LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 13, 1999
TO: Honorable Bill Ratliff, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1462 by Cain (relating to the ad valorem taxation of
tangible personal property held or used for the
production of income), As Introduced
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* Estimated Two-Year Net Impact to General Revenue Related Fundsfor *
* SB1462, As Introduced: impact of $0 through the biennium ending *
* August 31, 2001. *
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General Revenue-Related Funds, Five-Year Impact:
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* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $0 *
* 2001 0 *
* 2002 (102,385,000) *
* 2003 (105,457,000) *
* 2004 (108,621,000) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Revenue Revenue Revenue *
* from General Gain/(Loss) Gain/(Loss) Gain/(Loss) *
* Revenue Fund from School from Counties from Cities *
* 0001 Districts *
* 2000 $0 $0 $0 $0 *
* 2001 0 (102,385,000) (30,716,000) (22,184,000) *
* 2002 (102,385,000) (3,072,000) (31,637,000) (22,849,000) *
* 2003 (105,457,000) (3,164,000) (32,586,000) (23,534,000) *
* 2004 (108,621,000) (3,259,000) (33,564,000) (24,241,000) *
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Fiscal Analysis
The bill would exempt from property taxation the first $10,000 of the
total appraised value of tangible personal property held or used for the
production of income. To receive the exemption, the owner would be
required to timely deliver a rendition statement or property report to
the chief appraiser as required by Chapter 22 of the Tax Code.
The bill would take effect January 1, 2000, contingent upon passage of a
constitutional amendment authorizing the exemption. The bill only would
apply to the imposition of ad valorem taxes for a tax year beginning on
or after the effective date.
Methodology
The Comptroller's staff, using 1998 reported school district information,
determined the number of taxable personal property accounts in the state
and multiplied that number by the proposed $10,000 exemption. The
result was then reduced to take into consideration accounts less than
$10,000 and owners of multiple personal property accounts.
The 1998 estimated taxable value losses to school districts, cities, and
counties were trended forward through 2004 and applied to estimated
average school district, city, and county tax rates to calculate the
estimated local levy losses.
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 total levy losses, after a one-year
lag.
Local Government Impact
Local units of government would have a corresponding fiscal impact, as
indicated in the table above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, BB, BR