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.