LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                            February 12, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1194  by Brimer (Relating to the eligibility of certain
               property owned or leased by a local official for ad
               valorem tax abatement or tax increment financing.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Section 312 of the Tax Code to allow tax abatement
or tax increment financing (TIF) eligibility to continue on a property
when the property owner subsequently serves as a member of the governing
body or planning commission of the granting municipality or county.
Current law excludes property owned by such public officials from
property tax abatement or tax increment financing upon that person
becoming a member of the specified governing body.

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 is taxable.  The
bill would not change the way local taxable abated value is determined
by the state.  There could be an increase in the valuation of tax
increment financing (TIF) property due to the provisions of the bill.
In 1999, approximately $20.1 million in school district tax levies was
lost to TIF agreements, which was passed on to the state through the
school funding formulas.  Depending on the number of property owners
that could qualify under the provision of the bill, there could be a
cost increase to the state.  However, it is not anticipated that this
would lead to a significant fiscal impact on the state's school funding
appropriations level.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, WP, BR