85(R) - 2017
House Ways & Means
House Ways & Means
Relating to the exemption from ad valorem taxation of real property leased to and used by certain schools.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1030, As Introduced: a negative impact of ($23,000) through the biennium ending August 31, 2019.
The bill would result in a negative impact of ($12,311,000) through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Current law allows for property tax exemptions for a vast number of specialized property uses, including real property used for a variety of types of schools. SB 1030 would extend that property tax exemption to the owners of real property who lease to an open-enrollment charter school, and meets a number of specific conditions.
This bill is enabling legislation for SJR 42.
Vote Recommendation Notes
While we oppose the creation of new special tax exemptions that benefit one type of industry or one category of taxpayers at the expense of others, this does not truly fit that category of tax bill. The tax code is already filled with property tax exemptions for property used for a variety of different types of schools including theater schools, nursing schools, and a number of others. This bill places property leased to open-enrollment charter schools on equal footing with property used for other types of schools.
Ultimately we would prefer a property tax system that is low-rate, broad-based, and treats all types of property equally rather than having numerous special exemptions for preferred groups of taxpayers. However, because these schools are funded by the state it is sensible to exempt the property from local taxes, otherwise the property owners will simply pass the cost of the taxes along to the charter school through the lease, effectively allowing local taxing authorities to tax a charter school. Ultimately SB 1030 neither uplifts nor offends our principles and we therefore remain neutral.