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 ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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