LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION March 21, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1473 by Bohac (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1473, As Introduced: a negative impact of ($378,966,000) through the biennium ending August 31, 2019. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
March 21, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1473 by Bohac (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB1473 by Bohac (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB1473 by Bohac (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.), As Introduced
HB1473 by Bohac (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homesteads of certain elderly persons and their surviving spouses.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1473, As Introduced: a negative impact of ($378,966,000) through the biennium ending August 31, 2019. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1473, As Introduced: a negative impact of ($378,966,000) through the biennium ending August 31, 2019.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 $0 2019 ($378,966,000) 2020 ($411,493,000) 2021 ($446,962,000) 2022 ($488,115,000)
2018 $0
2019 ($378,966,000)
2020 ($411,493,000)
2021 ($446,962,000)
2022 ($488,115,000)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities Probable Revenue Gain/(Loss) fromOther Special Districts 2018 $0 $0 $0 $0 2019 ($378,966,000) ($111,184,000) ($106,843,000) ($83,909,000) 2020 ($411,493,000) ($120,188,000) ($114,290,000) ($90,568,000) 2021 ($446,962,000) ($129,962,000) ($122,294,000) ($97,787,000) 2022 ($488,115,000) ($141,287,000) ($131,563,000) ($106,150,000)
Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities Probable Revenue Gain/(Loss) fromOther Special Districts 2018 $0 $0 $0 $0 2019 ($378,966,000) ($111,184,000) ($106,843,000) ($83,909,000) 2020 ($411,493,000) ($120,188,000) ($114,290,000) ($90,568,000) 2021 ($446,962,000) ($129,962,000) ($122,294,000) ($97,787,000) 2022 ($488,115,000) ($141,287,000) ($131,563,000) ($106,150,000)
2018 $0 $0 $0 $0
2019 ($378,966,000) ($111,184,000) ($106,843,000) ($83,909,000)
2020 ($411,493,000) ($120,188,000) ($114,290,000) ($90,568,000)
2021 ($446,962,000) ($129,962,000) ($122,294,000) ($97,787,000)
2022 ($488,115,000) ($141,287,000) ($131,563,000) ($106,150,000)
Fiscal Analysis
The bill would amend Chapter 11 of the Tax Code, related to property tax exemptions, to provide a total residence homestead exemption to individuals who are 80 years of age or older and have received a residence homestead exemption on that homestead for at least the preceding 10 years. A surviving spouse of a deceased individual who received the exemption would receive the exemption under the following conditions:1. the deceased spouse died in a year in which the deceased spouse qualified for the exemption;2. the surviving spouse was 55 years of age or older when the deceased spouse died; and3. the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse. The bill would amend Chapter 403 of the Government Code, related to the Comptroller's property value study, and Chapters 41, 42 and 46 of the Education Code, related to school funding, to hold school districts harmless for any negative fiscal effect of the new exemption on school district Tier 1, Tier 2, or facilities funding. The bill would make conforming changes to various provisions of the Tax Code and the Education Code. The bill would take effect on January 1, 2018, contingent on voter approval of a constitutional amendment (HJR 64).
Methodology
The bill's provisions providing a total residence homestead exemption to certain individuals who are 80 years of age or older and to certain surviving spouses of those individuals would create a cost to local taxing units and to the state through the school finance formulas. The bill's school funding hold harmless provisions would ensure that 100 percent of the school district cost related to the new homestead exemption is transferred to the state. The taxable value loss estimate was based on information from appraisal districts, the Texas Demographic Center and the 2013 Demand Institute Housing & Community Survey. Projected tax rates were applied to the taxable value losses through the five-year projection period to estimate tax revenue losses to school districts, special districts, cities and counties. Under the bill's provisions in conjunction with existing provisions of the Education Code, the school district tax revenue loss is transferred to the state.
Local Government Impact
The estimated fiscal implication to units of local government is reflected in the table above and is contingent upon passage of a constitutional amendment authorizing the exemption.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD, SJS
UP, KK, SD, SJS