HBA-KDB S.B. 985 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 985 By: Duncan Ways & Means 5/4/2001 Engrossed BACKGROUND AND PURPOSE Under current law, the governing body of a municipality is authorized to grant a tax abatement to the owner of taxable real property that is located in a reinvestment zone. However, the owner of a leasehold interest in real property that is located in a reinvestment zone is not authorized to receive a tax abatement. Senate Bill 985 authorizes the governing body of a municipality to enter into a tax abatement agreement with the owner of a leasehold interest in real property that is located in a reinvestment zone. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 985 amends the Tax Code to authorize the governing body of a municipality eligible to enter into a tax abatement agreement to agree in writing with the owner of a leasehold interest in real property that is located in a reinvestment zone to exempt a portion of the value of tangible personal property located on the real property, for a period not to exceed 10 years, on the condition that the owner of the leasehold interest make specific improvements or repairs to the real property. The bill provides that such a tax abatement agreement is subject to the rights of holders of outstanding bonds of the municipality. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.