81(R) HB 1292 - Introduced version

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION


April 26, 2009

TO:	Honorable Rene Oliveira, Chair, House Committee on Ways & Means

FROM:	John S. O'Brien, Director, Legislative Budget Board

IN RE:	HB1292 by Eiland (Relating to an exemption from ad valorem taxation of the total appraised value of the residence homestead of a member of a reserve component of the United States armed forces who is serving on active duty during a war or national emergency.), As Introduced

Contingent upon the passage of a constitutional amendment and to the extent that school districts choose to grant the total homestead exemption for active duty military reserves, there would be an indeterminate cost to the state through the operation of the school funding formulas.

The bill would amend Chapters 11 (taxable property and exemptions) and 26 (property tax assessments) of the Tax Code.

The bill would allow the governing body of a taxing unit to grant a homestead value exemption of 100 percent for a member of a reserve component of the U.S. armed forces, including the National Guard, who is serving on active duty during a war or national emergency. The exemption could also be adopted by a favorable vote at an election called by the taxing unit, which would be required if at least 20 percent of those who voted at the last election petitioned for the election.

The bill would require proration of the exemption in years in which the active duty status changes, and outline the application procedure for the exemption.

The bill would amend Chapter 403 of the Government Code to require that the school district exemption loss be deducted in the Comptroller's Property Value Study.

Contingent on the passage of a constitutional amendment and to the extent that school districts and other taxing units choose to grant the total homestead exemption for active duty military reserves, there would be a cost to taxing units and to the state through the operation of the school funding formulas.

The future decisions of taxing units or voters in granting the exemption cannot be predicted, nor can future deployment of reserve forces for wars or national emergencies, so the cost of the optional exemption cannot be estimated. As an example, assuming all the bill's conditions were met and one-half of school districts participate the state cost of the exemption is estimated to be approximately $7-8 million per year.

This bill would be contingent upon the passage of a constitutional amendment and would be effective on the date the amendment was approved by the voters. The proposed amendment would be submitted to voters at an election to be held November 3, 2009.

Local Government Impact

Contingent upon the passage of a constitutional amendment and to the extent that local taxing units choose to grant the total homestead exemption for active duty military reserves, there would be a cost to local taxing units. The future decisions of taxing units or voters in granting the exemption cannot be predicted, nor can future deployment of reserve forces for wars or national emergencies, so the cost of the optional exemption cannot be estimated.