By Longoria H.B. No. 2965
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to allowing municipalities and counties to grant tax
1-3 abatement agreements to lessees.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 312.204, Tax Code, is amended to read as
1-6 follows:
1-7 Sec. 312.204. Municipal Tax Abatement Agreement. (a) The
1-8 governing body of a municipality eligible to enter into tax
1-9 abatement agreements under Section 312.002 may agree in writing
1-10 with the owner or lessee of [taxable] real property that is located
1-11 in a reinvestment zone, but that is not in an improvement project
1-12 financed by tax increment bonds, to exempt from taxation a portion
1-13 of the value of the real property or of tangible personal property
1-14 located on the real property, or both, for a period not to exceed
1-15 10 years, subject to the rights of holders of outstanding bonds of
1-16 the municipality, on the condition that the owner or lessee of the
1-17 property make specific improvements or repairs to the property. An
1-18 agreement may provide for the exemption of the real property in
1-19 each year covered by the agreement only to the extent its value for
1-20 that year exceeds its value for the year in which the agreement is
1-21 executed. An agreement may provide for the exemption of tangible
1-22 personal property located on the real property in each year covered
1-23 by the agreement other than tangible personal property that was
2-1 located on the real property at any time before the period covered
2-2 by the agreement with the municipality, and other than inventory or
2-3 supplies. In a municipality that has a comprehensive zoning
2-4 ordinance, an improvement, repair, development, or redevelopment
2-5 taking place under an agreement under this section must conform to
2-6 the comprehensive zoning ordinance.
2-7 SECTION 2. Section 312.206, Tax Code, is amended to read as
2-8 follows:
2-9 (a) If property taxes on property located in the taxing
2-10 jurisdiction of a municipality are abated under an agreement made
2-11 under Section 312.204 or 312.211, the governing body of each other
2-12 taxing unit eligible to enter into tax abatement agreements under
2-13 Section 312.002 in which the property is located may execute a
2-14 written tax abatement agreement with the owner or lessee of the
2-15 property not later than the 90th day after the date the municipal
2-16 agreement is executed. The agreement is not required to contain
2-17 terms identical to those contained in the agreement with the
2-18 municipality. Section 312.205 applies to an agreement made by a
2-19 taxing unit under this section in the same manner as it applies to
2-20 an agreement made by a municipality under Section 312.204 or
2-21 312.211. If the governing body of the taxing unit by official
2-22 action at any time before the execution of the municipal agreement
2-23 expresses an intent to be bound by the terms of the municipal
2-24 agreement if the municipality enters into an agreement under
2-25 Section 312.204 or 312.211 with the owner or lessee relating to the
2-26 property, the terms of the municipal agreement regarding the share
3-1 of the property to be exempt in each year of the municipal
3-2 agreement apply to the taxation of the property by the taxing unit.
3-3 (b) If property taxes on property located in the taxing
3-4 jurisdiction of a municipality are abated under an agreement made
3-5 by the municipality before September 1, 1989, the terms of the
3-6 agreement with the municipality regarding the share of the property
3-7 that is to be exempt in each year of the agreement apply to the
3-8 taxation of the property by every other taxing unit, other than a
3-9 county or school district, in which the property is located. If
3-10 the agreement was made before September 1, 1987, the terms
3-11 regarding the share of the property to be exempt in each year of
3-12 the agreement also apply to the taxation of the property by a
3-13 county or school district.
3-14 (c) If the governing body of a municipality designates a
3-15 reinvestment zone that includes property in the extraterritorial
3-16 jurisdiction of the municipality, the governing body of a taxing
3-17 unit eligible to enter into tax abatement agreements under Section
3-18 312.002 in which the property is located may execute a written
3-19 agreement with the owner or lessee of the property to exempt from
3-20 its property taxes all or part of the value of the property in the
3-21 same manner and subject to the same restrictions as provided by
3-22 Section 312.204 or 312.211 for a municipality. The taxing unit may
3-23 execute an agreement even if the municipality does not execute an
3-24 agreement for the property, and the terms of the agreement are not
3-25 required to be identical to the terms of a municipal agreement.
3-26 However, if the governing body of another eligible taxing unit has
4-1 previously executed an agreement to exempt all or part of the value
4-2 of the property and that agreement is still in effect, the terms of
4-3 the subsequent agreement relating to the share of the property that
4-4 is to be exempt in each year that the existing agreement remains in
4-5 effect must be identical to those of the existing agreement.
4-6 (d) If property taxes are abated on property in the
4-7 extraterritorial jurisdiction of a municipality due to an agreement
4-8 with a county or school district made before September 1, 1989, the
4-9 terms of the agreement with the county or school district relating
4-10 to the share of the property that is to be exempt in each year of
4-11 the agreement apply to the taxation of the property by every other
4-12 taxing unit, other than a municipality, school district, or county,
4-13 in which the property is located.
4-14 (e) If property taxes on property located in an enterprise
4-15 zone are abated under this chapter, the governing body of each
4-16 taxing jurisdiction may execute a written agreement with the owner
4-17 or lessee of the property not later than the 90th day after the
4-18 date the municipal or county agreement is executed, whichever is
4-19 later. The agreement may, but is not required to, contain terms
4-20 that are identical to those contained in the agreement with the
4-21 municipality, county, or both, whichever applies, and the only
4-22 terms of the agreement that may vary are the portion of the
4-23 property that is to be exempt from taxation under the agreement and
4-24 the duration of the agreement.
4-25 SECTION 3. Section 312.210(b), Tax Code, is amended to read
4-26 as follows:
5-1 (a) This section applies only to a tax abatement agreement
5-2 applicable to property located in a reinvestment zone with respect
5-3 to which a municipality, county, and junior college district have
5-4 entered into a joint agreement to offer tax abatements exempting
5-5 from taxation a specified portion of the value of the property in
5-6 the reinvestment zone.
5-7 (b) A tax abatement agreement with the owner or lessee of
5-8 real property that is located in the reinvestment zone described by
5-9 Subsection (a) and in a school district that has a wealth per
5-10 student that does not exceed the equalized wealth level must exempt
5-11 from taxation:
5-12 (1) the portion of the value of the property in the
5-13 amount specified in the joint agreement among the municipality,
5-14 county, and junior college district; and
5-15 (2) an amount equal to 10 percent of the maximum
5-16 portion of the value of the property that may under Section
5-17 312.204(a) be otherwise exempted from taxation.
5-18 SECTION 4. Section 312.402(a), Tax Code, is amended to read
5-19 as follows:
5-20 (a) The commissioners court may execute a tax abatement
5-21 agreement with the owner or lessee of [taxable] real property
5-22 located in a reinvestment zone designated under this subchapter.
5-23 The execution, duration, and other terms of an agreement made under
5-24 this section are governed by the provisions of Sections 312.204,
5-25 312.205, and 312.211 applicable to a municipality. Section
5-26 312.2041 applies to an agreement made by a county under this
6-1 section in the same manner as it applies to an agreement made by a
6-2 municipality under Section 312.204 or 312.211.
6-3 SECTION 5. This Act takes effect September 1, 2001.