BILL ANALYSIS


                                                    C.S.H.B. 2860
                                      By: Grusendorf (Barrientos)
                                                          Finance
                                                         05-25-95
                            Senate Committee Report (Substituted)
BACKGROUND

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

PURPOSE

As proposed, C.S.H.B. 2860 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 grant
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 312B, Tax Code, by adding Section
321.210, as follows:

     Sec.  312.210.  AGREEMENT BY TAXING UNITS RELATING TO PROPERTY
     IN CERTAIN SCHOOL DISTRICTS.  (a)  Provides that this section
     applies to a tax abatement agreement applicable to property
     located in a reinvestment zone with respect to which a
     municipality, county, and junior college district have entered
     into a joint agreement to offer tax abatements exempting from
     taxation a specified portion of the value of the property in
     the reinvestment zone.
     
     (b)  Requires a tax abatement agreement with the owner of
       real property that is located in the reinvestment zone
       described by Subsection (a) and in a school district that
       has a wealth per student that does not exceed the equalized
       wealth level to exempt certain portions of the value of
       property from taxation.
       
       (c)  Defines "wealth per student" and "equalized wealth
       level."
       
       SECTION 2.   Makes application of this Act prospective.

SECTION 3. Emergency clause.
           Effective date:  upon passage.