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: SB1480 by Madla (Relating to the administration of reinvestment zones for tax increment finance and ad valorem tax abatement and to ad valorem tax abatement agreements for property in a reinvestment zone.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** The bill would amend Section 311.009 of the Tax Code to grant additional appointment authority regarding reinvestment zone boards of directors to taxing units that pay into a tax increment financing (TIF) fund. Taxing units that had approved the payment of all or part of the tax increment produced by the unit would have the right to appoint as many board members as had the city that created the reinvestment zone. The bill would allow for the appointment of the board chairman by fellow board members. The bill would amend Chapter 312 of the Tax Code to allow the governing body of a taxing unit to impose a reasonable fee, not to exceed $1,000, in connection with a property owner's application or request for a tax abatement. Proprietary information provided to a taxing unit in connection with a tax abatement would remain confidential after an abatement agreement was executed. An abatement agreement would be permitted to take effect on January 1 of the next tax year following the substantial completion of improvements or repairs required by the agreement. The current requirement that other taxing units must execute a tax abatement agreement with the owner no later than the 90th day after the date the municipal agreement was executed would be deleted. Local Government Impact If tax abatement agreements were to take effect after improvements had been made and value added to the taxable real property located in the reinvestment zone, the bill could affect tax abatement exemptions granted by taxing units. Additionally, the bill could result in additional revenue to taxing units choosing to impose the discretionary fee. The amount of such revenues would depend on the number of units imposing such a fee, the number of applicants, and the amounts of the fees charged. Note: According to the Comptroller's Property Tax Division, taxing units reported 276 tax abatement agreements executed in tax year 2001. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, DB, BR