SRC-SEW S.B. 985 77(R)BILL ANALYSIS


Senate Research CenterS.B. 985
By: Duncan
Intergovernmental Relations
6/18/2001
Enrolled


DIGEST AND PURPOSE 

Under current law, municipalities are able to offer tax abatement
incentives on real property.  However, they are unable to offer the same
tax abatement incentives to property owners who lease personal property.
Tax abatement can be a useful in stimulating economic investment and
development.  S.B. 985 allows municipalities to offer tax abatement
incentives to property owners who lease personal property.   

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 312.204(a), Tax Code, to delete text regarding
the rights of holders of outstanding bonds of the municipality.  Authorizes
the governing body of an eligible municipality 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 the leasehold
interest, if taxable, or of improvements or tangible personal property
located on the real property subject to the leasehold interest, for a
period not to exceed 10 years, on certain conditions.  Provides that a tax
abatement agreement under this section is subject to the rights of holders
of outstanding bonds of the municipality.  Authorizes an agreement
exempting taxable real property to provide for the exemption of the real
property in each year covered by the agreement only to the extent its value
for that year exceeds its value for the year in which the agreement is
executed.  Authorizes an agreement exempting tangible personal property
located on real property to provide for the exemption of tangible personal
property located on the real property in each year covered by the agreement
other than tangible personal property that was located on the real property
at any time before the period covered by the agreement with the
municipality, and other than inventory or supplies. 

SECTION 2.  Effective date:  upon passage or September 1, 2001.