LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 29, 1997 TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 1030 Committee on Ways & Means By: Maxey House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1030 ( Relating to the consequences of noncompliance by a property owner with an ad valorem tax abatement agreement.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1030-As Introduced No fiscal implication to the State is anticipated. In determining the taxable value of property in each school district, as required by Section 403.302, the Comptroller includes the total dollar amount of any exemption granted through a tax abatement agreement granted after May 31, 1993. School districts are allowed to enter into abatement agreements, but for purposes of school funding formulas, the abated value is treated as if it is taxable. The bill would not change the way local taxable value is determined by the state. FISCAL ANALYSIS The bill would amend Chapter 312 of the Tax Code to require that tax abatement agreements entered into by a municipality contain specific provisions concerning the recapture of lost revenue as a result of an abatement agreement, the modification of an agreement by the municipality, and cancellation of an agreement for non-compliance by a property owner. The bill would take effect September 1, 1997 and would apply only to a tax abatement agreement entered into on or after the effective date. LOCAL For tax abatement agreements entered into after September 1, 1997, the bill would increase the possibility of cancellation of those agreements, placement of otherwise abated property value on local appraisal rolls, and the recapture of revenue lost as a result of abatement agreements. Value and revenue gains to local governments would depend on the number of abatement agreements entered into after the effective date and the actions of participating taxpayers and taxing unit governing bodies. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,BR