LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION April 18, 2013 TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1217 by Menéndez (Relating to the amount of the exemption from ad valorem taxation to which certain disabled veterans and the surviving spouses and children of certain veterans are entitled.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1217, As Introduced: a negative impact of ($8,538,000) through the biennium ending August 31, 2015. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
April 18, 2013
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1217 by Menéndez (Relating to the amount of the exemption from ad valorem taxation to which certain disabled veterans and the surviving spouses and children of certain veterans are entitled.), As Introduced
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB1217 by Menéndez (Relating to the amount of the exemption from ad valorem taxation to which certain disabled veterans and the surviving spouses and children of certain veterans are entitled.), As Introduced
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB1217 by Menéndez (Relating to the amount of the exemption from ad valorem taxation to which certain disabled veterans and the surviving spouses and children of certain veterans are entitled.), As Introduced
HB1217 by Menéndez (Relating to the amount of the exemption from ad valorem taxation to which certain disabled veterans and the surviving spouses and children of certain veterans are entitled.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1217, As Introduced: a negative impact of ($8,538,000) through the biennium ending August 31, 2015. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1217, As Introduced: a negative impact of ($8,538,000) through the biennium ending August 31, 2015.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2014 $0 2015 ($8,538,000) 2016 ($19,109,000) 2017 ($19,538,000) 2018 ($19,975,000)
2014 $0
2015 ($8,538,000)
2016 ($19,109,000)
2017 ($19,538,000)
2018 ($19,975,000)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromSchool Districts Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities 2014 $0 $0 $0 $0 2015 ($8,538,000) ($13,564,000) ($6,739,000) ($7,466,000) 2016 ($19,109,000) ($3,572,000) ($6,890,000) ($7,648,000) 2017 ($19,538,000) ($3,737,000) ($7,046,000) ($7,833,000) 2018 ($19,975,000) ($3,908,000) ($7,204,000) ($8,024,000) Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2014 $0 2015 ($4,925,000) 2016 ($5,032,000) 2017 ($5,142,000) 2018 ($5,253,000)
Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromSchool Districts Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities 2014 $0 $0 $0 $0 2015 ($8,538,000) ($13,564,000) ($6,739,000) ($7,466,000) 2016 ($19,109,000) ($3,572,000) ($6,890,000) ($7,648,000) 2017 ($19,538,000) ($3,737,000) ($7,046,000) ($7,833,000) 2018 ($19,975,000) ($3,908,000) ($7,204,000) ($8,024,000)
2014 $0 $0 $0 $0
2015 ($8,538,000) ($13,564,000) ($6,739,000) ($7,466,000)
2016 ($19,109,000) ($3,572,000) ($6,890,000) ($7,648,000)
2017 ($19,538,000) ($3,737,000) ($7,046,000) ($7,833,000)
2018 ($19,975,000) ($3,908,000) ($7,204,000) ($8,024,000)
Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2014 $0 2015 ($4,925,000) 2016 ($5,032,000) 2017 ($5,142,000) 2018 ($5,253,000)
2014 $0
2015 ($4,925,000)
2016 ($5,032,000)
2017 ($5,142,000)
2018 ($5,253,000)
Fiscal Analysis
The bill would amend Section 11.22 of the Tax Code, to increase the disabled veteran exemption amounts for each of the four ranges of disability percentage in current law. Each exemption amount would be doubled except for the highest disability range, which would increase from $12,000 to $25,000. The exemption can be applied to any property owned by the disabled veteran. The bill also would double the exempt amount for a surviving child or spouse of a person who dies while on active duty as a member of the armed services from $5,000 to $10,000. This bill would take effect January 1, 2014 contingent on a constitutional amendment.
Methodology
The bill's increased exemption amounts for disabled veterans, and for a surviving child or spouse of a deceased active duty member of the armed services, would create a cost to units of local government and to the state through the operation of the school funding formula. Information from appraisal districts was used to estimate the cost of the increased exemptions. The applicable projected tax rates were applied to estimate the levy loss to special districts, cities and counties, and to estimate the initial school district loss. Because of the operation of the hold harmless provisions of the Education Code, about 60 percent of the school district cost related to the compressed rate would be transferred to the state in the first year of a taxable property value loss and 100 percent in later years. Because lagged year property values are used in the enrichment formula, school districts lose enrichment funding (state savings) in the first year of a taxable property value reduction. In the second and successive years the enrichment cost and a portion of the school district debt (facilities) cost are transferred to the state through the relevant funding formulas. All costs were estimated over the five year projection period.
Local Government Impact
The fiscal implication to units of local government is reflected in the tables above and is contingent upon passage of a constitutional amendment authorizing the exemption.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD, SJS
UP, KK, SD, SJS