LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION March 5, 2009 TO: Honorable Craig Estes, Chair, Senate Committee on Agriculture & Rural Affairs FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB252 by Estes (Relating to the authority of a municipality with a population of less than 10,000 to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under certain revitalization or redevelopment programs to prohibit ad valorem tax increases on the owner's property for a limited period.), As Introduced No fiscal implication to the State is anticipated. The bill would add Section 11.34 to the Tax Code to allow the governing body of a municipality with a population of less than 10,000 to call an election to allow the voters to determine whether to authorize the governing body to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under the programs administered by the Department of Agriculture, to limit property tax increases on that property. If approved by the voters, the tax officials would be required to appraise the applicable property and calculate taxes as on other property, but if the calculated tax exceeds the limitation, the tax imposed would be the amount of the tax as limited, except as otherwise determined by date limitations established in the bill. Provisions of the bill would apply only to ad valorem taxes imposed for a tax year beginning on or after the effective date of the bill. Local Government Impact A municipality that chooses to hold an election would incur costs associated with that election. It is assumed that a municipality would choose to call an election only if the municipality could absorb those costs. In addition to election costs, if the voters were to approve the proposal, the municipality would experience a loss in revenue from limiting the ad valorem taxes on the applicable property for up to six years. Revenue loss would vary depending on the number of properties affected, the appraised value of the property, and any increases in value during that period that would have otherwise resulted in increased revenue. It is assumed that a municipality would not pursue these actions unless the loss in revenue would not be significant. No significant fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JOB, WK, DB
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
March 5, 2009
TO: Honorable Craig Estes, Chair, Senate Committee on Agriculture & Rural Affairs FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB252 by Estes (Relating to the authority of a municipality with a population of less than 10,000 to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under certain revitalization or redevelopment programs to prohibit ad valorem tax increases on the owner's property for a limited period.), As Introduced
TO: Honorable Craig Estes, Chair, Senate Committee on Agriculture & Rural Affairs
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: SB252 by Estes (Relating to the authority of a municipality with a population of less than 10,000 to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under certain revitalization or redevelopment programs to prohibit ad valorem tax increases on the owner's property for a limited period.), As Introduced
Honorable Craig Estes, Chair, Senate Committee on Agriculture & Rural Affairs
Honorable Craig Estes, Chair, Senate Committee on Agriculture & Rural Affairs
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
SB252 by Estes (Relating to the authority of a municipality with a population of less than 10,000 to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under certain revitalization or redevelopment programs to prohibit ad valorem tax increases on the owner's property for a limited period.), As Introduced
SB252 by Estes (Relating to the authority of a municipality with a population of less than 10,000 to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under certain revitalization or redevelopment programs to prohibit ad valorem tax increases on the owner's property for a limited period.), As Introduced
No fiscal implication to the State is anticipated.
No fiscal implication to the State is anticipated.
The bill would add Section 11.34 to the Tax Code to allow the governing body of a municipality with a population of less than 10,000 to call an election to allow the voters to determine whether to authorize the governing body to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under the programs administered by the Department of Agriculture, to limit property tax increases on that property. If approved by the voters, the tax officials would be required to appraise the applicable property and calculate taxes as on other property, but if the calculated tax exceeds the limitation, the tax imposed would be the amount of the tax as limited, except as otherwise determined by date limitations established in the bill. Provisions of the bill would apply only to ad valorem taxes imposed for a tax year beginning on or after the effective date of the bill.
The bill would add Section 11.34 to the Tax Code to allow the governing body of a municipality with a population of less than 10,000 to call an election to allow the voters to determine whether to authorize the governing body to enter into an agreement with an owner of real property in or adjacent to an area in the municipality that has been approved for funding under the programs administered by the Department of Agriculture, to limit property tax increases on that property. If approved by the voters, the tax officials would be required to appraise the applicable property and calculate taxes as on other property, but if the calculated tax exceeds the limitation, the tax imposed would be the amount of the tax as limited, except as otherwise determined by date limitations established in the bill.
Provisions of the bill would apply only to ad valorem taxes imposed for a tax year beginning on or after the effective date of the bill.
Local Government Impact
A municipality that chooses to hold an election would incur costs associated with that election. It is assumed that a municipality would choose to call an election only if the municipality could absorb those costs. In addition to election costs, if the voters were to approve the proposal, the municipality would experience a loss in revenue from limiting the ad valorem taxes on the applicable property for up to six years. Revenue loss would vary depending on the number of properties affected, the appraised value of the property, and any increases in value during that period that would have otherwise resulted in increased revenue. It is assumed that a municipality would not pursue these actions unless the loss in revenue would not be significant. No significant fiscal implication to units of local government is anticipated.
A municipality that chooses to hold an election would incur costs associated with that election. It is assumed that a municipality would choose to call an election only if the municipality could absorb those costs. In addition to election costs, if the voters were to approve the proposal, the municipality would experience a loss in revenue from limiting the ad valorem taxes on the applicable property for up to six years. Revenue loss would vary depending on the number of properties affected, the appraised value of the property, and any increases in value during that period that would have otherwise resulted in increased revenue. It is assumed that a municipality would not pursue these actions unless the loss in revenue would not be significant.
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JOB, WK, DB
JOB, WK, DB