H.B. No. 3438 amends the Texas Tax Code to clarify the definition of "nonprofit community business organization" eligible for property tax exemptions. The bill specifies that such organizations must have been in existence for at least five years, maintain a dues-paying membership of at least 50 members for the preceding three years, and have a board of directors elected by the members without compensation. Additionally, the organization must be primarily supported by membership dues and related income, and it cannot have formed or financially supported a political committee as defined by the Election Code.

The bill also includes a provision that it will only apply to ad valorem tax years beginning on or after its effective date of January 1, 2026. This legislation aims to ensure that only qualifying nonprofit organizations receive property tax exemptions, thereby promoting transparency and accountability within the nonprofit sector.

Statutes affected:
Introduced: Tax Code 11.231 (Tax Code 11)