Texas House Bill HB117

Texas 2023 - 88th Regular

• Filed: 11/14/22

Caption

Relating to a limitation on the total amount of ad valorem taxes that a school district may impose on certain residence homesteads following a substantial school tax increase.

Impact

The proposed legislation is expected to have a considerable impact on state laws regarding property taxation, particularly in how school districts manage their tax rates and valuations. By placing a cap on tax increases for eligible homeowners, the bill seeks to address rising housing costs and mitigate the financial pressure on fixed-income residents, including the elderly. The implementation of this bill would necessitate adjustments in school district budgets, as they would be limited in their ability to raise funds through property taxes from affected households.

Summary

House Bill 117 introduces significant changes to the regulation of ad valorem taxes imposed by school districts on residence homesteads, specifically targeting homeowners who have experienced substantial tax increases. The bill stipulates that if a homeowner qualifies their property as a residence homestead for at least 15 consecutive years and faces a school district tax increase of 120% over that period, their tax liability in subsequent years is capped. This measure is aimed at providing relief to long-standing homeowners who may find increasing taxes burdensome due to rising property values.

Sentiment

General sentiment around the bill is largely supportive among constituents advocating for tax relief, especially for seniors and long-term homeowners who might be disproportionately impacted by property tax hikes. However, there are concerns from some school districts about the potential constraints this bill could place on their funding mechanisms. Opponents argue that such limitations could impede necessary funding for educational programs and services, effectively putting pressure on other taxpayers to cover the shortfall.

Contention

Key points of contention related to HB 117 revolve around the balance between providing necessary tax relief to homeowners and ensuring that school districts retain adequate funding levels to maintain educational quality. The provision that allows surviving spouses to inherit this tax limitation further complicates the discourse, as it may open discussions on the long-term sustainability of funding for public schools. Such elements highlight the ongoing debate between providing immediate financial relief to individuals and the overarching needs of the public school system.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 11. Taxable Property And Exemptions
  • Section: New Section

• Chapter 26. Assessment
  • Section: New Section

Education Code

• Chapter 44. Fiscal Management
  • Section: New Section

Government Code

• Chapter 403. Comptroller Of Public Accounts
  • Section: 302