LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 12, 2001 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations 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.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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, DB, BR