Bill

HB 683

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

Vote Recommendation

No
  • Neutral
  • Neutral
  • Neutral
  • Negative
  • Neutral

Author(s)

Kenneth Sheets

Co-Author(s)

Bill Zedler

Bill Caption

Relating to the exemption from ad valorem taxation of a percentage of the assessed value of a property owned by certain disabled veterans and the amount of the exemption for the surviving spouses and children of certain disabled veterans.

Fiscal Notes

A fiscal note dated May 7, 2015 anticipates a negative two-year net impact to General Revenue Related Funds from CSHB 683 of $151,230,000 through the biennium ending August 31, 2017.

The net impact to General Revenue Related Funds would increase to a negative impact of $1,540,834,000 in the biennium ending August 31, 2019 and is contingent upon passage of a constitutional amendment authorizing the exemption.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

House Bill 683 would amend Section 11.22 of the Tax Code relating to an exemption from taxation of a portion of assessed value of a property owned designated as provided by Subsection 11.22(f) by a disabled veteran.

Under current law, disabled veterans are entitled to an exemption from taxation of a portion of the assessed value of a property  a veteran owns as a flat dollar amount depending on the disability rating of the veteran. House Bill 683 would change the flat dollar amount to a percentage, as follows:
  • 7.91 percent for a veteran having a disability rating of at least 10 percent but less than 30 percent;
  • 11.86 percent for a veteran having a disability rating of at least 30 percent but less than 50 percent;
  • 15.82 percent for a veteran having a disability rating of at least 50 percent but less than 70 percent;
  • 18.98 percent for a veteran having a disability rating of at least 70 percent.
A veteran under certain conditions, formerly entitled to the maximum dollar amount of exemption, would also receive the maximum percentage of exemption from taxation of a portion of the assessed value or property.

The surviving spouse of a veteran would be entitled, as long as she remains unmarried, to an exemption from taxation of a portion of the assessed value of a property the spouse owns equal to the dollar amount of the veteran's exemption at the time of death.

If the surviving spouse does not survive the veteran, each surviving child of a veteran that is younger than 18 and unmarried is entitled to an exemption from taxation of a portion of the assessed value of a property the child owns. The amount of the exemption for each child would be equal to the dollar amount of the veteran's exemption at the time of death divided by the number of children.

House Bill 683 would take effect on January 1, 2016 only if HJR 67 is passed and approved by voters.

House Bill 683 is the enabling legislation for House Joint Resolution 67.

Vote Recommendation Notes

House Bill 683 would change the amounts of exemptions from taxation on assessed value of property owned and designated by a veteran from dollar amount to percentages.

We understand the hardship placed on disabled veterans and their family and fully appreciate the price they pay to defend our country. While this exemption already exists, changing the amount from dollars to a percentage would have a negative fiscal impact to the State of $151,230,000 through the biennium ending August 31, 2017, raising to a whopping $1,540,834,000 in the biennium ending August 31, 2019.

Additionally to the cost forecast in the fiscal note, there can always be unintended consequences from such a legislation. A good, existing example of unintended consequences of such special exemptions lies in Senate Bill 1368 which recently passed the Senate. SB 1368 tries to remedy the revenue losses caused by tax exemptions to cities and counties located near or around major military installations. SB 1368 would provide that some of these cities and counties receive state aid to compensate revenue losses due to these exemptions. Under the provisions of SB 1368, taxpayers from across Texas who already pay their own property taxes will also have to pay for the lost tax revenue created by the special veterans tax breaks addressed by the bill. 

House Bill 683 would increase the scope of government, hence we cannot support this bill.