BILL ANALYSIS



C.S.H.B. 2860
By: Grusendorf
April 21, 1995
Committee Report (Substituted)


BACKGROUND

Chapter 312, Tax Code, the Property Redevelopment and Tax Abatement
Act, allows municipalities, counties, and other taxing entities to
enter into tax abatement agreements with property owners. 
Communities grant tax abatements to help stimulate economic growth
in certain areas.  Tax abatements may help to attract financial
investment which, in turn, can expand primary employment
opportunities.  Currently, the Property Redevelopment and Tax
Abatement Act will expire September 1, 1995

PURPOSE

The bill establishes an option to certain school districts to grant
tax abatements.  The bill also repeals the expiration provision of
Chapter 312, Tax Code, and reenacts the language in the Chapter
without the sunset provision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Chapter 312, Tax Code, is amended by adding Subchapter
           D, TAX ABATEMENT IN SCHOOL DISTRICT REINVESTMENT ZONE.

           312.501 DESIGNATION OF REINVESTMENT ZONE.

           (a) A board of trustees may designate an area as a
           reinvestment zone under the following criteria:

               (1) It must comply with guidelines in Section
               312.002 (Eligibility of Taxing Unit to Participate
               in Tax Abatement);

               (2) The district's wealth per student does not
               exceed the equalized wealth level;

               (3) The area is primarily undeveloped land
               contiguous to an airport of a city with a
               population of more than 400,000; and 

               (4) The area is a municipal utility district.

           (b) Requires the board to conduct a public hearing and
           find that the designation as a reinvestment zone would
           contribute to primary employment in the zone and to the
           economic development of the district.

           (c) Requires the board to give notice of the hearing as
           per Section 312.201 (Designation of Reinvestment Zone).

           (d) Limits the designation to 10 years and then renewal
           periods not longer than 5 years.

           (e) Areas designated as reinvestment zones by either a
           city or county remain eligible for this designation.

           (f) Establishes definitions for "wealth per student" and
           "equalized wealth level" to be the same as Section
           36.001 (Definitions), Education Code.

           312.502 SCHOOL DISTRICT TAX ABATEMENT AGREEMENT.

           (a) A board of trustees may abate the school's portion
           of ad valorem taxes on property of an individual who
           donates real property to the school district for the
           purpose of constructing a school.  The tax abatement
           does not take place until the donation is made.

           (b) Sections 312.204 (Municipal Tax Abatement
           Agreement), 312.2041 (Notice of Tax Abatement Agreement
           to Other Taxing Units), 312.205 (Specific Terms of Tax
           Abatement Agreement), and 312.208 (Modification or
           Termination of Agreement), apply to a tax abatement
           agreement under this section as if it were executed
           under Subchapter B (Tax Abatement in Municipal
           Reinvestment Zone).

           (c) An abatement agreement made by another taxing unit
           under this Chapter does not affect the authority of a
           school district to make a tax abatement agreement under
           this section.

           (d) An abatement agreement made by a school district
           under this Section does not affect the authority of
           another taxing unit to make a tax abatement agreement
           under this Chapter.

           (e) Tax abatements may not apply to property owned by
           a trustee of the school district.

SECTION 2. Repeals Section 312.006 (Expiration Date), Tax Code.

SECTION 3. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2860 clarifies drafting errors in the original bill.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on April 4, 1995.  Representative Grusendorf
explained the bill.  Without objection, H.B. 2625 was left pending
before the committee.

On April 18, 1995, the committee met in a public hearing, and H.B.
2860 was laid out on pending business.  The committee considered a
complete substitute by Representative Craddick.  Without objection,
the committee adopted C.S.H.B. 2860.  By a record vote of 7 ayes,
0 nays, 1 present not voting and 3 absent, the committee voted to
report H.B. 2860 to the House as substituted with the
recommendation that it be sent to the Local & Consent Calendar, and
that it do pass.

     Testimony received in favor of the bill (4/4/95):
           William Geo. Gurasich, representing himself and the MC
           Joint Venture