HBA-AMW C.S.H.B. 3383 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3383 By: Davis, Yvonne Ways & Means 4/10/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, properties owned by community housing development organizations (organizations) are exempt from ad valorem taxation. However, concerns exist that some organizations are taking advantage of the exemption without reinvesting the savings that are realized by the organization's tax exempt status and are not using surplus revenue generated by affordable housing units to maintain the property or offer other support services. C.S.H.B. 3383 prohibits rental property owned by an organization from being exempted from taxation in a subsequent tax year unless in the preceding tax year the organization spent a certain percentage of the exemption in that year on specified development services. 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. ANALYSIS C.S.H.B. 3383 amends the Tax Code to prohibit rental property owned by a community housing development organization (organization) from being exempted from taxation in a subsequent tax year unless in the preceding tax year the organization spent an amount equal to at least 50 percent of the amount of the exemption in that year on social, educational, or economic development services for eligible persons in the jurisdiction granting the exemption. The bill provides that an organization is not required to spend at least 50 percent of the amount of the exemption on these services if the organization acquired the property using tax exempt bond financing after January 1, 1997, and before December 31, 2001. EFFECTIVE DATE January 1, 2002. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3383 modifies the original bill to conform to Texas Legislative Council style and format. The substitute adds the provision that an organization is not required to spend at least 50 percent of the exemption on specified services if the community housing development organization (organization) acquired the property using tax exempt bond financing after January 1, 1997, and before December 31, 2001. The substitute differs from the original bill by clarifying that the tax exemption offered for a subsequent tax year is contingent on meeting certain spending requirements in the preceding year. The substitute modifies the original bill by exempting rental property, rather than property, owned by an organization. The substitute modifies the original bill by specifying that the amount spent by the organization must be spent on services for eligible persons in the jurisdiction granting the exemption, rather than eligible persons residing on the property. The substitute modifies the original bill by changing the effective date from the 91st day after adjournment to January 1, 2002.