JWB H.B. 1518 75(R)BILL ANALYSIS WAYS & MEANS H.B. 1518 By: Farrar 4-18-97 Committee Report (Unamended) BACKGROUND Chapter 11, Tax Code (Exemptions), provides for ad valorem tax exemptions for certain organizations that provide certain public policy goals, and Section 23.18, Tax Code, provides a nominal exemption for the property owned by a nonprofit homeowners' organization. Currently, neighborhood associations that preserve, protect, improve, and monitor matters affecting a defined residential area have no special tax treatment. PURPOSE This bill exempts property of a neighborhood association from ad valorem taxation. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1.Amends Subchapter B, Chapter 11, Tax Code (Exemptions), by adding Section 11.32, NEIGHBORHOOD ASSOCIATIONS. (a) provides for an exemption from taxation of the property the association owns and uses exclusively for the purpose for which the association is organized. (b) defines neighborhood associations. SECTION 2.Amends Section 11.43(c), Tax Code (Application for Exemption), by adding Section 11.32 to the list of current exemptions provided. This exemption applies to the property until it changes ownership or the person's qualification for the exemption changes. SECTION 3.Amends Section 11.436(a), Tax Code (Application for Exemption of Property Used for Low-Income Housing), providing that an organization qualifying for an exemption under Section 11.181(a) or 11.32 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 provides that the deadline in Section 11.43(d) does not apply to the application for that year. SECTION 4.Amends Section 26.111(a), Tax Code (Prorating Taxes--Acquisition by Charitable Organization), providing a calculation for the amount of tax due on the property if an organization qualifies for an exemption under Section 11.181(a) or 11.32. SECTION 5. Effective date: January 1, 1998, only upon passage of the proposed constitutional amendment, HJR 80. SECTION 6. Emergency clause.