LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 9, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB255 by Guillen (Relating to the definitions of certain terms for purposes of the exemption from ad valorem taxation of farm products in the hands of the producer.), As Introduced No significant fiscal implication to the State is anticipated. Contingent on the passage of HJR 31, the bill would expand the goods that are considered farm products from livestock, poultry and timber to also include aquatic goods produced in aquacultural operations and supplies used or produced in a farming operation.Expanding the definition of farm products in the hands of the producer and are therefore exempt from the property tax would reduce taxable property value and associated property tax revenue to school districts which would result in a cost to the state through the operation of the school finance formula. However, the cost is not expected to be significant. Local Government ImpactContingent upon passage of a constitutional amendment authorizing the legislature to define farm products in the hands of the producer for the purposes of the property tax exemption, the bill would expand the list of items exempt from the property tax, which would reduce taxable value. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code would be higher as a consequence of the reduced taxable property value proposed by the bill. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced. If those jurisdictions adopted higher tax rates, the initial revenue loss from the expanded exemption would be offset by increased tax levies from owners of non-exempt property and slightly reduced tax savings from owners of exempt property. Source Agencies: b > td > 304 Comptroller of Public Accounts LBB Staff: b > td > JMc, KK, SD, BRI
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 9, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB255 by Guillen (Relating to the definitions of certain terms for purposes of the exemption from ad valorem taxation of farm products in the hands of the producer.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB255 by Guillen (Relating to the definitions of certain terms for purposes of the exemption from ad valorem taxation of farm products in the hands of the producer.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB255 by Guillen (Relating to the definitions of certain terms for purposes of the exemption from ad valorem taxation of farm products in the hands of the producer.), As Introduced
HB255 by Guillen (Relating to the definitions of certain terms for purposes of the exemption from ad valorem taxation of farm products in the hands of the producer.), As Introduced
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
Contingent on the passage of HJR 31, the bill would expand the goods that are considered farm products from livestock, poultry and timber to also include aquatic goods produced in aquacultural operations and supplies used or produced in a farming operation.Expanding the definition of farm products in the hands of the producer and are therefore exempt from the property tax would reduce taxable property value and associated property tax revenue to school districts which would result in a cost to the state through the operation of the school finance formula. However, the cost is not expected to be significant.
Local Government Impact
Contingent upon passage of a constitutional amendment authorizing the legislature to define farm products in the hands of the producer for the purposes of the property tax exemption, the bill would expand the list of items exempt from the property tax, which would reduce taxable value. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code would be higher as a consequence of the reduced taxable property value proposed by the bill. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced. If those jurisdictions adopted higher tax rates, the initial revenue loss from the expanded exemption would be offset by increased tax levies from owners of non-exempt property and slightly reduced tax savings from owners of exempt property.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD, BRI
JMc, KK, SD, BRI