Bill > HB3438

This bill modifies the eligibility criteria for a property tax exemption for nonprofit community business organizations in Texas. The bill updates the definition of such organizations by clarifying that they cannot have formed or financially supported a political committee, as defined by the Election Code. To qualify for the exemption, an organization must: have existed for at least five years; be a nonprofit corporation under Texas law; be a nonprofit organization described by Section 501(c)(6) of the Internal Revenue Code; not be a statewide organization; maintain a dues-paying membership of at least 50 members for three years; have a board of directors elected by members without compensation; be primarily engaged in specific functions within Texas; be primarily supported by membership dues and related income; and not create or support political committees. The changes aim to refine the requirements for tax-exempt status for these nonprofit community business organizations. The bill will apply to ad valorem (property) tax years beginning on or after its effective date of January 1, 2026.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB3438