LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 10, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB603 by George (Relating to the treatment for school
finance purposes of school district optional homestead
exemptions.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB603, As Introduced: negative impact of $(265,400,000) through *
* the biennium ending August 31, 2003. *
* *
* 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 *
* 2002 $(128,200,000) *
* 2003 (137,200,000) *
* 2004 (146,800,000) *
* 2005 (157,000,000) *
* 2006 (168,000,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year Foundation School Fund from General Revenue Fund *
* 0193 0001 *
* 2002 $(112,000,000) $(16,200,000) *
* 2003 (119,900,000) (17,300,000) *
* 2004 (128,300,000) (18,500,000) *
* 2005 (137,200,000) (19,800,000) *
* 2006 (146,800,000) (21,200,000) *
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Fiscal Analysis
The bill amends provisions of the Education Code and the Government Code
related to the state's recognition of a portion of the optional homestead
exemption for school finance purposes.
The net effect of these changes would be to make permanent and automatic,
payments to school districts granting the optional homestead exemption.
School district taxable values would be reduced by 50 percent of the
value of the optional exemption.
The bill also strikes a reference to the repealed 42.2522 from
46.034(d), which has the effect of assuring that the allotments in
Chapter 46 (Existing Debt Allotment and Instructional Facilities
Allotment) will be computed without regard to availability of funds
other purposes.
Methodology
To determine the effects, the Texas Education Agency substituted property
values before and after adjusting for 50% of the value of the optional
homestead exemption. The analysis indicated that for fiscal year 2002,
recognition of 50% of the optional homestead increases state aid related
to the guaranteed yield (Tier 2) and debt service equalization (existing
debt allotment and the instructional facilities allotment) by about $112
million, and decreases revenue from Chapter 41 by about $16.2 million.
Local Government Impact
School districts would receive or retain additional revenue as reflected
in the state impact table above.
Source Agencies: 701 Texas Education Agency, 304 Comptroller of
Public Accounts
LBB Staff: JK, CT, PF, RN