LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 23, 1997 TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 1880 Committee on Finance By: Barrientos Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1880 ( Relating to exempting from ad valorem taxation property used to provide transitional shelter or housing to homeless persons who are military veterans or the dependents or survivors of military veterans.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1880-As Introduced Based on current law funding formulas, a reduction in school district taxable values could increase the cost of state funded public education. FISCAL ANALYSIS The bill would amend Chapter 11 of the Tax Code to provide a charitable exemption for organizations that provide transitional shelter or housing to homeless persons who are military veterans or their dependents or survivors. To be eligible, an organization would have to consist primarily of U.S. military veterans or meet the charitable organization requirements in Section 11.18(e) and (f) of the Tax Code. The exemption would apply to real and personal property owned by the organization and used exclusively for carrying out the organization's purpose. The bill would take effect January 1, 1998. METHODOLOGY There would be no direct revenue impact on the state because the state is constitutionally prohibited from imposing a state property tax. However, 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 the bill could cause a reduction in school district taxable values reported to the Commissioner of Education by the Comptroller. LOCAL The bill would result in a revenue loss to local governments. The amount of loss would depend on the number of organizations qualifying for the new exemption and the value of real and personal property exempted. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,BR