HBA-JRA, RBT H.B. 2821 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2821
By: McCall
Ways & Means
7/26/1999
Enrolled



BACKGROUND AND PURPOSE 

Tax Code Section 11.18 (Charitable Organizations) was enacted in 1979.
Since that time a trend toward the creation of multi-institutional health
care systems.  Prior to the 76th Legislature, the law did not include
provisions that specifically allow for exemption from property tax for
properties owned by parent holding companies.  Property owned by individual
hospitals can be granted property tax exemption, but nothing addressed
parent companies which do not directly perform certain necessary charitable
functions.  The parent company operates to provide the necessary support to
health care organizations so those organizations can focus more on
performing charitable functions. H.B. 2821 provides for property tax
exemption for properties owned by parent holding companies that operate to
provide necessary support services to affiliated organizations. 
 
RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 11.18(h), Tax Code, to provide that a division
of responsibilities between a charitable organization and another
organization will not disqualify the organizations or any property owned or
used by either organization from receiving an exemption under this section
if the collaboration furthers the provision of one or more of certain
charitable functions and the other organization is exempt from federal
income taxation, meets the criteria for a charitable organization, and is
under common control with the charitable organization described in this
subsection. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.