BILL ANALYSIS



H.B. 2613
By: Craddick
April 20, 1995
Committee Report (Unamended)


BACKGROUND

Section 11.20, Tax Code, exempts from ad valorem taxation property
owned by a religious organization and used as an actual place of
religious worship.  Section 11.20(a)(5) provides for the exemption
of an incomplete improvement that is under active construction or
other physical preparation and that is designed and intended to be
used by the religious organization as a place of religious worship
when complete.  Pursuant to Section 11.20(f), property qualifying
under the "active construction or other physical preparation"
standard may be exempted for only two years.

The provisions to exempt religious organization property "under
active construction or other physical preparation" were added in
1987.  Such provisions have served to resolve previous
administrative concerns relating to the taxable status of church-owned property during the time required for the establishment of
facilities for regular worship.

In certain cases, however, a religious organization will acquire
land late in the year.  Although significant planning and
preparation activities required to establish the facilities are
initiated and/or completed at the time of the land purchase, the
late-year acquisition makes it impossible for actual construction
activities to commence by January 1st, the date at which
qualification for exemption is determined.

Currently, there is inconsistency among appraisal district's
interpretation of Section 11.20(a)(5).  Some will include planning
and preparation activities as "other physical preparation" while
others use a more restrictive reading of the language.

PURPOSE

The bill proposes to define certain activities necessary to be
considered "an incomplete improvement under physical preparation"
for taxation exemption for religious organizations.

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 11.20 (Religious Organizations), Tax
Code, by adding Subsection (g) to further define "an incomplete
improvement under physical preparation" for purposes of taxation
exemption for facilities being established for regular religious
worship.

SECTION 2.  Emergency clause

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on April 18, 1995.  Representative Craddick
explained the bill.  By a record vote of 7 ayes, 0 nays, 0 present
not voting, and 4 absent, the committee voted to report H.B. 2613
to the House without amendment with the recommendation that it be
sent to the Local and Consent Calendar and that it do pass.

     Testimony received in favor of the bill:
           Jim Robinson, representing himself
           William H. Hinson, representing himself
           James D. Penny, representing First United Methodist
Church of Houston