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A fiscal note dated
April 20, 2015 indicates that passage of the bill would grant a property tax
exemption on the real property a person owns and leases to a qualified school
under certain conditions. To the extent that public schools with taxing authority
lease the property, there could be a gain to those school districts if the
school district property tax loss was more than offset by the gain from the
facilities rent reduction based on the total property tax reduction provided by
the bill. To the extent that schools without taxing authority lease the
property there would be a tax revenue loss to the public school districts with
taxing authority and a cost to the state through the operation of the school
Senate Bill 545 would
amend Chapter 11 of the Tax Code related to taxable property and exemptions to
create an exemption from ad valorem taxation of real property leased to and
used by certain schools.
Owners of real
property leased to certain schools (as described by Section 11.21 (d) of the
Tax Code) would be entitled to an exemption from taxation of the real property
if the real property is used exclusively by the school for educational
functions and is reasonably necessary for the operation of the school, if the
owner certifies by affidavit to the school that the rent of the lease would be
reduced by the amount by which the taxes would be reduced, if the owner would
provide to the school the amount by which the taxes would be reduced, how the
rent would be reduced to reflect the exemption, and if the rent actually
reflects the reduction in taxes.
If passed, Senate Bill
545 would take effect on January 1, 2016 only if Senate Joint Resolution 30 is
approved by voters.
Senate Bill 545 is the
enabling legislation for SJR 30.
An amendment was introduced and accepted on the Senate floor. The amendment would specify that to be eligible for an exemption under the related section, a person owns and leases to an open-enrollment charter school authorized by Subchapter D, Chapter 12, Education Code, that is qualified as provided by Section 11.21(d) of the Tax Code.
We continue to support this bill.
The second chamber sponsor is Representative Jim Murphy.
First chamber recommendation:
Current law provides that a person is entitled to an exemption from taxation of buildings and tangible personal property that the person owns and uses for a school (Section 11.21 of the Tax Code).
Senate Bill 545 would provide the same exemption for a person who owns real property and leases it to a school, with the condition that the reduction in the amount of taxation be fully reflected in a reduction in the rent of the lease to the school.