Senate Local Government met on July 10 to consider SB 8 (Bettencourt et al.), SB 12 (Bettencourt et al.), and SJR 4 (Bettencourt et al.).
Opening Comments
- Bettencourt – Will hear two homestead exemption bills today
- Bettencourt – SB 12 aims to follow up on SB 3 from the 86th
This report is intended to give you an overview and highlight of the discussions on 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.
SB 8 (Bettencourt | et al.) Relating to the authority of a person who acquires a residence homestead to receive an ad valorem tax exemption for the homestead in the year in which the property is acquired
- Bettencourt – Provides first year exemptions in the year they acquire the property, rather than waiting for January of the next year
- Homeowners must meet all existing requirements including having a drivers license at the new address
- Eckhardt – In favor of this bill; have questions for the resource witness on CADS and local taxing institutions
- Eckhardt – Calculation of average benefit to purchasing homeowner?
- Fiscal note is not sure of the impact, will do a pro-rate calculation on $5500 a year; were estimating $50 to $75 million
- Eckhardt – One-time cost or ongoing for implementation? Especially for local governments
- Will look into this
- Eckhardt – Impact analysis on the shifting cost burden over to non-homestead, residential and commercial
- Do not have that estimate
- Have appreciating tax rolls; if there was a shift, should be washed out
- Eckhardt – Is population that is not true for rural communities who have a decreasing population or struggling economy
- Will look into it
- Zaffirini – Urban counties, municipal school boards, etc. have issues with this; intention to pass as comes out of committee or with amendments on the floor?
- The latter
Brandy Guthrie, Texas Realtors – For
- 392,828 homes sold last year; $529,499 average price and 243,553 were owner-occupied
- This legislation is long past due; will account for predictability and accountability
- Currently, could be more than an extra $600 payment
- Bettencourt and Guthrie discuss the homeowner’s negative reaction to the current system
- Bettencourt – Asks the committee to be provided with more granular data; if we use M&O, fiscal note would be about $40 million
- Zaffirini – Your support of this bill is for future homeowners; any relief for current homeowners?
- Current bill says for those purchasing a home
- Bettencourt – Trying to give them a partial for that first year; how long do people live in a house?
- About 9 years
- Springer – Bill allows
- Eckhardt – Are seeing considerable appreciation in the housing market; is there a disclosure of sales price calculation with tax assessor collector?
- No; use estimates
Robert Henneke, TPPF – For
- Is overwhelming support to lower the burden of property taxes
- A little less of the evaluation of the homes are lower than $300,000
- Zaffirini – Did you consider any impacts to the Foundation School Fund?
- Support this bill because the exemption is already there; no need to wait
- Did not quantify impact on that fund; should be minimal because it is a partial-year and only to new home-buyers
- Zaffirini – Would be pro-rated?
- Yes
- Springer – HB 3 aimed to shift the cost away from property owners and to the state
- Bettencourt – Nelson has noted this will be in the next appropriation’s bill
Adam Haynes, Conference of Urban Counties – Against
- For the general idea; counties should have a minimal cost
- Against as drafted because recalculation of taxes due are going to be individually done
- Need to treat this the same as exemptions for 65 and above to roll it in
- Could add sales price disclosure to the tax assessor collector
- Bettencourt – Would be for it if increased the exemption for the full year?
- Yes
- Bettencourt – Passed a constitutional amendment against sales price disclosure, will not change that
- Bettencourt – Are aware people could get two exemptions?
- Is a way to work around it
- Bettencourt – Have you talked to TAC?
- No
- Hall – Who has the ultimate benefit? Need to think about this
- Bill aims to benefit the purchaser
- Zaffirini – Some county assessors said this would create an administrative nightmare, agree?
- Yes; would have to be manually done for each home sold
- Zaffirini – Are your ideas a concept or proposed language
- Several member counties have sent language to Bettencourt’s office; aim to alleviate administrative work
- Hall – Cost of recalculation? Do not understand what the issue is
- A third calculation, timeline on rebate/who gets it, rebate based on current value and date of sale to make sure no public money goes to a private entity
- Hall – you would do calculations regardless
- Eckhardt – agrees in principal and knows we can get there but concerned with moment in time calculations that need stability, is there a suggestion to nail down a point in time?
- Don’t have a hard and fast number but across the board it is a minimal concern
- Can work to define that moment in time, don’t have an answer just yet
- Bettencourt – there are optional exemptions for cities and counties, then there is the state
Maria Crigler, Chief Appraiser of Travis County CAD
- Here on bill as resource
- Assessment date is Jan 1, value set on Jan 1 and it does not get reset
- New homeowners purchasing existing home with homestead exemption, can continue benefit for remainder of the year so in terms in fiscal note only looking at impact of new homes that didn’t have benefit before
- Bettencourt – or over 65 exemption
- In this case it would allow new purchaser to apply for exemption if rug was pulled from out from under them
- Eckhardt – homestead exemption
- Can only claim exemption on one home per year
- If it’s a July sale and home has over 65 and homestead, then new owner gets benefit for reminder of year unless previous owner can transfer this benefit
- Eckhardt – Can only claim one homestead exemption for the year?
- Yes
- Under this law the new owner can go get some of the benefit
- Current law, new owner would be responsible for the loss of benefit/increase charge (shock)
- Currently new owners are told to ask if the seller is going to take their exemptions to the new place or leave them there
Christy Rome, Texas School Coalition
- In favor of the bill and for Bettencourt on record saying they will pick up the tab
- Points out precedent in 2019, process in place in law for schools to get a reimbursement
- Want to make sure schools don’t lose money, would like to see general law put into this bill or in another bill
SB 8 reported favorably (7-0)
SB 12 (Bettencourt | et al.) Relating to the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed by a school district on the residence homestead of an individual who is elderly or disabled to reflect any reduction from the preceding tax year in the district’s maximum compressed rate
SJR 4 (Bettencourt | et al.) Proposing a constitutional amendment authorizing the legislature to provide for the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed for general elementary and secondary public school purposes on the residence homestead of a person who is elderly or disabled to reflect any statutory reduction from the preceding tax year in the maximum compressed rate of the maintenance and operations taxes imposed for those purposes on the homestead
Bettencourt lays out bills
- SB 12 enabling for SJR 4
- Bill has been in previous session, notes Howard who is in the audience voted for it last time
- This bill is same model as last time, so it got out of lege council quickly
David Vercheik, self in Richmond – For
- Testified in previous House Committee in support
- Bill is something good for elderly
- His calculations show bill would cost $350 million, only 2.8% of budget
- Approval would allow this to go onto the voters, let voters decide
- Bettencourt – Comptroller says cost is $197 million so a little less than $200 million
- Asked if money was sitting in account someplace and no one knows
- Bettencourt – ISDs do have a substantial reserve
- Bettencourt – HB 3 though moved all accounting to current year
Alan Sturdevent, self from Richmond – For
- Appreciates opportunity to support the bill and appreciate if they vote for it
Greg Barnes, self from Richmond – For
- Volunteer at Helping Hand Foodbank and seeing an awful lot of seniors come in
- This will help seniors
- Eckhardt – appreciates seeing bipartisan support on this issue
Christy Rome, Texas School Coalition –For
- Support relief for elderly and senior taxpayers
- Appreciates again that State of Texas will be offering the relief, not asking ISDs
- Notes move from prior year to current year so ask for amendment that provides access to data to those entities that are using it
- Bettencourt – input from TCAD asked the same thing, publish of tax rate data online and easily available
- Would like information to be a two-way street so information from TCAD goes to TEA
Maria Crigler, Chief Appraiser of Travis County CAD
- Only concern was to make sure they had information in order to recalculate, data readily available to all tax offices, and get it in enough time prior to tax bills going out
Larry Sierneck, self from Deer Park – For
- Bill would be great help to them
SB 12 reported favorably (6-0)
SJR 4 reported favorably (6-0)