78R1343 SMH-D
By: Rodriguez H.B. No. 765
A BILL TO BE ENTITLED
AN ACT
relating to the terms and conditions of an ad valorem tax abatement
agreement and the consequences of noncompliance by a property owner
with a tax abatement agreement.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 312.205, Tax Code, is amended to read as
follows:
Sec. 312.205. SPECIFIC TERMS OF TAX ABATEMENT
AGREEMENT. (a) An agreement made under Section 312.204 or
312.211 must:
(1) list the kind, number, and location of all
proposed improvements or repairs of the property;
(2) provide access to and authorize inspection of the
property by municipal employees to ensure that the improvements or
repairs are made according to the specifications and conditions of
the agreement;
(3) limit the uses of the property consistent with the
general purpose of encouraging development or redevelopment of the
zone during the period that property tax exemptions are in effect;
(4) provide for recapture by the municipality of the
[recapturing] property tax revenue lost as a result of the
agreement if the owner of the property fails to comply with each
term of [make the improvements or repairs as provided by] the
agreement;
(5) contain each term agreed to by the owner of the
property;
(6) require the owner of the property to certify
annually to the governing body of each taxing unit that the owner is
in compliance with each [applicable] term of the agreement; [and]
(7) provide for modification of the agreement by
[that] the governing body of the municipality and the owner of the
property; and
(8) provide for cancellation of the agreement by the
governing body of the municipality [may cancel or modify the
agreement] if the [property] owner of the property fails to comply
with each term of the agreement.
(b) An agreement made under Section 312.204 or 312.211 may
include, at the option of the governing body of the municipality,
provisions for:
(1) improvements or repairs by the municipality to
streets, sidewalks, and utility services or facilities associated
with the property, except that the agreement may not provide for
lower charges or rates than are made for other services or
properties of a similar character;
(2) an economic feasibility study, including a
detailed list of estimated improvement costs, a description of the
methods of financing all estimated costs, and the time when related
costs or monetary obligations are to be incurred;
(3) a map showing existing uses and conditions of real
property in the reinvestment zone;
(4) a map showing proposed improvements and uses in
the reinvestment zone;
(5) proposed changes of zoning ordinances, the master
plan, the map, building codes, and city ordinances; and
(6) penalties or interest, or both, on the recapture
of [all or a portion of] property tax revenue lost as a result of the
agreement if the owner of the property fails to comply with each
term of the agreement [create all or a portion of the number of new
jobs provided by the agreement, if the appraised value of the
property subject to the agreement does not attain a value specified
in the agreement, or if the owner fails to meet any other
performance criteria provided by the agreement, and payment of a
penalty or interest, or both, on that recaptured property tax
revenue].
SECTION 2. Subchapter B, Chapter 312, Tax Code, is amended
by adding Section 312.212 to read as follows:
Sec. 312.212. ACTION BY TAXING UNIT ON
NONCOMPLIANCE. (a) If a property owner fails to comply with each
term of a tax abatement agreement before the fifth anniversary of
the date the agreement is entered into, the governing body of the
taxing unit shall:
(1) cancel the agreement; and
(2) take all appropriate measures to recapture any
property tax revenue lost as a result of the agreement.
(b) Cancellation of a tax abatement agreement under this
section does not negate the property owner's duty under the
agreement to pay any property taxes the owner did not pay as a
result of the agreement.
SECTION 3. Section 312.402(e), Tax Code, is amended to read
as follows:
(e) An agreement made under this section by a county or
other taxing unit may be canceled, modified, or terminated in the
same manner and subject to the same limitations as provided by
Sections [Section] 312.208 and 312.212 for an agreement made under
Subchapter B.
SECTION 4. Section 379.004, Local Government Code, is
amended to read as follows:
Sec. 379.004. ADDITIONAL POWERS. (a) A municipality
may:
(1) waive or adopt fees related to the construction of
buildings in the zone, including fees related to the inspection of
buildings and impact fees;
(2) enter into agreements, for a period of not more
than 10 years, for the purpose of benefiting the zone, for sales tax
refunds or abatements of municipal sales tax on sales made in the
zone;
(3) enter into agreements abating municipal property
taxes on property in the zone subject to the duration limits of
Section 312.204, Tax Code; and
(4) set baseline performance standards, such as the
Energy Star Program as developed by the Department of Energy, to
encourage the use of alternative building materials that address
concerns relating to the environment or to building costs,
maintenance, or energy consumption.
(b) Sections 312.205(a)(4), (7), and (8) and (b)(6) and
312.212, Tax Code, apply to a property tax abatement agreement
entered into under Subsection (a)(3) of this section.
SECTION 5. Section 379.005(a), Local Government Code, is
amended to read as follows:
(a) A business that operates in a zone and receives benefits
as a result of a municipality's action under Section 379.004(a)(1)
[379.004(1)], (2), or (3) shall make a good faith effort to hire
individuals receiving NAFTA transitional adjustment assistance
under 19 U.S.C. Section 2331.
SECTION 6. Section 381.004(g), Local Government Code, is
amended to read as follows:
(g) The commissioners court may develop and administer a
program authorized by Subsection (b) for entering into a tax
abatement agreement with an owner or lessee of a property interest
subject to ad valorem taxation. The execution, duration, and other
terms of the agreement are governed, to the extent practicable, by
[the provisions of] Sections 312.204, 312.205, [and] 312.211, and
312.212, Tax Code, as if the commissioners court were the [a]
governing body of a municipality.
SECTION 7. This Act applies only to a tax abatement
agreement entered into on or after the effective date of this Act.
A tax abatement agreement entered into before the effective date of
this Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 8. This Act takes effect September 1, 2003.