LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 25, 1995
TO: Honorable John T. Montford, Chair IN RE: Committee Substitute
Committee on Finance for Senate
Senate Bill No. 345
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
345 (Relating to tax abatement, reinvestment zones, and the
refund of certain taxes by the comptroller to reimburse certain
taxes paid on property in a reinvestment zone.) this office has
determined the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill would amend Subchapter C, Chapter 111, Tax Code and
Chapter 312, Tax Code by requiring the Comptroller to issue a
partial refund of State taxes paid by a taxpayer when presented
with an application of refund. The application would specify the
amount of school taxes paid on property abated by a county or a
municipality that would not have been paid if the school district
had abated the property under an agreement with terms identical
to those in the county or municipality's abatement agreement.
The state would refund 80% of this amount subject to certain
conditions and limitations.
To be eligible for the partial refund the property owner must
have established a new business (or expanded or modernized an
existing business) and must have increased the business's payroll
by $3,000,000 or increased the appraised value of the business's
property by $10,000,000 since the date of the abatement
agreement.
The partial refund would be limited to the net amount of state
franchise and sales taxes paid into general revenue during the
calendar year or the total school property tax paid for that
year, whichever is less; and would be limited to 5 years or the
term of the abatement, whichever is less.
The bill would amend Chapter 312, Tax Code, by requiring an
abatement agreement to provide for criteria, specific agreed
terms and conditions, cancellation or modification if the terms
are not met, and an annual report from the property owner to the
taxing unit certifying that the terms were met. The bill would
also require each taxing unit to provide the abatement criteria,
a copy of the abatement agreement and any amendments or
modifications to the Comptroller, and the Texas Department of
Commerce.
The bill would repeal the section in Chapter 312, Tax Code, that
sunsets the Property Redevelopment and Tax Abatement Act.
The Comptroller has estimated the impact of the provisions of
this bill as follows:
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out Probable Probable Loss to Probable Loss to
Year of General Administrative Counties Cities
Revenue Fund 001 Cost Out of
General Revenue
Fund 001
1996 $0 $0 $22,350,000 $3,857,000
1997 0 6,240 27,451,000 4,737,000
1998 23,066,000 212,384 31,966,000 5,516,000
1999 48,733,000 177,884 34,371,000 5,931,000
2000 54,107,000 177,884 34,795,000 6,004,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
Source: Comptroller of Public Accounts
LBB Staff: JK, BR, DF