C.S.H.B. 2416 78(R)    BILL ANALYSIS


C.S.H.B. 2416
By: Hochberg
Local Government Ways and Means
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current statute allows nonprofit organizations to be exempt from ad
valorem taxation while improvements are under construction.  Due to the
current uncertain economic environment, some nonprofit organizations are
unable to raise the capital required to complete property improvements. 

Committee Substitute House Bill 2416 temporarily extends the tax exempt
period, up to a maximum of five years, for nonprofit organizations while
improvements are under construction. 

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

Committee Substitute House Bill 2416 amends the Tax Code to authorize
veteran's organizations, Federation of Women's Clubs, Nature Conservancy
of Texas, Congress of Parents and Teachers, private enterprise
demonstration associations, theater schools, community service clubs,
medical center development, scientific research corporations, charitable
or religious organizations, schools, or youth spiritual, mental, or
physical development associations to be exempted from ad valorem taxes on
developing property for up to five years. 

These extensions expire December 31, 2005 and the current three year
exemption is then restored. 


EFFECTIVE DATE

Upon passage if the Act receives a vote of two-thirds of the members of
each house, or, if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003. 


COMPARISON OF ORIGINAL TO SUBSTITUTE

This substitute modifies the original by temporarily extending the tax
exempt period up to a maximum of five years as opposed to six years in the
introduced version.