HB 3623

84(R) - 2015
House Ways & Means
House Ways & Means
Property taxes

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Negative
  • Neutral


Larry Gonzales

Bill Caption

Relating to the exemption from ad valorem taxation of property owned by the National Hispanic Institute.

Fiscal Notes

A fiscal note dated April 13, 2015 anticipates not fiscal implication to the State or units of local government.

Nevertheless, the fiscal note also points out that under the bill the headquarters of the NHI and the land on which the headquarters is located would be exempt from property taxation. The headquarters, according to the NHI website, is located approximately 26 miles southeast of Austin, Texas, on a 46-acre parcel of land. Construction on the NHI campus is expected to begin in the near future. It is possible that all or part of this property could be exempted under current law as property owned by a charitable organization or as a school. To the extent that this property cannot be exempted under current law, this exemption would create a cost to units of local government and to the state through the operation of the school funding formulas. The cost is not expected to be significant.

Bill Analysis

House Bill 3623 would amend Section 11.23 of the Tax Code related to miscellaneous exemptions to add an exemption from taxation of the real and tangible personal property for the National Hispanic Institute.

Vote Recommendation Notes

05/26/15 update:

No changes have been made to House Bill 3623 since we first reported on it. We continue to oppose it.

The second chamber sponsor is Senator Eddie Lucio, Jr.

First chamber recommendation:

Certain charitable organizations already benefit from a property tax exemption. According to the statement of purpose for House Bill 3623 though, some charitable organizations still have to pay property taxes. Hence the bill wants to include the National Hispanic Institute among the miscellaneous exemptions to emphasize its nonprofit status and ensure the tax-free status of the institute's property. According to the fiscal note for House Bill 3623, it is possible that all or part of this property could be exempted under current law as property owned by a charitable organization or as a school.

If the National Hispanic Institute is already exempt from property taxes, House Bill 3623 would add a miscellaneous exemption specifically for this organization.

Having redundant legislation would make the tax code less clear, and hence less transparent. Tax exemptions that benefit specific groups of people, businesses or organizations distort the market and have the potential to create unintended consequences.

A good example of such unintended consequences lies in Senate Bill 1368 that was introduced this legislative session. SB 1368 tries to remedy the revenue losses caused by certain property tax exemptions to certain cities and counties. SB 1368 would provide that some of these cities and counties receive state aid to compensate revenue losses due to these exemptions.

In either case, we cannot consistently support this bill.