SRC-SEW H.B. 1940 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1940
77R3327 SMH-DBy: Bonnen (Cain)
Intergovernmental Relations
5/10/2001
Engrossed


DIGEST AND PURPOSE 

The 76th legislature amended the Property and Tax codes to allow a
homeowner who turns 65 during a calendar year to receive the over-65
exemption on their homestead as if they were age 65 on January 1 of that
year. Under this provision, the homeowner would benefit for the entire year
because there is not a provision for prorating the exemption. Currently, if
a homeowner who is receiving the over-65 exemption passes away during the
year, the over-65 exemption is prorated off the property for the remainder
of the calendar year. There are concerns that this action could cause undue
hardship on the estate or family of an elderly person. H.B. 1940 clarifies
when to prorate because of an over-65 residence homestead exemption and
modifies other provisions regarding residence homestead exemptions.  

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 26.10(b), Tax Code, to delete text regarding
property being eligible for taxation at its full appraised value for only
part of a year.   Provides that if the appraisal roll shows that a
residence homestead exemption for an individual 65 years of age or older
applicable to a property on January 1 of a year terminated during the year
and if the owner qualifies a different property for a residence homestead
exemption during the same year, the tax due against the former residence
homestead (rather than the property) is calculated according to a certain
formula.   

SECTION 2. Amends Section 26.112, Tax Code, to delete existing Subsection
(b) and make conforming and nonsubstantive changes. 

SECTION 3. Effective date:  January 1, 2002.  Makes application of this Act
prospective.