LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION

April 15, 2013

TO:	Honorable Jimmie Don Aycock, Chair, House Committee on Public Education
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB3776 by Isaac (Relating to consideration of payments made in lieu of ad valorem taxes.), As Introduced

The fiscal implications of the bill cannot be determined at this time due to insufficient data regarding the payments in lieu of taxes made by property owners described by the provisions of the bill. However, it would have the effect of increasing payments remitted to the state by school districts required to reduce property wealth per student under the provisions of Education Code, Chapter 41, which would produce a savings to General Revenue Funds. The amount of savings cannot be determined.

The bill would require that payments in lieu of taxes (PILTs) made to school districts by a property owner exempt from ad valorem property taxes who receives low income housing tax credits be included in calculations of local maintenance and operations tax revenue in the determination of the cost of attendance credits to a district required to reduce its property wealth per student pursuant to Education Code, Chapter 41.

The value of PILTs made by property owners that would qualify for inclusion in the calculation of the cost of attendance credits under the provisions of the bill is unknown, and therefore the fiscal impact of the provision cannot be estimated at this time. However, an increase in the amount of maintenance and operations tax revenue for a district subject to the provisions of Education Code, Chapter 41, would tend to increase the cost of attendance credits purchased (recapture) from the state, which would reduce the cost of the state's obligations under the Foundation School Program paid from General Revenue Funds.

Local Government Impact

School districts subject to the provisions of Education Code, Chapter 41, would be required to include the value of PILTs made on certain properties described by the bill as if it were part of the district's maintenance and operations tax revenue for purposes of determining the cost of attendance credits. Inclusion of these funds in M&O tax revenue would tend to increase the cost of attendance credits a school district is required to purchase. The fiscal impact to affected school districts cannot be determined.

Source Agencies:

304 Comptroller of Public Accounts, 332 Department of Housing and Community Affairs, 701 Central Education Agency

LBB Staff:

UP, JBi, JSc