Texas House Bill HB994

Texas 2021 - 87th Regular

Caption

Relating to an exemption from ad valorem taxation by a taxing unit other than a school district of a portion of the appraised value of a residence homestead based on the average appraised value of all qualified residence homesteads located in the same county.

Impact

If enacted, HB994 would significantly impact the calculation of property taxes for homeowners by providing a percentage reduction in the appraised value that is taxed. This amendment to the Tax Code intends to alleviate some of the financial burdens associated with property taxes, particularly for homeowners who may be struggling to keep up with rising property values. Additionally, local taxing authorities will have the discretion to implement this exemption, potentially leading to varying tax burdens across different regions of the state, which may create disparities in financial relief among homeowners.

Summary

House Bill 994 introduces a modification to the Texas Tax Code that allows for an exemption from ad valorem taxation for a portion of the appraised value of a residence homestead. This exemption applies to a taxing unit other than a school district and is based on the average appraised value of all qualified residence homesteads located within the same county. Specifically, individuals can receive an exemption amounting to 5% or a higher percentage not exceeding 25%, determined by the governing body of the taxing unit. This change is aimed at providing residents with financial relief concerning property taxes.

Contention

While the bill seeks to offer tax relief, it could spur debate regarding the effectiveness and fairness of property tax assessments and exemptions. Critics may argue that allowing local taxing units to decide on the percentage of exemption could lead to inconsistencies and inequities in how tax relief is distributed. There are also concerns regarding how this kind of legislation might affect the funding for services that are reliant on stable tax income, particularly in counties that may choose to implement lower tax rates. As tax revenues fluctuate depending on local government's decisions, municipalities might face challenges in maintaining necessary public services.

Additional_info

The effective date of HB994 is contingent upon the approval of a constitutional amendment proposed by the 87th Legislature that would allow such exemptions to be granted. If voters do not approve the amendment, the bill will have no effect. This condition underscores the importance of public opinion and electoral processes in determining future local tax laws.