LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 30, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB511 by Bernal (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of an unpaid caregiver of an individual who is eligible to receive long-term services and supports under the Medicaid program while the individual is on a waiting list for the services and supports.), As Introduced Contingent on the passage of a constitutional amendment, passage of the bill would provide a 100 percent homestead exemption for qualifying caregivers of qualified individuals on an interest list for certain long-term services under the Medicaid program. The fiscal impact of the bill cannot be determined because of conflicting language regarding eligibility qualifications. Contingent on the passage of HJR 67, the bill would create a 100 percent homestead exemption for a qualifying caregiver for the time period during which the qualifying individual for whom the qualifying caregiver provides care is on an interest list for long-term services and support under the Medicaid program, including services and supports provided under a Section 1915(c) waiver program, the STAR Kids managed care program, or the STAR PLUS home and community-based services and supports program.The bill would provide that if the property owner qualifies for the exemption after January 1 of a tax year, the property owner may receive the exemption for the applicable portion of that tax year immediately on qualification for the exemption.According to the Health and Human Services Commission (HHSC), the fiscal implications of the bill cannot be determined because the provisions of the bill cannot be implemented. Because the bill would establish that a qualifying caregiver is eligible for an exemption only for the period during which the qualifying individual is on an interest list, and because eligibility for services as specified in the bill is not determined until after the qualifying individual is issued a waiver slot during the enrollment process, the two qualifications are mutually exclusive. Once an individual on an interest list is deemed to be eligible for services, they must be served as an entitlement.For illustrative purposes only, providing a total exemption for the residential homesteads of qualifying caregivers would create a cost for local taxing units, school districts and the state through the school finance formulas. The estimate was based on information from Texas Health and Human Services, the U.S. Census Bureau, and appraisal districts. The projected number of qualifying caregivers and the projected median taxable value of residence homesteads were used to calculate the taxable value losses.There were 175,406 individuals on the Texas Medicaid waiver interest list per HHSC's Interest List Reporting published in December 2024. Additionally, HHSC's Medicaid Waiver Programs Interest List Study, published in September 2020, stated that the share of waiting list individuals living with family or friends varied from 32 percent to 79 percent. The midpoint of this range was used to estimate number of qualifying unpaid caregivers.The estimated number of qualifying caregivers was multiplied by the population homeownership rate and by the average taxable value of a homestead to estimate the reduction in taxable value, and extrapolated through the forecast period based on expected rates of population and homestead property value growth.Projected tax rates were applied to the taxable value losses through the five-year projection period to estimate tax revenue losses to special districts, cities, and counties. Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $64.7 million in fiscal year 2026, $101.9 million in fiscal year 2027, increasing to $174.5 million in fiscal year 2030. Local Government ImpactContingent on the passage of a constitutional amendment, passage of the bill would provide a 100 percent homestead exemption for qualifying caregivers of qualified individuals on an interest list for certain long-term services under the Medicaid program. The fiscal impact of the bill on units of local government cannot be determined because provisions of the bill are in conflict. Based on the illustrative scenario provided above, taxable value would be reduced. 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 providing an exemption to qualified caregivers. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced by $111.9 million in fiscal year 2026. If those jurisdictions adopted higher tax rates, the initial revenue loss from the 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, 529 Health and Human Services Commission LBB Staff: b > td > JMc, KK, SD, BRI
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 30, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB511 by Bernal (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of an unpaid caregiver of an individual who is eligible to receive long-term services and supports under the Medicaid program while the individual is on a waiting list for the services and supports.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB511 by Bernal (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of an unpaid caregiver of an individual who is eligible to receive long-term services and supports under the Medicaid program while the individual is on a waiting list for the services and supports.), 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
HB511 by Bernal (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of an unpaid caregiver of an individual who is eligible to receive long-term services and supports under the Medicaid program while the individual is on a waiting list for the services and supports.), As Introduced
HB511 by Bernal (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of an unpaid caregiver of an individual who is eligible to receive long-term services and supports under the Medicaid program while the individual is on a waiting list for the services and supports.), As Introduced
Contingent on the passage of a constitutional amendment, passage of the bill would provide a 100 percent homestead exemption for qualifying caregivers of qualified individuals on an interest list for certain long-term services under the Medicaid program. The fiscal impact of the bill cannot be determined because of conflicting language regarding eligibility qualifications.
Contingent on the passage of a constitutional amendment, passage of the bill would provide a 100 percent homestead exemption for qualifying caregivers of qualified individuals on an interest list for certain long-term services under the Medicaid program. The fiscal impact of the bill cannot be determined because of conflicting language regarding eligibility qualifications.
Contingent on the passage of HJR 67, the bill would create a 100 percent homestead exemption for a qualifying caregiver for the time period during which the qualifying individual for whom the qualifying caregiver provides care is on an interest list for long-term services and support under the Medicaid program, including services and supports provided under a Section 1915(c) waiver program, the STAR Kids managed care program, or the STAR PLUS home and community-based services and supports program.The bill would provide that if the property owner qualifies for the exemption after January 1 of a tax year, the property owner may receive the exemption for the applicable portion of that tax year immediately on qualification for the exemption.According to the Health and Human Services Commission (HHSC), the fiscal implications of the bill cannot be determined because the provisions of the bill cannot be implemented. Because the bill would establish that a qualifying caregiver is eligible for an exemption only for the period during which the qualifying individual is on an interest list, and because eligibility for services as specified in the bill is not determined until after the qualifying individual is issued a waiver slot during the enrollment process, the two qualifications are mutually exclusive. Once an individual on an interest list is deemed to be eligible for services, they must be served as an entitlement.For illustrative purposes only, providing a total exemption for the residential homesteads of qualifying caregivers would create a cost for local taxing units, school districts and the state through the school finance formulas. The estimate was based on information from Texas Health and Human Services, the U.S. Census Bureau, and appraisal districts. The projected number of qualifying caregivers and the projected median taxable value of residence homesteads were used to calculate the taxable value losses.There were 175,406 individuals on the Texas Medicaid waiver interest list per HHSC's Interest List Reporting published in December 2024. Additionally, HHSC's Medicaid Waiver Programs Interest List Study, published in September 2020, stated that the share of waiting list individuals living with family or friends varied from 32 percent to 79 percent. The midpoint of this range was used to estimate number of qualifying unpaid caregivers.The estimated number of qualifying caregivers was multiplied by the population homeownership rate and by the average taxable value of a homestead to estimate the reduction in taxable value, and extrapolated through the forecast period based on expected rates of population and homestead property value growth.Projected tax rates were applied to the taxable value losses through the five-year projection period to estimate tax revenue losses to special districts, cities, and counties. Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $64.7 million in fiscal year 2026, $101.9 million in fiscal year 2027, increasing to $174.5 million in fiscal year 2030.
Local Government Impact
Contingent on the passage of a constitutional amendment, passage of the bill would provide a 100 percent homestead exemption for qualifying caregivers of qualified individuals on an interest list for certain long-term services under the Medicaid program. The fiscal impact of the bill on units of local government cannot be determined because provisions of the bill are in conflict. Based on the illustrative scenario provided above, taxable value would be reduced. 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 providing an exemption to qualified caregivers. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced by $111.9 million in fiscal year 2026. If those jurisdictions adopted higher tax rates, the initial revenue loss from the 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, 529 Health and Human Services Commission
304 Comptroller of Public Accounts, 529 Health and Human Services Commission
LBB Staff: b > td > JMc, KK, SD, BRI
JMc, KK, SD, BRI