LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 14, 1997
TO: Honorable Paul Sadler, Chair IN RE: Senate Bill No. 841, Committee Report 2nd House, Substituted
Committee on Revenue and Public Education Funding By: Cain
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB841 ( relating
to ad valorem taxation.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB841-Committee Report 2nd House, Substituted FN Revision 1
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill is an omnibus property tax bill. It bill would make
numerous changes to the Tax code in the area of appraisal district
administration, appraisal methods, transfer of over-65 tax freeze
and limits in the growth in appraised value of residential homesteads
and limits on the frequency of value increase.
Methodolgy
The bill would allow persons 65 years of age or older who move
from one homestead to another to continue a tax freeze that
they would otherwise loss under current law, creating a cost
to the state. A mobility factor was estimated by dividing the
national number of 65 and over homesteads moving within their
state by the total US number of 65 and over homesteads. The
mobility factor times the number of 65 and over homesteads in
Texas equals the number of Texas 65 and over homesteads moving.
The number of Texas 65 and over homesteads moving times the
average freeze value loss times the 1996 average tax rate equals
the yearly levy loss from movers. The levy loss was trended
over the projection period. Each year's levy loss, net of 65
and over deaths is cumulative. The school funding formula would
reimburse school districts after a one-year lag, resulting in
a state cost and a corresponding reduction in the cost to school
districts.
The other provisions of the bill would also result
in increased cost to the state and units of local government.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable Revenue
Gain/(Loss) from Gain/(Loss) to
General Revenue School Districts
Fund
0001 LCL-SCHOOL
1998 $0 $0
1998 0 (49,500,000)
2000 (49,500,000) (14,400,000)
2001 (63,900,000) (13,800,000)
2002 (77,700,000) (12,700,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 (49,500,000)
2001 (63,900,000)
2002 (77,700,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Source: Agencies:
LBB Staff: JK ,RR ,JD ,BR