Texas House Bill HB302

Texas 2017 - 85th Regular

• Filed: 11/14/16

Caption

Relating to the exemption from ad valorem taxation of mineral interests having a value of less than a certain amount.

Impact

If enacted, HB302 would specifically revise the applicable provisions of the Texas Tax Code relating to the taxation of mineral interests. The change in the exemption amount is expected to impact how local governments assess property taxes on mineral interests, hence affecting their revenues from such taxation. Supporters argue that the bill may stimulate local economies by allowing mineral interest owners to retain more of their earnings, which could be reinvested or spent locally, potentially leading to increased economic activity.

Summary

House Bill 302 proposes an increase in the exemption threshold from ad valorem taxation for mineral interests from $500 to $2,000. The primary aim of this adjustment is to alleviate the tax burden on owners of mineral interests that yield limited economic value. By raising the exemption limit, the bill seeks to provide financial relief to smaller mineral interest holders, who often face disproportionate taxation relative to the value of their holdings. This legislative change is positioned as a means to support economic activity among smaller operators in the mineral sector.

Contention

While the bill has garnered support due to its proposed economic benefits, there are concerns among various stakeholders about the potential revenue implications for local governments. Critics point out that the predicted revenue decline from elevated exemption thresholds could strain local budgets, particularly in areas heavily reliant on taxation from mineral interests. Additionally, there may be concerns about how the bill would affect equity in taxation among larger property owners and the overall principles of tax fairness in Texas.