Bill Text: TX SB113 | 2021-2022 | 87th Legislature | Introduced


Bill Title: Relating to community land trusts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2020-11-09 - Filed [SB113 Detail]

Download: Texas-2021-SB113-Introduced.html
  87R859 CJC-F
 
  By: West S.B. No. 113
 
 
 
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 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 3.  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 4.  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 5.  This Act takes effect September 1, 2021.
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