LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              April 16, 1999
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB 824  by Gallegos (Relating to tax increment investment
               financing and the powers of a municipality.), As
               Introduced
  
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*  Implementing the provisions of this bill could result in a loss of    *
*  local property tax revenue and an increase in the cost of state       *
*  public education.  However, it not anticipated that the fiscal        *
*  impact would be significant given total state wide property tax       *
*  levies.                                                               *
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Fiscal Analysis

The bill would allow local governments to enter into tax abatement and
tax increment financing agreements. Tax abatement agreements could cause
a loss of taxable value to the extent that the abated value otherwise
would be taxed by each taxing unit.  No significant fiscal implications
are expected from the bill's tax increment financing provisions.

Methodology

The effect of this bill on local value and revenue changes would depend
on the manner in which some municipalities act relative to acquiring,
constructing, reconstructing, or installing educational facilities under
the proposed definition.

Section 403.302 of the Government Code 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 change in
school district taxable values reported to the Commissioner of Education
by the Comptroller. The Texas Education Agency has estimated that as a
general rule, a difference of $1 billion in property valuation would
change state aid requirements by about $14 million each year. 
  
Local Government Impact
  
There would be a loss in local value and tax revenue based on how
municipalities act relative to acquiring, constructing, reconstructing,
or installing educational facilities under the provisions of the bill.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, TL, BR