H.B. No. 770
 
 
 
 
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.
 
 
  ______________________________ ______________________________
     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