SRC-AAA S.B. 1048 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1048
By: Truan
Finance
3-24-97
As Filed


DIGEST 

Currently, the law provides an ad valorem tax exemption for property
acquired by a nonprofit housing organization during the time the
organization is improving the property for transfer to its final owners.
This exemption applies only to an organization which constructs the
housing primarily with volunteer help.  Community development
organizations do not primarily use volunteer labor, yet they use public
money to provide housing for low-income Texans.  This bill extends the ad
valorem exemption to property acquired by community development
organizations for the purpose of providing low-income and moderate-income
housing during the time they hold the property. 

PURPOSE

As proposed, S.B. 1048 extends the ad valorem exemption to property
acquired by community development organizations for the purpose of
providing low-income housing during the time they hold 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 Chapter 11B, Tax Code, by adding Section 11.182, as
follows: 

Sec. 11.182. COMMUNITY HOUSING DEVELOPMENT ORGANIZATIONS IMPROVING
PROPERTY FOR LOW-INCOME AND MODERATE-INCOME HOUSING. Provides that an
organization is entitled to an exemption from taxation of improved or
unimproved real property it owns if the organization meets certain
requirements.  Prohibits property owned by the organization from being
exempted after a certain period of time unless the property is offering to
rent or renting the property without profit to a low-income or
moderate-income individual or family.  Entitles an organization entitled
to an exemption under Subsection (a) to also be exempt from taxation of
any building used for acquisition, building, repair, sale, or rental of
property.  Sets forth the qualifications of the exemption. Defines
"community housing development organization." 

SECTION 2. Amends Section 11.436(a), Tax Code, to authorize an
organization to apply for an exemption if it qualifies under Section
11.182(a), Tax Code. 

SECTION 3. Amends Section 26.111(a), Tax Code, to make a conforming change.

SECTION 4. Effective date: January 1, 1998.

SECTION 5. Emergency clause.