LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                               May 10, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB985  by Duncan (Relating to authorizing the governing
               body of a municipality to enter into a tax abatement
               agreement with the owner of a leasehold interest in real
               property that is located in a reinvestment zone.),
               Committee Report 2nd House, Substituted
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Section 312.204 of the Tax Code to allow cities to
enter into tax abatement agreements with owners of leasehold interests in
real property for the exemption of a portion of tangible personal
property located on the real property.  The agreements could be for a
period not exceeding 10 years, on condition that the leasehold owner made
specific improvements or repairs to the real property.

There would be no cost to the General Revenue Fund 0001, because only
cities would be affected by the provisions of the bill.
  
Local Government Impact
  
Local governments choosing to enter into the type of agreements proposed
by the bill could experience a revenue loss, depending on the value of
property subject to future tax abatement agreements.   The amount of
such loss would depend on the number of cities entering into tax
abatement agreements, and the appraised value of those abated
properties.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, DB, BR