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:HB2306 by Canales (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as qualified open-space land if a change in use of the land occurs.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2306, As Introduced: a negative impact of ($20,741,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds is estimated to increase to a negative ($160,784,000) through the biennium ending August 31, 2019. 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, 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:HB2306 by Canales (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as qualified open-space land if a change in use of the land occurs.), As Introduced
TO: Honorable Tracy O. King, Chair, House Committee on Agriculture & Livestock
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2306 by Canales (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as qualified open-space land if a change in use of the land occurs.), 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
HB2306 by Canales (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as qualified open-space land if a change in use of the land occurs.), As Introduced
HB2306 by Canales (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as qualified open-space land if a change in use of the land occurs.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2306, As Introduced: a negative impact of ($20,741,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds is estimated to increase to a negative ($160,784,000) through the biennium ending August 31, 2019. 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 HB2306, As Introduced: a negative impact of ($20,741,000) through the biennium ending August 31, 2017. The net impact to General Revenue Related funds is estimated to increase to a negative ($160,784,000) through the biennium ending August 31, 2019.
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 2016 ($3,467,000) 2017 ($17,274,000) 2018 ($69,992,000) 2019 ($90,792,000) 2020 ($113,765,000)
2016 ($3,467,000)
2017 ($17,274,000)
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) fromSchool Districts Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities 2016 ($3,467,000) ($20,837,000) ($7,372,000) ($7,290,000) 2017 ($17,274,000) ($81,906,000) ($30,155,000) ($29,760,000) 2018 ($69,992,000) ($59,195,000) ($39,373,000) ($38,780,000) 2019 ($90,792,000) ($71,644,000) ($49,624,000) ($48,779,000) 2020 ($113,765,000) ($83,491,000) ($60,404,000) ($59,257,000) Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 ($5,129,000) 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) fromSchool Districts Probable Revenue Gain/(Loss) fromCounties Probable Revenue Gain/(Loss) fromCities 2016 ($3,467,000) ($20,837,000) ($7,372,000) ($7,290,000) 2017 ($17,274,000) ($81,906,000) ($30,155,000) ($29,760,000) 2018 ($69,992,000) ($59,195,000) ($39,373,000) ($38,780,000) 2019 ($90,792,000) ($71,644,000) ($49,624,000) ($48,779,000) 2020 ($113,765,000) ($83,491,000) ($60,404,000) ($59,257,000)
2016 ($3,467,000) ($20,837,000) ($7,372,000) ($7,290,000)
2017 ($17,274,000) ($81,906,000) ($30,155,000) ($29,760,000)
2018 ($69,992,000) ($59,195,000) ($39,373,000) ($38,780,000)
2019 ($90,792,000) ($71,644,000) ($49,624,000) ($48,779,000)
2020 ($113,765,000) ($83,491,000) ($60,404,000) ($59,257,000)
Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 ($5,129,000) 2017 ($20,961,000) 2018 ($27,342,000) 2019 ($34,426,000) 2020 ($41,863,000)
2016 ($5,129,000)
2017 ($20,961,000)
2018 ($27,342,000)
2019 ($34,426,000)
2020 ($41,863,000)
Fiscal Analysis
The bill would amend Chapter 23 of the Tax Code, regarding property tax appraisal methods and procedures, to 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. The bill would take effect on September 1, 2015.
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 create a cost to the state through the operation of the school funding formula. These costs were estimated 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, SD, SJS
UP, SZ, SD, SJS