By Ellis, et al. S.B. No. 1596
75R1396 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to ad valorem tax incentives for the development or
1-3 redevelopment of certain property subject to a voluntary cleanup
1-4 agreement.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 312.002(a), Tax Code, is amended to read
1-7 as follows:
1-8 (a) A taxing unit may not enter into a tax abatement
1-9 agreement under this chapter and the governing body of a
1-10 municipality or county may not designate an area as a reinvestment
1-11 zone unless the governing body has established guidelines and
1-12 criteria governing tax abatement agreements by the taxing unit and
1-13 a resolution stating that the taxing unit elects to become eligible
1-14 to participate in tax abatement. The guidelines applicable to
1-15 property other than property described by Section 312.211(a) must
1-16 provide for the availability of tax abatement for both new
1-17 facilities and structures and for the expansion or modernization of
1-18 existing facilities and structures.
1-19 SECTION 2. Sections 312.201(c) and (d), Tax Code, are
1-20 amended to read as follows:
1-21 (c) Area of a reinvestment zone designated for residential
1-22 tax abatement or commercial-industrial tax abatement may be
1-23 included in an overlapping or coincidental residential or
1-24 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. Section 312.2041(a), Tax Code, is amended to read
2-21 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
2-26 presiding officer of the governing body of each other taxing unit
2-27 in which the property to be subject to the agreement is located a
3-1 written notice that the municipality intends to enter into the
3-2 agreement. The notice must include a copy of the proposed
3-3 agreement.
3-4 SECTION 4. Section 312.205, Tax Code, is amended to read as
3-5 follows:
3-6 Sec. 312.205. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
3-7 (a) An agreement made under Section 312.204 or 312.211 must:
3-8 (1) list the kind, number, and location of all
3-9 proposed improvements of the property;
3-10 (2) provide access to and authorize inspection of the
3-11 property by municipal employees to ensure that the improvements or
3-12 repairs are made according to the specifications and conditions of
3-13 the agreement;
3-14 (3) limit the uses of the property consistent with the
3-15 general purpose of encouraging development or redevelopment of the
3-16 zone during the period that property tax exemptions are in effect;
3-17 (4) provide for recapturing property tax revenue lost
3-18 as a result of the agreement if the owner of the property fails to
3-19 make the improvements or repairs as provided by the agreement;
3-20 (5) contain each term agreed to by the owner of the
3-21 property;
3-22 (6) require the owner of the property to certify
3-23 annually to the governing body of each taxing unit that the owner
3-24 is in compliance with each applicable term of the agreement; and
3-25 (7) provide that the governing body of the
3-26 municipality may cancel or modify the agreement if the property
3-27 owner fails to comply with the agreement.
4-1 (b) An agreement made under Section 312.204 or 312.211 may
4-2 include, at the option of the governing body of the municipality,
4-3 provisions for:
4-4 (1) improvements or repairs by the municipality to
4-5 streets, sidewalks, and utility services or facilities associated
4-6 with the property, except that the agreement may not provide for
4-7 lower charges or rates than are made for other services or
4-8 properties of a similar character;
4-9 (2) an economic feasibility study, including a
4-10 detailed list of estimated improvement costs, a description of the
4-11 methods of financing all estimated costs, and the time when related
4-12 costs or monetary obligations are to be incurred;
4-13 (3) a map showing existing uses and conditions of real
4-14 property in the reinvestment zone;
4-15 (4) a map showing proposed improvements and uses in
4-16 the reinvestment zone; and
4-17 (5) proposed changes of zoning ordinances, the master
4-18 plan, the map, building codes, and city ordinances.
4-19 SECTION 5. Sections 312.206(a) and (c), Tax Code, are
4-20 amended to read as follows:
4-21 (a) If property taxes on property located in the taxing
4-22 jurisdiction of a municipality are abated under an agreement made
4-23 under Section 312.204 or 312.211, the governing body of each other
4-24 taxing unit eligible to enter into tax abatement agreements under
4-25 Section 312.002 in which the property is located may execute a
4-26 written agreement with the owner of the property not later than the
4-27 90th day after the date the municipal agreement is executed. The
5-1 agreement must contain terms identical to those contained in the
5-2 agreement with the municipality providing for the portion of the
5-3 property that is to be exempt from taxation under the agreement,
5-4 the duration of the agreement, and the provisions included in the
5-5 agreement under Section 312.205, even if the value of the property
5-6 at the time the agreement is executed is not the same as its value
5-7 when the municipal agreement was executed and even if improvements
5-8 or repairs have been made to the property since the municipal
5-9 agreement was executed. If the governing body of the taxing unit
5-10 by official action at any time before the execution of the
5-11 municipal agreement expresses an intent to enter into an agreement
5-12 with the owner of property under this subsection or to be bound by
5-13 the terms of the municipal agreement if the municipality enters
5-14 into an agreement under Section 312.204 or 312.211 with the owner
5-15 relating to the property, the terms of the municipal agreement
5-16 regarding the share of the property to be exempt in each year of
5-17 the municipal agreement apply to the taxation of the property by
5-18 the taxing unit. If the taxing unit that expressed its intent to
5-19 enter into an agreement or to be bound by the municipal agreement
5-20 is a county, those terms of the municipal agreement also apply to
5-21 the taxation of the property by a taxing unit in the county to
5-22 which a county tax abatement agreement would apply under Section
5-23 312.004.
5-24 (c) If the governing body of a municipality designates a
5-25 reinvestment zone that includes property in the extraterritorial
5-26 jurisdiction of the municipality, the governing body of a taxing
5-27 unit eligible to enter into tax abatement agreements under Section
6-1 312.002 in which the property is located may execute a written
6-2 agreement with the owner of the property to exempt from its
6-3 property taxes all or part of the value of the property in the same
6-4 manner and subject to the same restrictions as provided by Section
6-5 312.204 or 312.211 for a municipality. The taxing unit may execute
6-6 an agreement even if the municipality does not execute an agreement
6-7 for the property, and the terms of the agreement are not required
6-8 to be identical to the terms of a municipal agreement. However, if
6-9 the governing body of another eligible taxing unit has previously
6-10 executed an agreement to exempt all or part of the value of the
6-11 property and that agreement is still in effect, the terms of the
6-12 subsequent agreement relating to the share of the property that is
6-13 to be exempt in each year that the existing agreement remains in
6-14 effect must be identical to those of the existing agreement.
6-15 SECTION 6. Subchapter B, Chapter 312, Tax Code, is amended
6-16 by adding Section 312.211 to read as follows:
6-17 Sec. 312.211. AGREEMENT BY MUNICIPALITY RELATING TO PROPERTY
6-18 SUBJECT TO VOLUNTARY CLEANUP AGREEMENT. (a) This section applies
6-19 only to:
6-20 (1) real property:
6-21 (A) that is located in a reinvestment zone;
6-22 (B) that is not in an improvement project
6-23 financed by tax increment bonds;
6-24 (C) that is the subject of a voluntary cleanup
6-25 agreement under Section 361.606, Health and Safety Code; and
6-26 (D) the value of which is adversely affected by
6-27 the release of a hazardous substance or contaminant according to
7-1 the two preceding appraisals by the appraisal office; and
7-2 (2) tangible personal property located on the real
7-3 property.
7-4 (b) The governing body of a municipality eligible to enter
7-5 into a tax abatement agreement under Section 312.002 may agree in
7-6 writing with the owner of property described by Subsection (a) to
7-7 exempt from taxation a portion of the value of the property for a
7-8 period not to exceed four years. The agreement takes effect on
7-9 January 1 of the next tax year after the date the owner receives a
7-10 certificate of completion for the property under Section 361.609,
7-11 Health and Safety Code. The agreement may exempt from taxation:
7-12 (1) not more than 100 percent of the value of the
7-13 property in the first year covered by the agreement;
7-14 (2) not more than 75 percent of the value of the
7-15 property in the second year covered by the agreement;
7-16 (3) not more than 50 percent of the value of the
7-17 property in the third year covered by the agreement; and
7-18 (4) not more than 25 percent of the value of the
7-19 property in the fourth year covered by the agreement.
7-20 (c) A property owner may not receive a tax abatement under
7-21 this section for the first tax year covered by the agreement unless
7-22 the property owner includes with the application for an exemption
7-23 under Section 11.28 filed with the chief appraiser of the appraisal
7-24 district in which the property has situs a copy of the certificate
7-25 of completion for the property.
7-26 (d) A property owner who files a copy of the certificate of
7-27 completion for property for the first tax year covered by the
8-1 agreement is not required to refile the certificate in a subsequent
8-2 tax year to receive a tax abatement under this section for the
8-3 property for that tax year.
8-4 (e) The chief appraiser shall accept a certificate of
8-5 completion filed under Subsection (c) as conclusive evidence of the
8-6 facts stated in the certificate.
8-7 (f) The governing body of the municipality may cancel or
8-8 modify the agreement if:
8-9 (1) the use of the land is changed from the use
8-10 specified in the certificate of completion; and
8-11 (2) the governing body determines that the new use may
8-12 result in an increased risk to human health or the environment.
8-13 (g) A municipality may enter into a tax abatement agreement
8-14 covering property described by Subsection (a) under this section or
8-15 under Section 312.204, but not under both sections. Section
8-16 312.204 applies to an agreement entered into under this section
8-17 except as otherwise provided by this section.
8-18 SECTION 7. Section 312.402(a), Tax Code, is amended to read
8-19 as follows:
8-20 (a) The commissioners court may execute a tax abatement
8-21 agreement with the owner of taxable real property located in a
8-22 reinvestment zone designated under this subchapter. The execution,
8-23 duration, and other terms of an agreement made under this section
8-24 are governed by the provisions of Sections 312.204, [and] 312.205,
8-25 and 312.211 applicable to a municipality. Section 312.2041 applies
8-26 to an agreement made by a county under this section in the same
8-27 manner as it applies to an agreement made by a municipality under
9-1 Section 312.204 or 312.211.
9-2 SECTION 8. Section 41.009(b), Education Code, is amended to
9-3 read as follows:
9-4 (b) The commissioner shall determine the wealth per student
9-5 of a school district under this chapter as if any tax abatement
9-6 agreement executed by a school district on or after May 31, 1993,
9-7 other than a tax abatement agreement pertaining to property
9-8 described by Section 312.211(a), Tax Code, had not been executed.
9-9 SECTION 9. Section 403.302(d), Government Code, is amended
9-10 to read as follows:
9-11 (d) For the purposes of this section, "taxable value" means
9-12 market value less:
9-13 (1) the total dollar amount of any exemptions of part
9-14 but not all of the value of taxable property required by the
9-15 constitution or a statute that a district lawfully granted in the
9-16 year that is the subject of the study;
9-17 (2) the total dollar amount of any exemptions granted
9-18 before May 31, 1993, within a reinvestment zone under agreements
9-19 authorized by Chapter 312, Tax Code, and the total dollar amount of
9-20 any exemptions granted under agreements authorized by Chapter 312,
9-21 Tax Code, pertaining to property described by Section 312.211(a),
9-22 Tax Code;
9-23 (3) the total dollar amount of any captured appraised
9-24 value of property that is located in a reinvestment zone and that
9-25 is eligible for tax increment financing under Chapter 311, Tax
9-26 Code;
9-27 (4) the total dollar amount of any exemptions granted
10-1 under Section 11.251, Tax Code;
10-2 (5) the difference between the market value and the
10-3 productivity value of land that qualifies for appraisal on the
10-4 basis of its productive capacity, except that the productivity
10-5 value may not exceed the fair market value of the land;
10-6 (6) the portion of the appraised value of residence
10-7 homesteads of the elderly on which school district taxes are not
10-8 imposed in the year that is the subject of the study, calculated as
10-9 if the residence homesteads were appraised at the full value
10-10 required by law;
10-11 (7) a portion of the market value of property not
10-12 otherwise fully taxable by the district at market value because of
10-13 action required by statute or the constitution of this state that,
10-14 if the tax rate adopted by the district is applied to it, produces
10-15 an amount equal to the difference between the tax that the district
10-16 would have imposed on the property if the property were fully
10-17 taxable at market value and the tax that the district is actually
10-18 authorized to impose on the property; and
10-19 (8) the market value of all tangible personal
10-20 property, other than manufactured homes, owned by a family or
10-21 individual and not held or used for the production of income.
10-22 SECTION 10. This Act takes effect September 1, 1997, and
10-23 applies only to ad valorem taxes imposed on or after January 1,
10-24 1998.
10-25 SECTION 11. The importance of this legislation and the
10-26 crowded condition of the calendars in both houses create an
10-27 emergency and an imperative public necessity that the
11-1 constitutional rule requiring bills to be read on three several
11-2 days in each house be suspended, and this rule is hereby suspended.