88R1655 RDS-F     By: Hefner H.B. No. 3691       A BILL TO BE ENTITLED   AN ACT   relating to the exemption from ad valorem taxation of certain   property owned by a charitable organization that is engaged in   providing housing and related facilities and services to persons   who are at least 62 years of age.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 11.18(d), Tax Code, is amended to read as   follows:          (d)  A charitable organization must be organized exclusively   to perform religious, charitable, scientific, literary, or   educational purposes and, except as permitted by Subsections (h)   and (l), engage exclusively in performing one or more of the   following charitable functions:                (1)  providing medical care without regard to the   beneficiaries' ability to pay, which in the case of a nonprofit   hospital or hospital system means providing charity care and   community benefits in accordance with Section 11.1801;                (2)  providing support or relief to orphans, delinquent   or [,] dependent[, or handicapped] children in need of residential   care, children with disabilities in need of residential care,   abused or battered spouses or children in need of temporary   shelter, the impoverished, or victims of natural disaster without   regard to the beneficiaries' ability to pay;                (3)  providing support without regard to the   beneficiaries' ability to pay to:                      (A)  elderly persons, including the provision of:                            (i)  recreational or social activities; and                            (ii)  facilities designed to address the   special needs of elderly persons; or                      (B)  persons with disabilities [the handicapped],   including training and employment:                            (i)  in the production of commodities; or                            (ii)  in the provision of services under 41   U.S.C. Sections 8501-8506;                (4)  preserving a historical landmark or site;                (5)  promoting or operating a museum, zoo, library,   theater of the dramatic or performing arts, or symphony orchestra   or choir;                (6)  promoting or providing humane treatment of   animals;                (7)  acquiring, storing, transporting, selling, or   distributing water for public use;                (8)  answering fire alarms and extinguishing fires with   no compensation or only nominal compensation to the members of the   organization;                (9)  promoting the athletic development of boys or   girls under the age of 18 years;                (10)  preserving or conserving wildlife;                (11)  promoting educational development through loans   or scholarships to students;                (12)  providing halfway house services pursuant to a   certification as a halfway house by the parole division of the Texas   Department of Criminal Justice;                (13)  providing permanent housing and related social,   health care, and educational facilities for persons who are 62   years of age or older:                      (A)  without regard to the residents' ability to   pay; or                      (B)  as an organization described by Section   11.1802;                (14)  promoting or operating an art gallery, museum, or   collection, in a permanent location or on tour, that is open to the   public;                (15)  providing for the organized solicitation and   collection for distributions through gifts, grants, and agreements   to nonprofit charitable, education, religious, and youth   organizations that provide direct human, health, and welfare   services;                (16)  performing biomedical or scientific research or   biomedical or scientific education for the benefit of the public;                (17)  operating a television station that produces or   broadcasts educational, cultural, or other public interest   programming and that receives grants from the Corporation for   Public Broadcasting under 47 U.S.C. Section 396, as amended;                (18)  providing housing for low-income and   moderate-income families, for unmarried individuals 62 years of age   or older, for [handicapped] individuals with disabilities, and for   families displaced by urban renewal, through the use of trust   assets that are irrevocably and, pursuant to a contract entered   into before December 31, 1972, contractually dedicated on the sale   or disposition of the housing to a charitable organization that   performs charitable functions described by Subdivision (9);                (19)  providing housing and related services to persons   who are 62 years of age or older in a retirement community, if the   retirement community provides independent living services,   assisted living services, and nursing services to its residents on   a single campus:                      (A)  without regard to the residents' ability to   pay; [or]                      (B)  in which at least four percent of the   retirement community's combined net resident revenue is provided in   charitable care to its residents; or                      (C)  as an organization described by Section   11.1802;                (20)  providing housing on a cooperative basis to   students of an institution of higher education if:                      (A)  the organization is exempt from federal   income taxation under Section 501(a), Internal Revenue Code of   1986, as amended, by being listed as an exempt entity under Section   501(c)(3) of that code;                      (B)  membership in the organization is open to all   students enrolled in the institution and is not limited to those   chosen by current members of the organization;                      (C)  the organization is governed by its members;   and                      (D)  the members of the organization share the   responsibility for managing the housing;                (21)  acquiring, holding, and transferring unimproved   real property under an urban land bank demonstration program   established under Chapter 379C, Local Government Code, as or on   behalf of a land bank;                (22)  acquiring, holding, and transferring unimproved   real property under an urban land bank program established under   Chapter 379E, Local Government Code, as or on behalf of a land bank;                (23)  providing housing and related services to   individuals who:                      (A)  are unaccompanied and homeless and have a   disabling condition; and                      (B)  have been continuously homeless for a year or   more or have had at least four episodes of homelessness in the   preceding three years;                (24)  operating a radio station that broadcasts   educational, cultural, or other public interest programming,   including classical music, and that in the preceding five years has   received or been selected to receive one or more grants from the   Corporation for Public Broadcasting under 47 U.S.C. Section 396, as   amended; or                (25)  providing, without regard to the beneficiaries'   ability to pay, tax return preparation services and assistance with   other financial matters.          SECTION 2.  Subchapter B, Chapter 11, Tax Code, is amended by   adding Section 11.1802 to read as follows:          Sec. 11.1802.  REQUIREMENTS FOR CERTAIN CHARITABLE   ORGANIZATIONS PROVIDING HOUSING AND SERVICES TO THE ELDERLY. (a)     In this section:                (1)  "Charitable housing and services" means the   following provided by a charitable organization to a person 62   years of age or older in financial need:                      (A)  housing, including as an independent living   facility, assisted living facility, or nursing facility; and                      (B)  any service designed to meet the unique needs   of a person 62 years of age or older, including:                            (i)  independent living services;                            (ii)  assisted living services;                            (iii)  nursing facility services;                            (iv)  social services;                            (v)  health services, including subsidized   health services;                            (vi)  services provided through a   government-sponsored program, including through Medicaid or   another federal, state, or local indigent health care program based   on financial need;                            (vii)  educational services; and                            (viii)  donations.                (2)  "Net resident revenue" means a charitable   organization's total revenue from providing housing and services to   residents of a facility operated by the organization who are 62   years of age or older, less all allowances and discounts on   residents' accounts, including:                      (A)  debts that are in default;                      (B)  contractual adjustments;                      (C)  teaching allowances;                      (D)  policy discounts;                      (E)  administrative adjustments; and                      (F)  other deductions from revenue.                (3)  "Very low-income" has the meaning assigned by 12   U.S.C. Section 1701q(k)(8).          (b)  To qualify as a charitable organization under Section   11.18(d)(13)(B) or (19)(C), an organization must:                (1)  except as provided by Subsection (c), provide   charitable housing and services in an unreimbursed amount that is   not less than four percent of the charitable organization's net   resident revenue;                (2)  be located in a county with a population of less   than 58,000 in which the entire county or the population of the   entire county has been designated a health professionals shortage   area; or                (3)  operate a housing development restricted to very   low-income persons who are 62 years of age or older.          (c)  A charitable organization described by Subsection   (b)(1) of this section that qualified for an exemption under   Section 11.18(d)(13)(B) or (19)(C) in the preceding tax year and   otherwise qualifies for the exemption in the current tax year is   entitled to the exemption if the organization demonstrates that:                (1)  a reduction in the amount of charitable housing   and services prescribed by Subsection (b)(1) is necessary:                      (A)  to maintain financial reserves at a level   required by a debt obligation;                      (B)  to prevent the organization from endangering   its ability to continue operating; or                      (C)  in response to a natural or other disaster;   or                (2)  subject to Subsection (e), through unintended   miscalculation, the organization failed in the preceding tax year   to provide charitable housing and services in the amount prescribed   by Subsection (b)(1).          (d)  Subject to Subsection (e), a charitable organization   that failed to provide charitable housing and services in the   preceding tax year in the amount prescribed by Subsection (b)(1) of   this section as described by Subsection (c)(2) of this section is   entitled to an exemption under Section 11.18(d)(13)(B) or (19)(C)   for the current tax year, but not for more than one tax year in each   five tax years.          (e)  A charitable organization to which Subsection (d)   applies is not entitled to an exemption under Section   11.18(d)(13)(B) or (19)(C) in the tax year following the current   tax year unless the organization in the current tax year provides   charitable housing and services in an amount at least equal to the   sum of:                (1)  the amount prescribed by Subsection (b)(1) for the   current tax year; and                (2)  the amount for the preceding tax year by which the   organization failed to meet the requirement prescribed by   Subsection (b)(1).          (f)  A charitable organization that fails to satisfy the   requirements prescribed by Subsection (e) for the current tax year   is liable for the amount of the tax, plus penalties and interest,   that would have otherwise been imposed for both the preceding and   current tax years, calculated as if the taxes were delinquent on   February 1 of the tax year following the tax year for which the tax   would otherwise have been imposed.          SECTION 3.  The changes in law made by this Act apply only to   an ad valorem tax year that begins on or after the effective date of   this Act.          SECTION 4.  This Act takes effect January 1, 2024.