LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION March 28, 2017 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2253 by Darby (Relating to the calculation of interest on an ad valorem tax refund resulting from the final determination of an appeal that decreases a property owner's liability.), As Introduced No fiscal implication to the State is anticipated. The bill would amend Chapter 42 of the Tax Code, regarding judicial review (property tax), to require a taxing unit to include with a property tax refund interest on all or a portion of the amount refunded (rather than on the entire amount refunded). The court that makes the final determination of the appeal would be required, in its discretion, to determine the amount on which interest is to be calculated, provided that the amount is: 1. not greater than the amount refunded; and2. not less than the difference between the minimum amount the taxpayer was required to pay to preserve the right to appeal and the amount of taxes for which the property owner is liable. The bill would make a conforming amendment and would apply only to a tax refund that is made following an appeal that is filed on or after the effective date of the bill. The bill would, in some instances, create a gain to local taxing units by allowing payment of interest on a portion of the tax refunded after a property tax appeal rather than on the full amount. A court would be required to make the determination of the amount on which interest is calculated. The extent to which courts would reduce interest payments under the bill is unknown; consequently the gain to local taxing units cannot be estimated but is not expected to be significant. There would be no fiscal impact on the state because interest payments are not included in the school finance formulas.The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts LBB Staff: UP, KK, SD, SJS
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
March 28, 2017
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2253 by Darby (Relating to the calculation of interest on an ad valorem tax refund resulting from the final determination of an appeal that decreases a property owner's liability.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2253 by Darby (Relating to the calculation of interest on an ad valorem tax refund resulting from the final determination of an appeal that decreases a property owner's liability.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB2253 by Darby (Relating to the calculation of interest on an ad valorem tax refund resulting from the final determination of an appeal that decreases a property owner's liability.), As Introduced
HB2253 by Darby (Relating to the calculation of interest on an ad valorem tax refund resulting from the final determination of an appeal that decreases a property owner's liability.), As Introduced
No fiscal implication to the State is anticipated.
No fiscal implication to the State is anticipated.
The bill would amend Chapter 42 of the Tax Code, regarding judicial review (property tax), to require a taxing unit to include with a property tax refund interest on all or a portion of the amount refunded (rather than on the entire amount refunded). The court that makes the final determination of the appeal would be required, in its discretion, to determine the amount on which interest is to be calculated, provided that the amount is: 1. not greater than the amount refunded; and2. not less than the difference between the minimum amount the taxpayer was required to pay to preserve the right to appeal and the amount of taxes for which the property owner is liable. The bill would make a conforming amendment and would apply only to a tax refund that is made following an appeal that is filed on or after the effective date of the bill. The bill would, in some instances, create a gain to local taxing units by allowing payment of interest on a portion of the tax refunded after a property tax appeal rather than on the full amount. A court would be required to make the determination of the amount on which interest is calculated. The extent to which courts would reduce interest payments under the bill is unknown; consequently the gain to local taxing units cannot be estimated but is not expected to be significant. There would be no fiscal impact on the state because interest payments are not included in the school finance formulas.The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD, SJS
UP, KK, SD, SJS