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Senate Finance met on May 10 to take up a full agenda. This report covers SB 734, HB 115, HB 1197, HB 1544, HJR 125 , HB 2530, HB 3786 and HB 2080. The full schedule for this meeting can be found here and the archive can be found here.

 

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing 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.

 

Vote Outs:

SB 734 (Paxton) (11-0)

SB 2247 (Huffman) (9-2)

HB 1197 (Metcalf) (11-0)

CSHB 1544 (Guillen) (9-2)

HB 2080 (Leman) (11-0) Bill going to the floor

HB 2530 (Ashby) (11-0)

HB 3786 (Holland) (11-0)

HB 3788 (Holland) (11-0)

HB 3799 (Metcalf) (9-2)

HJR 125 (Ellzey) (11-0)

 

SB 734 (Paxton) Relating to an exemption from ad valorem taxation of property owned by a charitable organization that provides services related to the placement of a child in a foster or adoptive home

  • Child placing agencies aid birth mothers during adoptive process
  • Under current law, it is unclear if child placing agencies qualify as charitable organization exemption
  • Bill clarifies this issue by adding language to section 11.18 so child placing agencies can receive charitable organization exemption
  • Subsection adds “planning for the placement of or placing a child in placement home, and providing relief to expectant birth mothers or replacement of child in foster home
  • Children directly placed in homes to receive tax relief

 

James Harris, Citizens for Appraisal Reform – For 

  • Bill is important because it helps nonprofit organizations place kids in adoptive homes and provides support for mothers placing those children in adoptive homes
  • Code sections added help clarify
  • Supporting the parents can best help the parents make the best decision for the child
  • Agencies have to thoroughly vet the parents on both ends and follow up with the kids months later
  • Funding is largely donations
  • Law before this bill is more geared towards orphans
  • Bettencourt – what appraisal districts are not granting this exemption now? Wants to understand what the problem is
    • Harris County has denied one like he described in testimony
    • Thinks it is occurring in other districts since it is happening in his

SB 734 left pending

 

HB 1544 (Guillen) Relating to the eligibility of land to continue to be appraised for ad valorem tax purposes as qualified open-space land if the land is temporarily used for sand mining operations, authorizing a fee.

  • Laid out by Senate Sponsor Zaffirini
  • Passed by house with 146 votes
  • Bill is a permissive bill that would encourage sand mine operators to follow best practices
  • Only in areas south of San Antonio
  • TCEQ would need to update their rules
  • Allows projects currently going on but adapt to keep their exemption
  • CS adopted
  • Substitute matches terminology used by Texas Water Development board

 

Joseph Neal, Self – Resource

  • Is a sand miner and grew up with it
  • West – Asked if it was the only sand mining operation in the state
    • Currently sand mining on their property
    • There are large ones around them
    • Issue with leaving the land raw is that the poor surrounding communities are getting sand blasted
  • West – Is there a duty to put the land back the way it was? Is that a condition for exemption?
    • If you are positively affecting the land, you should not have to pay higher taxes
    • Deep sand mining destroys wildlife
  • West – Just trying to figure out if this applies to only one mine or all in the state
    • Only familiar with those south of San Antonio
  • Perry – Is this an environmental bill? You want this agricultural exemption to extend to when you are done restoring the land
    • Yes
    • It’s usually two years
  • Perry – TCEQ would have the say in the cutoff?
    • Yes
    • When the land gets reclaimed so close to SA, you can build on it
  • Bettencourt – Trying to understand how precedent applies statewide. Why not make it a requirement statewide?
    • Incentive works better than enforcement
  • Neal – Children growing up in san blasting area are developing lung issues, about 10,000 acres have not been reclaimed and are sand blasting

HB 1544 left pending

 

HB 115 (Rodriguez) Relating to the exemption from ad valorem taxation of certain property owned by a charitable organization and used in providing housing and related services to certain homeless individuals

  • Laid out by Senate Sponsor Seliger
  • SB 2628 and HB 294 from prior sessions created charitable organization for property tax exemption if it provides the homeless, shelter
  • As law stands, Austin is only allowed to have one organization do this
  • Bill strikes one organization rule for Austin
  • Extends to include midland
  • Bill is not state-wide
  • Provides local solution to local problem by providing housing food and medical on sight and job opportunities

 

Alan Graham, Mobile Loaves and Fishes – For

  • Community first is from Austin
  • 310 people they have taken off the streets and living full time at the property
  • Average age of death is 58 for their homeless population
  • All operational expenses come from private sources
  • Government should play subsidiary role
  • Bill would show that Texas is top in compassion
  • Buckingham – Has the city of Austin changed its attitude towards working with them
    • They partner with us on water and electricity and fee waivers in past
  • Buckingham – Asked if he had seen the new plan and if it involves them
    • Yes
    • Trying to stay politically neutral
    • They can add another 1400 homes to the inventory that focuses on chronically homeless
    • Currently the plan does not involve us
  • Buckingham – What is the cost?
    • Averages about 85,000 per unit
    • All privately raised
  • West – What is “campus”
    • Currently have 51 acres of contiguous property, another 51 across the street and 79 a couple miles away
    • Asking to expand the definition
  • West – Is there a definition of campus in the law
    • Cannot legally answer
    • Doesn’t know
    • Seliger – Doesn’t know either, even in the case of universities
    • Resource – Doesn’t have campus definition
  • West – Seems like there needs to be a definition so there is no ambiguity
  • Schwertner – Bill as written removes exemption applied to property on single property but added portion for midland requires single campus. Could allow for ad valorem tax exemption and negatively affect surrounding taxpayers. Would the bill allow any entity to have tax exemption on the grounds of homeless?
    • Doesn’t think that is the case
    • His understanding was that bill was bracketed
  • Schwertner – Sees this potentially being misused

 

John-Mark Echols, Fields Edge Midland – For

  • Personally houses the homeless in RV camp
  • Privately funded; raised over 4.1 million
  • Each homeless person costs local government 17,000
  • Each chronically homeless person lifted off the street creates 4 jobs
  • Fields Edge Midland would have to start paying taxes on their properties and a roll-back fee if bill doesn’t pass

 

Susanna Corenza, Self – For

  • Sees the hardship on the streets and thinks it’s not right
  • After prop B passed there is a rush to find housing for homeless

HB 115 left pending

 

HJR 125 (Ellzey) Proposing a constitutional amendment to allow the surviving spouse of a person who is disabled to receive a limitation on the school district ad valorem taxes on the spouse’s residence homestead if the spouse is 55 years of age or older at the time of the person’s death

  • Birdwell- Homestead exemption based on disability, doesn’t allow for
  • Disabled individual who had ability for exemption on school taxes
  • Code and constitution not codified for last 2 years
  • Amendment is needed to SB 1313
  • Under bill collector would have to impose tax from 20-21 and could have to refund difference to spouse and would expire in 2023
  • Ensures implementation of statutory regulations
  • Minimal impact across the state
  • Bill provides tax relief for those who needs it
  • Passed out of house unanimously

 

Dale Craymer, Texas Taxpayers and Research Association – For

  • Rare for their association to testify on property tax bills
  • Urge caution on exemption but support this one because of the benefit it provides to surviving spouses
  • Bettencourt – Agrees with their analysis, does he have any other exemptions or notes
    • Not at this moment
  • Hancock – Clarified, that there is not a loss of revenue for tax but a shift of tax rate
    • There is an option to do that
    • Voter approved tax rate
    • 3.5% applied after discount of exemption
  • Hancock – If there are exemptions added, then other taxing entities pay that
    • The taxpayers pay it forward
    • Ultimately, the cost is socialized

HJR 125 left pending

 

HB 1197 (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

  • Campbell – Extends property tax exemption for churches from 6 years to 10

HB 1197 left pending

 

SB 2080 (Leman) Relating to taxpayers’ suits

  • Laid out by Senate Sponsor Huffman
  • Under bill, taxpayers couldn’t sue without paying first part of tax
  • Gives taxpayer more financial ability when it comes to dispute
  • Substitute adopted
  • Substitute clarifies what constitutes a process payment
  • Bill is pro taxpayers and prevents them from having an agency over their shoulder

 

Shannon Brant, Comptroller’s Office – Resource

  • West – Asked about the attorney’s fees being counter intuitive
    • That is the status quo
  • West – Then why is new law needed if that’s the status quo
    • Will have to look
    • To her knowledge this wasn’t creating any real change
  • West – Is with her on bill, but wonders how the taxpayers can get an attorney to advocate for them in these suits if they can’t get an award of attorney fees
    • Doesn’t know, that just is how current law is
  • West – Disputed should be litigated, but non disputed should be paid. But as is they have to pay the whole thing
    • Resource – Correct in order to avoid a hearing yes
    • A small portion of cases go to state office for resolution
    • SOA process taxpayer can represent themselves
    • Expectation is that very few will take this and continue to court
  • Bettencourt – Can the judge still award attorney fees if they want to
    • Doesn’t think so
    • But as in most cases each party bears the cost of their own fees
  • Bettencourt – Thinks bill should move on since there is no issue, but want clarification from author

HB 2080 left pending

 

HB 2530 (Ashby) Relating to the rate of interest on certain tax refunds

  • Laid out by Senate Sponsor Nelson
  • Change month of comptroller uses to calculate the interest rate for a tax refund from December of previous year to November of previous year
  • Current law dictates that Comptroller uses the rate to determine refund
  • Bill will allow comptroller will be able to calculate new rate and update system before the start of the year

HB 2530 left pending

 

HB 3786 (Holland) Relating to the authority of the comptroller to send, or to require the submission to the comptroller of, certain ad valorem tax-related items electronically

  • Senate Sponsor Nelson
  • Current statute requires comptroller to send and accept some items by mail only
  • Bill would allow them to send and receive all items electronically even money

HB 3786 left pending