LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
                                Revision 1
  
                              March 23, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1731  by King, Tracy (Relating to the exemption from ad
               valorem taxation for freeport goods.), As Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Sections 11.251 and 11.43 of the Tax Code to allow
additional time for property owners to deliver requested information to
the chief appraiser concerning an application for a freeport exemption.
An owner also would be allowed to file a late freeport exemption
application up until the Appraisal Review Board approved the appraisal
records.  A late application would be subject to the same 10 percent
penalty.

There could be some loss of taxable value associated with the passage of
this bill, depending on the number of applicants who would provide late
information and file late applications and the value of the subject
property.  There also could be a gain of local revenue resulting from
the proposed penalties associated with late information submissions and
late exemption applications.  In 1999, $5.7 billion of taxable property
qualified as freeport property resulting in a tax levy loss to school
districts of $82.7 million, which under the current school funding
formula is passed on to the state after a one year lag.  While the
provisions of this bill provide additional time for providing
information, it does not create significant new freeport exemption
opportunities and should not result in a significant fiscal impact on
the state or units of local government.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, BR