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.