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


Office of House Bill AnalysisH.B. 2821
By: McCall
Ways & Means
4/6/1999
Committee Report (Amended)



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.  Current law does 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 addresses 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 Subsection (h), Section 11.18, Tax Code, to provide that
a division of responsibilities between a charitable organization and
another organization will not jeopardize the exemption of property or
properties owned or used by either organization if the collaboration
furthers the provision of one or more of certain charitable functions and
the other organization meets specified criteria. 

SECTION 2.  Amends Subchapter B, Chapter 42, Tax Code, by adding Section
42.27, as follows: 

Sec.  42.27.  REMEDY FOR EXEMPTION DENIAL.  Requires a court to grant an
exemption described by Section 11.18(h), Tax Code, if the exemption has
been improperly denied, and order the removal of the property from the
taxable portion of the appraisal roll. 

SECTION 3.  Amends Subsection (a), Section 42.29, Tax Code, to authorize a
property owner who prevails in an appeal to the court under Section 42.27,
Tax Code, to recover reasonable attorney's fees. 

SECTION 4.  Effective date: September 1, 1999.
            Makes application of Section 3 of this Act prospective.

SECTION 5.  Emergency clause.

EXPLANATION OF AMENDMENTS

SECTIONS 2 and 3 are deleted.

SECTION 4 is amended to delete the reference to the prospective application
of the Act. 

SECTIONS 4 and 5 are redesignated to SECTIONS 2 and 3, respectively.