HBA-SEP C.S.H.B. 824 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 824
By: Ellis, Dan
Ways & Means
4/19/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law does not exempt county fair associations that own land and
buildings from ad valorem taxation (taxation) of the property.  While most
county fair association property is owned by a county and is therefore
exempt, and other counties give the county tax assessors discretion to
exempt the property owned by the county fair association, a statewide
policy to exempt county fair associations from taxation of property would
benefit those county fair associations that are not presently exempt.
C.S.H.B. 824 entitles a nonprofit county fair association organized to hold
agricultural fairs and encourage agricultural pursuits to a tax exemption
on the land and buildings it owns and uses to hold agricultural fairs.   

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. 824 amends the Tax Code to entitle a county fair association
organized to hold agricultural fairs and encourage agricultural pursuits to
a tax exemption on the land and buildings it owns and uses to hold
agricultural fairs.  An association that holds a license under the Texas
Racing Act to conduct a horse race meeting or a greyhound race meeting with
pari-mutuel wagering is not entitled to an exemption.  The bill prohibits
land or a building used to conduct such a race from being exempt.  The bill
provides that, to qualify for an exemption, a county fair association must: 

_be a nonprofit corporation as defined by the Texas Non-Profit Corporation
Act; 

_be exempt from federal income taxes as an organization; 

_qualify for an exemption from the franchise tax under the exemption for a
nonprofit corporation organized for agricultural purposes; and 

_meet the qualifications of a charitable organization.

EFFECTIVE DATE

January 1, 2002.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 824 modifies the original to provide that an association that
holds a license under the Texas Racing Act to conduct a horse race meeting
or a greyhound race meeting with pari-mutuel wagering is not entitled to a
tax exemption.  The bill prohibits land or a building used to conduct such
a race from being exempt.  The substitute adds that county fair
associations that are held in 501 (c)(4) or (5), Internal Revenue Code
status are also eligible for the exemption.