JWB H.B. 1030 75(R)BILL ANALYSIS


WAYS & MEANS
H.B. 1030
By: Maxey
5-1-97
Committee Report (Unamended)



BACKGROUND 


Chapter 312, Tax Code (Property Redevelopment and Tax Abatement Act),
provides that a governmental entity granting a tax abatement may cancel or
modify the abatement agreement, but there is currently no statutory
penalty for failure to comply with the terms of the agreement.  By
allowing a governmental entity to recapture lost property tax revenue from
a non-complying business, there will be an effective tool to ensure
compliance with promises made to the governmental entity and an attempt to
guarantee tax revenue is not lost. 

PURPOSE

The bill allows a governmental entity to cancel a tax abatement agreement
if a property owner fails to comply with each applicable term of the
agreement.  It also allows the governmental entity to take all appropriate
measures to recapture lost tax revenue, and provides a mechanism to cancel
the agreement and recapture revenue if the agreement is not fulfilled
completely within five years. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.Amends Sec. 312.205(a), Tax Code (Specific Terms of Tax
Abatement Agreement), requiring that a tax abatement agreement made under
Sec. 312.204, Tax Code (Municipal Tax Abatement Agreement), must include
provisions: (1) allowing a municipality to recapture lost property tax
revenue if the property owner does not comply with each applicable term of
the agreement; (2) allowing modification of the agreement by the
municipality and the property owner; and (3) allowing for cancellation of
the agreement by the municipality if the property owner doesn't comply
with each applicable term of the agreement. 

SECTION 2.Amends Chapter 312, Tax Code (Property Redevelopment and Tax
Abatement Act), by adding Section 312.211.  ACTION BY TAXING UNIT ON
NONCOMPLIANCE. 

Requires the cancellation of a property tax abatement agreement and
recapture of lost revenue if the property owner does not comply with each
applicable term of the abatement agreement by the fifth anniversary of the
date the agreement was entered into.  Cancellation does not negate the
duty to pay property taxes owed as a result of the agreement. 

SECTION 3.Amends Sec. 312.402(e), Tax Code (County Tax Abatement
Agreement), to extend requirements enacted by Sections 1 and 2 of the bill
to counties or other taxing units.  

 SECTION 4. Provides that this Act applies only to tax abatement
agreements entered into after effective date of Act. 

SECTION 5.Effective date:  September 1, 1997

SECTION 6. Emergency clause.