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.

89(R) SB 1237 - Senate Committee Report version - Bill Text

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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