LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 9, 1997 TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 2293 Committee on Ways & Means By: Oliveira House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2293 ( Relating to the listing on an ad valorem tax appraisal roll of certain possessory interests in exempt property.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2293-As Introduced Section 403.302 of the Government Code requires the Comptroller to conduct a property value study to determine the total taxable value for each school district. Total taxable value is an element in the state's school funding formula. Passage of this bill could cause a reduction in school district taxable values reported to the Commissioner of Education by the Comptroller. To the extent that currently taxable property was removed from local school district tax rolls, the state could experience an increase in the cost of public education base on current funding formulas. FISCAL ANALYSIS The bill would amend Section 25.07 of the Tax Code to provide that leaseholds or other possessory interests in certain exempt property could not be listed by an appraisal district and would therefore be exempt from ad valorem taxation. The property could not be listed if it was owned by an incorporated city or town, a public port, or a navigation district and was used as a facility or aid incidental or useful in the operation or development of a port or waterway or in aid of navigation-related commerce. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect 90 days after adjournment. LOCAL The bill could result in a revenue loss to local governments. The amount of loss would depend on the number of entities qualifying for the new exemption and the value of the leaseholds or possessory interests exempted. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,BR