LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 3, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3165 by Chavez (Relating to an exemption from ad
valorem taxation of property that is owned by certain
child-care facilities and is used for providing care for
children.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3165, As Introduced: negative impact of $(35,773,859) through *
* the biennium ending August 31, 2003. *
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The bill would add Section 11.33 to Chapter 11 of the Tax Code to exempt
from property taxation the real and personal property owned by a
child-care facility, day-care center, or group day-care home as defined
in the Human Resources Code. To qualify for the exemption, the property
would have to be used exclusively for children using the facility, and
it would have to be reasonably necessary for providing care for children
attending the facility.
General Revenue-Related Funds, Five-Year Impact:
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* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (35,773,859) *
* 2004 (36,847,074) *
* 2005 (37,952,487) *
* 2006 (39,091,061) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Revenue Revenue Revenue *
* to General Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* Revenue Fund School Districts Cities Counties *
* 0001 *
* 2002 $0 $(35,773,859) $(11,525,758) $(10,184,837) *
* 2003 (35,773,859) (1,073,216) (11,871,531) (10,490,382) *
* 2004 (36,847,074) (1,105,412) (12,227,677) (10,805,093) *
* 2005 (37,952,487) (1,138,575) (12,594,507) (11,129,246) *
* 2006 (39,091,061) (1,172,732) (12,972,342) (11,463,123) *
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Fiscal Analysis
The Comptroller's office reported that the Dallas Central Appraisal
District (CAD) indicated, for the 2000 tax year, a taxable value of
$114,038,030 was attributable to real property owned by private child
day-care centers. Travis CAD reported $63,358,088 in taxable value for
the 2000 tax year.
Methodology
The Texas Department of Protective and Regulatory Services reported that
there are 10,674 licensed day care facilities and 11,554 licensed
residential child care facilities in Texas, for a total of 22,228
facilities. Of this total, 4,363 are non-profit facilities. For
purposes of this analysis it was assumed that all 17,865 for-profit
facilities would qualify for exemption proposed by the bill. At an
average taxable value of $125,000, approximately $2.2 billion in taxable
value would be removed from the tax rolls. To illustrate the fiscal
impact on the state and units of local government, this base amount was
trended upward based on historical property tax levy increases to reflect
losses in future fiscal years.
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. The cost to the state was estimated by assuming
that the state would reimburse school districts for their total levy
losses, including losses for this exemption, after a one-year lag.
Local Government Impact
The fiscal impact on units of local government are reflected in the above
table.
Source Agencies: 530 Department of Protective and Regulatory
Services, 304 Comptroller of Public Accounts
LBB Staff: JK, SD, WP, BR