Texas Senate Bill SB1328

Texas 2015 - 84th Regular

Caption

Relating to an increase in the amount of the residence homestead exemption from ad valorem taxation by a school district and the increase of the exemption amount in subsequent years to reflect inflation in homestead values, a reduction of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the homestead of a disabled or elderly person to reflect the increased exemption amounts, and the protection of school districts against the resulting loss in local revenue.

Impact

The bill's amendments to Sections 11.13 and 11.26 of the Texas Tax Code will limit the total amount of ad valorem taxes that can be imposed by school districts on the residences of disabled or elderly homeowners, reflecting the increased exempt amounts. This change intends to protect vulnerable populations from rising tax pressures while allowing them to maintain their homes. Specifically, school districts will not be able to increase their total annual tax amounts above what was imposed when these residents first qualified for exemptions. This creates a protective measure for those who may be financially strained by the burdens of property taxes.

Summary

SB1328 aims to increase the residence homestead exemption from ad valorem taxation imposed by school districts in Texas. The bill proposes a base exemption amount of $35,000 for the 2016 tax year, with subsequent annual adjustments tied to the inflation rate of homestead values. This structure is expected to provide homeowners financial relief by reducing the taxable value of their residence homesteads, ultimately lowering their tax burdens. The adjustments would be calculated annually by the state comptroller and published in the Texas Register, ensuring transparency and predictability for homeowners seeking to understand their tax liabilities.

Contention

While there are likely benefits to this legislation in providing tax relief, it may raise concerns regarding the stability of funding for local school districts. With increased exemptions and limitations on revenue growth from property taxes, school districts may face challenges in maintaining adequate funding levels. This could necessitate compensatory measures or additional state aid to ensure that educational services are not adversely affected. Notably, the bill includes provisions for additional state aid to school districts to account for any losses in tax revenue due to the increased exemptions, which may be a point of contention as stakeholders discuss budget implications.