SRC-HRD S.B. 344 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 344
By: Harris
Finance
2-12-97
As Filed


DIGEST 

Currently, Texas law provides that a person is entitled to an exemption
from taxes of the buildings and tangible personal property, provided the
property is used only for educational purposes, that the person operates
the school, and the buildings and property are reasonably necessary for
the operation of the school.  In addition, current law provides that use
of the property for non-educational purposes does not result in the loss
of an exemption, if those other purposes are incidental to use of the
property for educational functions and benefit the students or faculty of
the school.   

S.B. 344 adds a provision to current law by which the buyer of the tax
exempt property, if the buyer and seller would be exempt from taxation
under current law, is exempted from taxation on the property even if
incidental use of the property is not for the benefit of students or
faculty of the school.   

Such provisions would apply when a church that owns and operates a school
grows and wishes to sell its original sanctuary to its school and and move
to a new location.  This bill would allow the property to remain
tax-exempt (under certain conditions) after the sale of the property to
the school, even if the church still incidentally uses the property for
purposes that do not benefit the students or faculty of the school.   

PURPOSE

As proposed, S.B. 344 provides that a person is entitled to an exemption
from taxes of the buildings and tangible property the person acquires for
use as a school if the person allows the former owner to continue using
the property pending its use as a school, and the former owner is entitled
to an exemption from taxation of the property if the former owner
continued to own the property. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.21, Tax Code, by adding Section (f), to
provide that, notwithstanding Subsection (a), a person is entitled to an
exemption from taxation of the buildings and tangible personal property
the person acquires for use for a school that meets each requirement of
Subsection (d), under certain conditions. 

SECTION 2.  Requires the chief appraiser of an appraisal district to
accept and approve or deny an application for an exemption from ad valorem
taxation under Section 11.21(f), Tax Code, as added by this Act, for the
ad valorem tax year that began January 1, 1997, if the application is
filed as provided by Section 11.434, Tax Code. 

SECTION 3. Effective date: September 1, 1997.

SECTION 4. Emergency clause.