LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 7, 2015 TO: Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1513 by Fletcher (Relating to the ad valorem taxation of qualified open-space land.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1513, As Introduced: a negative impact of ($13,908,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds increases to a negative ($160,784,000) through the biennium ending August 31, 2019.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 7, 2015
TO: Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1513 by Fletcher (Relating to the ad valorem taxation of qualified open-space land.), As Introduced
TO: Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB1513 by Fletcher (Relating to the ad valorem taxation of qualified open-space land.), As Introduced
Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock
Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB1513 by Fletcher (Relating to the ad valorem taxation of qualified open-space land.), As Introduced
HB1513 by Fletcher (Relating to the ad valorem taxation of qualified open-space land.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1513, As Introduced: a negative impact of ($13,908,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds increases to a negative ($160,784,000) through the biennium ending August 31, 2019.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1513, As Introduced: a negative impact of ($13,908,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds increases to a negative ($160,784,000) through the biennium ending August 31, 2019.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 $0 2017 ($13,908,000) 2018 ($69,992,000) 2019 ($90,792,000) 2020 ($113,765,000)
2016 $0
2017 ($13,908,000)
2018 ($69,992,000)
2019 ($90,792,000)
2020 ($113,765,000)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromCities Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromSchool Districts 2016 $0 $0 $0 $0 2017 ($13,908,000) ($29,760,000) ($30,155,000) ($85,272,000) 2018 ($69,992,000) ($38,780,000) ($39,373,000) ($59,195,000) 2019 ($90,792,000) ($48,779,000) ($49,624,000) ($71,644,000) 2020 ($113,765,000) ($59,257,000) ($60,404,000) ($83,491,000) Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 $0 2017 ($20,961,000) 2018 ($27,342,000) 2019 ($34,426,000) 2020 ($41,863,000)
Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromCities Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromSchool Districts 2016 $0 $0 $0 $0 2017 ($13,908,000) ($29,760,000) ($30,155,000) ($85,272,000) 2018 ($69,992,000) ($38,780,000) ($39,373,000) ($59,195,000) 2019 ($90,792,000) ($48,779,000) ($49,624,000) ($71,644,000) 2020 ($113,765,000) ($59,257,000) ($60,404,000) ($83,491,000)
2016 $0 $0 $0 $0
2017 ($13,908,000) ($29,760,000) ($30,155,000) ($85,272,000)
2018 ($69,992,000) ($38,780,000) ($39,373,000) ($59,195,000)
2019 ($90,792,000) ($48,779,000) ($49,624,000) ($71,644,000)
2020 ($113,765,000) ($59,257,000) ($60,404,000) ($83,491,000)
Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 $0 2017 ($20,961,000) 2018 ($27,342,000) 2019 ($34,426,000) 2020 ($41,863,000)
2016 $0
2017 ($20,961,000)
2018 ($27,342,000)
2019 ($34,426,000)
2020 ($41,863,000)
Fiscal Analysis
This bill would amend Chapter 23 of the Tax Code, regarding property tax appraisal methods and procedures, to amend the definition of qualified open space land to include land used for agricultural or timber purposes at the required degree of intensity in the preceding year. Currently land must be in agricultural or timber use for five out of the previous seven years to qualify. The definition of agricultural use would be amended to reduce the minimum number of acres from five to two for land used to keep bees. The bill also would reduce from five to two the number of previous years for which additional taxes and interest would be calculated after land is no longer in a qualifying agricultural use. Enacting the bill's provisions would result in a loss to school districts and other units of local government because they would no longer receive the additional tax and interest. The loss of the additional tax would also create a cost to the state through the operation of the school funding formula.
Methodology
The bill's provision reducing from five to two the number of previous years for which additional taxes and interest would be calculated after land is no longer in a qualifying agricultural use would create a cost to units of local government. The loss of the additional tax would also create a cost to the state through the operation of the school funding formula. These costs were estimated by the Comptroller of Public Accounts based on information from appraisal districts. Under the hold harmless provisions of the Education Code, only a small portion of each year's additional school district loss related to the compressed rate would be transferred to the state while 100 percent of the previous year's loss would be transferred to the state. Because lagged year property values are used in the enrichment formula, school districts lose enrichment funding (a state gain) in the first year of a taxable property value reduction. In the second and successive years the enrichment loss and a portion of the school district debt (facilities) loss are transferred to the state through the relevant funding formulas.
Local Government Impact
The estimated fiscal implication to units of local government is reflected in the table above.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, SZ, JJ, BRi
UP, SZ, JJ, BRi