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 ************************************************************************** * Adoption of this bill could result in a reduction in school * * district taxable values, resulting in an increase in state public * * education costs. * ************************************************************************** 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