Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                              April 9, 2001
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  SB1007  by Barrientos (Relating to the exemption from ad
               valorem taxation of property owned by charitable
               organizations that provide child care services.), As
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  SB1007, As Introduced:  negative impact of $(1,495,099) through       *
*  the biennium ending August 31, 2003.                                  *
The bill would amend Section 11.18 of the Tax Code to include in the
statutory list of charitable organizations eligible for property tax
exemptions, certain organizations providing child-care services.

The bill would exempt from property taxation the real and personal
property owned by a child-care facility if the organization were exempt
from federal income taxation under Section 501(a), Internal Revenue Code
of 1986, by  being listed as an exempt entity under Section 501(c)(3) of
that code.
General Revenue-Related Funds, Five-Year Impact:
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2002                                   $0  *
          *       2003                          (1,495,099)  *
          *       2004                          (1,539,952)  *
          *       2005                          (1,586,150)  *
          *       2006                          (1,633,735)  *
All Funds, Five-Year Impact:
*Fiscal      Probable        Probable        Probable        Probable     *
* Year    Savings/(Cost)     Revenue         Revenue         Revenue      *
*          from General   Gain/(Loss) to  Gain/(Loss) to  Gain/(Loss) to  *
*          Revenue Fund  School Districts     Cities         Counties     *
*              0001                                                       *
*  2002                $0    $(1,495,099)      $(481,697)      $(425,655) *
*  2003       (1,495,099)        (44,853)       (496,148)       (438,425) *
*  2004       (1,539,952)        (46,199)       (511,032)       (451,578) *
*  2005       (1,586,150)        (47,585)       (526,363)       (465,125) *
*  2006       (1,633,735)        (49,012)       (542,154)       (479,079) *
Fiscal Analysis
The Comptroller's office contacted the Dallas County Central Appraisal
District (CAD), the Harris County CAD, the Tarrant County CAD, the Bexar
County CAD, and the Travis County CAD.  They indicated that for the 2000
tax year, a taxable value of $475,480,059 was attributable to real
property owned by private child day-care centers.
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, the percent of non-profit facilities, (19.6%) was
applied to the values reported by the above appraisal districts.  Based
on this percentage, approximately $93 million in taxable value could 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 potential 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 is reflected in the above
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, BR