Filed: Mar. 21, 2014
Latest Update: Mar. 21, 2014
Summary: Chief Justice HECHT delivered the opinion of the Court. This case, like AHF-Arbors at Huntsville I, LLC v. Walker County Appraisal District, 1 concerns the ad valorem tax exemption available under section 11.182 of the Texas Tax Code for property that a community housing development organization ("CHDO") "owns". One issue, as in AHF-Arbors, is whether a CHDO must have legal title to the property to qualify for the exemption. We held in AHF-Arbors that equitable title is sufficient. Anoth
Summary: Chief Justice HECHT delivered the opinion of the Court. This case, like AHF-Arbors at Huntsville I, LLC v. Walker County Appraisal District, 1 concerns the ad valorem tax exemption available under section 11.182 of the Texas Tax Code for property that a community housing development organization ("CHDO") "owns". One issue, as in AHF-Arbors, is whether a CHDO must have legal title to the property to qualify for the exemption. We held in AHF-Arbors that equitable title is sufficient. Anothe..
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Chief Justice HECHT delivered the opinion of the Court.
This case, like AHF-Arbors at Huntsville I, LLC v. Walker County Appraisal District,1 concerns the ad valorem tax exemption available under section 11.182 of the Texas Tax Code for property that a community housing development organization ("CHDO") "owns". One issue, as in AHF-Arbors, is whether a CHDO must have legal title to the property to qualify for the exemption. We held in AHF-Arbors that equitable title is sufficient. Another issue, not present in AHF-Arbors, is whether the CHDO's application for an exemption was timely. We hold that it was. Accordingly, we affirm the judgment of the court of appeals and remand this case to the trial court.2
TRQ Captain's Landing, L.P., has legal title to Captain's Landing Apartments. American Housing Foundation formed and became the sole member of CD Captain's Landing, LLC, which in turn acquired TRQ by purchasing the limited partners' 99% interest and acquiring TRQ's general partner, which owns 1% of the limited partnership. Thus, the Foundation completely controls the LLC, which owns and controls the LP, which owns the apartments.
The Foundation, a Texas nonprofit corporation, is a CHDO; the LLC and the LP are not.3 The LLC, the day it acquired the LP, applied for a tax exemption under section 11.182. Section 11.182(b) states that "[a]n organization is entitled to an exemption from taxation of improved or unimproved real property it owns" if the organization is a CHDO and meets certain other requirements.4 The Galveston Central Appraisal District denied the exemption on the ground that the LLC did not own the property. The LP filed a notice of protest, providing records to show the relationship between the property, the LP, the LLC, and the Foundation, and the Foundation's status as a CHDO, but the Appraisal Review Board denied the protest. The Foundation and the LP then sued for a declaration that they are entitled to the exemption. The trial court granted summary judgment for the District and denied the plaintiffs' motion for partial summary judgment.
A divided court of appeals reversed, holding that "an otherwise qualified equitable property owner may obtain an exemption from ad valorem taxes pursuant to subsection 11.182(b)",5 and that plaintiffs' application for an exemption was timely under section 11.436.6 We granted the District's petition for review,7 but after we heard oral argument, the Foundation sought protection in bankruptcy, and we abated the case.8 The bankruptcy trustee and the District now agree that this case is no longer stayed. We therefore vacate our order abating this cause and reinstate this matter on the active docket.
While the case was abated, we addressed section 11.182(b)'s ownership requirement in AHF-Arbors. The CHDO in that case was Atlantic Housing Foundation, Inc., a South Carolina nonprofit corporation.9 Atlantic was the sole member of two limited liability companies — the "Arbors" — each of which owned an apartment complex as its sole asset.10 The Arbors unsuccessfully applied for the tax exemptions available to a CHDO, and sought judicial review.11 We held that a CHDO's equitable ownership of property qualifies for an exemption under section 11.182(b), specifically noting our agreement with the reasoning of the court of appeals in the case now before us.12 AHF-Arbors is thus dispositive of the ownership issue in the present case.
The District here additionally contends that the application for an exemption was untimely. Generally, eligibility for an exemption is determined as of January 1 of the year in which the exemption is sought, and a person must apply for the exemption before May 1 of that year.13 Because the plaintiffs did not apply for an exemption until December of the year at issue, on the day the Foundation's LLC acquired the LP, the District argues that the application was late. But section 11.436(a) provided at the time:
An organization that acquires property that qualifies for an exemption under Section 11.181(a) or 11.182(a) may apply for the exemption for the year of acquisition not later than the 30th day after the date the organization acquires the property, and the deadline provided by Section 11.43(d) does not apply to the application for that year.14
The District argues that the relevant occurrence was not the LLC's acquisition of the LP but the LP's acquisition of the apartments years earlier. We agree with the court of appeals that this argument is based on the District's position that an exemption must be based only on legal title, which we have rejected. Under section 11.436, the Foundation's application, made within thirty days of the date it acquired equitable title to the apartments, was timely.
Accordingly, the judgment of the court of appeals is
Affirmed.
