LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 12, 1999
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1461 by Cain (relating to the calculation of a
residence homestead exemption from ad valorem taxation
and the limitation of school taxes on the homestead of
an elderly person if the owner of the homestead
qualifies for the exemption or limitation after the
beginning of a tax year), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Fundsfor *
* SB1461, As Engrossed: $0 through the biennium ending August 31, *
* 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $0 *
* 2001 0 *
* 2002 (2,562,000) *
* 2003 (2,639,000) *
* 2004 (2,718,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Revenue Revenue Revenue *
* to General Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* Revenue Fund School Districts Cities Counties *
* 0001 *
* 2000 $0 $0 $0 $0 *
* 2001 0 (3,032,000) (372,000) (515,000) *
* 2002 (2,562,000) (561,000) (383,000) (530,000) *
* 2003 (2,639,000) (578,000) (395,000) (546,000) *
* 2004 (2,718,000) (595,000) (406,000) (563,000) *
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Fiscal Analysis
The bill would amend Section 11.42 of the Tax Code to provide that
persons turning 65 years of age and persons already 65 years of age who
acquired a homestead anytime during the year would qualify for the
homestead exemption for the entire tax year.
The bill would take effect January 1, 2000 and only would apply to ad
valorem taxes imposed for a tax year that began on or after that date.
Methodology
To determine the impact of the bill relative to the 65-and-over homestead
exemption provisions, the Comptroller's staff estimated the number
persons who would qualify for the homestead exemption in fiscal 2000
through 2004. The value loss for cities, counties, and school districts
was calculated using value information reported to the Comptroller's
Property Tax Division by taxing units. The calculated loss was reduced
by 50 percent, recognizing current proration provisions.
The Comptroller's staff trended 1998 estimated taxable value losses to
school districts, cities, and counties forward through fiscal 2004 and
applied estimated average school district, city, and county tax rates to
calculate estimated local levy losses.
The estimate includes losses attributable to mandatory and optional
homestead exemptions.
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. The cost to the state was estimated by assuming
that the state would reimburse school districts for their levy losses
attributable to mandatory homestead exemptions, after a one-year lag.
Local Government Impact
The fiscal impact on local taxing units is reflected in the above table.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, BB, BR