Do Exemption Changes to Texas Stormwater Utility Law Affect You?
A recent amendment to stormwater utility laws in Texas, House Bill 1662, passed during the recently concluded session of the Texas Legislature that includes two key changes. The amendment clarifies the availability of partial exemptions for tax-exempt religious institutions and adds closed cemeteries to the list of properties that can be exempt. The new law went into effect May 28, 2015.
Local Government Code 552.053(d)
(d) A municipality may exempt property owned by a religious organization that is exempt from taxation pursuant to Section 11.20, Tax Code, from all or a portion of drainage charges under this subchapter, as the governing body of the municipality considers appropriate.
While tax-exempt religious organizations were already eligible for stormwater utility fee exemption at the discretion of the governing municipality, new language was added to clarify that the municipality may choose to partially exempt these organizations.
The language does not address partial exemptions of entities that cities are already permitted by law to choose to exempt from stormwater utility fees such as a city itself, counties and school districts. Numerous cities already partially exempt one or more of these entities by charging reduced rates. Cities may wish to obtain a legal opinion as to whether the new partial exemption language in any way limits the city’s ability to charge reduced rates for cities, counties or school districts.
(d-1) A municipality may exempt property used for cemetery purposes from drainage charges under Section 552.047 if the cemetery is closed to new interments and does not accept new burials.
Cities may also now choose to exempt closed cemeteries from drainage charges as long as the cemeteries are no longer accepting new burials. Previously, cemeteries were only eligible for exemption if they were owned by other entities already eligible for exemption, such as the tax-exempt religious organizations, State, counties or municipalities.
For more information about stormwater utilities or the new law, please contact Freese and Nichols Stormwater Engineer Trey Shanks at 214-217-2221.