logo-updated-012918
Property Tax Inquiries Call 713.290.9700

S.B. No. 402

S.B. No. 402

AN ACT

relating to community land trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 373B to read as follows:
CHAPTER 373B. COMMUNITY LAND TRUSTS
Sec. 373B.001. DEFINITION. In this chapter, “community
housing development organization” has the meaning assigned by 42
U.S.C. Section 12704.
Sec. 373B.002. CREATION OR DESIGNATION. The governing body
of a municipality or county by ordinance or order may create or
designate one or more community land trusts, including a housing
finance corporation established under Chapter 394 or a land trust
operated by a community housing development organization certified
by the municipality or county, to operate in the municipality or
county.
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) exempt from federal income taxation under Section
501(a), Internal Revenue Code of 1986, by being certified as an
exempt organization under Section 501(c)(3) of that code.
Sec. 373B.004. PURPOSES OF TRUST. The purposes of a
community land trust are to:
(1) provide affordable housing for low-income and
moderate-income residents in the community;
(2) promote resident ownership of housing;
(3) keep housing affordable for future residents; and
(4) capture the value of public investment for
long-term community benefit.
Sec. 373B.005. OWNERSHIP OF LAND AND HOUSING UNITS. A
community land trust may retain title to land it acquires and may:
(1) sell housing units located on the land and lease
the land under ground leases with terms of at least 99 years; or
(2) lease housing units located on the land.
Sec. 373B.006. QUALIFICATIONS OF PURCHASERS OR LESSEES OF
HOUSING UNITS. (a) A community land trust may sell housing units
only to families with a yearly income at the time of sale at or below
80 percent of the area median family income, adjusted for family
size.
(b) Notwithstanding Subsection (a), for housing units
located on one or more tracts of land owned by the community land
trust that constitute a contiguous geographic area or are located
in the same platted subdivision, the trust may sell not more than 20
percent of the housing units to families with a yearly income at the
time of sale that exceeds the amount provided by Subsection (a) but
does not exceed 120 percent of the area median family income,
adjusted for family size.
(c) At least 25 percent of the housing units sold by the
trust must be sold to families with a yearly income at the time of
sale at or below 60 percent of the area median family income,
adjusted for family size.
(d) A community land trust may lease housing units only to
families with a yearly income at the time of lease at or below 60
percent of the area median family income, adjusted for family size.
(e) Notwithstanding Subsection (d), for housing units
located on one or more tracts of land owned by the community land
trust that constitute a contiguous geographic area or are located
in the same platted subdivision, the trust may lease not more than
20 percent of the housing units to families with a yearly income at
the time of lease that exceeds the amount provided by Subsection (d)
but does not exceed 80 percent of the area median family income,
adjusted for family size.
Sec. 373B.007. RELATION TO OTHER LAW. This chapter does not
preclude the creation of a land trust by a nonprofit organization,
including a community housing development organization, under
other statutory or common law or the operation of that land trust
inside or outside a municipality or county that has created or
designated a community land trust under Section 373B.002.
Sec. 373B.008. APPLICABILITY OF CHAPTER TO TRUST OPERATED
BY HOUSING FINANCE CORPORATION. Section 373B.003 does not apply to
a community land trust operated in the municipality or county by a
housing finance corporation established under Chapter 394.
SECTION 2. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.1827 to read as follows:
Sec. 11.1827. COMMUNITY LAND TRUST. (a) In this section,
“community land trust” means a community land trust created or
designated under Section 373B.002, Local Government Code.
(b) In addition to any other exemption to which the trust
may be entitled, a community land trust is entitled to an exemption
from taxation by a taxing unit of land owned by the trust, together
with the housing units located on the land if they are owned by the
trust, if:
(1) the trust:
(A) meets the requirements of a charitable
organization provided by Sections 11.18(e) and (f);
(B) owns the land for the purpose of leasing the
land and selling or leasing the housing units located on the land as
provided by Chapter 373B, Local Government Code; and
(C) engages exclusively in the sale or lease of
housing as described by Paragraph (B) and related activities,
except that the trust may also engage in the development of
low-income and moderate-income housing; and
(2) the exemption is adopted by the governing body of
the taxing unit before July 1 in the manner provided by law for
official action by the body.
(c) Property owned by a community land trust may not be
exempted under Subsection (b) after the third anniversary of the
date the trust acquires the property unless the trust is offering to
sell or lease or is leasing the property as provided by Chapter
373B, Local Government Code.
(d) A community land trust entitled to an exemption from
taxation by a taxing unit under Subsection (b) is also entitled to
an exemption from taxation by the taxing unit of any real or
tangible personal property the trust owns and uses in the
administration of its acquisition, construction, repair, sale, or
leasing of property. To qualify for an exemption under this
subsection, property must be used exclusively by the trust, except
that another person may use the property for activities incidental
to the trust’s use that benefit the beneficiaries of the trust.
(e) To receive an exemption under this section, a community
land trust must annually have an audit prepared by an independent
auditor. The audit must include:
(1) a detailed report on the trust’s sources and uses
of funds; and
(2) any other information required by the governing
body of the municipality or county that created or designated the
trust under Section 373B.002, Local Government Code.
(f) Not later than the 180th day after the last day of the
community land trust’s most recent fiscal year, the trust must
deliver a copy of the audit required by Subsection (e) to:
(1) the governing body of the municipality or county
or an entity designated by the governing body; and
(2) the chief appraiser of the appraisal district in
which the property subject to the exemption is located.
SECTION 3. Subsection (c), Section 11.43, Tax Code, is
amended to read as follows:
(c) An exemption provided by Section 11.13, 11.131, 11.17,
11.18, 11.182, 11.1827, 11.183, 11.19, 11.20, 11.21, 11.22,
11.23(h), (j), or (j-1), 11.231, 11.254, 11.29, 11.30, or 11.31,
once allowed, need not be claimed in subsequent years, and except as
otherwise provided by Subsection (e), the exemption applies to the
property until it changes ownership or the person’s qualification
for the exemption changes. However, the chief appraiser may
require a person allowed one of the exemptions in a prior year to
file a new application to confirm the person’s current
qualification for the exemption by delivering a written notice that
a new application is required, accompanied by an appropriate
application form, to the person previously allowed the exemption.
SECTION 4. Section 23.21, Tax Code, is amended by adding
Subsections (c) and (d) 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 take into account the extent to which that use
and limitation reduce the market value of the property.
(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.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 6. This Act takes effect January 1, 2012.

______________________________ ______________________________
President of the Senate Speaker of the House

I hereby certify that S.B. No. 402 passed the Senate on
April 14, 2011, by the following vote: Yeas 31, Nays 0.

______________________________
Secretary of the Senate

I hereby certify that S.B. No. 402 passed the House on
May 20, 2011, by the following vote: Yeas 146, Nays 3, one
present not voting.

______________________________
Chief Clerk of the House

Approved:

______________________________
Date

______________________________
Governor

Property Tax Protection Program™ Benefits

  • No flat fees or upfront costs.  No cost ever unless your property taxes are reduced.
  • All practical efforts are made every year to reduce your property taxes.
  • Never miss another appeal deadline.
  • Property taxes protested for you annually.
  • You do not have to accept the appraisal district’s initial guesstimate of value.
  • We coordinate with you regarding building size / condition to avoid excess taxes.
  • Free support regarding homestead exemptions.
  • Some years are good – typically 6 to 7 out of 10 will result in tax reduction for you.
  • The other 3 to 4 years out of 10 we strike out. Most often due to people issues in the hearing process. Some years we get an easy appraiser at the informal; some years someone who is impossible to settle with.
The Residential Property Protection Program™
is powered by O’Connor
  • Enter your information below and your documents and enrollment information will be emailed to you within one business day

  • Hidden
  • Hidden
  • Hidden
  • Call 713.290.9700 to discuss with a representative.

    Please monitor your E-mail and spam filter. If you don't receive your enrollment documents within 24 business hours, call 713.290.9700 8am - 5pm CST

  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • This field is for validation purposes and should be left unchanged.

When you submit your enrollment, you understand this is a risk free offer to you. If your taxes are not reduced you PAY NOTHING, and a portion of the tax savings is the only fee you pay when your taxes are reduced.