LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 3, 1995 TO: Honorable Ken Armbrister, Chair IN RE: Senate Bill No. 783 Committee on State Affairs By: Ratliff Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 783 (Relating to the right of a person leasing property to administrative and judicial review of a determination of the appraised value of the property for ad valorem taxation.) this office has determined the following: The bill would allow a person leasing property, who is contractually obligated to reimburse the owner for ad valorem taxes, to protest the leased property's value before the Appraisal Review Board (ARB), if the property owner does not file a protest. A lessee bringing a protest would be considered the owner of the property for purposes of the protest and would receive any notices relating to the protest. The bill would further allow the lessee to appeal an ARB determination to state district court with the same rights as the owner. The Comptroller's Property Tax Division does not receive or maintain information on property ownership and leasing arrangements. The Property Tax Division conducts an annual survey of Texas county appraisal districts. The current results published in the 1993-94 "Appraisal District Operations Survey" indicates that 436,501 taxpayer protest were filed in 1993. The number of protests potentially involving leased property cannot be determined. However, if 100,000 protest were filed at a cost to the appraisal district of $10 each, the administrative expenses of the districts would increase by $1,000,000. This expense would be passed through to the taxing units in the district, including school districts. Passage of this bill could also cause a change in school district property values. Changes in school district property wealth could have an impact on state funding for public education. The fiscal implication to the State or units of local government cannot be determined. Source: Comptroller of Public Accounts LBB Staff: JK, BR, DF