The House Committee on Ways met to take up the following bills in order: HB 300 (Howard), CSHB 591 (Capriglione), HB 596/HJR 45 (Shaheen), HB 456 (Craddick), HB 260 (Murr), HB 623/HJR 47 (Harris, Cody), HB 796 (Button), HB 398 (Shine), and HB 105 (Noble). All bills were left pending. The notice can be found here and a video archive of the hearing can be found here.
This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
HB 300 (Howard) Relating to an exemption from sales and use taxes for certain family care items.
- Howard – Tax free bill, exemption for family items like period products, diapers, wipes, baby bottles, etc.
- Good use of funds from surplus for essential items for low-income families
- 23 other states do not tax period products, 21 do not tax diapers
- Chair Meyer – Additions from the bill last session?
- Howard – Had two separate bills, one for period products & one for diapers; Speaker suggesting combining all needs into one bill to address all needs like maternity clothing, etc.
- Thierry – Asks Howard to educate committee on Toxic Shock Syndrome
- Howard – Have health-related impacts from hygiene products, diapers, etc.; can still get infections and sepsis if you use products longer than they are intended to be used, lack of supply leads to this
- Some re-use diapers or leave them on for longer than necessary, can lead to infection
- Products have a positive health benefit related to sufficient supply
Emily Adams, Austin Diaper Bank – For
- Many states moving to remove sales tax on these items; has a burden on low-income families and communities of color
- Child care services require parents to supply fresh diapers, without care parents may be forced out of the workforce
Paula Blackmon, Dallas City Council – For
- Products are necessary, HB 300 will ensure women & families have resources needed to thrive
- City of Dallas in full support
Ali Foyt, Texas Menstrual Equity Coalition, Baker Botts – For
- Coalition supports the bill & recommends it be passed; provided written testimony
Jorge Medina, Texas Diaper Bank – For
- Diaper insecurity has a significant impact on families; diapers cost between $70-$100/month per baby
Nichole Ringer, Austin Diaper Bank – For
- Tax savings on diapers alone is $87/year, significant savings for low-income families
- Noble – Pretty significant amount for a family
Michael DeLeon, Self – For
- Support for food and other items, but no support for diapers; puts pressure on family resources
Adam Bazaldua, Dallas City Council – For
- HB 300 provides needed support for family care items, will make these items more accessible
- Stigma against feminine hygiene products & it comes at the expense of health
Rep. Howard closes
- Tax relief for everyday essentials is one way we can give back to Texans
- Button – Compliments Rep. Howard on the many years of hard work on this issue
HB 300 left pending
CSHB 591 (Capriglione) Relating to an exemption from the severance tax for gas produced from certain wells that is consumed on site and would otherwise have been lawfully vented or flared.
- CS laid out
- Capriglione – CS is not substantively different than the filed bill
- Oil producers struggle with stranded gas, prefer to sell, but will vent or flare when pipeline is not present
- Entrepreneurs have developed systems to use the stranded gas to power mobile bitcoin miners, but question is open on whether these should be open to severance tax
- HB 591 clarifies when severance tax should be paid, gas that would otherwise be flared or vented not subject to severance taxes
- Gervin-Hawkins – Difference between flaring & venting? How do you separate volumes?
- Capriglione – Flare or vent when there isn’t ability to use the stranded gas further down the line
- Gervin-Hawkins – Taxed at that time?
- Currently not taxed as it is wasted, clarifying that severance tax wouldn’t apply
Wayne Christian, RRC – For
- TX has the US’s most developed gas industry, significant tax revenue and economic activity
- HB 591 allows bitcoin mining and gas production to meet, utilizes otherwise flared or vented gas; free market solution for excess natural gas
- Currently bitcoin miners struggle to determine tax burden, HB 591 clarifies gas that would otherwise be flared or vented is not taxed if used for productive purpose
Brent Whitehead, Giga Energy – For
- Have been developing this tech over the last 4 years; mobile gas generators and datacenters can be moved in and combust the otherwise flared or vented gas
- HB 591 clarifies bookkeeping for usage of otherwise flared or vented gas
Griffin Haby, Mountain Lion Oil & Gas – For
- Mobile bitcoin miners provide economic solution for wasted gas
HB 591 left pending
HB 596 (Shaheen) Relating to a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.
- Shaheen – Concerns that health care costs are rising and availability of doctors is dropping; HB 596 is a tool to bring doctors back into indigent health care
- Counties are responsible for indigent care outside of Medicaid, can establish hospital district; HB 596 will allow counties to reduce property taxes for doctors providing care to the needy for free
- Optional, passed out of House last session, died in the Senate
HB 596 left pending
HJR 45 (Shaheen) Proposing a constitutional amendment authorizing a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.
- Shaheen – Constitutional amendment legislation for HB 596
HJR 45 left pending
HB 456 (Craddick) Relating to an exemption from ad valorem taxation of certain royalty interests owned by a charitable organization.
- Craddick – Allows non-profits to receive exemption for mineral interest; some counties are taxing ad valorem and some not, HB 456 clarifies that these ad valorem taxes cannot be charged for §501 and §409 entities
- Noble – Taxing based on location in the county, or taxing by the mineral rights?
- Craddick – Both, talking about entities being taxed in the county they exist
- Noble – So if a Midland College gave someone a legacy interest in minerals, it would be taxed in the full amount?
- Yes, in Odessa located farther west they don’t do it
- Noble – Does Midland try and tax other areas?
- Can’t answer that, witnesses present might
- Chair Meyer – In simple terms, entities are already exempt, you’re just including the mineral interest?
- Correct
Don Sparks, The Village at Manor Park – For
- Manor Park is a 501(c)(3) that has had mineral interests donated to it, but being taxed on those minerals; mineral donations important to continued operations of the care unit
- Craddick – State taxes will not be exempt?
- Correct, severance taxes are paid by the operator
- Craddick – What is Manor Park paying in ad valorem taxes each year?
- For 2022, $360k
- Chair Meyer – Would be about 9 months of a care for a patient
Stephen Nelson, The Village at Manor Park – For
- Medicaid is costing about $123 more to care for a patient than is reimbursed, HB 456 would help make up some of that difference; funds would also help retain staff and recruit
Raegan Marble, National Association of Royalty Owners – For
- About 5% of mineral royalty owners are charitable causes, charging on ad valorem tax makes a difference to bottom line for these organizations
- Gervin-Hawkins – Asks for a list of entities
- Don’t have a list, but can look back at membership and pick out charities
- 3-5% of mineral owners in TX, substantial tax if counties are charging ad valorem taxes
- Noble – If you are a charity outside of Midland, but you have mineral rights in Midland, are you taxed in mineral?
- Yes, ad valorem structure is based on site of property
- Noble – So asking charities to pay taxes they would otherwise be exempt from
- Yes; taxation is 100% driven by whoever is running appraisal in those counties
Pat McDaniel, Self – For
- Ad valorem taxes in Midland County will impact revenue for Bellview Church, other churches
- Raymond – How many years have you had the exemption in other counties?
- Have had minerals in other counties for 10-15 years, more recently in Midland
- Raymond – Midland County is doing this because of horizontal drilling?
- What it seems like to me
- Raymond – May not be talking about many that are being unfairly taxed, should be easier to pass a bill; for the bill
Rep. Craddick closes
- Loophole in the taxing system, will close it with HB 456
 HB 456 left pending
HB 260 (Murr) Relating to the calculation of net to land in the appraisal of open-space land for ad valorem tax purposes.
- Murr – Bill from last session, passed out of House (133-6), died in Senate
- Surveillance zones can be designated for a variety of reasons, incl. CWD, fever tick, etc., but no time limit on how long zones will remain once established
- HB 260 tries to shift burden from landowner to chief appraiser when making values based on wildlife or livestock; asks appraiser to take into account that property is within a surveillance zone
- Raymond – Excellent point, real issue
HB 260 left pending
HB 623 (Harris, Cody) Relating to an exemption from ad valorem taxation of tangible personal property consisting of animal feed held by the owner of the property for sale at retail.
- Cody Harris – Prevents animal feed from being subject to ad valorem tax as tangible personal property when that feed is exempt from sales tax; feed is not taxed at any point aside from when it is on store shelves
- Shine – Talking about those that produce and sell hay as well?
- This is specifically for feed stores, directly for retailers
Tara Artho, Texas Grain & Feed Association – For
- Have on coop that would save $75k/year, in many cases producers are already taxed on tonnage, so the ad valorem tax is an additional tax
- Ag exemptions are important, understand they need to be limited but this would alleviate a big burden
Ted Britton, Anderson County Farm Bureau, Owner & Operator of a Feed Store – For
- Livestock feed purchases are tax free, feed store operators are the only one with the tax burden and margins are small; will help keep feed costs low
HB 623 left pending
HJR 47 (Harris, Cody) Proposing a constitutional amendment authorizing the legislature to exempt from ad valorem taxation tangible personal property consisting of animal feed held by the owner of the property for sale at retail.
- Cody Harris – Constitutional amendment for HB 623
HJR 47 left pending
HB 796 (Button) Relating to the creation and maintenance by an appraisal district of a publicly available Internet database of information regarding protest hearings conducted by the appraisal review board established for the district.
- Button – Creates database of protest hearings conducted by the ARB
Dale Craymer, Texas Taxpayers & Research Association – For
- Posts determinations of ARB and allows stakeholders to see if there is any bias and tendency of the holdings
- Chair Meyer – Who could be against this bill? Someone is registered against
- There may be some technical issues, requires real time reporting; hoping any concerns are more technical in nature as opposed to policy, about transparency and accountability
Marya Crigler, Texas Association of Appraisal Districts – On
- Support transparency, but have comments on technical items
- Makes sense to roll this into Truth in Taxation database, want to keep staff on hearings and don’t want venue shopping so asking reporting to not be real-time
- January 1, 2024 rather than Sept. 1, 2023, also asking for staggered effective dates based on size to allow smaller CADs to do work
- Chair Meyer – Have you met with Rep. Button?
- Association has had meetings
- Chair Meyer – Sounds like technical issues, encourage you to work with her
Rep. Button closes
- Button – Association met with us last Friday, no significant disagreement on technical aspects and working on CS
HB 796 left pending
HB 398 (Shine) Relating to an exemption from ad valorem taxation of property owned by an economic development corporation and used for a public purpose.
- Shine – Had issue last session where appraisal districts were lifting exemptions on type A municipality eco dev corporations; didn’t have a bill last session that divided type A and type B municipalities
- Clarifies that EDC resources used for public good are included in the tax code exemption
Cynthia Hernandez, Belton Economic Development Corporation – For
- Currently, exemption is only active for 3 years and it can take longer than 3 years to sell property
- HB 398 will clarify procedures for EDC owned property
Kris Collins, Greater Waco Chamber of Commerce – For
- Represent multiple EDCs across the county; Type A & B EDCs are public entities, dollars allocated are public, used for public good
- Would provide clarity for policies that can differ from county to county
Marya Crigler, Texas Association of Appraisal Districts – On
- Bill provides clarity to create uniformity across the industry
- Chair Meyer – Clarification is needed because policy is not consistently applied; reason for the $20m fiscal note?
- Crigler – Comptroller put this together, might be an issue of where those exemptions were in place and where not
HB 398 left pending
HB 105 (Noble) Relating to excluding the furnishing of an academic transcript from the definition of “information service” for purposes of sales and use taxes.
- Noble – Would exempt academic transcripts from sales & use tax; currently private universities are required to collect a sales tax
- Comptroller clean up bill that didn’t get down last time, was unanimously voted out of House, died in the Senate
- Gervin-Hawkins – Asks about source of tax
- Noble – This has to do with how transcripts from public universities are under PIA, not under the same heading at private universities so sales tax is attached
- Gervin-Hawkins – Fee for transcripts?
- Fee often attached for costs
- Gervin-Hawkins – Cost?
- So little that LBB didn’t come up with a number
- Chair Meyer – So you’re trying to eliminate an unfair tax on those graduating from public universities, can’t imagine anyone against this
HB 105 left pending