AN ACT
1-1 relating to ad valorem tax incentives for the development or
1-2 redevelopment of certain property subject to a voluntary cleanup
1-3 agreement.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection (a), Section 312.002, Tax Code, is
1-6 amended to read as follows:
1-7 (a) A taxing unit may not enter into a tax abatement
1-8 agreement under this chapter and the governing body of a
1-9 municipality or county may not designate an area as a reinvestment
1-10 zone unless the governing body has established guidelines and
1-11 criteria governing tax abatement agreements by the taxing unit and
1-12 a resolution stating that the taxing unit elects to become eligible
1-13 to participate in tax abatement. The guidelines applicable to
1-14 property other than property described by Section 312.211(a) must
1-15 provide for the availability of tax abatement for both new
1-16 facilities and structures and for the expansion or modernization of
1-17 existing facilities and structures.
1-18 SECTION 2. Subsections (c) and (d), Section 312.201, Tax
1-19 Code, are amended to read as follows:
1-20 (c) Area of a reinvestment zone designated for residential
1-21 tax abatement or commercial-industrial tax abatement may be
1-22 included in an overlapping or coincidental residential or
1-23 commercial-industrial zone. In that event, the zone in which the
2-1 property is considered to be located for purposes of executing an
2-2 agreement under Section 312.204 or 312.211 is determined by the
2-3 comprehensive zoning ordinance, if any, of the municipality.
2-4 (d) The governing body may not adopt an ordinance
2-5 designating an area as a reinvestment zone until the governing body
2-6 has held a public hearing on the designation and has found that the
2-7 improvements sought are feasible and practical and would be a
2-8 benefit to the land to be included in the zone and to the
2-9 municipality after the expiration of an agreement entered into
2-10 under Section 312.204 or 312.211, as applicable. At the hearing,
2-11 interested persons are entitled to speak and present evidence for
2-12 or against the designation. Not later than the seventh day before
2-13 the date of the hearing, notice of the hearing must be:
2-14 (1) published in a newspaper having general
2-15 circulation in the municipality; and
2-16 (2) delivered in writing to the presiding officer of
2-17 the governing body of each taxing unit that includes in its
2-18 boundaries real property that is to be included in the proposed
2-19 reinvestment zone.
2-20 SECTION 3. Subsection (a), Section 312.2041, Tax Code, is
2-21 amended to read as follows:
2-22 (a) Not later than the seventh day before the date on which
2-23 a municipality enters into an agreement under Section 312.204 or
2-24 312.211, the governing body of the municipality or a designated
2-25 officer or employee of the municipality shall deliver to the
3-1 presiding officer of the governing body of each other taxing unit
3-2 in which the property to be subject to the agreement is located a
3-3 written notice that the municipality intends to enter into the
3-4 agreement. The notice must include a copy of the proposed
3-5 agreement.
3-6 SECTION 4. Section 312.205, Tax Code, is amended to read as
3-7 follows:
3-8 Sec. 312.205. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
3-9 (a) An agreement made under Section 312.204 or 312.211 must:
3-10 (1) list the kind, number, and location of all
3-11 proposed improvements of the property;
3-12 (2) provide access to and authorize inspection of the
3-13 property by municipal employees to ensure that the improvements or
3-14 repairs are made according to the specifications and conditions of
3-15 the agreement;
3-16 (3) limit the uses of the property consistent with the
3-17 general purpose of encouraging development or redevelopment of the
3-18 zone during the period that property tax exemptions are in effect;
3-19 (4) provide for recapturing property tax revenue lost
3-20 as a result of the agreement if the owner of the property fails to
3-21 make the improvements or repairs as provided by the agreement;
3-22 (5) contain each term agreed to by the owner of the
3-23 property;
3-24 (6) require the owner of the property to certify
3-25 annually to the governing body of each taxing unit that the owner
4-1 is in compliance with each applicable term of the agreement; and
4-2 (7) provide that the governing body of the
4-3 municipality may cancel or modify the agreement if the property
4-4 owner fails to comply with the agreement.
4-5 (b) An agreement made under Section 312.204 or 312.211 may
4-6 include, at the option of the governing body of the municipality,
4-7 provisions for:
4-8 (1) improvements or repairs by the municipality to
4-9 streets, sidewalks, and utility services or facilities associated
4-10 with the property, except that the agreement may not provide for
4-11 lower charges or rates than are made for other services or
4-12 properties of a similar character;
4-13 (2) an economic feasibility study, including a
4-14 detailed list of estimated improvement costs, a description of the
4-15 methods of financing all estimated costs, and the time when related
4-16 costs or monetary obligations are to be incurred;
4-17 (3) a map showing existing uses and conditions of real
4-18 property in the reinvestment zone;
4-19 (4) a map showing proposed improvements and uses in
4-20 the reinvestment zone; and
4-21 (5) proposed changes of zoning ordinances, the master
4-22 plan, the map, building codes, and city ordinances.
4-23 SECTION 5. Subsections (a) and (c), Section 312.206, Tax
4-24 Code, are amended to read as follows:
4-25 (a) If property taxes on property located in the taxing
5-1 jurisdiction of a municipality are abated under an agreement made
5-2 under Section 312.204 or 312.211, the governing body of each other
5-3 taxing unit eligible to enter into tax abatement agreements under
5-4 Section 312.002 in which the property is located may execute a
5-5 written agreement with the owner of the property not later than the
5-6 90th day after the date the municipal agreement is executed. The
5-7 agreement must contain terms identical to those contained in the
5-8 agreement with the municipality providing for the portion of the
5-9 property that is to be exempt from taxation under the agreement,
5-10 the duration of the agreement, and the provisions included in the
5-11 agreement under Section 312.205, even if the value of the property
5-12 at the time the agreement is executed is not the same as its value
5-13 when the municipal agreement was executed and even if improvements
5-14 or repairs have been made to the property since the municipal
5-15 agreement was executed. If the governing body of the taxing unit
5-16 by official action at any time before the execution of the
5-17 municipal agreement expresses an intent to enter into an agreement
5-18 with the owner of property under this subsection or to be bound by
5-19 the terms of the municipal agreement if the municipality enters
5-20 into an agreement under Section 312.204 or 312.211 with the owner
5-21 relating to the property, the terms of the municipal agreement
5-22 regarding the share of the property to be exempt in each year of
5-23 the municipal agreement apply to the taxation of the property by
5-24 the taxing unit. If the taxing unit that expressed its intent to
5-25 enter into an agreement or to be bound by the municipal agreement
6-1 is a county, those terms of the municipal agreement also apply to
6-2 the taxation of the property by a taxing unit in the county to
6-3 which a county tax abatement agreement would apply under Section
6-4 312.004.
6-5 (c) If the governing body of a municipality designates a
6-6 reinvestment zone that includes property in the extraterritorial
6-7 jurisdiction of the municipality, the governing body of a taxing
6-8 unit eligible to enter into tax abatement agreements under Section
6-9 312.002 in which the property is located may execute a written
6-10 agreement with the owner of the property to exempt from its
6-11 property taxes all or part of the value of the property in the same
6-12 manner and subject to the same restrictions as provided by Section
6-13 312.204 or 312.211 for a municipality. The taxing unit may execute
6-14 an agreement even if the municipality does not execute an agreement
6-15 for the property, and the terms of the agreement are not required
6-16 to be identical to the terms of a municipal agreement. However, if
6-17 the governing body of another eligible taxing unit has previously
6-18 executed an agreement to exempt all or part of the value of the
6-19 property and that agreement is still in effect, the terms of the
6-20 subsequent agreement relating to the share of the property that is
6-21 to be exempt in each year that the existing agreement remains in
6-22 effect must be identical to those of the existing agreement.
6-23 SECTION 6. Subchapter B, Chapter 312, Tax Code, is amended
6-24 by adding Section 312.211 to read as follows:
6-25 Sec. 312.211. AGREEMENT BY MUNICIPALITY RELATING TO PROPERTY
7-1 SUBJECT TO VOLUNTARY CLEANUP AGREEMENT. (a) This section applies
7-2 only to:
7-3 (1) real property:
7-4 (A) that is located in a reinvestment zone;
7-5 (B) that is not in an improvement project
7-6 financed by tax increment bonds;
7-7 (C) that is the subject of a voluntary cleanup
7-8 agreement under Section 361.606, Health and Safety Code; and
7-9 (D) the value of which is adversely affected by
7-10 the release of a hazardous substance or contaminant according to
7-11 the two preceding appraisals by the appraisal office; and
7-12 (2) tangible personal property located on the real
7-13 property.
7-14 (b) The governing body of a municipality eligible to enter
7-15 into a tax abatement agreement under Section 312.002 may agree in
7-16 writing with the owner of property described by Subsection (a) to
7-17 exempt from taxation a portion of the value of the property for a
7-18 period not to exceed four years. The agreement takes effect on
7-19 January 1 of the next tax year after the date the owner receives a
7-20 certificate of completion for the property under Section 361.609,
7-21 Health and Safety Code. The agreement may exempt from taxation:
7-22 (1) not more than 100 percent of the value of the
7-23 property in the first year covered by the agreement;
7-24 (2) not more than 75 percent of the value of the
7-25 property in the second year covered by the agreement;
8-1 (3) not more than 50 percent of the value of the
8-2 property in the third year covered by the agreement; and
8-3 (4) not more than 25 percent of the value of the
8-4 property in the fourth year covered by the agreement.
8-5 (c) A property owner may not receive a tax abatement under
8-6 this section for the first tax year covered by the agreement unless
8-7 the property owner includes with the application for an exemption
8-8 under Section 11.28 filed with the chief appraiser of the appraisal
8-9 district in which the property has situs a copy of the certificate
8-10 of completion for the property.
8-11 (d) A property owner who files a copy of the certificate of
8-12 completion for property for the first tax year covered by the
8-13 agreement is not required to refile the certificate in a subsequent
8-14 tax year to receive a tax abatement under this section for the
8-15 property for that tax year.
8-16 (e) The chief appraiser shall accept a certificate of
8-17 completion filed under Subsection (c) as conclusive evidence of the
8-18 facts stated in the certificate.
8-19 (f) The governing body of the municipality may cancel or
8-20 modify the agreement if:
8-21 (1) the use of the land is changed from the use
8-22 specified in the certificate of completion; and
8-23 (2) the governing body determines that the new use may
8-24 result in an increased risk to human health or the environment.
8-25 (g) A municipality may enter into a tax abatement agreement
9-1 covering property described by Subsection (a) under this section or
9-2 under Section 312.204, but not under both sections. Section
9-3 312.204 applies to an agreement entered into under this section
9-4 except as otherwise provided by this section.
9-5 (h) A school district may not enter into a tax abatement
9-6 agreement under this section.
9-7 SECTION 7. Subsection (a), Section 312.402, Tax Code, is
9-8 amended to read as follows:
9-9 (a) The commissioners court may execute a tax abatement
9-10 agreement with the owner of taxable real property located in a
9-11 reinvestment zone designated under this subchapter. The execution,
9-12 duration, and other terms of an agreement made under this section
9-13 are governed by the provisions of Sections 312.204, [and] 312.205,
9-14 and 312.211 applicable to a municipality. Section 312.2041 applies
9-15 to an agreement made by a county under this section in the same
9-16 manner as it applies to an agreement made by a municipality under
9-17 Section 312.204 or 312.211.
9-18 SECTION 8. This Act takes effect September 1, 1997, and
9-19 applies only to ad valorem taxes imposed on or after January 1,
9-20 1998.
9-21 SECTION 9. The importance of this legislation and the
9-22 crowded condition of the calendars in both houses create an
9-23 emergency and an imperative public necessity that the
9-24 constitutional rule requiring bills to be read on three several
9-25 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1596 passed the Senate on
April 25, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1596 passed the House on
May 26, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor