LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              March 13, 1999
  
  
          TO:  Honorable Paul Sadler, Chair, House Committee on Public
               Education
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2117  by Nixon, Joe (Relating to the authority of a
               school district to permit certain persons to perform
               teaching services or to provide teachers for the
               district in lieu of paying ad valorem taxes owed to the
               district), As Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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This bill creates an optional program for school districts to provide tax
credits to certain eligible taxpayers that choose to teach in lieu of
paying taxes.  The bill permits, but does not require, school boards to
allow qualified individuals to teach in lieu of taxes on their own
homestead or on a business of which the individual is an employee.

The bill specifically allows the tax credits granted under this program
to be counted as taxes collected for purposes of calculating a school
district's state aid under Texas Education Code Section 42.302.  Since
the bill explicitly directs that tax credits are to be considered tax
collections for state aid purposes, the bill would have no impact on
projected costs for state aid.

It is likely, however, that certain modifications will need to be made in
the standard accounting requirements for school districts in order to
properly account for and report the tax credits granted under this
program.  In addition, minor modifications to data collection standards
for the PEIMS system would be expected.  These changes would seem to fit
within the scope of annual/biennial maintenance, and should not require
additional staffing.
  
Local Government Impact
  
Those school districts choosing to participate would likely incur costs
associated with processing applications, properly recording individuals
in the program, verifying qualifications, coordinating information with
the tax collector for school district taxes, and monitoring and
processing contracts.
  
  
Source Agencies:   
LBB Staff:         JK, CT, RN