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


Senate Research Center   S.B. 985
77R8320 GJH-FBy: Duncan
Intergovernmental Relations
4/10/2001
As Filed


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.  As proposed, 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 tangible personal
property located on the real property, 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.