LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                             February 2, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB550  by Mowery (Relating to a prohibition on ad valorem
               tax abatement agreements covering certain property
               located in air quality nonattainment areas.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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Tax abatements may be entered into by local governments at the option of
each taxing unit's governing body.  Tax abatements cause a loss of
taxable value to the extent that the abated value would have been taxed
by each taxing unit absent the abatement agreement.

In determining the taxable value of property in each school district, as
required by Section 403.302 of the Government Code, 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 were taxable.
The bill would not change the way local taxable value is determined by
the state.
  
Local Government Impact
  
The bill could have an impact on local property tax levies related to
abatement agreements affected by this bill.  The bill would prohibit
taxing units from entering into ad valorem tax abatement agreements in
the following counties: Brazoria, Chambers, Collin, Dallas, Denton, El
Paso, Fort Bend, Galveston, Hardin, Harris, Jefferson, Liberty,
Montgomery, Orange and Waller.

  
  
Source Agencies:   582   Texas Natural Resource Conservation Commission,
                   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, BR