According to the Legislative Budget Board (LBB), the bill is not expected to have a significant fiscal impact on the state.

The proposed exemption applies to nonprofits organized exclusively for charitable, educational, and scientific purposes. The bill also allows for incidental use of the property for other purposes without losing the exemption, as long as any resulting revenue is used to support the nonprofit’s charitable mission. However, the exemption does not extend to any for-profit lessee of the property. Once granted, the exemption does not require annual reapplication.

The fiscal note indicates that the passage of HB 4580 would reduce taxable property value in Harris County, thereby decreasing associated property tax collections for local governments. Under the Education Code, part of the lost revenue from school district property taxes would be transferred to the state, but the overall impact is expected to be minimal. For local governments, the reduction in taxable value would result in higher no-new-revenue and voter-approval tax rates under Section 26.04 of the Tax Code, helping to mitigate the financial impact.

In summary, while the bill may lead to a slight decrease in local tax revenues, the LBB considers the fiscal impact on both the state and local levels to be insignificant. The limited geographical scope to Harris County and the targeted nature of the exemption contribute to the minimal fiscal implications. 

HB 4580 grants a specific ad valorem tax exemption to nonprofit organizations that promote agriculture, support youth, and provide educational support within Harris County (population of 3.3 million or more). While the bill's primary intent is to solidify the tax-exempt status of properties owned by the Houston Livestock Show and Rodeo (HLSR), it inadvertently creates a special class of nonprofit organizations that receive favorable tax treatment based solely on their location and purpose. This targeted exemption can be seen as granting special rights to specific organizations to the exclusion of others, raising concerns about equal treatment under the law.

The bill’s narrow scope contradicts the principle of Limited Government by allowing the state to grant specific exemptions that do not apply uniformly. This creates a precedent for unequal tax policy, where organizations with similar missions in other counties or with slightly different structures may not benefit from the same exemptions. This special classification undermines Individual Liberty and Free Enterprise by creating an uneven playing field where some nonprofits receive financial advantages while others do not.

To address these concerns, the bill should be amended to ensure that the tax exemption applies uniformly to all nonprofit organizations across the state that meet the charitable, educational, and scientific purpose criteria, rather than limiting it to one geographic area or specific organizations. This amendment would better align the bill with core liberty principles by fostering equal opportunity and preventing the government from selectively favoring certain entities.

Texas Policy Research recommends that lawmakers vote NO on HB 4580 unless amended as described above.

• Individual Liberty: The bill has a mixed impact on individual liberty. On one hand, it supports the liberty of nonprofit organizations, specifically the Houston Livestock Show and Rodeo (HLSR) and similar entities in Harris County, by reducing their property tax burden. This enables these organizations to continue promoting agriculture, supporting youth, and providing educational opportunities. However, the bill also restricts liberty by creating a special class of organizations that receive this tax benefit solely due to their location and purpose. This targeted approach limits the equal application of tax exemptions to other similar nonprofits elsewhere in Texas, thereby infringing on the principle that all individuals and entities should have equal rights under the law.
• Personal Responsibility: The bill indirectly supports personal responsibility by allowing organizations like HLSR to self-sustain through incidental revenue-generating activities without losing their tax-exempt status. This encourages nonprofits to take proactive measures to generate funds that support their mission rather than relying solely on donations or government assistance. However, by selectively granting this privilege to specific organizations, the bill diminishes the broader responsibility of the state to ensure fair and equal treatment of all nonprofits, regardless of their geographic location.
• Free Enterprise: The bill potentially disrupts free enterprise by giving a competitive advantage to certain nonprofit organizations in Harris County. By exempting these organizations from ad valorem taxation, it effectively lowers their operational costs compared to similar nonprofits or businesses that do not qualify for the exemption. This unequal application of tax policy could distort the local nonprofit sector and hinder fair competition, especially when for-profit entities leasing from exempt nonprofits do not receive the same tax benefits.
• Private Property Rights: The bill upholds private property rights for specific nonprofits by allowing them to retain ownership of tax-exempt property even when the property is used incidentally for revenue-generating purposes, provided the proceeds support the nonprofit’s mission. However, this protection is not extended universally, limiting the principle's application. Moreover, the bill explicitly excludes for-profit lessees from enjoying the exemption, which preserves the integrity of the policy by ensuring that commercial enterprises do not benefit from the nonprofit's tax status.
• Limited Government: The bill reflects an effort to support a valued community institution, but its selective application raises equity and fairness concerns. The bill could be improved by broadening the eligibility criteria to include similar nonprofits statewide, thus better aligning with liberty principles of equal treatment, free enterprise, and limited government. 

• SB 2973 (Similar To)