LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 4, 1997
         
         
      TO: Honorable Bill Ratliff, Chair            IN RE:  Senate Bill No. 1048, Committee Report 1st House, 
as amended
          Committee on Finance                              By: Truan
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1048 ( relating 
to exempting from ad valorem taxation property owned by certain 
organizations constructing, repairing, and providing housing 
for low-income and moderate-income persons) this office has 
detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1048-Committee Report 1st House, as amended
         
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.  Based 
on the state's school funding formulas, a reduction in taxable 
values could result in an increase in the cost of state aid 
for public education.
         

         
 
FISCAL ANALYSIS
The bill would amend Chapter 11 of the Tax 
Code to create a new property tax exemption for community housing 
development organizations.

A community housing development 
organization would be entitled to a property tax exemption on 
its real and personal property under certain circumstances. 
 The bill would require the organization to be a community housing 
development organization, as defined by federal law and meet 
the requirements of a charitable organization under Sec. 11.18 
(e) and (f).

The organization would be required to engage 
exclusively in building or repairing housing and selling or 
renting that property without profit to low or moderate income 
persons.  The property could not be exempt from property taxation 
for more than three years after acquisition by the organization, 
unless rented without profit to low- or moderate-income persons. 
 The property tax exemption also would extend to tangible personal 
property used in building, repairing, selling, or renting real 
property owned by the organization.

The bill would take effect 
January 1, 1998.
          
LOCAL
There would be some revenue loss to local governments 
if organizations that would not otherwise qualify for existing 
property tax exemptions qualified under the proposed exemption. 
 The amount of any loss to local governments would depend on 
the number of organizations qualifying and the value of real 
and tangible personal property owned and used exclusively as 
required by the bill.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,RR ,BR