Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4270 by Perez, Vincent (Relating to the authority of certain taxing units to enter into an agreement to abate ad valorem taxes imposed on an individual's residence homestead that is located in a reinvestment zone.), As Introduced
Passage of the bill would allow school districts to enter into tax abatement agreements with residence homestead property owners located in a reinvestment zone. As a result, school district property tax collections 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 allow certain taxing units, including school districts, to enter into tax abatement agreements with residence homestead property owners located in a reinvestment zone to exempt all or part of the property value under Chapter 312 of the Tax Code. The bill would provide criteria, definitions and requirements.
The bill would allow certain taxing units to enter into tax abatement agreements with residence homestead property owners for a duration of up to 10 years with a minimum spending amount of $500 on improvements or repairs in the first year of the agreement. It is not known how many taxing entities would enter into such abatement agreements and what the level of tax exemption would be.
Local Government Impact
Passage of the bill would allow certain taxing units to enter into tax abatement agreements with residence homestead property owners located in a reinvestment zone. As a result, property tax collections for units of local government that choose to enter into abatement agreements would be reduced.