Department of Finance and Administration
Legislative Impact Statement
Bill: HB1143 Amendment Number: S2
Bill Subtitle: TO DEFINE "HOMESTEAD" FOR PURPOSES OF THE PROPERTY TAX EXEMPTION
FOR DISABLED VETERANS, SURVIVING SPOUSES OF DISABLED VETERANS, AND MINOR
DEPENDENT CHILDREN OF DISABLED VETERANS.
----------------------------------------------------------------------------------------------------------------------------- ----------
Basic Change :
Sponsors: Rep. C. Fite and Sen. Wallace
Senate Amendment No. 2 --- HB1143-S2 (engrossed S2/28/23) amends the definition of "homestead"
by removing the additional exclusionary language added by Senate Amendment No. 1, which required
that the real property not be valued as agricultural land, pasture land, or timber land. Senate
Amendment No. 2 retains the exclusion from the definition of homestead added by Senate Amendment
No. 1, which required that the real property not be used for a commercial purpose.
In this version of the bill, “homestead” would be defined as a:
Dwelling that a disabled veteran, surviving spouse of a disabled veteran, or minor dependent child
of a disabled veteran occupies as his or her principal place of residence; and
Up to 40 acres of real property contiguous to the dwelling if the contiguous property is not being
used for a commercial purpose.
Senate Amendment No. 1 --- HB1143-S1 (engrossed S2/21/23) amends the definition of "homestead"
by limiting the tax exemption to 40 acres of real property contiguous to the homestead dwelling if the
contiguous property is not:
Being used for a commercial purpose; or
Valued as agricultural land, pasture land, or timber land.
House Amendment No. 1 --- HB1143-H1 (engrossed H1/25/23) amends the definition of "homestead"
by excluding the tax exemption from real property contiguous to the homestead if the contiguous
property is being used for a commercial purpose. HB1143-H1 also adds an effective date for
assessment years beginning on or after January 1, 2023.
Original Bill --- HB1143 creates a definition of "homestead" for the property tax exemption for a
disabled veteran, surviving spouse of a disabled veteran, or minor dependent child of a disabled
veteran under § 26-3-306. A disabled veteran who has been awarded special monthly compensation
by the Department of Veterans Affairs for the loss of, or the loss of use of, one or more limbs, for total
blindness in one or both eyes, or for service-connected 100% total and permanent disability is exempt
from payment of all state taxes on the homestead and personal property owned by the disabled
veteran. Generally, a surviving spouse and minor dependent child of a deceased disabled veteran are
also exempt from payment of all state taxes on the homestead.
HB1143 defines a homestead as: "the dwelling that a disabled veteran, surviving spouse of a disabled
veteran, or minor dependent child of a disabled veteran occupies as his or her principal place of
residence and the land contiguous to the dwelling that the disabled veteran, surviving spouse of a
disabled veteran, or minor dependent child of a disabled veteran occupies as his or her principal place
of residence."
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3/7/2023 3:48 PM 1
Department of Finance and Administration
Legislative Impact Statement
Bill: HB1143 Amendment Number: S2
Bill Subtitle: TO DEFINE "HOMESTEAD" FOR PURPOSES OF THE PROPERTY TAX EXEMPTION
FOR DISABLED VETERANS, SURVIVING SPOUSES OF DISABLED VETERANS, AND MINOR
DEPENDENT CHILDREN OF DISABLED VETERANS.
----------------------------------------------------------------------------------------------------------------------------- ----------
Revenue Impact :
No impact to state general revenue. It is uncertain whether a revenue impact to county property tax
collections would result.
Taxpayer Impact :
A definition of "homestead" would be provided for purposes of the exemption under § 26-3-306.
Resources Required :
The disabled veteran's exemption is from payment of property tax and not the assessment of property.
Any software changes would be administered by county tax collectors. Any resources required by
county tax collectors is unknown.
Time Required :
This exemption is administered by county tax collectors. Any time needed by county collectors to
implement is unknown.
Procedural Changes :
This exemption is administered by county tax collectors. Any procedural changes needed by county
collectors to implement is unknown.
Other Comments :
None.
Legal Analysis :
Senate Amendments No. 1 and 2 --- None.
House Amendment No. 1 --- HB1143-H1 (engrossed H1/25/23) amends the definition of "homestead"
by excluding the tax exemption from real property contiguous to the homestead if the contiguous
property is being used for a commercial purpose. HB1143-H1 also adds an effective date for
assessment years beginning on or after January 1, 2023.
Original Bill --- HB1143 amends § 26-3-306(a)(2) by defining the term "homestead" when applying the
exemption from payment of taxes for disabled veterans. HB1143 defines "homestead" as "the dwelling
that a disabled veteran, surviving spouse of a disabled veteran, or minor dependent child of a disabled
veteran occupies as his or her principal place of residence and the land contiguous to the dwelling that
the disabled veteran, surviving spouse of a disabled veteran, or minor dependent child of a disabled
veteran occupies as his or her principal place of residence." HB1143 does not define the term
"contiguous" which generally is defined as sharing an actual boundary, touching. Amer. Heritage Dict.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3/7/2023 3:48 PM 2
Department of Finance and Administration
Legislative Impact Statement
Bill: HB1143 Amendment Number: S2
Bill Subtitle: TO DEFINE "HOMESTEAD" FOR PURPOSES OF THE PROPERTY TAX EXEMPTION
FOR DISABLED VETERANS, SURVIVING SPOUSES OF DISABLED VETERANS, AND MINOR
DEPENDENT CHILDREN OF DISABLED VETERANS.
----------------------------------------------------------------------------------------------------------------------------- ----------
at 316 (2nd Ed.); see also Seligson v. Seegar, 211 Ark. 871, 876 (1947) ("Webster defines contiguous
as 'in actual contact; touching."). As written, HB1143 could include commercial or agricultural property
that is contiguous to a disabled veteran's homestead, which may be administered differently than the
definition of the word "homestead" in § 26-26-1122, the legislation implementing Amendment 79, which
defines "homestead" as the "dwelling of a person that is used as his or her principal place of residence
with the contiguous land, excluding all land valued as agricultural land, pasture land, or timberland."
HB1143 does not contain an effective date. HB1143 may benefit from an amendment providing that it
is effective for assessment years beginning on and after January 1, 2023.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3/7/2023 3:48 PM 3
Statutes affected: Old version HB1143 Original - 1-17-2023 12:49 PM: 26-3-306(a)
Old version HB1143 V2 - 1-25-2023 09:07 AM: 26-3-306(a)
Old version HB1143 V3 - 2-21-2023 09:29 AM: 26-3-306(a)
Old version HB1143 V4 - 2-28-2023 10:31 AM: 26-3-306(a)
HB 1143: 26-3-306(a)
Act 395: 26-3-306(a)