This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0127.WMC
DATE: 3/15/2023
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 127 Ad Valorem Tax Exemption for Nonprofit Homes for the Aged
SPONSOR(S): Ways & Means Committee, Smith
TIED BILLS: IDEN./SIM. BILLS: SB 566
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 22 Y, 0 N, As CS McCain Aldridge
2) Local Administration, Federal Affairs & Special
Districts Subcommittee
3) State Affairs Committee
SUMMARY ANALYSIS
Florida law exempts from ad valorem taxation property used as a home for the aged by certain non-profit
corporations, if at least 75 percent of the occupants of the facility are over the age of 62 years or totally and
permanently disabled. The exemption also applies to the extent these properties are used exclusively for the
conduct of religious services or to rendering of nursing or medical services.
Individual units and apartments in such a facility may be exempt from ad valorem taxation if the units or
apartments are reserved for, restricted to, or actually occupied by a permanent resident of the state who is at
least 62 years of age or totally and permanently disabled and who meets certain income qualifications.
The bill revises eligibility for the ad valorem tax exemption for property used as a home for the aged by
nonprofit corporations to include property owned by a Florida limited partnership where an entity not licensed
under chapter 429 and wholly owned by a corporation not-for-profit under ch. 617, F.S., is the sole general
partner.
The Revenue Estimating Conference estimates the provisions of the bill will have an annual recurring impact
on local government revenues of -$0.1 million beginning in FY 2023-24.
The bill has an effective date of January 1, 2024.
STORAGE NAME: h0127.WMC PAGE: 2
DATE: 3/15/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Exemption for Property Used by Nonprofit Homes for the Aged
Florida law exempts from ad valorem taxation property used as a home for the aged by certain
nonprofit corporations.
1
In order to qualify for the exemption, the following criteria must be met:
The applicant for exemption must be qualified as a 501(c)(3) exempt charitable organization
under federal law by January 1 of the year it requests to be exempt from Florida ad valorem
taxation; and be either:
o A corporation not-for-profit pursuant to ch. 617, F.S.; or
o A Florida limited partnership, the sole general partner of which is a corporation not-for-
profit pursuant to ch. 617, F.S.;
75 percent of the occupants of the facility must be over the age of 62 years or be totally and
permanently disabled; and
Certain facilities must also acquire licensing by the Agency for Health Care Administration.
2
Upon sufficient proof that the applicant meets the above criteria, the property appraiser will exempt the
portions of the facility which are devoted exclusively to the conduct of religious services or the
rendering of nursing or medical services.
3
In addition, the property appraiser may exempt individual
units or apartments in the facility if residency in those units or apartments is reserved for or restricted
to, or the unit or apartment is occupied by, a permanent resident of the state who is:
An individual with a gross income
4
of no more than $38,869
5
per year who is either at least 62
years of age or is totally and permanently disabled;
A couple with a combined gross income of no more than $40,636 per year, or the surviving
spouse of such a couple, if the surviving spouse lived with the deceased at the time of the
deceased’s death in a home for the aged, at least one of whom must be at least 62 years of age
or is totally and permanently disabled; or
A totally and permanently disabled veteran who meets the requirements of s. 196.081, F.S.
6
If any portion of the facility is used for a non-exempt purpose, those portions may be valued and placed
upon the tax rolls separately from any portion entitled to the exemption.
7
Common areas of the home
are exempt from taxation as long as at least 25 percent of the units or apartments of the home are
restricted to or are occupied by persons who meet the income requirements.
8
The facility must file an application annually with the property appraiser to demonstrate continuing
qualification for the exemption.
9
The facility must also file an affidavit from each person residing in a
unit or apartment in the facility who meets the disability or income requirements described above.
10
1
Fla. Const. ss. 3(a), 6(c), art. VII, implemented by s. 196.1975, F.S.
2
Ss. 196.1975(1)-(2), F.S. Licensure by the Agency for Health Care Administration is required for facilities that furnish medical facilities
or nursing services to residents or that qualifies as an assisted living facility under ch. 429, F.S. Ss 196.1975(2)(a)-(b), F.S.
3
S. 196.1975(3), F.S.
4
Social security benefits are considered gross income for the purposes of this exemption. S. 196.1975(6), F.S.
5
S. 196.1975(4)(b), F.S. See also Fla. Dept. of Revenue, Cost of Living Adjustments,
https://floridarevenue.com/property/Documents/CostofLivingAdjust.pdf (last accessed March 3, 2023).
6
S. 196.1975(4)(a), F.S. Statute defines the maximum income limitation as $7,200 (for individuals) or $8,000 (for couples) in the year
the provision was passed (1977), adjusted annually by the percentage change in U.S. Department of Labor’s cost-of-living index. See s.
196.1975(4)(a)-(b). The values above reflect those present adjustments for 2023. Fla. Dept. of Revenue, Cost of Living Adjustments,
https://floridarevenue.com/property/Documents/CostofLivingAdjust.pdf (last accessed March 3, 2023).
7
S. 196.1975(11), F.S.
8
S. 196.1975(8), F.S.
9
S. 196.1975(9)(b), F.S. This application is known as a DR-504HA form. Fla. Dept. of Revenue, Property Tax Oversight Forms,
https://floridarevenue.com/property/pages/forms.aspx (last accessed March 3, 2023).
10
S. 196.1975(9)(b), F.S. This application is known as a DR-504S form. STORAGE NAME: h0127.WMC PAGE: 3
DATE: 3/15/2023
The person signing the affidavit must attest that he or she resides in the unit or apartment claiming the
exemption and, in good faith, makes that unit or apartment his or her permanent residence.
11
Effect of Proposed Changes
The bill revises eligibility for the ad valorem tax exemption for property used as a home for the aged by
non-profit corporations to include property owned by a Florida limited partnership where an entity not
licensed under chapter 429 and wholly owned by a corporation not-for-profit under ch. 617, F.S., is the
sole general partner.
B. SECTION DIRECTORY:
Section 1: Amends s. (1) of s. 196.1975, F.S., revising criteria for the ad valorem taxation
exemption for property used by non-profit homes for the aged.
Section 2: Provides an effective date of January 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimates the provisions of the bill will have an annual
recurring impact on local government revenues of -$0.1 million beginning in FY 2023-24.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may enable additional homes for the aged operated by not-for-profit corporations to qualify for
the ad valorem tax exemption.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, section 18, of the Florida Constitution may
apply because this bill reduces ad valorem tax revenues to the extent this bill may enable additional
homes for the aged operated by not-for-profit corporations to qualify for an ad valorem tax
11
Id. STORAGE NAME: h0127.WMC PAGE: 4
DATE: 3/15/2023
exemption; however, an exemption may apply because the bill may have an insignificant fiscal
impact.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 15, 2023, the Ways and Means Committee considered a proposed committee substitute and
reported the bill favorably as a committee substitute. The committee substitute differs from HB 127 in that it
provides that the entity which owns the non-profit home for the aged, and which is wholly owned by a not-
for-profit corporation may not be an entity licensed under chapter 429 for purposes of the exemption.
This analysis is drafted to the committee substitute as reported favorably by the Ways & Means
Committee.