LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              March 19, 1999
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1218 by Craddick (relating to the exemption of personal
               property from ad valorem taxation), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Fundsfor     *
*  HB1218, As Introduced:  $0 through the biennium ending August 31,     *
*  2001.                                                                 *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                                   $0  *
          *       2001                                    0  *
          *       2002                      (2,351,400,000)  *
          *       2003                      (2,359,200,000)  *
          *       2004                      (2,359,200,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***************************************************************************
*Fiscal      Probable        Probable        Probable        Probable     *
* Year    Savings/(Cost)     Revenue         Revenue         Revenue      *
*        from Foundation   Gain/(Loss)     Gain/(Loss)     Gain/(Loss)    *
*          School Fund     from General    from School     from Cities    *
*              0193       Revenue Fund*     Districts                     *
*                              0001                                       *
*  2000                $0              $0              $0              $0 *
*  2001                 0               0 (1,967,400,000)   (756,553,000) *
*  2002   (1,967,400,000)   (384,000,000)    (34,500,000)   (798,564,400) *
*  2003   (2,001,000,000)   (358,200,000)       (400,000)   (857,286,700) *
*  2004   (2,001,000,000)   (358,200,000)       (400,000)   (900,151,000) *
***************************************************************************
  

* Loss in Chapter 41 recapture revenue.
  
         *****************************************************
         * Fiscal Year    Probable Revenue Gain/(Loss) from   *
         *                            Counties                *
         *      2000                                       $0 *
         *      2001                            (661,443,500) *
         *      2002                            (698,173,400) *
         *      2003                            (749,913,500) *
         *      2004                            (786,989,200) *
         *****************************************************
  
Fiscal Analysis
  
The bill would exempt all personal property in Texas from ad valorem
(property) taxation.

The bill would take effect January 1, 2000, contingent on the passage of
a constitutional amendment authorizing the exemption.
  
  
Methodology
  
School Finance

To estimate the fiscal impact on school finance the Legislative Budget
Board's Public Education Team modeled the exemption of personal property
by school district and the state's funding formulas.

Model analysis is based on student enrollment data with an annual growth
of approximately 2 percent, as well as tax rate and district property
value assumptions.


Local Government Taxing Units

The estimate for local government taxing units are based on projections
provided by the Comptroller of Public Accounts.
  
  
Local Government Impact
  
The fiscal impact on local taxing units is reflected in the above table.
  
  
Source Agencies:   
LBB Staff:         JK, BB, BR