BILL ANALYSIS

Senate Research Center	S.B. 1340
88R5951 SGM-F	By: Zaffirini
	Natural Resources & Economic Development
	4/3/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Chapters 380 and 381, Local Government Code, allow local entities to provide tax or other financial incentives for businesses to locate in the city or county. In 2021 the legislature passed H.B. 2404 by Representative Meyer and Senator Zaffirini, which ensures that the public has access to basic information about these local development agreements via a database developed by the comptroller.

Although the database has PDF copies of the agreements available, only the contact information about the local government is reported in a searchable, sortable format. What's more, there are more types of local agreements and governments than those under Chapters 380 and 381 that provide similar financial incentives but are not included in the database. This leaves Texans without the ability to assess properly whether all the tax abatements granted by their elected officials were an effective use of taxpayer dollars.

S.B. 1340 would expand the definitions of "local development agreement" to include agreements under Chapters 312 and 313, Tax Code, and "local government" to encompass school districts and require local governments to report the following information in a comptroller-determined manner: name and contact information of the benefiting company, agreement expiration terms, total monetary value of the agreement, types and sources of abated/shared taxes; require taxing entities to maintain a direct link to their local development agreements listed in the local development agreement database; and ensure that school districts submit required information about a local development agreement to the comptroller within 14 days of entering the agreement. These changes would enhance transparency, accountability, and accessibility of local development agreement information, empowering Texas voters to make informed decisions and fostering responsible use of public resources.

As proposed, S.B. 1340 amends current law relating to the local development agreement database maintained by the comptroller of public accounts.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 403.0246(a)(2) and (3), Government Code, to redefine "local development agreement" and "local government."

SECTION 2. Amends Section 403.0246, Government Code, by amending Subsections (b) and (c) and adding Subsection (h), as follows:

(b) Requires the Comptroller of Public Accounts of the State of Texas (comptroller) to create and make accessible on the Internet a database, to be known as the Local Development Agreement Database, rather than the Chapter 380 (Miscellaneous Provisions Relating to Municipal Planning and Development) and 381 (County Development and Growth) Agreement Database, that contains information regarding all local development agreements in this state.

(1)-(4) makes no changes to these subdivisions;

(5) the name and contact information of any entity or the entity's agent that entered into the agreement with the local government, including the business address and any assumed names of the entity;

(6) the date on which the agreement went into effect and the date and terms on which the agreement expires;

(7) makes no change to this subdivision;

(8)-(9) makes nonsubstantive changes to these subdivisions;

(10) the total monetary value of the agreement; and

(11) the source of the money used or type of tax implicated by the agreement, including a sales and use tax, ad valorem tax, or hotel occupancy tax.

(h) Authorizes the comptroller to prescribe the form and manner in which a local government is required to submit information under Subsection (c).

SECTION 3. Amends Section 312.005(a), Tax Code, as follows:

(a) Requires the chief appraiser of each appraisal district that appraises property for a taxing unit that has designated a reinvestment zone or executed a tax abatement agreement under Chapter 312 (Property Redevelopment and Tax Abatement Act) to deliver to the comptroller before July 1 of the year following the year in which the zone is designated or the agreement is executed a report providing certain information, including the information described by Section 403.0246(c), Government Code, in connection with each tax abatement agreement described by Subdivision (2) (relating to requiring the chief appraiser of each appraisal district to deliver a report to the comptroller providing a copy of each tax abatement agreement to which a taxing unit that participates in the appraisal district is a party) of this subsection. Makes nonsubstantive changes.

SECTION 4. Amends Subchapter A, Chapter 312, by adding Section 312.008, as follows:

Sec. 312.008. INTERNET LINK TO AGREEMENT. Requires a taxing unit that maintains an Internet website and that executes a tax abatement agreement under this chapter to provide on the website a direct link to the location of the agreement information published on the comptroller's Internet website under Section 403.0246 (Local Development Agreement Database), Government Code.

SECTION 5. Amends Subchapter A, Chapter 313, Tax Code, by adding Section 313.011, as follows:

Sec. 313.011. PROVISION OF CERTAIN INFORMATION TO COMPTROLLER. (a) Requires a school district, not later than the 14th day after the date of entering into, amending, or renewing an agreement authorized by Chapter 313 (Texas Economic Development Act), to submit to the comptroller the information described by Section 403.0246(c), Government Code, and any other information the comptroller considers necessary to operate and update the database described by that section.

(b) Requires a school district to transmit the information required by Subsection (a) in a form and manner prescribed by the comptroller.

(c) Requires a school district, if the district submits an agreement to the comptroller under this section and the district maintains an Internet website, to provide on the website a direct link to the location of the agreement information published on the comptroller's Internet website.

SECTION 6. Makes application of this Act prospective.

SECTION 7. Effective date: September 1, 2023.