House Bill 445

Chair�s Name: Larry O�Neal

Committee: Ways & Means

House Sponsor: Richard Royal

HB 445 changes how certain property exempt from taxation may be used.  Currently, if a charity�s real estate and buildings are exempt under federal law they may be used to raise money as long as it is �exclusively� used for charitable purposes.  This bill would only allow a tax-exempt building and up to fifteen acres on which the building sits to be used to raise money for charitable purposes.

This bill received a Do Pass recommendation from the Ways & Means Committee and comes to the House Floor under the Structured Rule. 

Chairman O�Neal�s opinion of this legislation:

WHAT PROBLEM/OPPORTUNITY DOES THIS LEGISLATION ADDRESS?

The purpose of HB 445 is to clarify the intent of legislation that was passed last year so as to ensure that only those that were intended to benefit from the legislation may do so.  Legislation was passed to allow charitable institutions to produce income on their property so long as that income is used for the operation of the charitable institution.  This was to allow Goodwill and Salvation Army stores, for example, to have retail stores on their property without being subject to ad valorem taxation.

WHAT IS THE DRIVING FORCE BEHIND THIS LEGISLATION?

To prevent those that were not intended to benefit from this provision from placing large amounts of timberland into charitable trusts drastically reducing county revenues.  This bill will prohibit these companies from taking advantage of this exemption by limiting the acreage on which such properties are located to 15 acres.

THIS LEGISLATION:

• Reduces the Tax Burden on our Citizens:

This bill will ensure that counties may collect ad valorem tax on these tracts of timber land, so that they do not have to increase the taxation on other properties.

Senate Changes:

The Senate added a provision to transfer tax credits (income) on property donated for conservation purposes. Because this is a revenue measure which did not originate in the House, the House disagreed with the change.