| TO: | Honorable Allan Ritter, Chair, House Committee on Economic Development |
| FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
| IN RE: | HB1253 by Kuempel ( relating to projects that may be undertaken by certain development corporations for career centers.), Committee Report 1st House, Substituted |
This bill would amend the Development Corporation Act of 1979 (the Act) to allow industrial development corporations to undertake projects required or suitable for career centers. Under current law, an industrial development corporation (corporation) can lease authorized projects to a nonexempt entity and that project is exempt from ad valorem, sales and use taxes or any other taxes levied or imposed by this state or any political subdivision of the state. Since the bill would expand the types of authorized projects to include certain educational facilities at a higher education institution, it could impact the amount of taxable property values and the related ad valorem taxes as well as other taxes.
Section 403.302 of the Government Code requires the Comptroller to conduct a property value study to determine the total taxable value for each school district. Total taxable value is an element in the state's school funding formula. Passage of this bill could cause a change in the school district taxable values reported to the Commissioner of Education by the Comptroller and a change in state costs to the Foundation School Fund.
Since the bill would expand the types of authorized projects to include career centers, it could impact the amount of taxable property values and the related ad valorem taxes as well as other taxes collected by units of local government.
According to the Comptroller's office, the number of development corporations created by counties and cities statewide is unknown. However, corporations created under Sections 4A and 4B of the Act are required to file an annual report with the Comptroller. For fiscal 2004, there were 517 cities with a Section 4A and/or 4B development corporation(s).
The development corporations for the cities of New Braunfels and Seguin indicated that the Central Texas Technology Center is looking at an expansion project, and this bill would enable the two corporations to provide assistance with the project.
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, JRO, WP, DLBe
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