C.S.H.B. 3433 78(R)    BILL ANALYSIS


C.S.H.B. 3433
By: Rodriguez
Local Government Ways and Means
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

When a person purchases a home in Texas they are not automatically given a
residential  homestead exemption for ad valorem taxes; the homeowner must
be informed of the exemption and  then must locate, obtain and apply
separately for the exemption at a certain time in order to be eligible for
the exemption. As a result many Texas homeowners do not obtain in a timely
manner the exemption they are entitled to which often increases the cost
of property taxes on the home. While applying for an exemption is free,
some  companies have emerged which charge homeowners exorbitant fees for
applying for the homestead exemption, while others charge the homeowner a
flat fee and a significant percentage  of the tax savings for future
years.  C.S.H.B. 3433 addresses both problems by setting a maximum charge
on assisting a person with applying for a homestead exemption at $25.
C.S.H.B. 3433 also makes it easier for homeowners to apply for the
exemption by  requiring the person that prepares the closing documents for
compensation, to also provide a copy of the homestead exemption form to
the homeowner.  On request by the homeowner, the person is to file the
application with the appropriate authority. The bill allows the homeowner
to waive their rights completely regarding all the requirements of this
section of the bill.  
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

SECTION 1. Amends Subchapter C, Chapter 11, Tax Code, by adding Section
11.48 and 11.49 which requires a person that prepares closing
documentation for compensation for a single-family  residential structure
to provide an application for homestead exemption for ad valorem taxes to
the purchaser of a home, and to file it on request of the purchaser by a
specific time.  The purchaser may waive  the right to receive this
assistance.  A person that assists another person by preparing or filing
an  application for an exemption may not charge a fee greater than $25.  
SECTION 2. This Act takes effect September 1, 2003

EFFECTIVE DATE

This Act takes effect September 1, 2003; however, it applies only to
property sales, transfers or encumbrance that occur on or after the
effective date. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B 3433 amends language of Section 11.48 to require persons that
commercially prepare closing documents to provide the application
exemption form and instructions to the buyer as prepared by the appraisal
district which include instructions on how to file the application, the
location of appraisal districts where the property is located, and the
time period in which the appraisal district may receive the application
for any applicable exemptions.  
Furthermore, C.S.H.B 3433 adds new language to Section 11.49 relating to
the charge of a fee for assisting a person with preparing or filing an
application for exemptions; and where a fee is charged, the person must
file the application for the exemptions with the appraisal district.