owned by the trust and leased by
the owner of the housing unit, the chief appraiser shall take into
account the extent to which any regulations or restrictions
limiting the right of the owner of the housing unit to sell the
housing unit, including any limitation on the price for which the
housing unit may be sold, reduce the market value of the housing
unit. If the sale of the housing unit is subject to an eligible land
use restriction, the chief appraiser may not appraise the housing
unit in a tax year for an amount that exceeds the price for which the
housing unit may be sold under the eligible land use restriction in
that tax year. For purposes of this subsection, "eligible land use
restriction" means an agreement, deed restriction, or restrictive
covenant applicable to the housing unit that:
(1) is recorded in the real property records;
(2) has a term of at least 40 years;
(3) restricts the price for which the housing unit may
be sold to a price that is equal to or less than the market value of
the housing unit; and
(4) restricts the sale of the housing unit to a family
meeting the income-eligibility standards established by Section
373B.006, Local Government Code.
SECTION 4. Section 26.10, Tax Code, is amended by amending
Subsection (a) and adding Subsection (d) to read as follows:
(a) If the appraisal roll shows that a property is eligible
for taxation for only part of a year because an exemption, other
than a residence homestead exemption or an exemption described by
Subsection (d), applicable on January 1 of that year terminated
during the year, the tax due against the property is calculated by
multiplying the tax due for the entire year as determined as
provided by Section 26.09 [of this code] by a fraction, the
denominator of which is 365 and the numerator of which is the number
of days the exemption is not applicable.
(d) Subsection (a) does not apply to an exemption for land
received by an organization under Section 11.181, 11.182, or
11.1825 that terminated during the year because of the sale by the
organization of a housing unit located on the land if:
(1) the housing unit is sold to a family meeting the
income-eligibility standards established by Section 373B.006,
Local Government Code;
(2) the organization retains title to the land on
which the housing unit is located; and
(3) before the date on which the housing unit is sold,
the organization is designated a community land trust by the
governing body of a municipality or county as provided by Section
373B.002, Local Government Code.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year that begins on or after the effective date of this
Act.
SECTION 6. This Act takes effect September 1, 2019.