LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 16, 1997
         
         
      TO: Honorable David Sibley, Chair            IN RE:  Senate Bill No. 1596
          Committee on Economic Development                              By: Ellis
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1596 ( Relating 
to ad valorem tax incentives for the development or redevelopment 
of certain property subject to a voluntary cleanup agreement.) 
this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1596-As Introduced
         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.  To the extent that the state's cost of public 
education was increasd due to the provisions of this bill, an 
appropriation of funds for public education maybe required.
         
FISCAL ANALYSIS

The bill would allow a governmental entity 
to enter into a tax abatement agreement on certain property 
in a reinvestment zone that is subject to a voluntary cleanup 
agreement.  The tax abatement agreement would exempt a declining 
portion of the property value from ad valorem taxation for a 
period not to exceed four years.  The bill would specifically 
exempt these agreements from the determination of school district 
taxable value.

The bill would also require the eligible property 
owner to provide the chief appraiser with a certificate of completion 
relating to the cleanup of the property to accompany the application 
for an exemption. 

The bill would take effect September 1, 
1997, and would apply only to ad valorem taxes imposed on or 
after January 1, 1998. 

METHODOLOGY

The Property Tax Division 
of the Comptroller s Office and the Texas Municipal League were 
contacted to provide information for this fiscal note. 

State 
law requires the Comptroller to conduct a property value study 
to determine the total taxable value for each school district. 
 Total taxable value is an element in the state s school funding 
formula.  Passage of this bill could cause a reduction in school 
district taxable values reported to the Commissioner of Education 
by the Comptroller.  A reduction in school district taxable 
values could increase the state s cost of public education based 
on current law funding formulas.
         
 
          
There could be a loss of property tax revenue to local units 
of governments.  This loss of revenue would be a function of 
both the number and value of abatement agreements entered into 
under the provisions of this bill.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,TH ,BR