HomeMy WebLinkAboutIR 8308 " INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8308
March 27, 2001
To the Mayor and Members of the City Council Page 1 of 4
SUBJECT: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES
State laws governing property tax administration provide for certain exemptions, which may either partially,
or totally exempt real or personal property from taxation. Some exemptions require only that property meet
certain criteria before the appraisal district may grant the property owner's application for exemption. Other
exemptions require specific action by the taxing authority before the exemption may be requested by the
property owner. Those exemptions currently being claimed by Fort Worth property owners and over which
the City Council exercises no discretionary power are: AGRICULTURAL, FREEPORT, FOREIGN TRADE
ZONE, DISABLED VETERANS, SCENIC LAND, SOLAR AND WIND POWERED ENERGY DEVICES,
POLLUTION CONTROL DEVICES, PRORATED ABSOLUTES, AND NOMINAL VALUE PERSONAL
PROPERTY.
The City Council has the option, on an annual basis, to increase or decrease certain exemptions presently
being claimed by property owners in Fort Worth. These "local option"exemptions include:
el"01 1. GENERAL RESIDENCE HOMESTEAD EXEMPTION- exemption of not less than $5,000 and not
to exceed 20 percent of appraised value (will remain at current level of 20 percent for Fort Worth citizens
unless other action is taken by City Council prior to May 1.)
2. SENIOR CITIZEN HOMESTEAD EXEMPTION - in addition to the General Residence Homestead
exemption, for the aged 65 or older property owner, an exemption of$3,000 of appraised value or larger,
if larger amount is established by the governing body or by voters (will remain at current level of$40,000
unless revoked or increased by City Council.)
3. DISABLED HOMESTEAD EXEMPTION - exempts not less than $3,000 of assessed value for the
homestead of disabled property owners, who are 100 percent disabled and unable to work due to their
disability as determined by Social Security standards and confirmed by a physician (will remain at current
level of$40,000 unless amended by the City Council prior to May 1.)
4. HISTORIC SITES EXEMPTION - exemption of part or all of assessed value of property designated
by the Texas Historical Commission or local governing body as an exempt historical site. (Practice by
Fort Worth City Council has been to exempt increase in value resulting from renovation or preservation of
a designated historical site - each site is presented to Council on an individual basis.)
5. TRANSITIONAL HOUSING FOR INDIGENT PERSONS - exempts residential property owned by the
United States or an agency of the United States and used to provide transitional housing for the indigent
under a program operated or directed by the U.S. Department of Housing and Urban Development. (The
Community Enrichment Center, Open Arms Home, Inc., and Women's Haven of Tarrant County last
participated in this program in 1997. All program houses have been purchased outright by the non-profit
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8308
March 27, 2001
dA,0Te To the Mayor and Members of the City Council
Page 2 of 4
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SUBJECT: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES
organizations. The organizations are receiving a total tax exemption based on another area of tax law and
no longer require City Council approval.)
A comparison of various tax exemptions in selected Texas cities is outlined below:
RESIDENCE HOMESTEAD EXEMPTIONS
Freeport Transitional
General Sr. Citizen Disabled Exemption Hous
Arlington 20% $50,000 $50,000 yes yes
Austin none $51,000 $51,000 yes no
Dallas 20% $64,000 $64,000 yes no
El Paso none $15,000 $15,000 yes yes
Fort Worth 20% $40,000 $40,000 yes yes
Houston 20% $34,000 $34,000 no no
San Antonio none $60,000 none yes yes
The average value of a single-family residence in Fort Worth is $66,418 for the 2000 tax year. Since the 2000
tax rate is $0.875/$100 value, the impact the various optional exemptions have on property with an average
value, as well as property of greater and lesser values, is listed below:
2000 City Taxes on a House with a Value of
Exemptio $66,418 $30,000 $80,000
No exemption $581.16 $262.50 $700.00
General homestead 464.93 210.00 560.00
Sr. Citizen w/general homestead 114.93 -0- 210.00
Disabled homestead* 114.93 -0- 210.00
*Homeowner cannot claim both Senior Citizen and Disabled exemption.
The amounts of assessed value and tax revenue lost due to exemptions are presented on the following tables:
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ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No- 8308
March 27, 2001
To the Mayor and Members of the City Council
Page 3 of 4
rira
SUBJECT: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES
ASSESSED VALUE LOST TO EXEMPTIONS
FY 1999-00 FY 2000-01
Total assessed value: $22,095,655,060 $24,702,811,370
Value lost to exemptions:
general residence homestead 1,260,702,624 1,417,767,833
senior citizen homestead 743,044,304 769,727,718
agriculture 357,173,988 380,275,676
freeport goods 1,199,492,810 1,684,086,318
disabled residence homestead 52,454,813 59,551,117
scenic land 5,124,103 5,789,310
disabled veterans 28,840,787 28,889,226
historic sites 25,787,188 21,433,045
solar/wind energy devices 13,886 13,886
abatements 426,858,253 530,719,609
pollution control devices 6,204,821 5,275,154
foreign trade zone 200,664,509 47,924,125
prorated absolute 3,992,694 3,616,762
personal property nominal value 171,576 171,471
Total value lost to exemptions 4,310,526,356 4,955,241,250
Net assessed value (as of September) $17,785,128,704 $19,747,570,120
*Note: Nokia did not file for a foreign trade zone exemption due to massive inventory reductions.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 8308
March 27, 2001
To the Mayor and Members of the City Council
Page 4 of 4
SUBJECT: AD VALOREM TAX EXEMPTION POLICIES AND PRACTICES
REVENUE LOST TO EXEMPTIONS
FY 1999-2000 FY 2000-01
General residence homestead* $11,157,218 $12,405,468
Senior citizen homestead* 6,575,942 6,735,117
Agriculture 3,160,990 3,327,412
Freeport goods 10,615,511 14,735,755
Disabled residence homestead* 464,225 521,072
Scenic land 45,348 50,656
Disabled veterans 255,241 252,781
Historic sites* 228,217 187,539
Solar/wind energy devices 123 123
Abatements* 3,777,696 4,643,797
Pollution control devices 54,913 46,158
Foreign trade zone 1,775,881 419,336
Prorated absolute 35,335 31,647
Personal property nominal value 1,518 1,500
Total revenue lost to exemptions $38,148,158
*Discretionary
Property owners have until April 30'h to apply for the various property tax exemptions currently offered by
the City for the 2001 tax year.
The last day the City Council may change the various local option homestead exemptions in order to impact
the FY 2001-02 budget is April 30, 2001. Staff is available to provide additional information if the City
Council should require it.
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Gary Jackson
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS