CHAPTER 11. TAXABLE PROPERTY AND EXEMPTIONS
TAX CODE
TITLE 1. PROPERTY TAX CODE
SUBTITLE C. TAXABLE PROPERTY AND EXEMPTIONS
CHAPTER 11. TAXABLE PROPERTY AND EXEMPTIONS
SUBCHAPTER A. TAXABLE PROPERTY
Sec. 11.01. REAL AND TANGIBLE PERSONAL PROPERTY. (a) All real
and tangible personal property that this state has jurisdiction
to tax is taxable unless exempt by law.
(b) This state has jurisdiction to tax real property if located
in this state.
(c) This state has jurisdiction to tax tangible personal
property if the property is:
(1) located in this state for longer than a temporary period;
(2) temporarily located outside this state and the owner resides
in this state; or
(3) used continually, whether regularly or irregularly, in this
state.
(d) Tangible personal property that is operated or located
exclusively outside this state during the year preceding the tax
year and on January 1 of the tax year is not taxable in this
state.
Acts 1979, 66th Leg., p. 2233, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1983, 68th Leg., p. 1908, ch. 353, Sec. 1,
eff. Jan. 1, 1984; Acts 1989, 71st Leg., ch. 534, Sec. 2, eff.
Jan. 1, 1990.
Sec. 11.02. INTANGIBLE PERSONAL PROPERTY. (a) Except as
provided by Subsection (b) of this section, intangible personal
property is not taxable.
(b) Intangible property governed by Article 4.01, Insurance
Code, or by Section 89.003, Finance Code, is taxable as provided
by law, unless exempt by law, if this state has jurisdiction to
tax those intangibles.
(c) This state has jurisdiction to tax intangible personal
property if the property is:
(1) owned by a resident of this state; or
(2) located in this state for business purposes.
Acts 1979, 66th Leg., p. 2233, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 3,
part A, Sec. 1, eff. Jan. 1, 1985; Acts 1999, 76th Leg., ch. 62,
Sec. 7.88, eff. Sept. 1, 1999.
SUBCHAPTER B. EXEMPTIONS
Sec. 11.11. PUBLIC PROPERTY. (a) Except as provided by
Subsections (b) and (c) of this section, property owned by this
state or a political subdivision of this state is exempt from
taxation if the property is used for public purposes.
(b) Land owned by the Permanent University Fund is taxable for
county purposes. Any notice required by Section 25.19 of this
code shall be sent to the comptroller, and the comptroller shall
appear in behalf of the state in any protest or appeal relating
to taxation of Permanent University Fund land.
(c) Agricultural or grazing land owned by a county for the
benefit of public schools under Article VII, Section 6, of the
Texas Constitution is taxable for all purposes. The county shall
pay the taxes on the land from the revenue derived from the land.
If revenue from the land is insufficient to pay the taxes, the
county shall pay the balance from the county general fund.
(d) Property owned by the state that is not used for public
purposes is taxable. Property owned by a state agency or
institution is not used for public purposes if the property is
rented or leased for compensation to a private business
enterprise to be used by it for a purpose not related to the
performance of the duties and functions of the state agency or
institution or used to provide private residential housing for
compensation to members of the public other than students and
employees of the state agency or institution owning the property,
unless the residential use is secondary to its use by an
educational institution primarily for instructional purposes. Any
notice required by Section 25.19 of this code shall be sent to
the agency or institution that owns the property, and it shall
appear in behalf of the state in any protest or appeal related to
taxation of the property.
(e) Property that is held or dedicated for the support,
maintenance, or benefit of an institution of higher education as
defined by Section 61.003, Education Code, but is not rented or
leased for compensation to a private business enterprise to be
used by it for a purpose not related to the performance of the
duties and functions of the state or institution or is not rented
or leased to provide private residential housing to members of
the public other than students and employees of the state or
institution is not taxable. If a portion of property of an
institution of higher education is used for public purposes and a
portion is not used for those purposes, the portion of the
property used for public purposes is exempt under this
subsection. All oil, gas, and other mineral interests owned by an
institution of higher education are exempt from all ad valorem
taxes. Property bequeathed to an institution is exempt from the
assessment of ad valorem taxes from the date of the decedent's
death, unless:
(1) the property is leased for compensation to a private
business enterprise as provided in this subsection; or
(2) the transfer of the property to an institution is contested
in a probate court, in which case ad valorem taxes shall be
assessed to the estate of the decedent until the final
determination of the disposition of the property is made. The
property is exempt from the assessment of ad valorem taxes upon
vesting of the property in the institution.
(f) Property of a higher education development foundation or an
alumni association that is located on land owned by the state for
the support, maintenance, or benefit of an institution of higher
education as defined in Chapter 61, Education Code, is exempt
from taxation if:
(1) the foundation or organization meets the requirements of
Sections 11.18(e) and (f) and is organized exclusively to operate
programs or perform other activities for the benefit of
institutions of higher education; and
(2) the property is used exclusively in those programs or
activities.
(g) For purposes of this section, an improvement is owned by the
state and is used for public purposes if it is:
(1) located on land owned by the Texas Department of Criminal
Justice;
(2) leased and used by the department; and
(3) subject to a lease-purchase agreement providing that legal
title to the improvement passes to the department at the end of
the lease period.
(h) For purposes of this section, tangible personal property is
owned by this state or a political subdivision of this state if
it is subject to a lease-purchase agreement providing that the
state or political subdivision, as applicable, is entitled to
compel delivery of the legal title to the property to the state
or political subdivision, as applicable, at the end of the lease
term. The property ceases to be owned by the state or political
subdivision, as applicable, if, not later than the 30th day after
the date the lease terminates, the state or political
subdivision, as applicable, does not exercise its right to
acquire legal title to the property.
(i) A corporation organized under the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes), or a successor statute, that engages primarily in
providing chilled water and steam to an eligible institution, as
defined by Section 301.031, Health and Safety Code, is entitled
to an exemption from taxation of the property the corporation
owns as though the property of the corporation were owned by this
state and used for health or educational purposes.
(j) For purposes of this section, any portion of a facility
owned by the Texas Department of Transportation that is part of
the Trans-Texas Corridor, is a rail facility or system, or is a
highway in the state highway system, and that is licensed or
leased to a private entity by that department under Chapter 91,
223, or 227, Transportation Code, is public property used for a
public purpose if the rail facility or system, highway, or
facility is operated by the private entity to provide
transportation or utility services. Any part of a facility, rail
facility or system, or state highway that is licensed or leased
to a private entity for a commercial purpose is not exempt from
taxation.
Acts 1979, 66th Leg., p. 2234, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13,
Sec. 30, eff. Jan. 1, 1984; Acts 1983, 68th Leg., p. 4821, ch.
851, Sec. 5, eff. Aug. 29, 1983; Acts 1983, 68th Leg., p. 5419,
ch. 1007, Sec. 1, eff. Jan. 1, 1984; Acts 1989, 71st Leg., ch.
796, Sec. 14, eff. Jan. 1, 1990; Acts 1989, 71st Leg., ch. 1021,
Sec. 1, eff. Aug. 28, 1989; Acts 1990, 71st Leg., 6th C.S., ch.
12, Sec. 2(31), eff. Sept. 6, 1990; Acts 1991, 72nd Leg., 2nd
C.S., ch. 6, Sec. 9, eff. Sept. 1, 1991; Acts 1997, 75th Leg.,
ch. 843, Sec. 1, eff. Jan. 1, 1998; Acts 2001, 77th Leg., ch.
362, Sec. 1, eff. May 26, 2001; Acts 2003, 78th Leg., ch. 1266,
Sec. 1.01, eff. June 20, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
281, Sec. 2.95, eff. June 14, 2005.
Acts 2007, 80th Leg., R.S., Ch.
204, Sec. 1, eff. January 1, 2008.
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 25.152, eff. September 1, 2009.
Sec. 11.111. PUBLIC PROPERTY USED TO PROVIDE TRANSITIONAL
HOUSING FOR INDIGENT PERSONS. (a) The governing body of a
taxing unit by ordinance or order may exempt from ad valorem
taxation residential property owned by the United States or an
agency of the United States and used to provide transitional
housing for the indigent under a program operated or directed by
the United States Department of Housing and Urban Development.
(b) For purposes of this section, transitional housing for
indigent individuals is housing provided at no cost or nominal
cost to an indigent individual or family during a temporary
period in which the individual or a member of the family
participates in a job training program, job placement program, or
other program intended to assist the individual or family to
become self-sufficient.
(c) The exemption provided by this section applies even if the
United States or its agency leases the property to a nonprofit
organization in return for the organization's assistance in
operating the program to provide transitional housing, as long as
the lease does not require the nonprofit organization to pay more
than a nominal amount to lease the property.
Added by Acts 1991, 72nd Leg., ch. 762, Sec. 13, eff. Jan. 1,
1992.
Sec. 11.12. FEDERAL EXEMPTIONS. Property exempt from ad valorem
taxation by federal law is exempt from taxation.
Acts 1979, 66th Leg., p. 2234, ch. 841, Sec. 1, eff. Jan. 1,
1980.
Sec. 11.13. RESIDENCE HOMESTEAD. (a) A family or single adult
is entitled to an exemption from taxation for the county purposes
authorized in Article VIII, Section 1-a, of the Texas
Constitution of $3,000 of the assessed value of his residence
homestead.
(b) An adult is entitled to exemption from taxation by a school
district of $15,000 of the appraised value of the adult's
residence homestead, except that $10,000 of the exemption does
not apply to an entity operating under former Chapter 17, 18, 25,
26, 27, or 28, Education Code, as those chapters existed on May
1, 1995, as permitted by Section 11.301, Education Code.
(c) In addition to the exemption provided by Subsection (b) of
this section, an adult who is disabled or is 65 or older is
entitled to an exemption from taxation by a school district of
$10,000 of the appraised value of his residence homestead.
(d) In addition to the exemptions provided by Subsections (b)
and (c) of this section, an individual who is disabled or is 65
or older is entitled to an exemption from taxation by a taxing
unit of a portion (the amount of which is fixed as provided by
Subsection (e) of this section) of the appraised value of his
residence homestead if the exemption is adopted either:
(1) by the governing body of the taxing unit; or
(2) by a favorable vote of a majority of the qualified voters of
the taxing unit at an election called by the governing body of a
taxing unit, and the governing body shall call the election on
the petition of at least 20 percent of the number of qualified
voters who voted in the preceding election of the taxing unit.
(e) The amount of an exemption adopted as provided by Subsection
(d) of this section is $3,000 of the appraised value of the
residence homestead unless a larger amount is specified by:
(1) the governing body authorizing the exemption if the
exemption is authorized as provided by Subdivision (1) of
Subsection (d) of this section; or
(2) the petition for the election if the exemption is authorized
as provided by Subdivision (2) of Subsection (d) of this section.
(f) Once authorized, an exemption adopted as provided by
Subsection (d) of this section may be repealed or decreased or
increased in amount by the governing body of the taxing unit or
by the procedure authorized by Subdivision (2) of Subsection (d)
of this section. In the case of a decrease, the amount of the
exemption may not be reduced to less than $3,000 of the market
value.
(g) If the residence homestead exemption provided by Subsection
(d) of this section is adopted by a county that levies a tax for
the county purposes authorized by Article VIII, Section 1-a, of
the Texas Constitution, the residence homestead exemptions
provided by Subsections (a) and (d) of this section may not be
aggregated for the county tax purposes. An individual who is
eligible for both exemptions is entitled to take only the
exemption authorized as provided by Subsection (d) of this
section for purposes of that county tax.
(h) Joint, community, or successive owners may not each receive
the same exemption provided by or pursuant to this section for
the same residence homestead in the same year. An eligible
disabled person who is 65 or older may not receive both a
disabled and an elderly residence homestead exemption but may
choose either. A person may not receive an exemption under this
section for more than one residence homestead in the same year.
(i) The assessor and collector for a taxing unit may disregard
the exemptions authorized by Subsection (b), (c), (d), or (n) of
this section and assess and collect a tax pledged for payment of
debt without deducting the amount of the exemption if:
(1) prior to adoption of the exemption, the unit pledged the
taxes for the payment of a debt; and
(2) granting the exemption would impair the obligation of the
contract creating the debt.
(j) For purposes of this section:
(1) "Residence homestead" means a structure (including a mobile
home) or a separately secured and occupied portion of a structure
(together with the land, not to exceed 20 acres, and improvements
used in the residential occupancy of the structure, if the
structure and the land and improvements have identical ownership)
that:
(A) is owned by one or more individuals, either directly or
through a beneficial interest in a qualifying trust;
(B) is designed or adapted for human residence;
(C) is used as a residence; and
(D) is occupied as his principal residence by an owner or, for
property owned through a beneficial interest in a qualifying
trust, by a trustor of the trust who qualifies for the exemption.
(2) "Trustor" means a person who transfers an interest in
residential property to a qualifying trust, whether by deed or by
will, or the person's spouse.
(3) "Qualifying trust" means a trust:
(A) in which the agreement, will, or court order creating the
trust provides that the trustor of the trust or the beneficiary
of the trust if created by court order has the right to use and
occupy as the trustor's or beneficiary's principal residence
residential property rent free and without charge except for
taxes and other costs and expenses specified in the instrument or
court order:
(i) for life;
(ii) for the lesser of life or a term of years; or
(iii) until the date the trust is revoked or terminated by an
instrument or court order that describes the property with
sufficient certainty to identify it and is recorded in the real
property records of the county in which the property is located;
and
(B) that acquires the property in an instrument of title or
under a court order that:
(i) describes the property with sufficient certainty to identify
it and the interest acquired;
(ii) is recorded in the real property records of the county in
which the property is located; and
(iii) in the case of a trust that is not created by court order,
is executed by the trustor or the personal representative of the
trustor.
(k) A qualified residential structure does not lose its
character as a residence homestead if a portion of the structure
is rented to another or is used primarily for other purposes that
are incompatible with the owner's residential use of the
structure. However, the amount of any residence homestead
exemption does not apply to the value of that portion of the
structure that is used primarily for purposes that are
incompatible with the owner's residential use.
(l) A qualified residential structure does not lose its
character as a residence homestead when the owner who qualifies
for the exemption temporarily stops occupying it as a principal
residence if that owner does not establish a different principal
residence and the absence is:
(1) for a period of less than two years and the owner intends to
return and occupy the structure as the owner's principal
residence; or
(2) caused by the owner's:
(A) military service outside of the United States as a member of
the armed forces of the United States or of this state; or
(B) residency in a facility that provides services related to
health, infirmity, or aging.
(m) In this section:
(1) "Disabled" means under a disability for purposes of payment
of disability insurance benefits under Federal Old-Age,
Survivors, and Disability Insurance.
(2) "School district" means a political subdivision organized to
provide general elementary and secondary public education.
"School district" does not include a junior college district or a
political subdivision organized to provide special education
services.
(n) In addition to any other exemptions provided by this
section, an individual is entitled to an exemption from taxation
by a taxing unit of a percentage of the appraised value of his
residence homestead if 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. If the percentage set by the
taxing unit produces an exemption in a tax year of less than
$5,000 when applied to a particular residence homestead, the
individual is entitled to an exemption of $5,000 of the appraised
value. The percentage adopted by the taxing unit may not exceed
20 percent.
(o) For purposes of this section, a residence homestead also may
consist of an interest in real property created through ownership
of stock in a corporation incorporated under the Cooperative
Association Act (Article 1396-50.01, Vernon's Texas Civil
Statutes) to provide dwelling places to its stockholders if:
(1) the interests of the stockholders of the corporation are
appraised separately as provided by Section 23.19 of this code in
the tax year to which the exemption applies;
(2) ownership of the stock entitles the owner to occupy a
dwelling place owned by the corporation;
(3) the dwelling place is a structure or a separately secured
and occupied portion of a structure; and
(4) the dwelling place is occupied as his principal residence by
a stockholder who qualifies for the exemption.
(p) Exemption under this section for a homestead described by
Subsection (o) of this section extends only to the dwelling place
occupied as a residence homestead and to a portion of the total
common area used in the residential occupancy that is equal to
the percentage of the total amount of the stock issued by the
corporation that is owned by the homestead claimant. The size of
a residence homestead under Subsection (o) of this section,
including any relevant portion of common area, may not exceed 20
acres.
(q) The surviving spouse of an individual who qualifies for an
exemption under Subsection (d) for the residence homestead of a
person 65 or older is entitled to an exemption for the same
property from the same taxing unit in an amount equal to that of
the exemption for which the deceased spouse qualified if:
(1) the deceased spouse died in a year in which the deceased
spouse qualified for the exemption;
(2) the surviving spouse was 55 or older when the deceased
spouse died; and
(3) the property was the residence homestead of the surviving
spouse when the deceased spouse died and remains the residence
homestead of the surviving spouse.
(r) An individual who receives an exemption under Subsection (d)
is not entitled to an exemption under Subsection (q).
(s) Expired.
Acts 1979, 66th Leg., p. 2234, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13,
Sec. 31, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 4822, ch.
851, Sec. 6, eff. Aug. 29, 1983; Acts 1985, 69th Leg., ch. 301,
Sec. 1, eff. June 7, 1985; Acts 1987, 70th Leg., ch. 547, Sec. 1,
eff. Jan. 1, 1988; Acts 1991, 72nd Leg., ch. 20, Sec. 18, eff.
Aug. 26, 1991; Acts 1991, 72nd Leg., ch. 20, Sec. 19(a), eff.
Jan. 1, 1992; Acts 1991, 72nd Leg., ch. 391, Sec. 14; Acts 1993,
73rd Leg., ch. 347, Sec. 4.08, eff. May 31, 1993; Acts 1993, 73rd
Leg., ch. 854, Sec. 1, eff. Jan. 1, 1994; Acts 1995, 74th Leg.,
ch. 76, Sec. 15.01, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch.
610, Sec. 1, eff. Jan. 1, 1996; Acts 1997, 75th Leg., ch. 194,
Sec. 1, eff. Jan. 1, 1998; Acts 1997, 75th Leg., ch. 592, Sec.
2.01; Acts 1997, 75th Leg., ch. 1039, Sec. 6, eff. Jan. 1, 1998;
Acts 1997, 75th Leg., ch. 1059, Sec. 2, eff. June 19, 1997; Acts
1997, 75th Leg., ch. 1071, Sec. 28, eff. Sept. 1, 1997; Acts
1999, 76th Leg., ch. 1199, Sec. 1, eff. June 18, 1999; Acts 1999,
76th Leg., ch. 1481, Sec. 1, eff. Jan. 1, 2000; Acts 2003, 78th
Leg., ch. 240, Sec. 1, eff. June 18, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
159, Sec. 1, eff. January 1, 2006.
Sec. 11.131. RESIDENCE HOMESTEAD OF 100 PERCENT OR TOTALLY
DISABLED VETERAN. (a) In this section:
(1) "Disabled veteran" has the meaning assigned by Section
11.22.
(2) "Residence homestead" has the meaning assigned by Section
11.13.
(b) A disabled veteran who receives from the United States
Department of Veterans Affairs or its successor 100 percent
disability compensation due to a service-connected disability and
a rating of 100 percent disabled or of individual unemployability
is entitled to an exemption from taxation of the total appraised
value of the veteran's residence homestead.
Added by Acts 2009, 81st Leg., R.S., Ch.
1405, Sec. 1(a), eff. June 19, 2009.
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.
Added by Acts 2009, 81st Leg., R.S., Ch.
1417, Sec. 2, eff. January 1, 2010.
Sec. 11.14. TANGIBLE PERSONAL PROPERTY NOT PRODUCING INCOME.
(a) A person is entitled to an exemption from taxation of all
tangible personal property, other than manufactured homes, that
the person owns and that is not held or used for production of
income. This subsection does not exempt from taxation a structure
that a person owns which is substantially affixed to real estate
and is used or occupied as a residential dwelling.
(b) In this section:
(1) "Manufactured home" has the meaning assigned by Section
11.432.
(2) "Structure" does not include a vehicle that:
(A) is a trailer-type unit designed primarily for use as
temporary living quarters in connection with recreational,
camping, travel, or seasonal use;
(B) is built on a single chassis mounted on wheels;
(C) has a gross trailer area in the set-up mode of 400 square
feet or less; and
(D) is certified by the manufacturer as complying with American
National Standards Institute Standard A119.5.
(c) The governing body of a taxing unit, by resolution or order,
depending upon the method prescribed by law for official action
by that governing body, may provide for taxation of tangible
personal property exempted under Subsection (a). If a taxing unit
provides for taxation of tangible personal property as provided
by this subsection, the exemption prescribed by Subsection (a)
does not apply to that unit.
(d) The central appraisal district for the county shall
determine the cost of appraising tangible personal property
required by a taxing unit under the provisions of Subsection (c)
and shall assess those costs to the taxing unit or taxing units
which provide for the taxation of tangible personal property.
(e) A political subdivision choosing to tax property otherwise
made exempt by this section, pursuant to Article VIII, Section
1(e), of the Texas Constitution, may not do so until the
governing body of the political subdivision has held a public
hearing on the matter, after having given notice of the hearing
at the times and in the manner required by this subsection, and
has found that the action will be in the public interest of all
the residents of that political subdivision. At the hearing, all
interested persons are entitled to speak and present evidence for
or against taxing the property. Not later than the 30th day prior
to the date of a hearing held under this subsection, notice of
the hearing must be:
(1) published in a newspaper having general circulation in the
political subdivision and in a section of the newspaper other
than the advertisement section;
(2) not less than one-half of one page in size; and
(3) republished on not less than three separate days during the
period beginning with the 10th day prior to the hearing and
ending with the actual date of the hearing.
Acts 1979, 66th Leg., p. 2236, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1987, 70th Leg., ch. 181, Sec. 1, eff. May
26, 1987; Acts 1989, 71st Leg., ch. 76, Sec. 1, eff. Jan. 1,
1990; Acts 1991, 72nd Leg., ch. 391, Sec. 15, eff. Aug. 26, 1991;
Acts 1993, 73rd Leg., ch. 347, Sec. 4.09, eff. May 31, 1993; Acts
2001, 77th Leg., ch. 521, Sec. 1, eff. Jan. 1, 2002; Acts 2003,
78th Leg., ch. 5, Sec. 1, eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1216, Sec. 1, eff. January 1, 2009.
Sec. 11.145. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY HAVING
VALUE OF LESS THAN $500. (a) A person is entitled to an
exemption from taxation of the tangible personal property the
person owns that is held or used for the production of income if
that property has a taxable value of less than $500.
(b) The exemption provided by Subsection (a) applies to each
separate taxing unit in which a person holds or uses tangible
personal property for the production of income, and, for the
purposes of Subsection (a), all property in each taxing unit is
aggregated to determine taxable value.
Added by Acts 1995, 74th Leg., ch. 296, Sec. 1, eff. Jan. 1,
1996.
Sec. 11.146. MINERAL INTEREST HAVING VALUE OF LESS THAN $500.
(a) A person is entitled to an exemption from taxation of a
mineral interest the person owns if the interest has a taxable
value of less than $500.
(b) The exemption provided by Subsection (a) applies to each
separate taxing unit in which a person owns a mineral interest
and, for the purposes of Subsection (a), all mineral interests in
each taxing unit are aggregated to determine value.
Added by Acts 1995, 74th Leg., ch. 296, Sec. 1, eff. Jan. 1,
1996.
Sec. 11.15. FAMILY SUPPLIES. A family is entitled to an
exemption from taxation of its family supplies for home or farm
use.
Acts 1979, 66th Leg., p. 2236, ch. 841, Sec. 1, eff. Jan. 1,
1980.
Sec. 11.16. FARM PRODUCTS. (a) A producer is entitled to an
exemption from taxation of the farm products that he produces and
owns. A nursery product, as defined by Section 71.041,
Agriculture Code, is a farm product for purposes of this section
if it is in a growing state.
(b) Farm products in the hands of the producer are exempt.
(c) For purposes of this exemption, the following definitions
apply:
(1) "Farm products" include livestock, poultry, and timber.
(2) "In the hands of the producer," for livestock and poultry,
means under the ownership of the person who is financially
providing for the physical requirements of such livestock and
poultry on January 1 of the tax year and, for timber, means
standing timber or timber that has been harvested and, on January
1 of the tax year, is located on the real property on which it
was produced and is under the ownership of the person who owned
the timber when it was standing.
Acts 1979, 66th Leg., p. 2236, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1981, 67th Leg., p. 457, ch. 192, Sec. 1,
eff. Jan. 1, 1982; Acts 1981, 67th Leg. p. 1487, ch. 388, Sec. 3,
eff. Sept. 1, 1981; Acts 1999, 76th Leg., ch. 631, Sec. 2, eff.
Jan. 1, 2000.
Sec. 11.161. IMPLEMENTS OF HUSBANDRY. Machinery and equipment
items that are used in the production of farm or ranch products
or of timber, regardless of their primary design, are considered
to be implements of husbandry and are exempt from ad valorem
taxation.
Added by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13, Sec. 32,
eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 4823, ch.
851, Sec. 7, eff. Aug. 29, 1983; Acts 1991, 72nd Leg., ch. 16,
Sec. 17.01, eff. Aug. 26, 1991; Acts 1999, 76th Leg., ch. 631,
Sec. 3, eff. Jan. 1, 2000.
Amended by:
Acts 2005, 79th Leg., Ch.
412, Sec. 6, eff. January 1, 2006.
Sec. 11.17. CEMETERIES. A person is entitled to an exemption
from taxation of the property he owns and uses exclusively for
human burial and does not hold for profit.
Acts 1979, 66th Leg., p. 2236, ch. 841, Sec. 1, eff. Jan. 1,
1980.
Sec. 11.18. CHARITABLE ORGANIZATIONS. (a) An organization that
qualifies as a charitable 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 charitable organization; and
(B) except as permitted by Subsection (b), are used exclusively
by qualified charitable organizations; and
(2) the real property owned by the charitable 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 charitable 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 charitable organizations.
(b) Use of exempt property by persons who are not charitable
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 charitable
organizations and limited to activities that benefit the
beneficiaries of the charitable organizations that own or use the
property.
(c) To qualify as a charitable organization for the purposes of
this section, an organization, whether operated by an individual,
or as a corporation, foundation, trust, or association, must meet
the applicable requirements of Subsections (d), (e), (f), and
(g).
Text of subsection as reenacted by Acts 2009, 81st Leg., R.S.,
Ch.
1246, Sec. 1
(d) A charitable organization must be organized exclusively to
perform religious, charitable, scientific, literary, or
educational purposes and, except as permitted by Subsections (h)
and (l), engage exclusively in performing one or more of the
following charitable functions:
(1) providing medical care without regard to the beneficiaries'
ability to pay, which in the case of a nonprofit hospital or
hospital system means providing charity care and community
benefits in accordance with Section 11.1801;
(2) providing support or relief to orphans, delinquent,
dependent, or handicapped children in need of residential care,
abused or battered spouses or children in need of temporary
shelter, the impoverished, or victims of natural disaster without
regard to the beneficiaries' ability to pay;
(3) providing support without regard to the beneficiaries'
ability to pay to:
(A) elderly persons, including the provision of:
(i) recreational or social activities; and
(ii) facilities designed to address the special needs of elderly
persons; or
(B) the handicapped, including training and employment:
(i) in the production of commodities; or
(ii) in the provision of services under 41 U.S.C. Sections
46-48c;
(4) preserving a historical landmark or site;
(5) promoting or operating a museum, zoo, library, theater of
the dramatic or performing arts, or symphony orchestra or choir;
(6) promoting or providing humane treatment of animals;
(7) acquiring, storing, transporting, selling, or distributing
water for public use;
(8) answering fire alarms and extinguishing fires with no
compensation or only nominal compensation to the members of the
organization;
(9) promoting the athletic development of boys or girls under
the age of 18 years;
(10) preserving or conserving wildlife;
(11) promoting educational development through loans or
scholarships to students;
(12) providing halfway house services pursuant to a
certification as a halfway house by the parole division of the
Texas Department of Criminal Justice;
(13) providing permanent housing and related social, health
care, and educational facilities for persons who are 62 years of
age or older without regard to the residents' ability to pay;
(14) promoting or operating an art gallery, museum, or
collection, in a permanent location or on tour, that is open to
the public;
(15) providing for the organized solicitation and collection for
distributions through gifts, grants, and agreements to nonprofit
charitable, education, religious, and youth organizations that
provide direct human, health, and welfare services;
(16) performing biomedical or scientific research or biomedical
or scientific education for the benefit of the public;
(17) operating a television station that produces or broadcasts
educational, cultural, or other public interest programming and
that receives grants from the Corporation for Public Broadcasting
under 47 U.S.C. Section 396, as amended;
(18) providing housing for low-income and moderate-income
families, for unmarried individuals 62 years of age or older, for
handicapped individuals, and for families displaced by urban
renewal, through the use of trust assets that are irrevocably
and, pursuant to a contract entered into before December 31,
1972, contractually dedicated on the sale or disposition of the
housing to a charitable organization that performs charitable
functions described by Subdivision (9);
(19) providing housing and related services to persons who are
62 years of age or older in a retirement community, if the
retirement community provides independent living services,
assisted living services, and nursing services to its residents
on a single campus:
(A) without regard to the residents' ability to pay; or
(B) in which at least four percent of the retirement community's
combined net resident revenue is provided in charitable care to
its residents;
(20) providing housing on a cooperative basis to students of an
institution of higher education if:
(A) the organization is exempt from federal income taxation
under Section 501(a), Internal Revenue Code of 1986, as amended,
by being listed as an exempt entity under Section 501(c)(3) of
that code;
(B) membership in the organization is open to all students
enrolled in the institution and is not limited to those chosen by
current members of the organization;
(C) the organization is governed by its members; and
(D) the members of the organization share the responsibility for
managing the housing;
(21) acquiring, holding, and transferring unimproved real
property under an urban land bank demonstration program
established under Chapter 379C, Local Government Code, as or on
behalf of a land bank;
(22) acquiring, holding, and transferring unimproved real
property under an urban land bank program established under
Chapter 379E, Local Government Code, as or on behalf of a land
bank; or
(23) operating a radio station that broadcasts educational,
cultural, or other public interest programming, including
classical music, and that in the preceding five years has
received or been selected to receive one or more grants from the
Corporation for Public Broadcasting under 47 U.S.C. Section 396,
as amended.
Text of subsection as reenacted by Acts 2009, 81st Leg., R.S.,
Ch.
1314, Sec. 1
(d) A charitable organization must be organized exclusively to
perform religious, charitable, scientific, literary, or
educational purposes and, except as permitted by Subsections (h)
and (l), engage exclusively in performing one or more of the
following charitable functions:
(1) providing medical care without regard to the beneficiaries'
ability to pay, which in the case of a nonprofit hospital or
hospital system means providing charity care and community
benefits in accordance with Section 11.1801;
(2) providing support or relief to orphans, delinquent,
dependent, or handicapped children in need of residential care,
abused or battered spouses or children in need of temporary
shelter, the impoverished, or victims of natural disaster without
regard to the beneficiaries' ability to pay;
(3) providing support to elderly persons, including the
provision of recreational or social activities and facilities
designed to address the special needs of elderly persons, or to
the handicapped, without regard to the beneficiaries' ability to
pay;
(4) preserving a historical landmark or site;
(5) promoting or operating a museum, zoo, library, theater of
the dramatic or performing arts, or symphony orchestra or choir;
(6) promoting or providing humane treatment of animals;
(7) acquiring, storing, transporting, selling, or distributing
water for public use;
(8) answering fire alarms and extinguishing fires with no
compensation or only nominal compensation to the members of the
organization;
(9) promoting the athletic development of boys or girls under
the age of 18 years;
(10) preserving or conserving wildlife;
(11) promoting educational development through loans or
scholarships to students;
(12) providing halfway house services pursuant to a
certification as a halfway house by the parole division of the
Texas Department of Criminal Justice;
(13) providing permanent housing and related social, health
care, and educational facilities for persons who are 62 years of
age or older without regard to the residents' ability to pay;
(14) promoting or operating an art gallery, museum, or
collection, in a permanent location or on tour, that is open to
the public;
(15) providing for the organized solicitation and collection for
distributions through gifts, grants, and agreements to nonprofit
charitable, education, religious, and youth organizations that
provide direct human, health, and welfare services;
(16) performing biomedical or scientific research or biomedical
or scientific education for the benefit of the public;
(17) operating a television station that produces or broadcasts
educational, cultural, or other public interest programming and
that receives grants from the Corporation for Public Broadcasting
under 47 U.S.C. Section 396, as amended;
(18) providing housing for low-income and moderate-income
families, for unmarried individuals 62 years of age or older, for
handicapped individuals, and for families displaced by urban
renewal, through the use of trust assets that are irrevocably
and, pursuant to a contract entered into before December 31,
1972, contractually dedicated on the sale or disposition of the
housing to a charitable organization that performs charitable
functions described by Subdivision (9);
(19) providing housing and related services to persons who are
62 years of age or older in a retirement community, if the
retirement community provides independent living services,
assisted living services, and nursing services to its residents
on a single campus:
(A) without regard to the residents' ability to pay; or
(B) in which at least four percent of the retirement community's
combined net resident revenue is provided in charitable care to
its residents;
(20) providing housing on a cooperative basis to students of an
institution of higher education if:
(A) the organization is exempt from federal income taxation
under Section 501(a), Internal Revenue Code of 1986, as amended,
by being listed as an exempt entity under Section 501(c)(3) of
that code;
(B) membership in the organization is open to all students
enrolled in the institution and is not limited to those chosen by
current members of the organization;
(C) the organization is governed by its members; and
(D) the members of the organization share the responsibility for
managing the housing;
(21) acquiring, holding, and transferring unimproved real
property under an urban land bank demonstration program
established under Chapter 379C, Local Government Code, as or on
behalf of a land bank;
(22) acquiring, holding, and transferring unimproved real
property under an urban land bank program established under
Chapter 379E, Local Government Code, as or on behalf of a land
bank; or
(23) providing housing and related services to individuals who:
(A) are unaccompanied and homeless and have a disabling
condition; and
(B) have been continuously homeless for a year or more or have
had at least four episodes of homelessness in the preceding three
years.
(e) A charitable organization must be operated in a way that
does not result in accrual of distributable profits, realization
of private gain resulting from payment of compensation in excess
of a reasonable allowance for salary or other compensation for
services rendered, or realization of any other form of private
gain and, if the organization performs one or more of the
charitable functions specified by Subsection (d) other than a
function specified by Subdivision (1), (2), (8), (9), (12), (16),
or (18), be organized as a nonprofit corporation as defined by
the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
Vernon's Texas Civil Statutes).
(f) A charitable organization must:
(1) use its assets in performing the organization's charitable
functions or the charitable functions of another charitable
organization; and
(2) by charter, bylaw, or other regulation adopted by the
organization to govern its affairs direct that on discontinuance
of the organization by dissolution or otherwise:
(A) the assets are to be transferred to this state, the United
States, or an educational, religious, charitable, or other
similar organization that is qualified as a charitable
organization under Section 501(c)(3), Internal Revenue Code of
1986, as amended; or
(B) if required for the organization to qualify as a tax-exempt
organization under Section 501(c)(12), Internal Revenue Code of
1986, as amended, the assets are to be transferred directly to
the organization's members, each of whom, by application for an
acceptance of membership in the organization, has agreed to
immediately transfer those assets to this state or to an
educational, religious, charitable, or other similar organization
that is qualified as a charitable organization under Section
501(c)(3), Internal Revenue Code of 1986, as amended, as
designated in the bylaws, charter, or regulation adopted by the
organization.
(g) A charitable organization that performs a charitable
function specified by Subsection (d)(15) must:
(1) be affiliated with a state or national organization that
authorizes, approves, or sanctions volunteer charitable
fundraising organizations;
(2) qualify for exemption under Section 501(c)(3), Internal
Revenue Code of 1986, as amended;
(3) be governed by a volunteer board of directors; and
(4) distribute contributions to at least five other associations
to be used for general charitable purposes, with all recipients
meeting the following criteria:
(A) be governed by a volunteer board of directors;
(B) qualify for exemption under Section 501(c)(3), Internal
Revenue Code of 1986, as amended;
(C) receive a majority of annual revenue from private or
corporate charitable gifts and government agencies; and
(D) provide services without regard to the ability of persons
receiving the services to pay for the services.
(h) Performance of noncharitable functions by a charitable
organization that owns or uses exempt property does not result in
loss of an exemption authorized by this section if those other
functions are incidental to the organization's charitable
functions. The division of responsibilities between an
organization that qualifies as a charitable organization under
Subsection (c) and another organization will not disqualify the
organizations or any property owned or used by either
organization from receiving an exemption under this section if
the collaboration furthers the provision of one or more of the
charitable functions described in Subsection (d) and if the other
organization:
(1) is exempt from federal income taxation under Section 501(a),
Internal Revenue Code of 1986, as an organization described by
Section 501(c)(3) of that code;
(2) meets the criteria for a charitable organization under
Subsections (e) and (f); and
(3) is under common control with the charitable organization
described in this subsection.
(i) In this section, "building" includes the land that is
reasonably necessary for use of, access to, and ornamentation of
the building.
(j) The exemption of an organization preserving or conserving
wildlife is limited to land and improvements and may not exceed
1,000 acres in any one county.
(k) In connection with a nursing home or retirement community,
for purposes of Subsection (d):
(1) "Assisted living services" means responsible adult
supervision of or assistance with routine living functions of an
individual in instances where the individual's condition
necessitates that supervision or assistance.
(2) "Charity care," "government-sponsored indigent health care,"
and "net resident revenue" are determined in the same manner for
a retirement community or nursing home as for a hospital under
Section 11.1801(a)(2).
(3) "Nursing care services" includes services provided by
nursing personnel, including patient observation, the promotion
and maintenance of health, prevention of illness or disability,
guidance and counseling to individuals and families, and referral
of patients to physicians, other health care providers, or
community resources if appropriate.
(4) "Retirement community" means a collection of various types
of housing that are under common ownership and designed for
habitation by individuals over the age of 62.
(5) "Single campus" means a facility designed to provide
multiple levels of retirement housing that is geographically
situated on a site at which all levels of housing are contiguous
to each other on a single property.
(l) A charitable organization described by Subsection (d)(3)
that provides support to elderly persons must engage primarily in
performing charitable functions described by Subsection (d)(3),
but may engage in other activities that support or are related to
its charitable functions.
(m) A property may not be exempted under Subsection (a)(2) for
more than three years.
(n) For purposes of Subsection (a)(2), an incomplete improvement
is under physical preparation if the charitable 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.
(o) For purposes of Subsection (a)(2), real property acquired,
held, and transferred by an organization that performs the
function described by Subsection (d)(21) or (22) is considered to
be used exclusively by the qualified charitable organization to
perform that function.
Text of subsection as added by Acts 2009, 81st Leg., R.S., Ch.
1246, Sec. 2
(p) Real property owned by a charitable organization and leased
to an institution of higher education, as defined by Section
61.003, Education Code, is exempt from taxation to the same
extent as the property would be exempt if the property were owned
by the institution.
Text of subsection as added by Acts 2009, 81st Leg., R.S., Ch.
1314, Sec. 2
(p) The exemption authorized by Subsection (d)(23) applies only
to improvements that:
(1) are owned by a charitable organization that has been in
existence for at least 10 years;
(2) are used to provide housing and related services to
individuals described by that subsection; and
(3) are located on a single campus owned by a municipality with
a population of more than 600,000 and less than 700,000.
Acts 1979, 66th Leg., p. 2236, ch. 841, Sec. 1, eff. Jan. 1,
1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 127, ch. 13,
Sec. 33, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 2207, ch.
412, Sec. 1, eff. Jan. 1, 1984; Acts 1985, 69th Leg., ch. 960,
Sec. 1, eff. Jan. 1, 1986; Acts 1987, 70th Leg., ch. 430, Sec. 1,
eff. Jan. 1, 1988; Acts 1991, 72nd Leg., ch. 407, Sec. 1, eff.
Jan. 1, 1992; Acts 1993, 73rd Leg., ch. 360, Sec. 5, eff. Sept.
1, 1993; Acts 1995, 74th Leg., ch. 471, Sec. 1, eff. Jan. 1,
1996; Acts 1995, 74th Leg., ch. 781, Sec. 4, eff. Sept. 1, 1995;
Acts 1997, 75th Leg., ch. 715, Sec. 1, eff. Jan. 1, 1998; Acts
1997, 75th Leg., ch. 1039, Sec. 7, eff. Jan. 1, 1998; Acts 1997,
75th Leg., ch. 1411, Sec. 1, eff. June 20, 1997; Acts 1999, 76th
Leg., ch. 138, Sec. 1, eff. May 18, 1999; Acts 1999, 76th Leg.,
ch. 266, Sec. 1, eff. Jan. 1, 2000; Acts 1999, 76th Leg., ch.
924, Sec. 1, eff. Jan. 1, 2000; Acts 1999, 76th Leg., ch. 1443,
Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec.
18.001(a), eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 288,
Sec. 1.01, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 288,
Sec. 2.01, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1034, Sec. 13, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
1341, Sec. 34, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
87, Sec. 22.002, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1246, Sec. 1, eff. January 1, 2010.
Acts 2009, 81st Leg., R.S., Ch.
1246, Sec. 2, eff. January 1, 2010.
Acts 2009, 81st Leg., R.S., Ch.
1314, Sec. 1, eff. January 1, 2010.
Acts 2009, 81st Leg., R.S., Ch.
1314, Sec. 2, eff. January 1, 2010.
Sec. 11.1801. CHARITY CARE AND COMMUNITY BENEFITS REQUIREMENTS
FOR CHARITABLE HOSPITAL. (a) To qualify as a charitable
organization under Section 11.18(d)(1), a nonprofit hospital or
hospital system must provide charity care and community benefits
as follows:
(1) charity care and government-sponsored indigent health care
must be provided at a level that is reasonable in relation to the
community needs, as determined through the community needs
assessment, the available resources of the hospital or hospital
system, and the tax-exempt benefits received by the hospital or
hospital system;
(2) charity care and government-sponsored indigent health care
must be provided in an amount equal to at least four percent of
the hospital's or hospital system's net patient revenue;
(3) charity care and government-sponsored indigent health care
must be provided in an amount equal to at least 100 percent of
the hospital's or hospital system's tax-exempt benefits,
excluding federal income tax; or
(4) charity care and community benefits must be provided in a
combined amount equal to at least five percent of the hospital's
or hospital system's net patient revenue, provided that charity
care and government-sponsored indigent health care are provided
in an amount equal to at least four percent of net patient
revenue.
(b) A nonprofit hospital that has been designated as a
disproportionate share hospital under the state Medicaid program
in the current year or in either of the previous two fiscal years
shall be considered to have provided a reasonable amount of
charity care and government-sponsored indigent health care and is
considered to be in compliance with the standards in Subsection
(a).
(c) A hospital operated on a nonprofit basis that is located in
a county with a population of less than 58,000 and in which the
entire county or the population of the entire county has been
designated as a health professionals shortage area is considered
to be in compliance with the standards in Subsection (a).
(d) A hospital providing health care services to inpatients or
outpatients without receiving any payment for providing those
services from any source, including the patient or person legally
obligated to support the patient, third-party payors, Medicare,
Medicaid, or any other state or local indigent care program but
excluding charitable donations, legacies, bequests, or grants or
payments for research, is considered to be in compliance with the
standards in Subsection (a).
(e) For purposes of complying with Subsection (a)(4), a hospital
or hospital system may not change its existing fiscal year unless
the hospital or hospital system changes its ownership or
corporate structure as a result of a sale or merger.
(f) For purposes of this section, a hospital that complies with
Subsection (a)(1) or that is considered to be in compliance with
the standards in Subsection (a) under Subsection (b), (c), or (d)
shall be excluded in determining a hospital system's compliance
with the standards in Subsection (a)(2), (3), or (4).
(g) For purposes of this section, "charity care,"
"government-sponsored indigent health care," "health care
organization," "hospital system," "net patient revenue,"
"nonprofit hospital," and "tax-exempt benefits" have the meanings
assigned by Sections 311.031 and 311.042, Health and Safety Code.
A determination of the amount of community benefits and charity
care and government-sponsored indigent health care provided by a
hospital or hospital system and the hospital's or hospital
system's compliance with Section 311.045, Health and Safety Code,
shall be based on the most recently completed and audited prior
fiscal year of the hospital or hospital system.
(h) The providing of charity care and government-sponsored
indigent health care in accordance with Subsection (a)(1) shall
be guided by the prudent business judgment of the hospital, which
will ultimately determine the appropriate level of charity care
and government-sponsored indigent health care based on the
community needs, the available resources of the hospital, the
tax-exempt benefits received by the hospital, and other factors
that may be unique to the hospital, such as the hospital's volume
of Medicare and Medicaid patients. These criteria shall not be
determinative factors, but shall be guidelines contributing to
the hospital's decision along with other factors that may be
unique to the hospital. The formulas in Subsections (a)(2), (3),
and (4) shall also not be considered determinative of a
reasonable amount of charity care and government-sponsored
indigent health care.
(i) The requirements of this section shall not apply to the
extent a hospital or hospital system demonstrates that reductions
in the amount of community benefits, charity care, and
government-sponsored indigent health care are necessary to
maint