LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 2, 2001 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HJR80 by Uher (Proposing a constitutional amendment to exempt from ad valorem taxation boats and other equipment used primarily in the commercial taking or production of fish, shrimp, shellfish, or other marine life as food for human consumption.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HJR80, As Introduced: negative impact of $(558,844) through the * * biennium ending August 31, 2003. * ************************************************************************** General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(80,000) * * 2003 (478,844) * * 2004 (493,210) * * 2005 (508,006) * * 2006 (523,246) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *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 $(80,000) $(478,844) $(154,276) $(136,327) * * 2003 (478,844) (14,365) (158,904) (140,417) * * 2004 (493,210) (14,796) (163,671) (144,630) * * 2005 (508,006) (15,240) (168,581) (148,968) * * 2006 (523,246) (15,697) (173,639) (153,437) * *************************************************************************** Fiscal Analysis The resolution would amend Article VIII, Section 19a of the Texas Constitution to exempt from property taxation boats and other equipment used primarily in the commercial taking or production of fish, shrimp, shellfish, or other marine life as food for human consumption. Passage of the proposed amendment would authorize the Legislature to provide for the administration of exemptions and to provide eligibility limitations for an exemption. Methodology The Comptroller's office has indicated that passage of this resolution would result in an undetermined revenue loss to local units of government because commercial fishing boats and equipment are currently taxable. The Comptroller's Property Tax Division does not receive or maintain information from appraisal districts or taxing units that would be helpful in determining the impact of this bill on units of local government. The LBB staff contacted a sample group of coastal appraisal districts to obtain data on the potential fiscal impact of the resolution. Ken Wright, Chief Appraiser of Galveston Central Appraisal Districts reported that the district would lose $14.7 million of taxable value. Michael A. Amezquita, Chief Appraiser of Cameron Central Appraisal Districts reported that the district would lose $11.9 million of taxable value. Other districts reported smaller valuation losses. Though it is not known how many appraisal districts would experience a loss in taxable value, this analysis reflects the amounts reported in the above sample to illustrate the potential fiscal impact on the state and units of local government. These amounts were 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. The cost to General Revenue in fiscal year 2002 reflects the cost to the state to publish the resolution. Local Government Impact The fiscal impact on units of local government is reflected in the above table. Source Agencies: 307 Secretary of State, 304 Comptroller of Public Accounts LBB Staff: JK, SD, WP, BR