By:  Madla                                            S.B. No. 1535
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to effective dates for municipal tax abatements.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subsection (a), Section 312.204, Tax Code, is
 1-5     amended to read as follows:
 1-6           (a)  The governing body of a municipality eligible to enter
 1-7     into tax abatement agreements under Section 312.002 may agree in
 1-8     writing with the owner of taxable real property that is located in
 1-9     a reinvestment zone, but that is not in an improvement project
1-10     financed by tax increment bonds, to exempt from taxation a portion
1-11     of the value of the real property or of tangible personal property
1-12     located on the real property, or both, for a period not to exceed
1-13     10 years, subject to the rights of holders of outstanding bonds of
1-14     the municipality, on the condition that the owner of the property
1-15     make specific improvements or repairs to the property.  An
1-16     agreement may provide for the exemption of the real property in
1-17     each year covered by the agreement only to the extent its value for
1-18     that year exceeds its value for the year in which the agreement is
1-19     executed.  The agreement may take effect on January 1 of the next
1-20     year after the date the improvements or repairs are substantially
1-21     completed.  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
1-24     located on the real property at any time before the period covered
1-25     by the agreement with the municipality, and other than inventory or
 2-1     supplies. In a municipality that has a comprehensive zoning
 2-2     ordinance, an improvement, repair, development, or redevelopment
 2-3     taking place under an agreement under this section must conform to
 2-4     the comprehensive zoning ordinance.
 2-5           SECTION 2.  This Act takes effect September 1, 2001.