Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                              April 12, 2001
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  HB2416  by Brown, Betty (Relating to limiting the amount
               of county or municipal ad valorem taxes that may be
               imposed on the residence homesteads of the elderly and
               their surviving spouses.), As Introduced
*  No significant fiscal implication to the State is anticipated.        *
The bill would add Section 11.261 to the Tax Code to extend the
65-and-over residence homestead property tax freeze to cities and
counties on a local option basis, in the same format as the current
school tax freeze.

The bill would take effect January 1, 2002, contingent on passage of a
constitutional amendment to permit a city or county to establish a
property tax freeze on residence homesteads of the elderly.

Note:  Counties or cities would not be reimbursed or "held harmless" for
exemption costs by the state.
Local Government Impact
The proposed freeze is similar to the existing mandatory freeze
applicable to school district property taxes.  Cities and counties
choosing to adopt a property tax freeze for 65-and-over homestead owners
would experience an undetermined loss of local property tax revenue.  The
amount of such loss would depend on the number of entities adopting the
limitation, the number of 65-and-over recipients, and the appraised value
of those recipients' homesteads.

Note:  Based on the Comptroller's 1999 Property Value Study findings,
approximately $19 billion in property value was attributable to the
mandatory school district property tax freeze.   This amounted to a
school tax levy loss of approximately $275.9 million, or 2.3 percent of
total 1999 school tax levies.  If all cities and counties adopted the
freeze, and all experienced a similar percent reduction in tax levies as
school districts, they would have the potential of losing $74.6 million
for cities and $68.4 million for counties.
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, WP, BR