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LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
April 23, 2021
TO:
Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB1197 by Metcalf (Relating to the period for which certain land owned by a religious organization for the purpose of expanding a place of religious worship or constructing a new place of religious worship may be exempted from ad valorem taxation.), As Engrossed
Passage of the bill would increase the current six year limitation to a ten year limitation on a tract of land owned for certain religious worship expansion purposes that is contiguous to the tract of land on which the religious organization's place of regular religious worship is located. 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 amend Chapter 11 of the Tax Code, regarding property tax exemptions, to increase the current six year limitation to a ten year limitation on a tract of land owned for certain religious worship expansion purposes that is contiguous to the tract of land on which the religious organization's place of regular religious worship is located.
The bill would create a cost to local taxing units and to the state through the school finance formulas by allowing certain exempt land held by a religious organization to keep a property tax exemption which would otherwise expire. The value of land that would remain exempt under the bill rather than become taxable under current law is unknown; consequently, the cost cannot be estimated.
The bill would take effect January 1, 2022.
Local Government Impact
Passage of the bill would increase the current six year limitation to a ten year limitation on a tract of land owned for certain religious worship expansion purposes that is contiguous to the tract of land on which the religious organization's place of regular religious worship is located. As a result, taxable property values and the related ad valorem tax revenue for units of local government could be reduced.