Texas House Bill HB55

Texas 2017 - 85th 1st C.S.

Caption

Relating to an exemption from ad valorem taxation by a school district of a dollar amount or a percentage, whichever is greater, of the appraised value of a residence homestead and 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 an elderly or disabled person to reflect any increase in the exemption amount.

Impact

If enacted, HB 55 will amend the existing provisions within the Texas Tax Code that govern property tax exemptions for residence homesteads. Notably, it specifies that school districts cannot increase the total annual ad valorem tax imposed on the homestead of individuals aged 65 and older or those who are disabled. This limitation is designed to offer financial stability and predictability for vulnerable populations, protecting them from potential tax increases resulting from rising property values.

Summary

House Bill 55 seeks to provide an exemption from ad valorem taxation imposed by school districts on residence homesteads. Specifically, the bill proposes that homeowners, particularly the elderly and disabled, receive either a dollar amount cutoff of $25,000 or a 13% exemption on their appraised homestead value—whichever is greater. This dual-structure exemption aims to cater to homeowners regardless of the varying property values across different regions in Texas, providing relief to those who may be significantly burdened by property taxes.

Contention

While the bill presents benefits for the elderly and disabled, it may generate contention among school districts that rely on property taxes for funding. Some stakeholders may argue that limiting the capacity for tax increases could adversely affect school funding, potentially creating financial strains in districts that are experiencing rising operational costs or declining enrollment. Furthermore, debates may arise regarding whether the proposed exemption effectively addresses the broader issue of property tax fairness and affordability in the face of rapidly escalating home values in some areas of Texas.