LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 20, 2015 TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1379 by Lucio (Relating to an exemption from ad valorem taxation of structures used primarily to store implements of husbandry.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1379, As Introduced: a negative impact of ($7,086,000) through the biennium ending August 31, 2017. 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 20, 2015
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1379 by Lucio (Relating to an exemption from ad valorem taxation of structures used primarily to store implements of husbandry.), As Introduced
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB1379 by Lucio (Relating to an exemption from ad valorem taxation of structures used primarily to store implements of husbandry.), As Introduced
Honorable Jane Nelson, Chair, Senate Committee on Finance
Honorable Jane Nelson, Chair, Senate Committee on Finance
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB1379 by Lucio (Relating to an exemption from ad valorem taxation of structures used primarily to store implements of husbandry.), As Introduced
SB1379 by Lucio (Relating to an exemption from ad valorem taxation of structures used primarily to store implements of husbandry.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1379, As Introduced: a negative impact of ($7,086,000) through the biennium ending August 31, 2017. 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 SB1379, As Introduced: a negative impact of ($7,086,000) through the biennium ending August 31, 2017.
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 $0 2017 ($7,086,000) 2018 ($35,670,000) 2019 ($36,869,000) 2020 ($38,138,000)
2016 $0
2017 ($7,086,000)
2018 ($35,670,000)
2019 ($36,869,000)
2020 ($38,138,000)
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 $0 $0 $0 $0 2017 ($7,086,000) ($36,068,000) ($13,121,000) ($12,949,000) 2018 ($35,670,000) ($9,090,000) ($13,642,000) ($13,436,000) 2019 ($36,869,000) ($9,573,000) ($14,188,000) ($13,946,000) 2020 ($38,138,000) ($10,067,000) ($14,761,000) ($14,481,000) Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 $0 2017 ($9,121,000) 2018 ($9,473,000) 2019 ($9,843,000) 2020 ($10,230,000)
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 $0 $0 $0 $0 2017 ($7,086,000) ($36,068,000) ($13,121,000) ($12,949,000) 2018 ($35,670,000) ($9,090,000) ($13,642,000) ($13,436,000) 2019 ($36,869,000) ($9,573,000) ($14,188,000) ($13,946,000) 2020 ($38,138,000) ($10,067,000) ($14,761,000) ($14,481,000)
2016 $0 $0 $0 $0
2017 ($7,086,000) ($36,068,000) ($13,121,000) ($12,949,000)
2018 ($35,670,000) ($9,090,000) ($13,642,000) ($13,436,000)
2019 ($36,869,000) ($9,573,000) ($14,188,000) ($13,946,000)
2020 ($38,138,000) ($10,067,000) ($14,761,000) ($14,481,000)
Fiscal Year Probable Revenue Gain/(Loss) fromOther Special Districts 2016 $0 2017 ($9,121,000) 2018 ($9,473,000) 2019 ($9,843,000) 2020 ($10,230,000)
2016 $0
2017 ($9,121,000)
2018 ($9,473,000)
2019 ($9,843,000)
2020 ($10,230,000)
Fiscal Analysis
The bill would amend Chapter 11 of the Tax Code, regarding taxable property and exemptions, to exempt from property taxation a structure used primarily to store implements of husbandry (machinery and equipment that is used in the production of farm or ranch products, or of timber). The bill would take effect on January 1, 2016, contingent on voter approval of a constitutional amendment.
Methodology
The bill's exemption of structures used to house implements of husbandry would create a cost to units of local government and to the state through the operation of the school funding formulas. The value loss was 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 in subsequent years 100 percent of the additional 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 fiscal implication to units of local government is reflected in the table 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