1-1                                   AN ACT
 1-2     relating to requirements regarding and terms of local tax abatement
 1-3     agreements.
 1-5           SECTION 1.  Subsection (a), Section 312.206, Tax Code, is
 1-6     amended to read as follows:
 1-7           (a)  If property taxes on property located in the taxing
 1-8     jurisdiction of a municipality are abated under an agreement made
 1-9     under Section 312.204 or 312.211, the governing body of each other
1-10     taxing unit eligible to enter into tax abatement agreements under
1-11     Section 312.002 in which the property is located may execute a
1-12     written tax abatement agreement with the owner of the property [not
1-13     later than the 90th day after the date the municipal agreement is
1-14     executed].  The agreement is not required to contain terms
1-15     identical to those contained in the agreement with the
1-16     municipality.  The execution, duration, and other terms of an
1-17     agreement made under this section are governed by the provisions of
1-18     Sections 312.204, 312.205, and 312.211 applicable to a
1-19     municipality.  [Section 312.205 applies to an agreement made by a
1-20     taxing unit under this section in the same manner as it applies to
1-21     an agreement made by a municipality under Section 312.204 or
1-22     312.211.]  If the governing body of the taxing unit by official
1-23     action at any time before the execution of the municipal agreement
1-24     expresses an intent to be bound by the terms of the municipal
1-25     agreement if the municipality enters into an agreement under
 2-1     Section 312.204 or 312.211 with the owner relating to the property,
 2-2     the terms of the municipal agreement regarding the share of the
 2-3     property to be exempt in each year of the municipal agreement apply
 2-4     to the taxation of the property by the taxing unit.
 2-5           SECTION 2.  Subsection (a), Section 312.204, Tax Code, is
 2-6     amended to read as follows:
 2-7           (a)  The governing body of a municipality eligible to enter
 2-8     into tax abatement agreements under Section 312.002 may agree in
 2-9     writing with the owner of taxable real property that is located in
2-10     a reinvestment zone, but that is not in an improvement project
2-11     financed by tax increment bonds, to exempt from taxation a portion
2-12     of the value of the real property or of tangible personal property
2-13     located on the real property, or both, for a period not to exceed
2-14     10 years, subject to the rights of holders of outstanding bonds of
2-15     the municipality, on the condition that the owner of the property
2-16     make specific improvements or repairs to the property.  An
2-17     agreement may provide for the exemption of the real property in
2-18     each year covered by the agreement only to the extent its value for
2-19     that year exceeds its value for the year in which the agreement is
2-20     executed.  The agreement may take effect on January 1 of the tax
2-21     year after the date the improvements or repairs are substantially
2-22     completed.  An agreement may provide for the exemption of tangible
2-23     personal property located on the real property in each year covered
2-24     by the agreement other than tangible personal property that was
2-25     located on the real property at any time before the period covered
2-26     by the agreement with the municipality, and other than inventory or
 3-1     supplies.  In a municipality that has a comprehensive zoning
 3-2     ordinance, an improvement, repair, development, or redevelopment
 3-3     taking place under an agreement under this section must conform to
 3-4     the comprehensive zoning ordinance.
 3-5           SECTION 3.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1710 passed the Senate on
         April 26, 2001, by the following vote:  Yeas 30, Nays 0, one
         present, not voting; and that the Senate concurred in House
         amendment on May 17, 2001, by a viva-voce vote.
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1710 passed the House, with
         amendment, on May 11, 2001, by a non-record vote.
                                                Chief Clerk of the House