Senate Property Tax Hearing

March 29, 2019

Legislative News

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Chairman Paul Bettencourt (R-Houston) and the Senate Committee on Property Tax met on Mar. 26 to hear 11 bills all addressing various exemptions and exceptions from ad valorem taxation. Two of particular interest are SB 5, an increase in the homestead exemption, and SB 1005, expanding the Freeport exemption.

SB 5 by Chairman Bettencourt would amend Chapter 11 of the Tax Code to increase the mandatory homestead exemption for school districts from $25,000 to $35,000. It would make the additional exemption available to taxpayers who are age 65 and older or disabled. SB 5 would create a cost to school districts and would presumably be paid by the State. The implementation of the homestead exemption is contingent upon the passage of SJR 71 that would be submitted to voters in November 2019. Sen. Bettencourt indicated the average property tax bill in Texas would be cut by $125 per year.  The estimated cost to the State would be roughly $733 million in 2020 and over $1.6 billion for the biennium ending Aug. 31, 2023. Chairman Bettencourt would use the Economic Stabilization Fund (ESF) to provide funding to schools. If the ESF didn’t have sufficient funds, the obligation would have to be paid from General Revenue.

Also of potential interest is SB 1005 by Chairman Bettencourt which would amend the Freeport exemption by more than doubling the number of days, from 175 to 365, that certain tangible personal property would be exempt from ad valorem taxation. Over the next five years, this exemption is expected to cost the Foundation School Fund $344 million, school districts $221 million, counties $154 million, cities $164 million, and special districts $118 million. The Freeport exemption outlined in SB 1005 is contingent upon the passage of and SJR 43 that would be submitted to voters in November 2019.

All bills were heard and left pending. The next committee hearing is expected to be Apr, 2, 1:30 p.m.