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�	H.B.�No.�770

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�	AN ACT
�	relating to ad valorem tax relief for an owner of certain property,
�	including a residence homestead that is rendered uninhabitable or
�	unusable by a casualty or by wind or water damage, and to a
�	restriction on the authority to bring an action to remove a house
�	that is partially located on a public beach as a result of a
�	meteorological event.
�	�������BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	�������SECTION�1.��Section 61.018, Natural Resources Code, is
�	amended by amending Subsection (a) and adding Subsections (a-1),
�	(a-2), and (a-3) to read as follows:
�	�������(a)��Except as provided by Subsection (a-1), any [Any] county
�	attorney, district attorney, or criminal district attorney, or the
�	attorney general at the request of the commissioner, shall file in a
�	district court of Travis County, or in the county in which the
�	property is located, a suit to obtain either a temporary or
�	permanent court order or injunction, either prohibitory or
�	mandatory, to remove or prevent any improvement, maintenance,
�	obstruction, barrier, or other encroachment on a public beach, or
�	to prohibit any unlawful restraint on the public's right of access
�	to and use of a public beach or other activity that violates this
�	chapter.
�	�������(a-1)��A county attorney, district attorney, or criminal
�	district attorney or the attorney general may not file a suit under
�	Subsection (a) to obtain a temporary or permanent court order or
�	injunction, either prohibitory or mandatory, to remove a house from
�	a public beach if:
�	�������������(1)��the line of vegetation establishing the boundary
�	of the public beach moved as a result of a meteorological event that
�	occurred before January 1, 2009;
�	�������������(2)��the house was located landward of the natural line
�	of vegetation before the meteorological event;
�	�������������(3)��a portion of the house continues to be located
�	landward of the line of vegetation; and
�	�������������(4)��the house is located on a peninsula in a county
�	with a population of more than 250,000 and less than 251,000 that
�	borders the Gulf of Mexico.
�	�������(a-2)��The owner of a house described by Subsection (a-1) may
�	repair or rebuild the house if the house was damaged or destroyed by
�	the meteorological event.
�	�������(a-3)��Notwithstanding Subsection (a-1), a county attorney,
�	district attorney, or criminal district attorney or the attorney
�	general may file a suit under Subsection (a) to obtain a temporary
�	or permanent court order or injunction, either prohibitory or
�	mandatory, to remove a house described by Subsection (a-1) from a
�	public beach if the house was damaged or destroyed by the
�	meteorological event and the owner of the house fails to repair or
�	rebuild the house before September 1, 2013.
�	�������SECTION�2.��Subchapter B, Chapter 11, Tax Code, is amended by
�	adding Section 11.135 to read as follows:
�	�������Sec.�11.135.��CONTINUATION OF RESIDENCE HOMESTEAD EXEMPTION
�	WHILE REPLACEMENT STRUCTURE IS CONSTRUCTED; SALE OF PROPERTY. (a)
�	If a qualified residential structure for which the owner receives
�	an exemption under Section 11.13 is rendered uninhabitable or
�	unusable by a casualty or by wind or water damage, the owner may
�	continue to receive the exemption for the structure and the land and
�	improvements used in the residential occupancy of the structure
�	while the owner constructs a replacement qualified residential
�	structure on the land if the owner does not establish a different
�	principal residence for which the owner receives an exemption under
�	Section 11.13 during that period and intends to return and occupy
�	the structure as the owner's principal residence. To continue to
�	receive the exemption, the owner must begin active construction of
�	the replacement qualified residential structure or other physical
�	preparation of the site on which the structure is to be located not
�	later than the first anniversary of the date the owner ceases to
�	occupy the former qualified residential structure as the owner's
�	principal residence. The owner may not receive the exemption for
�	that property under the circumstances described by this subsection
�	for more than two years.
�	�������(b)��For purposes of Subsection (a), the site of a
�	replacement qualified residential structure is under physical
�	preparation if the owner has engaged in architectural or
�	engineering work, soil testing, land clearing activities, or site
�	improvement work necessary for the construction of the structure or
�	has conducted an environmental or land use study relating to the
�	construction of the structure.
�	�������(c)��If an owner receives an exemption for property under
�	Section 11.13 under the circumstances described by Subsection (a)
�	and sells the property before the owner completes construction of a
�	replacement qualified residential structure on the property, an
�	additional tax is imposed on the property equal to the difference
�	between the taxes imposed on the property for each of the years in
�	which the owner received the exemption and the tax that would have
�	been imposed had the owner not received the exemption in each of
�	those years, plus interest at an annual rate of seven percent
�	calculated from the dates on which the differences would have
�	become due.
�	�������(d)��A tax lien attaches to property on the date a sale under
�	the circumstances described by Subsection (c) occurs to secure
�	payment of the additional tax and interest imposed by that
�	subsection and any penalties incurred. The lien exists in favor of
�	all taxing units for which the additional tax is imposed.
�	�������(e)��A determination that a sale of property under the
�	circumstances described by Subsection (c) has occurred is made by
�	the chief appraiser. The chief appraiser shall deliver a notice of
�	the determination to the owner of the property as soon as possible
�	after making the determination and shall include in the notice an
�	explanation of the owner's right to protest the determination. If
�	the owner does not file a timely protest or if the final
�	determination of the protest is that the additional taxes are due,
�	the assessor for each taxing unit shall prepare and deliver a bill
�	for the additional taxes plus interest as soon as practicable. The
�	taxes and interest are due and become delinquent and incur
�	penalties and interest as provided by law for ad valorem taxes
�	imposed by the taxing unit if not paid before the next February 1
�	that is at least 20 days after the date the bill is delivered to the
�	owner of the property.
�	�������(f)��The sanctions provided by Subsection (c) do not apply if
�	the sale is:
�	�������������(1)��for right-of-way; or
�	�������������(2)��to this state or a political subdivision of this
�	state to be used for a public purpose.
�	�������(g)��The comptroller shall adopt rules and forms to implement
�	this section.
�	�������SECTION�3.��Subchapter B, Chapter 11, Tax Code, is amended by
�	adding Section 11.231 to read as follows:
�	�������Sec.�11.231.��NONPROFIT COMMUNITY BUSINESS ORGANIZATION
�	PROVIDING ECONOMIC DEVELOPMENT SERVICES TO LOCAL COMMUNITY. (a)
�	In this section, "nonprofit community business organization" means
�	an organization that meets the following requirements:
�	�������������(1)��the organization has been in existence for at
�	least the preceding five years;
�	�������������(2)��the organization:
�	�������������������(A)��is a nonprofit corporation organized under
�	the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
�	Vernon's Texas Civil Statutes) or a nonprofit corporation formed
�	under the Texas Nonprofit Corporation Law, as described by Section
�	1.008, Business Organizations Code;
�	�������������������(B)��is a nonprofit organization described by
�	Section 501(c)(6), Internal Revenue Code of 1986; and
�	�������������������(C)��is not a statewide organization;
�	�������������(3)��for at least the preceding three years, the
�	organization has maintained a dues-paying membership of at least 50
�	members; and
�	�������������(4)��the organization:
�	�������������������(A)��has a board of directors elected by the
�	members;
�	�������������������(B)��does not compensate members of the board of
�	directors for service on the board;
�	�������������������(C)��with respect to its activities in this state,
�	is engaged primarily in performing functions listed in Subsection
�	(d);
�	�������������������(D)��is primarily supported by membership dues and
�	other income from activities substantially related to its primary
�	functions; and
�	�������������������(E)��is not, has not formed, and does not
�	financially support a political committee as defined by Section
�	251.001, Election Code.
�	�������(b)��An association that qualifies as a nonprofit community
�	business organization as provided by this section is entitled to an
�	exemption from taxation of:
�	�������������(1)��the buildings and tangible personal property that:
�	�������������������(A)��are owned by the nonprofit community business
�	organization; and
�	�������������������(B)��except as permitted by Subsection (c), are
�	used exclusively by qualified nonprofit community business
�	organizations to perform their primary functions; and
�	�������������(2)��the real property owned by the nonprofit community
�	business organization consisting of:
�	�������������������(A)��an incomplete improvement that:
�	�������������������������(i)��is under active construction or other
�	physical preparation; and
�	�������������������������(ii)��is designed and intended to be used
�	exclusively by qualified nonprofit community business
�	organizations; and
�	�������������������(B)��the land on which the incomplete improvement
�	is located that will be reasonably necessary for the use of the
�	improvement by qualified nonprofit community business
�	organizations.
�	�������(c)��Use of exempt property by persons who are not nonprofit
�	community business organizations qualified as provided by this
�	section does not result in the loss of an exemption authorized by
�	this section if the use is incidental to use by qualified nonprofit
�	community business organizations and limited to activities that
�	benefit the beneficiaries of the nonprofit community business
�	organizations that own or use the property.
�	�������(d)��To qualify for an exemption under this section, a
�	nonprofit community business organization must be engaged
�	primarily in performing one or more of the following functions in
�	the local community:
�	�������������(1)��promoting the common economic interests of
�	commercial enterprises;
�	�������������(2)��improving the business conditions of one or more
�	types of business; or
�	�������������(3)��otherwise providing services to aid in economic
�	development.
�	�������(e)��In this section, "building" includes the land that is
�	reasonably necessary for use of, access to, and ornamentation of
�	the building.
�	�������(f)��A property may not be exempted under Subsection (b)(2)
�	for more than three years.
�	�������(g)��For purposes of Subsection (b)(2), an incomplete
�	improvement is under physical preparation if the nonprofit
�	community business organization has:
�	�������������(1)��engaged in architectural or engineering work, soil
�	testing, land clearing activities, or site improvement work
�	necessary for the construction of the improvement; or
�	�������������(2)��conducted an environmental or land use study
�	relating to the construction of the improvement.
�	�������SECTION�4.��Section 11.26, Tax Code, is amended by adding
�	Subsections (n) and (o) to read as follows:
�	�������(n)��Notwithstanding Subsection (c), the limitation on tax
�	increases required by this section does not expire if the owner of
�	the structure qualifies for an exemption under Section 11.13 under
�	the circumstances described by Section 11.135(a).
�	�������(o)��Notwithstanding Subsections (a), (a-3), and (b), an
�	improvement to property that would otherwise constitute an
�	improvement under Subsection (b) is not treated as an improvement
�	under that subsection if the improvement is a replacement structure
�	for a structure that was rendered uninhabitable or unusable by a
�	casualty or by wind or water damage. For purposes of appraising the
�	property in the tax year in which the structure would have
�	constituted an improvement under Subsection (b), the replacement
�	structure is considered to be an improvement under that subsection
�	only if:
�	�������������(1)��the square footage of the replacement structure
�	exceeds that of the replaced structure as that structure existed
�	before the casualty or damage occurred; or
�	�������������(2)��the exterior of the replacement structure is of
�	higher quality construction and composition than that of the
�	replaced structure.
�	�������SECTION�5.��Section 11.261, Tax Code, is amended by adding
�	Subsections (l) and (m) to read as follows:
�	�������(l)��Notwithstanding Subsection (d), a limitation on county,
�	municipal, or junior college district tax increases provided by
�	this section does not expire if the owner of the structure qualifies
�	for an exemption under Section 11.13 under the circumstances
�	described by Section 11.135(a).
�	�������(m)��Notwithstanding Subsections (b) and (c), an improvement
�	to property that would otherwise constitute an improvement under
�	Subsection (c) is not treated as an improvement under that
�	subsection if the improvement is a replacement structure for a
�	structure that was rendered uninhabitable or unusable by a casualty
�	or by wind or water damage. For purposes of appraising the property
�	in the tax year in which the structure would have constituted an
�	improvement under Subsection (c), the replacement structure is
�	considered to be an improvement under that subsection only if:
�	�������������(1)��the square footage of the replacement structure
�	exceeds that of the replaced structure as that structure existed
�	before the casualty or damage occurred; or
�	�������������(2)��the exterior of the replacement structure is of
�	higher quality construction and composition than that of the
�	replaced structure.
�	�������SECTION�6.��Section 11.42(d), Tax Code, is amended to read as
�	follows:
�	�������(d)��A person who acquires property after January 1 of a tax
�	year may receive an exemption authorized by Section 11.17, 11.18,
�	11.19, 11.20, 11.21, 11.23, 11.231, or 11.30 for the applicable
�	portion of that tax year immediately on qualification for the
�	exemption.
�	�������SECTION�7.��Section 11.43(c), Tax Code, is amended to read as
�	follows:
�	�������(c)��An exemption provided by Section 11.13, 11.17, 11.18,
�	11.182, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(h), (j), or
�	(j-1), 11.231, 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�8.��Section 23.23(f), Tax Code, is amended to read as
�	follows:
�	�������(f)��Notwithstanding Subsections (a) and (e) and except as
�	provided by Subdivision (2), an improvement to property that would
�	otherwise constitute a new improvement is not treated as a new
�	improvement if the improvement is a replacement structure for a
�	structure that was rendered uninhabitable or unusable by a casualty
�	or by wind [mold] or water damage. For purposes of appraising the
�	property under Subsection (a) in the tax year in which the structure
�	would have constituted a new improvement:
�	�������������(1)��the appraised value the property would have had in
�	the preceding tax [last] year if the casualty or damage had not
�	occurred [in which the property was appraised for taxation before
�	the casualty or damage occurred] is considered to be the appraised
�	value of the property for that year, regardless of whether that
�	appraised value exceeds the actual appraised value of the property
�	for that year as limited by Subsection (a) [last year in which the
�	property was appraised for taxation for purposes of Subsection
�	(a)(2)(A)]; and
�	�������������(2)��the replacement structure is considered to be a
�	new improvement only if:
�	�������������������(A)��the square footage of the replacement
�	structure exceeds that of [to the extent it is a significant
�	improvement over] the replaced structure as that structure existed
�	before the casualty or damage occurred; or
�	�������������������(B)��the exterior of the replacement structure is
�	of higher quality construction and composition than that of the
�	replaced structure.
�	�������SECTION�9.��This Act applies only to ad valorem taxes imposed
�	for a tax year beginning on or after the effective date of this Act.
�	�������SECTION�10.��This Act takes effect January 1, 2010.
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�	______________________________	______________________________
�	���President of the Senate	Speaker of the House�����
�
�
�	�������I certify that H.B. No. 770 was passed by the House on May 7,
�	2009, by the following vote:��Yeas 141, Nays 1, 1 present, not
�	voting; that the House refused to concur in Senate amendments to
�	H.B. No. 770 on May 29, 2009, and requested the appointment of a
�	conference committee to consider the differences between the two
�	houses; and that the House adopted the conference committee report
�	on H.B. No. 770 on May 31, 2009, by the following vote:��Yeas 144,
�	Nays 0, 1 present, not voting.
�
�	______________________________
�	Chief Clerk of the House���
�
�	�������I certify that H.B. No. 770 was passed by the Senate, with
�	amendments, on May 27, 2009, by the following vote:��Yeas 31, Nays
�	0; at the request of the House, the Senate appointed a conference
�	committee to consider the differences between the two houses; and
�	that the Senate adopted the conference committee report on H.B. No.
�	770 on May 31, 2009, by the following vote:��Yeas 30, Nays 1.
�
�	______________________________
�	Secretary of the Senate���
�	APPROVED: __________________
�	����������������Date�������
�	�
�	�������� __________________
�	��������������Governor�������