Texas House Bill HB5046

Texas 2023 - 88th Regular

• Filed: 3/10/23

Caption

Relating to an increase in the amount of the exemption of residence homesteads from ad valorem taxation by a school district, an adjustment in the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect increases in the exemption amount, and the protection of school districts against the resulting loss in local revenue.

Impact

This legislation is expected to significantly affect the financial landscape for school districts across Texas by adjusting how property taxes are calculated for vulnerable demographics. By enhancing the exemption, elderly individuals and those with disabilities will experience reduced tax burdens on their homesteads, providing them with financial relief. However, the bill also requires the state to provide additional funding to school districts to offset the potential revenue loss. This dual approach aims to balance taxpayer relief with the financial health of the educational institutions.

Summary

House Bill 5046 proposes to increase the exemption amount of residence homesteads from ad valorem taxation by school districts. Specifically, it aims to raise the existing tax exemption from $40,000 to $70,000 for individuals aged 65 years or older or disabled. Additionally, the bill contains provisions intended to protect school districts from local revenue loss due to the adjustments in tax rates pertaining to these exemptions. The changes are positioned to take effect on January 1, 2025, contingent upon voter approval of a related constitutional amendment proposed by the 88th Legislature.

Sentiment

The general sentiment surrounding HB 5046 appears to be positive among advocates for the elderly and disabled, who view the increased tax exemption as a necessary support measure. Supporters argue that this bill acknowledges the unique financial challenges faced by these groups and effectively addresses their need for housing affordability. Conversely, there may be concerns among some legislators regarding the implications of decreased local revenue and the state's ability to adequately compensate school districts for these changes.

Contention

A notable point of contention revolves around the potential impact on funding for public education. Critics of the bill may express concerns about the long-term sustainability of school finance, particularly if state aid does not fully compensate for the losses schools experience from the increased exemption. As the bill moves through the legislative process, stakeholders will likely seek assurances that funding mechanisms are robust enough to support both the tax relief for residents and the operational needs of school districts.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 11. Taxable Property And Exemptions
  • Section: 13
  • Section: 26

Education Code

• Chapter 48. Foundation School Program
  • Section: 2542
  • Section: 2543
  • Section: 2556

• Chapter 46. Assistance With Instructional Facilities And Payment Of Existing Debt
  • Section: 071

Government Code

• Chapter 403. Comptroller Of Public Accounts
  • Section: 302