LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 21, 1995 TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 1622 Committee on Ways & Means By: Jackson House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 1622 (Relating to the exemption of a residence homestead from ad valorem taxation by a school district.) this office has determined the following: The bill would allow voters within a school district to adopt, at an election, a percentage homestead exemption for school district taxable values. A school board would be required to call an election on petition of at least 20 percent of the voters who voted in the preceding election of the district. Voters would be allowed to adopt an exemption if the school board has not already done so, and could increase or decrease the amount of an adopted exemption. The school board would be prohibited from increasing or decreasing the amount of an exemption adopted by the voters. The bill would be effective January 1, 1996, contingent on the passage of a constitutional amendment, such as HJR 75 or a similar Joint Resolution. In 1994, school districts reported to the Comptroller a total taxable value loss of $9,486,305,918 for local option percentage homestead exemptions. Voter approval of, or increases in, existing percentage homestead exemptions would result in a revenue loss to school districts, unless tax rates are increased in those districts to offset any value loss. The Comptroller cannot estimate the number of additional exemptions nor the amount of school district revenue losses as a result of this bill. Passage of this bill would not cause a reduction in school district taxable values reported to the Commissioner of Education by the Comptroller. The Comptroller does not recognize local option exemptions in their annual property value certification. No fiscal implication to the State is anticipated. The fiscal implication to units of local government cannot be determined. Source: Comptroller of Public Accounts LBB Staff: JK, BR, DF