The bill, H.B. No. 131, amends the Texas Tax Code to modify the exemption from ad valorem taxation for properties owned by organizations primarily engaged in charitable functions. Key changes include the expiration of the exemption when the organization no longer owns the property or fails to meet certain qualifications, replacing the previous rule that required reapplication after five years. New provisions require organizations to notify the comptroller and local appraisal districts of material changes, such as property sales or changes in tax-exempt status, within 30 days. Additionally, organizations whose exemptions expired before January 1, 2026, may automatically reinstate their exemptions if they still own the property and meet specific criteria.

The bill also clarifies that organizations entitled to continued exemptions under the new provisions do not owe taxes for the period between the expiration of their exemption and the reinstatement. If taxes were paid during this period, the organization is entitled to a refund. Furthermore, the bill ensures that certain exemptions do not require annual reapplication, streamlining the process for organizations that maintain their eligibility. The amendments are set to take effect on January 1, 2026.

Statutes affected:
Introduced: Tax Code 11.184, Tax Code 11.43 (Tax Code 11)