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.