Bill Text: TX HB388 | 2019-2020 | 86th Legislature | Comm Sub
Bill Title: Relating to the exemption from ad valorem taxation of real property leased to and used by certain schools.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Engrossed - Dead) 2019-05-21 - Committee report printed and distributed [HB388 Detail]
Download: Texas-2019-HB388-Comm_Sub.html
| By: Murphy, Middleton (Senate Sponsor - Creighton) | H.B. No. 388 | |
| (In the Senate - Received from the House May 9, 2019; | ||
| May 13, 2019, read first time and referred to Committee on Property | ||
| Tax; May 21, 2019, reported favorably by the following vote: | ||
| Yeas 4, Nays 0; May 21, 2019, sent to printer.) | ||
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| relating to the exemption from ad valorem taxation of real property | ||
| leased to and used by certain schools. | ||
| 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 SCHOOLS. (a) | ||
| A person is entitled to an exemption from taxation of the portion of | ||
| the real property that the person owns and leases to 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 if: | ||
| (1) the portion of the real property that is leased to | ||
| the school is: | ||
| (A) used exclusively by the school for the | ||
| operation or administration of the school or the performance of | ||
| other educational functions by the school; 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 school certifies by affidavit to the school that: | ||
| (A) if the lease agreement requires the school 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 | ||
| school 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 school 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 school is no longer required to pay the | ||
| taxes to the collector, owner, or property manager, as applicable, | ||
| and the rent charged to the school 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 an open-enrollment charter | ||
| school shall: | ||
| (1) provide the school 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) This section may not be construed as invalidating an | ||
| exemption from taxation of real property granted to an | ||
| open-enrollment charter school on the basis of Section 12.128, | ||
| Education Code, before January 1, 2020. | ||
| (d) 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, 2020, but only | ||
| if the constitutional amendment proposed by the 86th Legislature, | ||
| Regular Session, 2019, authorizing the legislature to exempt from | ||
| ad valorem taxation real property leased to certain schools | ||
| organized and operated primarily for the purpose of engaging in | ||
| educational functions is approved by the voters. If that amendment | ||
| is not approved by the voters, this Act has no effect. | ||
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