1-1 By: Ellis, Barrientos S.B. No. 1596
1-2 (In the Senate - Filed March 14, 1997; March 24, 1997, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 22, 1997, reported favorably, as amended, by the following
1-5 vote: Yeas 9, Nays 0; April 22, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Ellis
1-7 Amend S.B. No. 1596 as follows:
1-8 (1) In SECTION 6 of the bill, after proposed Subsection
1-9 312.211(g) (Introduced version, page 4, between lines 18 and 19),
1-10 insert a new Subsection 312.211(h) to read as follows:
1-11 (h) A school district may not enter into a tax abatement
1-12 agreement under this section.
1-13 (2) Strike Sections 8 and 9 (Introduced version, page 4,
1-14 line 30, through page 5, line 7), and renumber subsequent sections
1-15 of the bill accordingly.
1-16 A BILL TO BE ENTITLED
1-17 AN ACT
1-18 relating to ad valorem tax incentives for the development or
1-19 redevelopment of certain property subject to a voluntary cleanup
1-20 agreement.
1-21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-22 SECTION 1. Subsection (a), Section 312.002, Tax Code, is
1-23 amended to read as follows:
1-24 (a) A taxing unit may not enter into a tax abatement
1-25 agreement under this chapter and the governing body of a
1-26 municipality or county may not designate an area as a reinvestment
1-27 zone unless the governing body has established guidelines and
1-28 criteria governing tax abatement agreements by the taxing unit and
1-29 a resolution stating that the taxing unit elects to become eligible
1-30 to participate in tax abatement. The guidelines applicable to
1-31 property other than property described by Section 312.211(a) must
1-32 provide for the availability of tax abatement for both new
1-33 facilities and structures and for the expansion or modernization of
1-34 existing facilities and structures.
1-35 SECTION 2. Subsections (c) and (d), Section 312.201, Tax
1-36 Code, are amended to read as follows:
1-37 (c) Area of a reinvestment zone designated for residential
1-38 tax abatement or commercial-industrial tax abatement may be
1-39 included in an overlapping or coincidental residential or
1-40 commercial-industrial zone. In that event, the zone in which the
1-41 property is considered to be located for purposes of executing an
1-42 agreement under Section 312.204 or 312.211 is determined by the
1-43 comprehensive zoning ordinance, if any, of the municipality.
1-44 (d) The governing body may not adopt an ordinance
1-45 designating an area as a reinvestment zone until the governing body
1-46 has held a public hearing on the designation and has found that the
1-47 improvements sought are feasible and practical and would be a
1-48 benefit to the land to be included in the zone and to the
1-49 municipality after the expiration of an agreement entered into
1-50 under Section 312.204 or 312.211, as applicable. At the hearing,
1-51 interested persons are entitled to speak and present evidence for
1-52 or against the designation. Not later than the seventh day before
1-53 the date of the hearing, notice of the hearing must be:
1-54 (1) published in a newspaper having general
1-55 circulation in the municipality; and
1-56 (2) delivered in writing to the presiding officer of
1-57 the governing body of each taxing unit that includes in its
1-58 boundaries real property that is to be included in the proposed
1-59 reinvestment zone.
1-60 SECTION 3. Subsection (a), Section 312.2041, Tax Code, is
1-61 amended to read as follows:
1-62 (a) Not later than the seventh day before the date on which
1-63 a municipality enters into an agreement under Section 312.204 or
1-64 312.211, the governing body of the municipality or a designated
2-1 officer or employee of the municipality shall deliver to the
2-2 presiding officer of the governing body of each other taxing unit
2-3 in which the property to be subject to the agreement is located a
2-4 written notice that the municipality intends to enter into the
2-5 agreement. The notice must include a copy of the proposed
2-6 agreement.
2-7 SECTION 4. Section 312.205, Tax Code, is amended to read as
2-8 follows:
2-9 Sec. 312.205. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
2-10 (a) An agreement made under Section 312.204 or 312.211 must:
2-11 (1) list the kind, number, and location of all
2-12 proposed improvements of the property;
2-13 (2) provide access to and authorize inspection of the
2-14 property by municipal employees to ensure that the improvements or
2-15 repairs are made according to the specifications and conditions of
2-16 the agreement;
2-17 (3) limit the uses of the property consistent with the
2-18 general purpose of encouraging development or redevelopment of the
2-19 zone during the period that property tax exemptions are in effect;
2-20 (4) provide for recapturing property tax revenue lost
2-21 as a result of the agreement if the owner of the property fails to
2-22 make the improvements or repairs as provided by the agreement;
2-23 (5) contain each term agreed to by the owner of the
2-24 property;
2-25 (6) require the owner of the property to certify
2-26 annually to the governing body of each taxing unit that the owner
2-27 is in compliance with each applicable term of the agreement; and
2-28 (7) provide that the governing body of the
2-29 municipality may cancel or modify the agreement if the property
2-30 owner fails to comply with the agreement.
2-31 (b) An agreement made under Section 312.204 or 312.211 may
2-32 include, at the option of the governing body of the municipality,
2-33 provisions for:
2-34 (1) improvements or repairs by the municipality to
2-35 streets, sidewalks, and utility services or facilities associated
2-36 with the property, except that the agreement may not provide for
2-37 lower charges or rates than are made for other services or
2-38 properties of a similar character;
2-39 (2) an economic feasibility study, including a
2-40 detailed list of estimated improvement costs, a description of the
2-41 methods of financing all estimated costs, and the time when related
2-42 costs or monetary obligations are to be incurred;
2-43 (3) a map showing existing uses and conditions of real
2-44 property in the reinvestment zone;
2-45 (4) a map showing proposed improvements and uses in
2-46 the reinvestment zone; and
2-47 (5) proposed changes of zoning ordinances, the master
2-48 plan, the map, building codes, and city ordinances.
2-49 SECTION 5. Subsections (a) and (c), Section 312.206, Tax
2-50 Code, are amended to read as follows:
2-51 (a) If property taxes on property located in the taxing
2-52 jurisdiction of a municipality are abated under an agreement made
2-53 under Section 312.204 or 312.211, the governing body of each other
2-54 taxing unit eligible to enter into tax abatement agreements under
2-55 Section 312.002 in which the property is located may execute a
2-56 written agreement with the owner of the property not later than the
2-57 90th day after the date the municipal agreement is executed. The
2-58 agreement must contain terms identical to those contained in the
2-59 agreement with the municipality providing for the portion of the
2-60 property that is to be exempt from taxation under the agreement,
2-61 the duration of the agreement, and the provisions included in the
2-62 agreement under Section 312.205, even if the value of the property
2-63 at the time the agreement is executed is not the same as its value
2-64 when the municipal agreement was executed and even if improvements
2-65 or repairs have been made to the property since the municipal
2-66 agreement was executed. If the governing body of the taxing unit
2-67 by official action at any time before the execution of the
2-68 municipal agreement expresses an intent to enter into an agreement
2-69 with the owner of property under this subsection or to be bound by
3-1 the terms of the municipal agreement if the municipality enters
3-2 into an agreement under Section 312.204 or 312.211 with the owner
3-3 relating to the property, the terms of the municipal agreement
3-4 regarding the share of the property to be exempt in each year of
3-5 the municipal agreement apply to the taxation of the property by
3-6 the taxing unit. If the taxing unit that expressed its intent to
3-7 enter into an agreement or to be bound by the municipal agreement
3-8 is a county, those terms of the municipal agreement also apply to
3-9 the taxation of the property by a taxing unit in the county to
3-10 which a county tax abatement agreement would apply under Section
3-11 312.004.
3-12 (c) If the governing body of a municipality designates a
3-13 reinvestment zone that includes property in the extraterritorial
3-14 jurisdiction of the municipality, the governing body of a taxing
3-15 unit eligible to enter into tax abatement agreements under Section
3-16 312.002 in which the property is located may execute a written
3-17 agreement with the owner of the property to exempt from its
3-18 property taxes all or part of the value of the property in the same
3-19 manner and subject to the same restrictions as provided by Section
3-20 312.204 or 312.211 for a municipality. The taxing unit may execute
3-21 an agreement even if the municipality does not execute an agreement
3-22 for the property, and the terms of the agreement are not required
3-23 to be identical to the terms of a municipal agreement. However, if
3-24 the governing body of another eligible taxing unit has previously
3-25 executed an agreement to exempt all or part of the value of the
3-26 property and that agreement is still in effect, the terms of the
3-27 subsequent agreement relating to the share of the property that is
3-28 to be exempt in each year that the existing agreement remains in
3-29 effect must be identical to those of the existing agreement.
3-30 SECTION 6. Subchapter B, Chapter 312, Tax Code, is amended
3-31 by adding Section 312.211 to read as follows:
3-32 Sec. 312.211. AGREEMENT BY MUNICIPALITY RELATING TO PROPERTY
3-33 SUBJECT TO VOLUNTARY CLEANUP AGREEMENT. (a) This section applies
3-34 only to:
3-35 (1) real property:
3-36 (A) that is located in a reinvestment zone;
3-37 (B) that is not in an improvement project
3-38 financed by tax increment bonds;
3-39 (C) that is the subject of a voluntary cleanup
3-40 agreement under Section 361.606, Health and Safety Code; and
3-41 (D) the value of which is adversely affected by
3-42 the release of a hazardous substance or contaminant according to
3-43 the two preceding appraisals by the appraisal office; and
3-44 (2) tangible personal property located on the real
3-45 property.
3-46 (b) The governing body of a municipality eligible to enter
3-47 into a tax abatement agreement under Section 312.002 may agree in
3-48 writing with the owner of property described by Subsection (a) to
3-49 exempt from taxation a portion of the value of the property for a
3-50 period not to exceed four years. The agreement takes effect on
3-51 January 1 of the next tax year after the date the owner receives a
3-52 certificate of completion for the property under Section 361.609,
3-53 Health and Safety Code. The agreement may exempt from taxation:
3-54 (1) not more than 100 percent of the value of the
3-55 property in the first year covered by the agreement;
3-56 (2) not more than 75 percent of the value of the
3-57 property in the second year covered by the agreement;
3-58 (3) not more than 50 percent of the value of the
3-59 property in the third year covered by the agreement; and
3-60 (4) not more than 25 percent of the value of the
3-61 property in the fourth year covered by the agreement.
3-62 (c) A property owner may not receive a tax abatement under
3-63 this section for the first tax year covered by the agreement unless
3-64 the property owner includes with the application for an exemption
3-65 under Section 11.28 filed with the chief appraiser of the appraisal
3-66 district in which the property has situs a copy of the certificate
3-67 of completion for the property.
3-68 (d) A property owner who files a copy of the certificate of
3-69 completion for property for the first tax year covered by the
4-1 agreement is not required to refile the certificate in a subsequent
4-2 tax year to receive a tax abatement under this section for the
4-3 property for that tax year.
4-4 (e) The chief appraiser shall accept a certificate of
4-5 completion filed under Subsection (c) as conclusive evidence of the
4-6 facts stated in the certificate.
4-7 (f) The governing body of the municipality may cancel or
4-8 modify the agreement if:
4-9 (1) the use of the land is changed from the use
4-10 specified in the certificate of completion; and
4-11 (2) the governing body determines that the new use may
4-12 result in an increased risk to human health or the environment.
4-13 (g) A municipality may enter into a tax abatement agreement
4-14 covering property described by Subsection (a) under this section or
4-15 under Section 312.204, but not under both sections. Section
4-16 312.204 applies to an agreement entered into under this section
4-17 except as otherwise provided by this section.
4-18 SECTION 7. Subsection (a), Section 312.402, Tax Code, is
4-19 amended to read as follows:
4-20 (a) The commissioners court may execute a tax abatement
4-21 agreement with the owner of taxable real property located in a
4-22 reinvestment zone designated under this subchapter. The execution,
4-23 duration, and other terms of an agreement made under this section
4-24 are governed by the provisions of Sections 312.204, [and] 312.205,
4-25 and 312.211 applicable to a municipality. Section 312.2041 applies
4-26 to an agreement made by a county under this section in the same
4-27 manner as it applies to an agreement made by a municipality under
4-28 Section 312.204 or 312.211.
4-29 SECTION 8. Subsection (b), Section 41.009, Education Code,
4-30 is amended to read as follows:
4-31 (b) The commissioner shall determine the wealth per student
4-32 of a school district under this chapter as if any tax abatement
4-33 agreement executed by a school district on or after May 31, 1993,
4-34 other than a tax abatement agreement pertaining to property
4-35 described by Section 312.211(a), Tax Code, had not been executed.
4-36 SECTION 9. Subsection (d), Section 403.302, Government Code,
4-37 is amended to read as follows:
4-38 (d) For the purposes of this section, "taxable value" means
4-39 market value less:
4-40 (1) the total dollar amount of any exemptions of part
4-41 but not all of the value of taxable property required by the
4-42 constitution or a statute that a district lawfully granted in the
4-43 year that is the subject of the study;
4-44 (2) the total dollar amount of any exemptions granted
4-45 before May 31, 1993, within a reinvestment zone under agreements
4-46 authorized by Chapter 312, Tax Code, and the total dollar amount of
4-47 any exemptions granted under agreements authorized by Chapter 312,
4-48 Tax Code, pertaining to property described by Section 312.211(a),
4-49 Tax Code;
4-50 (3) the total dollar amount of any captured appraised
4-51 value of property that is located in a reinvestment zone and that
4-52 is eligible for tax increment financing under Chapter 311, Tax
4-53 Code;
4-54 (4) the total dollar amount of any exemptions granted
4-55 under Section 11.251, Tax Code;
4-56 (5) the difference between the market value and the
4-57 productivity value of land that qualifies for appraisal on the
4-58 basis of its productive capacity, except that the productivity
4-59 value may not exceed the fair market value of the land;
4-60 (6) the portion of the appraised value of residence
4-61 homesteads of the elderly on which school district taxes are not
4-62 imposed in the year that is the subject of the study, calculated as
4-63 if the residence homesteads were appraised at the full value
4-64 required by law;
4-65 (7) a portion of the market value of property not
4-66 otherwise fully taxable by the district at market value because of
4-67 action required by statute or the constitution of this state that,
4-68 if the tax rate adopted by the district is applied to it, produces
4-69 an amount equal to the difference between the tax that the district
5-1 would have imposed on the property if the property were fully
5-2 taxable at market value and the tax that the district is actually
5-3 authorized to impose on the property; and
5-4 (8) the market value of all tangible personal
5-5 property, other than manufactured homes, owned by a family or
5-6 individual and not held or used for the production of income.
5-7 SECTION 10. This Act takes effect September 1, 1997, and
5-8 applies only to ad valorem taxes imposed on or after January 1,
5-9 1998.
5-10 SECTION 11. The importance of this legislation and the
5-11 crowded condition of the calendars in both houses create an
5-12 emergency and an imperative public necessity that the
5-13 constitutional rule requiring bills to be read on three several
5-14 days in each house be suspended, and this rule is hereby suspended.
5-15 * * * * *