HBA-JRA, RAR H.B. 873 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 873
By: Hochberg
Ways & Means
3/18/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, cemeteries and other nonprofit organizations are entitled to an
exemption from ad valorem taxation for certain real property owned by the
organization and used in accordance with the organization's nonprofit
mission.  There has been inconsistent treatment of this exemption by some
assessors, due to their interpretation that property on which improvements
are incomplete does not qualify for the exemption.  H.B. 873 provides that
an incomplete improvement qualifies for an exemption from ad valorem
taxation for a period of not more than three years. 

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 11.17, Tax Code, as follows:

Sec. 11.17.  CEMETERIES.  (a)(1)  Makes nonsubstantive changes.

(2)  Includes as property exempted from taxation real property owned by a
person and consisting of:  

(A)  an incomplete improvement that is under active construction or other
physical preparation, is designed and intended to be used for human burial
when complete, and is not held for profit; and 

(B)  the land on which the incomplete improvement is located that is
reasonably necessary for use of the improvement for human burial and is not
held for profit. 

(b)  Prohibits a property from being exempted under Subsection (a)(2) for
more than three years.  

(c)  Provides that an incomplete improvement is under physical preparation
for purposes of Subsection (a)(2), if the owner has engaged in
architectural or engineering work, soil testing, land clearing activities,
or site improvement work necessary for the construction of the improvement;
or conducted an environmental or land study relating to the construction of
the improvement.  

SECTION 2.  Amends Section 11.18, Tax Code, by amending Subsection (a) and
adding Subsections (l) and (m), to make conforming changes applicable to
real property owned and used by a charitable organization. 

SECTION 3.  Amends Section 11.19, Tax Code, by amending Subsection (a) and
adding Subsections (e) and (f), to make conforming changes applicable to
real property owned and used by a youth development association.  

SECTION 4.  Amends Section 11.20(f), Tax Code, to make a conforming change
for the period of  exemption applicable to real property owned and used by
religious organizations. 

SECTION 5.  Amends Section 11.21, Tax Code, by amending Subsection (a) and
adding Subsections (g) and (h), to make conforming changes applicable to
real property owned by a person and used for a qualified school as provided
by Subsection (d). 

SECTION 6.  Amends Section 11.23, Tax Code, by adding Subsection (1), to
make conforming changes applicable to real property owned and used by
veterans organizations, Federation of Women's Clubs, Nature Conservancy of
Texas, Congress of Parents and Teachers, private enterprise demonstration
associations, theater schools, community services clubs, medical center
development, and scientific research corporations, as described in
Subsections (a)-(e), (g), or (i)-(k), Section 11.23, Tax Code
(Miscellaneous Exemptions.)  
      
SECTION 7.  Amends Section 11.30, Tax Code, to make conforming changes
applicable to real property owned  and used by a corporation organized
under Chapter 67, Water Code (Nonprofit Water Supply or Sewer Service
Corporations).   

SECTION 8.  Emergency clause.
  Effective date: upon passage.