Texas Senate Bill SB2517

Texas 2025 - 89th Regular

• Filed: 3/13/25

Caption

Relating to the exemption from ad valorem taxation of real property leased to certain local public entities for use as a hospital and related health care services.

Impact

If enacted, SB2517 would specifically affect the tax responsibilities of property owners who lease real estate to local government entities designated for hospital operation. The bill underscores a significant shift in how property utilization for medical services is taxed. This could lead to increased leasing arrangements between private property owners and public healthcare facilities, potentially expanding healthcare services in underserved areas due to reduced operational costs for those hospitals.

Summary

SB2517 proposes an exemption from ad valorem taxation for real property leased to specific local public entities for hospital use and related healthcare services. The bill aims to incentivize property owners to lease their real estate to public hospitals by allowing them to avoid certain tax liabilities, thereby promoting healthcare accessibility and support for related services within local communities. The bill includes stipulations that the property must be used exclusively for hospital operations and also requires affidavits from property owners certifying their compliance with the tax reduction provisions outlined in the measure.

Contention

The provisions of the bill may provoke discussions regarding tax equity, as exemptions could reduce the overall tax revenue for local governments, impacting funding for other public services. Some stakeholders may argue that while supporting hospitals is crucial, widespread tax exemptions should be balanced against the financial needs of municipalities. The requirement for leases to maintain affordability for tenants (via credits reflecting tax reductions) also places a shared responsibility on landlords, which could spark debate about the effectiveness of compliance and assurance mechanisms implemented by property owners.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 11. Taxable Property And Exemptions
  • Section: New Section

Health And Safety Code

• Chapter 265. Joint Municipal And County Hospitals
  • Section: New Section