LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                               May 10, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1940  by Bonnen (Relating to the proration of the taxes
               imposed on a residence homestead in a year in which a
               residence homestead exemption for an elderly person
               terminates.), As Engrossed
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Sections 26.10 and 26.112 of the Tax Code to require
proration of a 65-and-over homestead exemption in situations where the
over-65 owner (as of January 1 of the tax year) qualified a subsequent
property for a residence homestead exemption during the same year.  In
the event a 65-and-over homestead exemption terminated during the tax
year, and the 65-and-over owner did not qualify for another homestead in
the same year, the impact of the exemption would remain in effect for the
entire tax year.

The bill would allow the value reduction for a 65-and-over homestead
exemption to remain in effect for the entire tax year in those instances
where under current law the exemption would be prorated.  In 1999,
1,015,010 over-65 exemptions were granted.  If 2 percent of those
qualified for the over 65 exemption met the provisions of the bill, the
amount of potential loss would be approximately $1.5 million per year.
When compared  to the 1999 school district tax levy of $12.0 billion,
this potential loss would be insignificant.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, SD, BR