Texas Tax Code 11.30 – Nonprofit Water Supply or Wastewater Service Corporation
(a) A corporation organized under Chapter 67, Water Code, that provides in the bylaws of the corporation that on dissolution of the corporation the assets of the corporation remaining after discharge of the corporation’s indebtedness shall be transferred to an entity that provides a water supply or wastewater service, or both, that is exempt from ad valorem taxation is entitled to an exemption from taxation of:
(1) property that the corporation owns and that is reasonably necessary for and used in the operation of the corporation:
(A) to acquire, treat, store, transport, sell, or distribute water; or
(B) to provide wastewater service; and
(2) the real property owned by the corporation 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 in the operation of the corporation for a purpose described by Subdivision (1) when complete; and
(B) the land on which the incomplete improvement is located that will be reasonably necessary for the use of the improvement in the operation of the corporation for a purpose described by Subdivision (1).
(b) A property may not be exempted under Subsection (a)(2) for more than three years.
Terms Used In Texas Tax Code 11.30
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Improvement: means :
(A) a building, structure, fixture, or fence erected on or affixed to land;
(B) a transportable structure that is designed to be occupied for residential or business purposes, whether or not it is affixed to land, if the owner of the structure owns the land on which it is located, unless the structure is unoccupied and held for sale or normally is located at a particular place only temporarily; or
(C) for purposes of an entity created under § 52, Article III, or § 59, Article XVI, Texas Constitution, the:
(i) subdivision of land by plat;
(ii) installation of water, sewer, or drainage lines; or
(iii) paving of undeveloped land. See Texas Tax Code 1.04 - Property: means real and personal property. See Texas Government Code 311.005
(c) For purposes of Subsection (a)(2), an incomplete improvement is under physical preparation if the corporation 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.