| TO: | Honorable Fred Hill, Chair, House Committee on Local Government Ways and Means |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | HB905 by Mowery (Relating to the authority of a taxing unit to enter into and the terms of ad valorem tax abatement agreements.), As Introduced |
The bill would amend several sections in Chapter 312 of the Tax Code to require voter approval before a taxing unit could enter into a tax abatement agreement and to require the inclusion of specific provisions in all tax abatement agreements.
The bill would require abatement agreements to contain language requiring the taxing unit to recapture all or part of the property tax revenue lost as a result of the agreement if the property owner failed to comply with each term of the agreement. Any modification of an existing abatement agreement would have to contain terms at least as favorable to the taxing unit as the terms of the original agreement.
Passage of this bill would require some taxing units to hold elections to receive voter approval before entering into tax abatement agreements. The bill would also modify the required content of future tax abatement agreements and require taxing units to assume the cost of performing annual compliance audits and hold public hearings to report audit results. There would be an some additional cost to units of local government associated with these requirements. Due to the recapture provisions of the bill, which may offset some expenses, it is not anticipated that the costs incurred would be significant.
| Source Agencies: | 304 Comptroller Of Public Accounts
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| LBB Staff: | JK, SD, WP, BR
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