C.S.H.B. 837 78(R)    BILL ANALYSIS


C.S.H.B. 837
By: Hilderbran
Local Government Ways and Means
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law allows for prorated ad valorem taxes on residence homesteads
of persons over 65 years of age when property loses its exempt status
during the year, such as when an over 65 person moves to another county.
The amount of tax assessed is based on a percentage, which is based on the
number of days in the year that the property did not qualify for the
exemption.  Until 1997,  26.10 specifically excepted residence homestead
exemptions.   But, in the 75th Legislative Session  26.10(b) of the Tax
Code was enacted, which provided for the pro-rated tax to apply to
residential homesteads owned by persons over 65 years of age whose
exemptions terminated during the year. 

The purpose of the CSHB 837 is to delete the requirements in  26.10(b)
that taxing units must assess the pro-rated tax to persons who are over 65
and who lose their residential homestead tax exemptions. There were
several other amendments to the Tax Code which were enacted in the 75th
Legislative Session that referred to the over-65 residential homestead
pro-rated tax which were removed in the 76th Session, but  26.10(b) was
not contemplated for change. 

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. 

ANALYSIS

CSHB 837 repeals section 26.10(b) of the Tax Code, which provides for
prorated ad valorem taxes on residence homesteads of persons over 65 years
of age when the property loses its exempt status during the year.   

CSHB 837 also amends Section 11.13 of the Tax Code to add Subsection (s),
which would allow a person over 65 years of age to claim a residence
homestead exemption for more than one residence homestead in the same year
as long as the exemption is not claimed at the same time. 

EFFECTIVE DATE

January 1, 2004

COMPARISON OF ORIGINAL TO SUBSTITUTE

Section 1: Subsection (h) is removed from the original bill. The language
in Subsection (s) is expanded to say that a person receiving an exemption
authorized by Subsection (c) or (d), and subsequently establishing a
different residence homestead during the same year, may not qualify for an
exemption on the subsequent homestead under Subsection (c) or (d) before
January 1 of the following tax year.