LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 25, 1997
         
         
      TO: Honorable Tom Craddick, Chair            IN RE:  Senate Bill No. 95, 
As Engrossed
          Committee on Ways & Means                By: Patterson, Jerry
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB95 ( Relating 
to the immediate qualification for an ad valorem tax exemption 
for a church or other nonprofit organization.)) this office 
has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB95-As Engrossed
         
Under current school funding statutes, the bill could result 
in increased costs to the state in state aid for public education. 
 When calculating state aid for public education, the state 
must recognize the loss in local property value due to exemptions 
granted to qualified organizations within the school district. 
 Depending on a school district s wealth per student, this could 
result in an increased cost to state-funded public education.
         

         
 

FISCAL ANALYSIS
Section 11.42 of the Property Tax Code requires 
that eligibility for and the amount of a property tax exemption 
are determined by a claimant s qualifications on January 1. 
 A person who does not qualify for an exemption on January 1 
of any year may not receive the exemption for that year.

The 
bill would allow several types of organizations (charitable, 
cemeteries, youth development organizations, religious organizations, 
schools, miscellaneous organizations, and non profit water/wastewater 
corporations) to receive a property tax exemption immediately 
upon qualification for the exemption.  The bill would allow 
organizations that had not qualified on January 1 to pay a prorated 
tax bill based on the date that they had met the requirements 
for exemption.  Taxes would be prorated based on the number 
of days the organization qualified during the tax year.

Section 
403.302, 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.


METHODOLOGY
In 
a hypothetical school district that qualifies for both tier-one 
and tier-two state aid for public education, it would cost the 
state one dollar for each dollar of local tax revenue loss due 
to the proration formula contained in the bill.
          
LOCAL
Passage of this bill could also reduce other local taxing 
units taxable values and reduced the amount of their local tax 
levies.  Local taxing units would include Cities, Counties and 
Special Districts.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,RR ,BR