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