LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION May 24, 2011 TO: Honorable Joe Straus, Speaker of the House, House of Representatives FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1090 by Gonzalez, Naomi (Relating to the calculation of interest on certain ad valorem tax refunds.), As Passed 2nd House No fiscal implication to the State is anticipated. The bill would amend Chapter 42 of the Tax Code, regarding property taxation and judicial review, to require that interest on any refund to a property owner based on the final determination of an appeal to district court be calculated at an annual rate that is equal to the sum of 2 percent and the most recent prime rate quoted and published by the Federal Reserve Board as of the first day of the month in which the refund is made, but the rate may not be more than 8 percent. The current prime rate plus 2 percent is under 8 percent (the current statutory interest rate for refunds resulting from district court appeals that do not involve the denial of exemptions). To the extent that the prime rate plus 2 percent remains below 8 percent, the bill's proposed interest calculation method would reduce interest costs for taxing units. No information exists to estimate the amount of any gain to taxing units. The bill's proposed interest rate calculation change would not affect property values, tax rates, or other variables affecting property tax levies. Interest payments are not part of the school funding formula so there would be no fiscal impact on the state. The bill would take effect September 1, 2011. Local Government Impact To the extent that the prime rate plus 2 percent remains below 8 percent, the bill's proposed interest calculation method would reduce interest costs for taxing units. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, KKR, KK, SD, SJS
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
May 24, 2011
TO: Honorable Joe Straus, Speaker of the House, House of Representatives FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1090 by Gonzalez, Naomi (Relating to the calculation of interest on certain ad valorem tax refunds.), As Passed 2nd House
TO: Honorable Joe Straus, Speaker of the House, House of Representatives
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB1090 by Gonzalez, Naomi (Relating to the calculation of interest on certain ad valorem tax refunds.), As Passed 2nd House
Honorable Joe Straus, Speaker of the House, House of Representatives
Honorable Joe Straus, Speaker of the House, House of Representatives
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB1090 by Gonzalez, Naomi (Relating to the calculation of interest on certain ad valorem tax refunds.), As Passed 2nd House
HB1090 by Gonzalez, Naomi (Relating to the calculation of interest on certain ad valorem tax refunds.), As Passed 2nd House
No fiscal implication to the State is anticipated.
No fiscal implication to the State is anticipated.
The bill would amend Chapter 42 of the Tax Code, regarding property taxation and judicial review, to require that interest on any refund to a property owner based on the final determination of an appeal to district court be calculated at an annual rate that is equal to the sum of 2 percent and the most recent prime rate quoted and published by the Federal Reserve Board as of the first day of the month in which the refund is made, but the rate may not be more than 8 percent. The current prime rate plus 2 percent is under 8 percent (the current statutory interest rate for refunds resulting from district court appeals that do not involve the denial of exemptions). To the extent that the prime rate plus 2 percent remains below 8 percent, the bill's proposed interest calculation method would reduce interest costs for taxing units. No information exists to estimate the amount of any gain to taxing units. The bill's proposed interest rate calculation change would not affect property values, tax rates, or other variables affecting property tax levies. Interest payments are not part of the school funding formula so there would be no fiscal impact on the state. The bill would take effect September 1, 2011.
The bill would amend Chapter 42 of the Tax Code, regarding property taxation and judicial review, to require that interest on any refund to a property owner based on the final determination of an appeal to district court be calculated at an annual rate that is equal to the sum of 2 percent and the most recent prime rate quoted and published by the Federal Reserve Board as of the first day of the month in which the refund is made, but the rate may not be more than 8 percent.
The current prime rate plus 2 percent is under 8 percent (the current statutory interest rate for refunds resulting from district court appeals that do not involve the denial of exemptions). To the extent that the prime rate plus 2 percent remains below 8 percent, the bill's proposed interest calculation method would reduce interest costs for taxing units. No information exists to estimate the amount of any gain to taxing units. The bill's proposed interest rate calculation change would not affect property values, tax rates, or other variables affecting property tax levies. Interest payments are not part of the school funding formula so there would be no fiscal impact on the state.
The bill would take effect September 1, 2011.
Local Government Impact
To the extent that the prime rate plus 2 percent remains below 8 percent, the bill's proposed interest calculation method would reduce interest costs for taxing units.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KKR, KK, SD, SJS
JOB, KKR, KK, SD, SJS