LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 11, 2025 TO: Honorable Paul Bettencourt, Chair, Senate Committee on Local Government FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1237 by Paxton (Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization that is engaged in providing housing and related facilities and services to persons who are at least 62 years of age.), As Introduced Passage of the bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services to persons who are at least 62 years of age, with some qualifications. As a result, taxable property values could be reduced and the related costs to the Foundation School Fund could be increased through the operation of the school finance formulas. The bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services, in an amount not less than four percent of the organization's net resident revenue, to persons who are at least 62 years of age. The bill would add a definition for charitable housing and services and expand the definition of "charity care."To the extent the bill would result in an increase in the number of organizations eligible for exemption, there would be reduced taxable property value and a cost to the state through the operation of school funding formulas. However, the number of newly-qualifying organizations associated with the bill's provisions is unknown; consequently, the taxable property value loss cannot be determined. Local Government ImpactPassage of the bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services to persons who are at least 62 years of age, with some qualifications. As a result, taxable property values could be reduced. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code could be higher as a consequence of the reduced taxable 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 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, SZ, SD, BRI, KK
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 11, 2025
TO: Honorable Paul Bettencourt, Chair, Senate Committee on Local Government FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1237 by Paxton (Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization that is engaged in providing housing and related facilities and services to persons who are at least 62 years of age.), As Introduced
TO: Honorable Paul Bettencourt, Chair, Senate Committee on Local Government
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB1237 by Paxton (Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization that is engaged in providing housing and related facilities and services to persons who are at least 62 years of age.), As Introduced
Honorable Paul Bettencourt, Chair, Senate Committee on Local Government
Honorable Paul Bettencourt, Chair, Senate Committee on Local Government
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB1237 by Paxton (Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization that is engaged in providing housing and related facilities and services to persons who are at least 62 years of age.), As Introduced
SB1237 by Paxton (Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization that is engaged in providing housing and related facilities and services to persons who are at least 62 years of age.), As Introduced
Passage of the bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services to persons who are at least 62 years of age, with some qualifications. As a result, taxable property values could be reduced and the related costs to the Foundation School Fund could be increased through the operation of the school finance formulas.
Passage of the bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services to persons who are at least 62 years of age, with some qualifications. As a result, taxable property values could be reduced and the related costs to the Foundation School Fund could be increased through the operation of the school finance formulas.
The bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services, in an amount not less than four percent of the organization's net resident revenue, to persons who are at least 62 years of age. The bill would add a definition for charitable housing and services and expand the definition of "charity care."To the extent the bill would result in an increase in the number of organizations eligible for exemption, there would be reduced taxable property value and a cost to the state through the operation of school funding formulas. However, the number of newly-qualifying organizations associated with the bill's provisions is unknown; consequently, the taxable property value loss cannot be determined.
Local Government Impact
Passage of the bill would expand eligibility for the exemption for certain charitable organizations to include organizations that provide charitable housing and services to persons who are at least 62 years of age, with some qualifications. As a result, taxable property values could be reduced. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code could be higher as a consequence of the reduced taxable 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 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, SZ, SD, BRI, KK
JMc, SZ, SD, BRI, KK