Voters throughout Texas won’t have any candidates to consider in the “off-year” election Nov. 5 – but there will be nine proposed amendments to the Texas Constitution on the ballot for an up-or-down vote.
Monday, Oct. 7 is the last day to register to be eligible to vote in November.
Early voting opens Oct. 21 and runs Monday-Friday, Oct. 21-25 and Oct. 28-Nov. 1, from 8 a.m. to 5 p.m. at three Wise County locations:
- The Decatur Civic Center, 2010 W. U.S. Hwy. 380
- Rhome City Hall, 105 1st Street
- The Bridgeport Law Enforcement Center, 1000 Thompson Street
The nine propositions on the statewide ballot stem from bills approved by the 83rd Texas Legislature. To get to this point, they have to pass in both houses and earn the governor’s signature. Their final hurdle is the voters’ approval.
Information in this review comes from the Texas Legislative Council, a nonpartisan legislative agency that provides various services to the Texas Legislature and the other agencies.
Today we’ll review the first five proposed amendments. The final four will be reviewed Saturday.
The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a member of the armed services of the United States who is killed in action.
The Constitution requires all property be taxed on its value, unless specifically exempted.
In 2007, an exemption was authorized for the residence homestead of totally disabled veterans, and the Constitution allows the surviving spouse of such veterans to inherit that tax exemption if they have not remarried.
This proposition authorizes the same type of exemption for the surviving spouse of a service member who was killed in action, starting with tax year 2014.
Supporters point out that Texas is a national leader in honoring the service and sacrifice of veterans and their families. This measure would provide a tangible benefit for the surviving spouses of those who fell in the service of their country.
The average Texas homeowner pays about $3,170 a year in property taxes. For many, these taxes are due in a lump sum. The proposed amendment would provide relief to surviving spouses in a time of need.
Under this resolution, a surviving spouse would lose the exemption upon remarriage, because it is designed to help offset the loss of income the service member brought to the marriage.
Because the exemptions would apply to a very small group, they would not impose an economic burden on governments due to lost tax revenue.
Opponents point out that each exemption reduces the revenue available to local governments. If they need more funding they will be forced to raise property taxes on other groups.
They also note that it has no time limit and thus could be in effect for several decades, and could provide an economic incentive against remarrying.
The constitutional amendment eliminating an obsolete requirement for a State Medical Education Board and a State Medical Education Fund, neither of which is operational.
Proposition 2 simply eliminates two state entities which are no longer operational.
Authorized in 1952, the State Medical Education Board and State Medical Education Fund were designed to provide grants, loans and scholarships to students who wished to study medicine and agreed to practice in rural areas.
In 1989, the board was dissolved and its duties transferred to the Higher Education Coordinating board.
The state now uses loan repayment programs instead of direct loans to medical students to attract physicians to practice in rural Texas. These programs help already-licensed physicians retire their student-loan debt in return for practicing in medically underserved parts of the state.
There is no apparent opposition.
The constitutional amendment to authorize a political subdivision of this state to extend the number of days that aircraft parts that are exempt from ad valorem taxation due to their location in this state for a temporary period may be located in this state for purposes of qualifying for the tax exemption.
Both the Constitution and state law exempt from ad valorem taxation “freeport” property that is located in the state temporarily. Under the constitution, to qualify for the exemption from inventory taxes, such goods must have been:
- acquired in or imported into Texas;
- detained for assembly, storage, processing, manufacturing or fabrication; and
- shipped out of Texas no later than 175 days after acquisition or importation.
This proposal would exempt aircraft parts from taxes for up to 730 days after they are imported into or acquired in the state.
If approved, the amendment would take effect beginning in tax year 2014.
Supporters say the measure, which would apply at the discretion of local taxing entities, would accommodate the specialized aircraft parts industry. Airplane parts are expensive and, when needed, must be shipped quickly. But because requests for special parts are rare, inventory often sits on the shelves prior to sale for longer than in other industries. It is not unusual for airplane parts to sit in a warehouse for 600 days.
Texas is one of the few states that even assesses a property tax on inventory. The proposed exemption would promote economic development, and state education financing formulas ensure that any school district offering an extension would retain adequate funding.
Opponents say singling out one group for a tax exemption, even for a meritorious purpose, raises issues of uniformity in taxation.They urge the legislature to avoid measures that reduce funds available for public education.
Others say the Legislature should consider eliminating the inventory tax altogether.
The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of part of the market value of the residence homestead of a partially disabled veteran or the surviving spouse of a partially disabled veteran if the residence homestead was donated to the disabled veteran by a charitable organization.
This measure, which deals with some of the same issues as proposition 1, would offer a tax exemption for disabled veterans whose homesteads were donated by a charity.
It would allow a percentage exemption from property taxes equal to the disabled veteran’s percentage of disability if the residence homestead was donated by a charitable organization – such as Wise County Challenger Charities, which bought refurbished homes for five veterans’ families just this past year.
The proposed amendment would not affect whether a qualified veteran was entitled to any other exemption.
Supporters say the measure would help disabled veterans stay in donated homes, given that their injuries often limit job opportunities, and the tax liability on a donated home could become a burden. Without a tax burden, donated homes may offer veterans the freedom to pursue an education, find a suitable job or start a business.
The proposal is tailored to apply only to veterans who were disabled during their military service and who received a home from a charitable organization. The tax exemption would cost local governments very little, and would be appropriate considering the sacrifices made by these veterans.
Opponents are those who generally oppose property tax exemptions for certain groups.
The constitutional amendment to authorize the making of a reverse mortgage loan for the purchase of homestead property and to amend lender disclosures and other requirements in connection with a reverse mortgage loan.
Homeowners who are at least 62 years old can currently obtain loans and other extensions of credit based on their home equity. This includes reverse mortgages – loans secured by the homestead’s value, but not generally paid back until the homeowner transfers the home to another owner, passes away, or no longer occupies the property. At that time, the home often is sold, and the proceeds are used to pay off the loan.
This measure would allow a reverse mortgage to be used for the purchase of a residence homestead. The borrower would have to occupy the property as a principal residence by a date specified in the contract, and both borrower and spouse would be required to complete financial counseling.
It also would require a lender to provide to a prospective borrower a disclosure with a detailed description of borrower behavior that could lead to foreclosure, including the requirement to pay property taxes.
Supporters say it would allow seniors to make an informed decision to use a reverse mortgage to purchase a home. Giving seniors this option would allow them to move closer to family members, downsize to a smaller home, or upgrade to a home fitted and designed to meet the needs of aging householders.
Texas is currently the only state in which seniors cannot get reverse mortgages for home purchases.
Prop. 5 would maintain extensive consumer protections governing reverse mortgages, and it would extend these protections to any senior considering a reverse mortgage for a home purchase. In would also ensure that borrowers considering a reverse mortgage received a detailed disclosure that described their obligations and ways in which foreclosure could occur.
While it is possible for interest charges eventually to exceed an owner’s equity in the home, the reverse mortgage does not become due until the house is vacated or upon death of the mortgagees. In the latter case, the debt is not necessarily passed on to next of kin. Anyone who stood to inherit the property could walk away from the debt and leave the property to the bank.
Opponents say Texans were sheltered from much of the fallout of the 2008 financial crisis because the state’s long history of skepticism toward home equity lending and the sharp restrictions on such loans. Loosening these restrictions could make Texans more vulnerable to future financial difficulties.
COMING SATURDAY: PROPOSITIONS 6-9