Bill Text: TX SB1237 | 2025-2026 | 89th Legislature | Comm Sub

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Bill Title: 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.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced) 2025-04-29 - Committee report printed and distributed [SB1237 Detail]

Download: Texas-2025-SB1237-Comm_Sub.html

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By: Paxton S.B. No. 1237
(In the Senate - Filed February 12, 2025; February 28, 2025,
read first time and referred to Committee on Local Government;
April 29, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 0; April 29, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1237 By: Middleton

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, Tax Code, is amended by amending
Subsection (d) and adding Subsection (k-1) 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 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, 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 that provides charitable
housing and services in an amount that is not less than four percent
of the charitable organization's net resident revenue;
(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 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 that provides charitable
housing and services in an amount that is not less than four percent
of the charitable organization's net resident revenue;
(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;
(25) providing, without regard to the beneficiaries'
ability to pay, tax return preparation services and assistance with
other financial matters; or
(26) providing services related to planning for the
placement of or placing children in foster or adoptive homes or
providing support or relief to women who are or may be pregnant and
who are considering placing their unborn children for adoption.
(k-1) Notwithstanding any other provision of this section,
to be entitled to an exemption from taxation under this section as
an organization that performs a charitable function described by
Subsection (d)(13) or (19) in the manner described by Subsection
(d)(13)(B) or (19)(C), respectively, a charitable organization
must:
(1) have been in existence for at least 20 years; or
(2) be under common control with an organization that:
(A) is described by Subdivision (1); and
(B) performs a charitable function described by
Subsection (d).
SECTION 2. Section 11.18(k), Tax Code, is amended by adding
Subdivision (1-a) and amending Subdivision (2) to read as follows:
(1-a) "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) ministerial services;
(ii) government-sponsored indigent health
care;
(iii) social services;
(iv) health services;
(v) educational services; and
(vi) donations to an organization that
qualifies for an exemption under Subsection (d)(13) or (19).
(2) "Charity care," "government-sponsored indigent
health care," and "net resident revenue" are determined in the same
manner for a retirement community or nursing home as "charity
care," "government-sponsored indigent health care," and "net
patient revenue," respectively, are determined for a hospital under
Section 11.1801(a)(2).
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, 2026.
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