LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION

March 1, 2015

TO:	Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB279 by Watson (Relating to the authority of the governing body of a taxing unit other than a school district to adopt an exemption from ad valorem taxation of a portion, expressed as a dollar amount, of the appraised value of an individual's residence homestead.), As Introduced

No fiscal implication to the State is anticipated.

The bill would amend Chapter 11 of the Tax Code, regarding taxable property and exemptions, to authorize taxing units other than school districts to grant a residence homestead exemption of at least $5,000, or a larger amount specified by the taxing unit by taking official action before July 1 of the year in which the exemption is to take effect.

In a taxing unit (other than a school district) that has not previously adopted an optional exemption under Section 11.13(n) of the Tax Code, the proposed new exemption would take effect automatically unless the taxing unit takes official action electing not to adopt the exemption.

In a taxing unit that rescinds an exemption under Section 11.13(n) and grants the proposed new exemption, a qualifying taxpayer would be permitted to elect to continue the exemption by filing a written notice not later than July 15 of the tax year in which the rescinded exemption ceases.

The optional homestead exemption proposed by the bill would create a cost to taxing units other than school districts to the extent that the taxing units adopt the new exemption or allow the automatic exemption to go into effect.  There would be no cost to school districts or to the state. 

The number of taxing units that would adopt the new exemption or allow it to go into effect automatically cannot be predicted.  Similarly, the amount at which a taxing unit would set the exemption is unknown.  Consequently, the cost of the bill to these taxing units cannot be estimated. 

The bill would take effect on January 1, 2016 contingent on the passage of a constitutional amendment (SJR 20).

Local Government Impact

The optional homestead exemption proposed by the bill would create a cost to taxing units other than school districts to the extent that the taxing units adopt the new exemption or allow the automatic exemption to go into effect. The number of taxing units that would adopt the new exemption or allow it to go into effect automatically cannot be predicted.  Similarly, the amount at which a taxing unit would set the exemption is unknown.  Consequently, the cost of the bill to these taxing units cannot be estimated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

UP, KK, SD, SJS