LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 27, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2601  by Coleman (Relating to the ad valorem taxation
               of certain possessory interests in certain municipal
               property open to the public.), As Engrossed
  
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*  Adoption of this bill could result in a reduction in school           *
*  district taxable values, resulting in an increase in state public     *
*  education costs.                                                      *
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The bill would amend Section 25.07 of the Tax Code to define "public
facility" relative to the classes of leaseholds or possessory interests
that may not be listed in the appraisal roll to include:  convention
centers, visitor centers, sports facilities with permanent seating,
concert halls, arenas, or stadiums.  The facilities would have to be
owned by a city or town, serve a public purpose, and provide open access
to the public.

Because the state is constitutionally prohibited from imposing a state
property tax, there would be no direct fiscal impact on the state;
however, Section 403.302 of 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. Passage of this bill could cause a
change in school district taxable values reported to the Commissioner of
Education by the Comptroller.  The Texas Education Agency has estimated
that as a general rule, a decrease of $1 billion in property valuation
would increase state aid requirements by approximately $14 million per
year
  
Local Government Impact
  
Passage of the bill could cause a of reduction in tax revenues to local
units of government.  The amount of reduction would depend on the change
in the taxable values in taxing units where the appraisal districts
currently list leaseholds or possessory interest of the types of
facilities addressed in this bill in their current tax rolls.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, SD, BR