LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 10, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1449  by Oliveira (Relating to the expiration of the
               Property Redevelopment and Tax Abatement Act.), As
               Engrossed
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB1449, As Engrossed:  positive impact of $0 through the biennium     *
*  ending August 31, 2003.                                               *
*                                                                        *
*  No significant fiscal implication to the State is anticipated.        *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2002                                   $0  *
          *       2003                                    0  *
          *       2004                                    0  *
          *       2005                                    0  *
          *       2006                                    0  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***************************************************************************
*Fiscal  Probable Revenue Gain/(Loss) to Probable Revenue Gain/(Loss) to  *
* Year               Counties                         Cities              *
*  2002                      $(4,081,000)                    $(3,344,000) *
*  2003                       (8,028,400)                     (6,788,300) *
*  2004                      (12,614,000)                    (10,336,000) *
*  2005                      (17,073,400)                    (13,990,100) *
*  2006                      (21,666,600)                    (17,753,800) *
***************************************************************************
  
Fiscal Analysis
  
Passage of the bill would continue the language in Chapter 312, the
Property Redevelopment and Tax Abatement Act, without the sunset
provision.
  
  
Methodology
  
There would be no cost to the state because the granting of abatements by
school districts has not been factored into funding formulas since 1993.
It is assumed therefore that few school districts would grant
abatements.  However, other local taxing units would be impacted.

It is assumed that that the value of new abatements granted each year is
10 percent of the value of existing abatements agreements.  Counties and
cities reported the following taxable value losses for tax abatements
granted in 2000:  counties, $9,290,351,618 and cities, $6,754,815,786.
Projected tax rates were then applied to calculate the estimated county
and city losses.
  
  
Local Government Impact
  
The tax revenue losses to local units of government are reflected in the
above table.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, SD, WP, BR