Texas House Bill HB5042

Texas 2023 - 88th Regular

• Filed: 3/10/23

Caption

Relating to an adjustment of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the residence homestead of an individual who is elderly or disabled to reflect the most recent increase in the amount of the exemption of residence homesteads from ad valorem taxation by a school district and the protection of school districts against the resulting loss in local revenue.

Impact

The passage of HB 5042 has the potential to greatly impact the financial landscape for elderly and disabled homeowners in Texas. By aligning tax limitations with changes in exemptions, the bill would provide these demographics with much-needed financial relief, thus promoting housing stability. However, the adjustments would necessitate supplementary state aid to school districts to compensate for any revenue losses caused by these tax modifications, as school districts often rely heavily on property taxes for funding.

Summary

House Bill 5042 focuses on adjusting the limitations on ad valorem taxes that can be imposed by school districts on the residence homesteads of individuals who are elderly or disabled. Specifically, the bill seeks to ensure that these individuals continue to benefit from tax exemptions that reflect recent increases while simultaneously safeguarding school districts from corresponding losses in local revenue. By amending relevant sections of the Tax Code and Education Code, the bill aims to provide clarity and financial support for schools managing changes in revenue streams due to these exemptions.

Sentiment

General sentiment surrounding HB 5042 appears to be supportive, especially among advocacy groups championing the rights of the elderly and disabled. Supporters argue that the bill is a vital step towards ensuring that vulnerable residents are not disproportionately affected by increasing property taxes. Nonetheless, there are concerns regarding the balancing act between providing adequate funding for education and meeting the needs of these tax-exempt populations. The dialogues showcase a commitment to addressing these challenges, albeit with varying perspectives on fiscal sustainability.

Contention

A notable point of contention is the reliance on state aid to cover the losses in local revenue for school districts, which poses questions about long-term funding and dependency on state resources. Critics may challenge whether this is a sustainable approach, particularly if economic conditions change or if future legislative sessions do not prioritize funding for education. Additionally, there may be debates over the effectiveness of existing tax exemptions and whether they adequately serve the intended populations, leading to discussions on the efficacy of the bill relative to future tax reforms.

Texas Constitutional Statutes Affected

Tax Code

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

Education Code

• Chapter 46. Assistance With Instructional Facilities And Payment Of Existing Debt
  • Section: 071

• Chapter 48. Foundation School Program
  • Section: 2542
  • Section: 2556

Government Code

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