LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                                May 9, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HJR67  by Chisum (Proposing a constitutional amendment to
               extend residence homestead ad valorem tax exemptions and
               protection from forced sale to a homestead owned by a
               family-owned business.), As Engrossed
  
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*  Approval of the constitutional amendment would result in a            *
*  reduction of school district taxable values, resulting in an          *
*  increase in state public education cost.  The cost to the state       *
*  for publication of the resolution is $80,000.                         *
**************************************************************************
  
The resolution would propose an amendment to the Texas Constitution to
exempt, as a residence homestead, a person's residence that is owned by a
family-owned business.  The proposed amendment would allow for the
designation of a residence owned by a family-owned business as a
homestead for purposes of certain property taxes.

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 resolution extending residence homestead property tax
exemptions to a homestead owned by a family-owned business would cause a
reduction in school district taxable values reported to the Commissioner
of Education by the Comptroller.  There also would be some loss of
taxable value and local revenue to some local units of government
granting homestead exemptions.  The amount of such loss would depend on
the number and value of family-owned homesteads in those units.  The
Texas Education Agency has estimated that as a general rule, a
difference of $1 billion in property valuation would change state aid
requirements by approximately $14 million per year.
  
Local Government Impact
  
Local taxing units would experience similar losses in property tax
revenue due to a reduction in taxable value.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, JO, WP, BR