LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 19, 2011 TO: Honorable Royce West, Chair, Senate Committee on Intergovernmental Relations FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1120 by Seliger (Relating to the exemption from taxation of property of a local government corporation.), As Introduced The bill would limit a property tax exemption for a local government corporation to only the property located within the boundaries of a local government that the local government corporation was created to aid and act on behalf of. As a result, taxable property values could be increased and the related costs to the Foundation School Fund could be decreased through the operation of the school finance formulas. The bill would limit the exemptions available under this chapter for the property of a local government corporation (LGC) to that property located within the boundaries of a local government that the LGC was created to aid and act on behalf of. Under current law, all property of a local government corporation (LGC) and the transaction to acquire such property, are exempt from taxation in the same manner as a corporation created under Chapter 394, Local Government Code. The bill would limit the exemption to only the property located within the boundaries of a local government that the LGC was created to aid and act on behalf of, including the transaction to acquire such property. By extension, if an LGC acquired property outside the boundaries of the local government, the transaction and the property itself would lose the exemption and the result could be an increase in state and local taxes. Because the number of LGCs that could be affected by the bill's provisions, and the types of taxes that might be paid are not known, the fiscal impact cannot be determined. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2011. Local Government Impact The bill would limit a property tax exemption for a local government corporation to only the property located within the boundaries of a local government that the local government corporation was created to aid and act on behalf of. As a result, taxable property values and the related ad valorem tax revenue for units of local government could be increased. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, KKR, SD, SJS, TP, KK
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 19, 2011
TO: Honorable Royce West, Chair, Senate Committee on Intergovernmental Relations FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1120 by Seliger (Relating to the exemption from taxation of property of a local government corporation.), As Introduced
TO: Honorable Royce West, Chair, Senate Committee on Intergovernmental Relations
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1120 by Seliger (Relating to the exemption from taxation of property of a local government corporation.), As Introduced
Honorable Royce West, Chair, Senate Committee on Intergovernmental Relations
Honorable Royce West, Chair, Senate Committee on Intergovernmental Relations
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1120 by Seliger (Relating to the exemption from taxation of property of a local government corporation.), As Introduced
SB1120 by Seliger (Relating to the exemption from taxation of property of a local government corporation.), As Introduced
The bill would limit a property tax exemption for a local government corporation to only the property located within the boundaries of a local government that the local government corporation was created to aid and act on behalf of. As a result, taxable property values could be increased and the related costs to the Foundation School Fund could be decreased through the operation of the school finance formulas.
The bill would limit a property tax exemption for a local government corporation to only the property located within the boundaries of a local government that the local government corporation was created to aid and act on behalf of. As a result, taxable property values could be increased and the related costs to the Foundation School Fund could be decreased through the operation of the school finance formulas.
The bill would limit the exemptions available under this chapter for the property of a local government corporation (LGC) to that property located within the boundaries of a local government that the LGC was created to aid and act on behalf of. Under current law, all property of a local government corporation (LGC) and the transaction to acquire such property, are exempt from taxation in the same manner as a corporation created under Chapter 394, Local Government Code. The bill would limit the exemption to only the property located within the boundaries of a local government that the LGC was created to aid and act on behalf of, including the transaction to acquire such property. By extension, if an LGC acquired property outside the boundaries of the local government, the transaction and the property itself would lose the exemption and the result could be an increase in state and local taxes. Because the number of LGCs that could be affected by the bill's provisions, and the types of taxes that might be paid are not known, the fiscal impact cannot be determined. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2011.
Local Government Impact
The bill would limit a property tax exemption for a local government corporation to only the property located within the boundaries of a local government that the local government corporation was created to aid and act on behalf of. As a result, taxable property values and the related ad valorem tax revenue for units of local government could be increased.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KKR, SD, SJS, TP, KK
JOB, KKR, SD, SJS, TP, KK