BILL ANALYSIS


                                                        H.B. 1127
                                             By: Hamric (Sponsor)
                                                          Finance
                                                         05-10-95
                                Senate Committee Report (Amended)
BACKGROUND

Current law limits a school district's portion of ad valorem taxes
for persons who are 65 or older for their residence homesteads. 
The total amount of school district taxes are limited to the amount
in the first year of eligibility.  The Texas Constitution provides
that in the event of death, if the surviving spouse is a least 55
years old, the surviving spouse continues to qualify for the school
district tax limitation.  However, other taxing units that elect to
offer an exemption to elderly people cannot exempt a surviving
spouse that is over 55 years old.

PURPOSE

As proposed, H.B. 1127 extends the amount of tax exemption on a
residence homestead of an elderly person to a surviving spouse that
is over 55 years old.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.13, Tax Code, by adding Subsections
(q) and (r), as follows:

     (q)  Entitles the surviving spouse of an individual who
     received an exemption under Subsection (d) for the residence
     homestead of a person 65 or older to an exemption for the same
     property from the same taxing unit in an amount equal to that
     of the exemption received by the deceased spouse if the
     deceased spouse died in a year in which the deceased spouse
     received the exemption; the surviving spouse was 55 or older
     when the deceased spouse died; and 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)  Provides that an individual who receives an exemption
     under Subsection (d) is not entitled to an exemption under
     Subsection (q).
     
     SECTION 2.     (a)  Provides that this section applies only to a county
with a population of more than 225,000.

     (b)  Validates an exemption from ad valorem taxation adopted
     by the commissioners court of a county under Section 11.13(n),
     Tax Code, after May 1, 1995, for the tax year as of the date
     the exemption was adopted.
     
     (c)  Provides that the ad valorem taxation proceedings of the
     county occurring after the adoption of the exemption are
     validated and may not be held invalid because the exemption
     under Section 11.13(n), Tax Code, was not adopted in
     accordance with that section.
     
     (d)  Provides that this section does not apply to any matter
     that on the effective date of this Act:
     
     (1)  is involved in litigation if the litigation ultimately
       results in the matter being held invalid by a final judgment
       of a court of competent jurisdiction; or
       
       (2)  has been held invalid by a final judgment of a court of
       competent jurisdiction.
       
            (e)  Provides that this section expires January 1, 1996.
     
SECTION 3. Provides that this Act takes effect January 1, 1996, and
applies only to taxes imposed for tax years beginning on or after
that date, but only if the constitutional amendment proposed by the
74th Legislature, Regular Session, 1995, exempting from ad valorem
taxation the residence homestead of the surviving spouse of an
elderly person is approved by the voters.  Provides that if that
amendment is not approved by the voters, this Act has no effect.

SECTION 4. Emergency clause.