HBA-SEP C.S.H.J.R. 67 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.J.R. 67
By: Chisum
Financial Institutions
4/1/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law does not extend residence homestead ad valorem tax exemptions
to a homestead owned by a family-owned business or protect these businesses
from forced sale.  Exempting principal residences that are converted to
family-owned businesses from this tax and protecting them from forced sale
may encourage family business entrepreneurship.  As proposed C.S.H.J.R. 67
requires the submission to the voters of a constitutional amendment to
provide that the residence of a person that is owned by a familyowned
business in which the person owns an interest is considered the person's
residence homestead for the purposes of a residence homestead tax
exemption, a limitation of school tax on homesteads of elderly, or a
limitation on appraised value of a residence homestead.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this resolution
does not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.H.J.R. 67 amends the Texas Constitution to provide that the residence
of a person that is owned by a family-owned business in which the person
owns an interest is considered the person's residence homestead for the
purposes of a residence homestead tax exemption, a limitation of school tax
on homesteads of elderly, or a limitation on appraised value of a residence
homestead.  The eligibility of the residence homestead of a person or the
person's spouse or surviving spouse is not effected by a conveyance of the
residence by the owner to a family-owned business in which the owner owns
an interest. For the purposes of an extension of credit secured by a lien,
protection from forced sale, mortgages, trust deeds, and liens and uses and
amount of a homestead, the homestead of a person may consist of property
that is owned by a family-owned business in which a member of the family
owns an interest.  The homestead rights of the person are subject and
subordinate to the rights of creditors of and purchases of property from
the family-owned business and do not affect the validity or enforceability
of any conveyance, mortgage, or encumbrance of the property by the
family-owned business.  If the homestead claimant conveys the homestead to
a family business in which the claimant owns an interest, the claimant may
continue to claim homestead rights.   

FOR ELECTION

This proposed constitutional amendment shall be submitted to the voters at
an election to be held November 6, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.J.H.R. 67 modifies the original by providing that the homestead rights
of the person are subject and subordinate to the rights of creditors of and
purchases of property from the family-owned business and do not affect the
validity or enforceability of any conveyance, mortgage, or encumbrance of
the property by the family-owned business.