By Maxey                                        H.B. No. 1030

      75R3810 SMH-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the consequences of noncompliance by a property owner

 1-3     with an ad valorem tax abatement agreement.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 312.205(a), Tax Code, is amended to read

 1-6     as follows:

 1-7           (a)  An agreement made under Section 312.204 must:

 1-8                 (1)  list the kind, number, and location of all

 1-9     proposed improvements of the property;

1-10                 (2)  provide access to and authorize inspection of the

1-11     property by municipal employees to ensure that the improvements or

1-12     repairs are made according to the specifications and conditions of

1-13     the agreement;

1-14                 (3)  limit the uses of the property consistent with the

1-15     general purpose of encouraging development or redevelopment of the

1-16     zone during the period that property tax exemptions are in effect;

1-17                 (4)  provide for recapture by the municipality of the

1-18     [recapturing] property tax revenue lost as a result of the

1-19     agreement if the owner of the property fails to comply with each

1-20     applicable term of [make the improvements or repairs as provided

1-21     by] the agreement;

1-22                 (5)  contain each term agreed to by the owner of the

1-23     property;

1-24                 (6)  require the owner of the property to certify

 2-1     annually to the governing body of each taxing unit that the owner

 2-2     is in compliance with each applicable term of the agreement; [and]

 2-3                 (7)  provide for modification of the agreement by

 2-4     [that] the governing body of the municipality and the property

 2-5     owner; and

 2-6                 (8)  provide for cancellation of the agreement by the

 2-7     governing body of the municipality [may cancel or modify the

 2-8     agreement] if the property owner fails to comply with each

 2-9     applicable term of the agreement.

2-10           SECTION 2.  Subchapter B, Chapter 312, Tax Code, is amended

2-11     by adding Section 312.211 to read as follows:

2-12           Sec. 312.211.  ACTION BY TAXING UNIT ON NONCOMPLIANCE.  (a)

2-13     If a property owner fails to comply with each applicable term of a

2-14     tax abatement agreement before the fifth anniversary of the date

2-15     the agreement is entered into, the governing body of the taxing

2-16     unit shall:

2-17                 (1)  cancel the agreement; and

2-18                 (2)  take all appropriate measures to recapture any

2-19     property tax revenue lost as a result of the agreement.

2-20           (b)  Cancellation of a tax abatement agreement under this

2-21     section does not negate the property owner's duty under the

2-22     agreement to pay any property taxes the owner did not pay as a

2-23     result of the agreement.

2-24           SECTION 3.  Section 312.402(e), Tax Code, is amended to read

2-25     as follows:

2-26           (e)  An agreement made under this section by a county or

2-27     other taxing unit may be canceled, modified, or terminated in the

 3-1     same manner and subject to the same limitations as provided by

 3-2     Sections [Section] 312.208 and 312.211 for an agreement made under

 3-3     Subchapter B.

 3-4           SECTION 4.  This Act applies only to a tax abatement

 3-5     agreement entered into on or after the effective date of this Act.

 3-6     A tax abatement agreement entered into before the effective date of

 3-7     this Act is governed by the law as it existed immediately before

 3-8     the effective date of this Act, and that law is continued in effect

 3-9     for that purpose.

3-10           SECTION 5.  This Act takes effect September 1, 1997.

3-11           SECTION 6.  The importance of this legislation and the

3-12     crowded condition of the calendars in both houses create an

3-13     emergency and an imperative public necessity that the

3-14     constitutional rule requiring bills to be read on three several

3-15     days in each house be suspended, and this rule is hereby suspended.