Bill Summary – FastDemocracy

HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #:     HJR 159 Homestead Tax Exemption for Certain Senior, Low-income, Long-term residents
SPONSOR(S): Borrero, Garcia and others
TIED BILLS: CS/HB 161   IDEN./SIM. BILLS: SJR 126
    REFERENCE                                                   ACTION                  ANALYST            STAFF DIRECTOR or
                                                                                                           BUDGET/POLICY CHIEF
    1) Ways & Means Committee                                   24 Y, 0 N               McCain             Aldridge
    2) Local Administration, Federal Affairs & Special          15 Y, 0 N               Mwakyanjala        Darden
       Districts Subcommittee
    3) State Affairs Committee                                  18 Y, 0 N               Mwakyanjala        Williamson
                                               SUMMARY ANALYSIS
The Florida Constitution requires all property to be assessed at just value (market value) as of January 1 of
each year for purposes of ad valorem taxation. Ad valorem assessments are used to calculate property taxes
that fund counties, municipalities, district school boards, and special districts. The taxable value against which
local governments levy tax rates each year reflects the just value as reduced by applicable limitations and
exemptions allowed by the Florida Constitution. One such exemption is on the first $25,000 of assessed value
of a homestead property, which is exempt from all taxes. A second homestead exemption is on the value
between $50,000 and $75,000, which is exempt from all taxes other than school district taxes.
The joint resolution amends art. VII, s. 6 of the Florida Constitution, revising the just value limitation for the
existing additional homestead exemption for low-income seniors who have maintained permanent residence
on a property for at least 25 years. The just value limit is increased from $250,000 to $300,000.
The joint resolution provides for the proposed constitutional amendment to be submitted to the electors of
Florida for approval or rejection at the next general election or at an earlier special election specifically
authorized by law for that purpose.
The Constitution requires 60 percent voter approval for passage of a proposed constitutional
amendment. If approved by the voters, this amendment will take effect January 1, 2025.
The Revenue Estimating Conference estimated that the joint resolution will not have an impact on local
government revenue as the amendment it proposes is subject to voter approval and is not self-executing.
A joint resolution proposing an amendment to the State Constitution must be passed by three -fifths of
the membership of each house of the Legislature.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0159e.SAC
DATE: 3/23/2023
                                                      FULL ANALYSIS
                                               I. SUBSTANTIVE ANALYSIS
    A. EFFECT OF PROPOSED CHANGES:
        Present Situation
        Ad Valorem Taxation
        The Florida Constitution reserves ad valorem taxation to local governments and prohibits the state from
        levying ad valorem taxes on real and tangible personal property. 1 Ad valorem taxes are annual taxes
        levied by counties, cities, school districts, and certain special districts. These taxes are based on the
        just or fair market value of real and tangible personal property as determined by county property
        appraisers on January 1 of each year.2 The just value may be subject to limitations, such as the “save
        our homes” limitation on homestead property assessment increases. 3 The value determined after
        accounting for applicable limitations is known as the assessed value. Property appraisers then
        calculate taxable value by reducing the assessed value in accordance with any applicable exemptions,
        such as the exemptions for homestead property.4 Each year, local governing boards levy millage rates
        (i.e. tax rates) on taxable value to generate the property tax revenue contemplated in their annual
        budgets.
        Property Tax Assessment Limitations Exemptions Available to Seniors
        Homestead Exemption
        Every person having legal and equitable title to real estate who maintains a permanent residence on
        the real estate (homestead property) is eligible for a $25,000 tax exemption applicable to all ad valorem
        tax levies, including levies by school districts.5 An additional $25,000 exemption applies to homestead
        property value between $50,000 and $75,000. This additional exemption does not apply to ad valorem
        taxes levied by school districts.
        Additional Homestead Exemption for Low-income Seniors
        The Florida Constitution authorizes the Legislature to allow counties and municipalities, by general law,
        to grant an additional homestead exemption to persons aged 65 or older with a household income that
        does not exceed $20,000 (low-income seniors).6 The income limitation is adjusted each year to reflect
        changes in the consumer price index.7 For 2023, the income threshold for this exemption is $35,167. 8
        An owner must hold legal or equitable title to the property and maintain it as his or her permeant
        residence to qualify for the exemption.9 If title to the property is held jointly with a right of survivorship,
        the exemption may be claimed if one of the owners is residing on the property and would otherwise
        qualify.10
1 Art. VII, s. 1(a), Fla. Const.
2 Art. VII, s. 4, Fla. Const.
3 S. 193.155(1), F.S.
4 S. 196.031, F.S.
5 Art. VII, s. 6(a), Fla. Const.
6 Art. VII, s. 6(d), Fla. Const.
7 S. 196.075(3), F.S.
8 Fla. Dept. of Revenue, Two Additional Homestead Exemptions for Persons 65 and Older (Revised January 2023), available at
http://floridarevenue.com/property/Documents/AdditionalHomesteadExemptions.pdf (last visited Mar. 10, 2023).
9 Art. VII, s. 6(d), Fla. Const.
10 S. 196.075(8), F.S.
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DATE: 3/23/2023
          Under this section of the Constitution, a county or municipality may grant either (or both) of the
          following exemptions:
                An additional homestead exemption of up to $50,000 for all low-income seniors;11 or
                The entire assessed value of the homestead property, if the just value is less than $250,000 in
                  the year the low-income senior owner applies for the exemption, and the owner has maintained
                  a permanent residence on the property for at least 25 years. 12
          The exemption authorized under this section only applies to ad valorem taxes levied by the county or
          municipality granting the exemption.13 This includes taxes levied by dependent special districts or
          municipal service taxing units of the government granting the exemption.
          Effect of Proposed Changes
          The joint resolution proposes an amendment to art. VII, s. 6 of the Florida Constitution, revising the just
          value limitation for the existing additional homestead exemption for low-income seniors who have
          maintained permanent residence on a property for at least 25 years. The just value limit for the property
          in the first year the owner qualifies and applies for the exemption is increased from $250,000 to
          $300,000.
          The joint resolution must pass each chamber with a three-fifths vote before it may be placed on the
          ballot. Thereafter, it must be approved by at least 60 percent of the electors voting on the measure.
          If approved, the amendment will take effect January 1, 2025.
     B. SECTION DIRECTORY:
          Not applicable.
                                 II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
     A. FISCAL IMPACT ON STATE GOVERNMENT:
          1. Revenues:
               None.
          2. Expenditures:
               Art. XI, s. 5(d) of the Florida Constitution requires publication of a proposed amendment in a
               newspaper of general circulation in each county. The Division of Elections within the Department of
               State must advertise the full text of the amendment twice in a newspaper of general circulation in
               each county where the amendment will appear on the ballot. The Division must also provide each
               supervisor of elections with either booklets or posters displaying the full text of each proposed
               amendment.14
     B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
          1. Revenues:
               The Revenue Estimating Conference adopted a zero impact since this is a joint resolution
               proposing an amendment to be submitted to the voters, which is not self-executing.
11 Art. VII, s. 6(d)(1), Fla. Const.
12 Art. VII, s. 6(d)(2), Fla. Const.
13 S. 196.075(4)(b), F.S.
14 S. 101.171, F.S.
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DATE: 3/23/2023
       2. Expenditures:
            None.
   C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
       None, because the amendment proposed by the joint resolution is subject to voter approval and is not
       self-executing.
   D. FISCAL COMMENTS:
       None.
                                                III. COMMENTS
   A. CONSTITUTIONAL ISSUES:
       1. Applicability of Municipality/County Mandates Provision:
           Not applicable. The mandates provision of the state Constitution does not apply to a joint resolution
           proposing to amend the state Constitution.
       2. Other:
           None.
   B. RULE-MAKING AUTHORITY:
       None.
   C. DRAFTING ISSUES OR OTHER COMMENTS:
       None.
                           IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
   None.
STORAGE NAME: h0159e.SAC                                                                                   PAGE: 4
DATE: 3/23/2023