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: 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.), Committee Report 2nd House, Substituted ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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, if the appraised value of the property subject to the agreement does not attain a value specified in the agreement, and fails to meet any other performance criteria contained in the agreement. Payments would include 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, the property does not attain a value specified in the agreement, or does not meet the criteria of 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