Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4463 by Shine (Relating to the authority to file an application for certain ad valorem tax exemptions after the filing deadline if an exemption for the property was previously canceled because it was erroneously granted.), As Introduced
Passage of the bill would allow a charitable organization, or organization, that provides low-income housing to apply for certain property tax exemptions after an erroneously granted exemption was canceled. It is unknown whether the granting of the exemptions specified in the bill would change the taxability of the property or the number of properties that would be eligible to apply under the provisions of the bill. As a result, the fiscal impact cannot be determined.
The bill would amend Chapter 11 of the Tax Code, relating to Taxable Property and Exemptions, to provide that if the chief appraiser cancels an erroneously granted property tax exemption for a property owned by a charitable organization and the organization believes that the property would qualify for an exemption under Section 11.181(a) (Charitable Organizations Improving Property for Low-Income Housing) or 11.1825 (Organizations Constructing or Rehabilitating Low-Income Housing: Property Not Previously Exempt) the organization may apply for one of the two above-mentioned exemptions for that tax year or any subsequent prior tax year not later than the seventh anniversary of the date the chief appraiser canceled the previously granted exemption regardless of the application deadline prescribed in law.
The bill would allow a charitable organization, or organization, that provides low-income housing to apply for certain property tax exemptions after an erroneously granted exemption was canceled.
The bill does not specify the type or value of the erroneously granted exemption. The exemption may have been for the total appraised value of the property, in which case granting either of the specific exemptions in the bill (11.181(a) or 11.1825) would have no effect on taxable value and the associated ad valorem tax revenue. If the erroneously granted exemption was for a specified dollar amount or percentage based on the value of the property, the granting of either of the exemptions allowed for by the bill would result in a loss of taxable property value and increase costs to the state through the operations of the school finance formulas.
Additionally, the ability to apply for the exemption up to seven years after the erroneously granted exemption was canceled, would result in a loss to taxing units to the extent that the property was taxable in one or more of the prior years. However, since it is unknown whether the granting of the exemptions specified in the bill would change the taxability of the property or the number of properties that would be eligible to apply under this new provision, the fiscal impact cannot be determined.
Local Government Impact
Passage of the bill would allow a charitable organization, or organization, that provides low-income housing to apply for certain property tax exemptions after an erroneously granted exemption was canceled. It is unknown whether the granting of the exemptions specified in the bill would change the taxability of the property or the number of properties that would be eligible to apply under the provisions of the bill. As a result, the fiscal impact cannot be determined.