LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                                May 4, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB986  by Duncan (Relating to allowing certain tax
               abatement agreements to provide for the recapture of lost
               ad valorem tax revenue if a property owner fails to
               comply with tax abatement agreement requirements
               regarding job creation or property value.), As Engrossed
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Section 312.205 of the Tax Code to allow a tax
abatement agreement to include provisions requiring the recapture of all
or a portion of property tax revenue lost as a result of the owner's
failure to create all or a portion of the number of new jobs provided in
the agreement or if the appraised value of the property subject to the
agreement does not attain a value specified in the agreement, and for
payment of penalty, interest, or both, on the recaptured revenue.

There would be no cost to the General Revenue Fund 0001, because under
current law, abated values are included in the Comptroller's
determinations of school districts' total taxable values certified to
the Commissioner of Education for school funding purposes.
  
Local Government Impact
  
Passage of the bill and the inclusion of the proposed recapture
provisions in future city and county tax abatement agreements could
result in additional revenue to local units of governments in instances
where the property owner fails to create the number of jobs provided in
the agreement or the property does not attain a value specified in the
agreement. The amount of revenue gain would vary, depending on the
number of property owners that are required to pay the lost tax revenue,
penalties, or interest and the value of the property.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, DB, BR