LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 26, 2001
TO: Honorable Frank Madla, Chair, Senate Committee on
Intergovernmental Relations
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB530 by Bernsen (Relating to the presumption that
certain vessels and other watercraft are located in this
state only temporarily for ad valorem tax purposes.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB530, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 (990,014) *
* 2005 (1,019,714) *
* 2006 (1,050,306) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Revenue Revenue Revenue *
* from General Gain/(Loss) Gain/(Loss) Gain/(Loss) *
* Revenue Fund from School from Cities from Counties *
* 0001 Districts *
* 2002 $0 $0 $0 $0 *
* 2003 0 (990,014) (318,966) (281,857) *
* 2004 (990,014) (29,700) (328,535) (290,313) *
* 2005 (1,019,714) (30,591) (338,391) (299,023) *
* 2006 (1,050,306) (31,509) (348,543) (307,993) *
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Fiscal Analysis
The bill would create presumptions for a particular class of personal
property relative to its use in interstate, international, or foreign
commerce, as well as such property's situs in Texas for property tax
jurisdiction purposes. A presumption that certain personal property is
in interstate or international commerce and not located in the state for
more than a temporary period could result in an undetermined amount of
property value being exempt from property taxation that would otherwise
be taxable by local units of government under current law.
The Comptroller's office contacted three coastal appraisal districts for
information relative to the bill. Orange CAD indicated that, for tax
year 2000, property of the type described in the bill was on the
appraisal roll at $60 million (producing approximately $1.2 million in
local revenue). The taxable status of that property is currently a
subject of litigation. San Patricio CAD responded that property valued
at as much as $140 million has been located in the county, but it has
always been within a federal trade zone exempt under state and federal
law. Cameron CAD cited similar instances of property located in federal
trade zones.
Methodology
To illustrate the potential fiscal impact of the bill, the property value
data obtained by the Comptroller's office for Orange County was used as
a base to project to all affected jurisdictions. The taxable value and
local average tax rate in the county were extrapolated through fiscal
year 2006 using a combined three percent growth rate in values and tax
rates.
Fiscal implications would exist for the state, school districts, and
counties. Although the exemption would take effect January 1, 2002,
school districts, counties and cities would not experience an impact
until fiscal year 2003. Under the current school finance system, there
is a relatively complete offset for school districts for their losses
after a one-year lag. The state offset would begin in fiscal 2004.
Local Government Impact
The fiscal impacts on units of local government are reflected in the
above table.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, DB, SD, WP, BR