Texas House Bill HB3920

Texas 2017 - 85th Regular

Caption

Relating to a limitation on the total amount of ad valorem taxes that may be imposed by a taxing unit on the residence homestead of a lower-income individual that is located in a homestead preservation district.

Impact

This bill will amend the Texas Tax Code, specifically adding a new section that authorizes local taxing units to impose these tax limitations. If passed, it could usher in significant changes to fiscal policy regarding property taxes in Texas. By limiting the tax amount that can be levied against qualifying homesteads, it aims to provide stability and predictability for lower-income residents struggling to maintain homeownership amidst rising living costs.

Summary

House Bill 3920 aims to introduce a limitation on the total amount of ad valorem taxes imposed on the residence homesteads of lower-income individuals located in homestead preservation districts. The bill defines a lower-income individual as someone whose household income does not exceed 60% of the area's median family income, ensuring that this measure serves those most in need. The legislation seeks to alleviate tax burdens on vulnerable populations, particularly as housing markets become increasingly challenging for low-income families.

Contention

There may be potential points of contention surrounding HB3920. Advocates for the bill argue that it is a crucial step towards affordable housing and financial relief for lower-income families. However, opponents may express concerns about the implications for local government revenues. Fears regarding how these limitations might affect funding for essential services could emerge, leading to a debate about the balance between providing necessary relief to residents and ensuring adequate public funding.

Provisions

The bill stipulates how the limitations on ad valorem taxes are to be calculated and enforced. Should a local government unit adopt this limitation, it cannot increase the total annual amount of taxes beyond a set threshold, effectively shielding lower-income homeowners from sudden spikes in property taxes. HB3920 also outlines conditions and exceptions—such as the treatment of property improvements—ensuring that necessary reforms do not inadvertently weaken tax bases that support local services.