BILL ANALYSIS

S.B. 1340

By: Zaffirini

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Chapters 380 and 381, Local Government Code, allow local entities to provide tax or other financial incentives for businesses to locate in the city or county. In 2021, the legislature passed H.B. 2404, which ensures that the public has access to basic information about these local development agreements through a database maintained by the comptroller of public accounts. Although the database has PDF copies of the agreements available, only the contact information about the local government is reported in a searchable, sortable format.

Additionally, there are other types of local agreements than those under Chapters 380 and 381 that provide similar financial incentives but are not included in the database. This leaves Texans without the ability to assess properly whether all the tax abatements granted by their elected officials were an effective use of taxpayer dollars.

S.B. 1340 seeks to require agreements entered into under the Property Redevelopment and Tax Abatement Act to be included in the database and to require the database to be a consolidated searchable data tool. The bill also seeks to require additional important information on each agreement to be reported to the comptroller for inclusion in the database. These changes will enhance transparency, accountability, and accessibility of local development agreement information, which will empower Texas voters to make informed decisions and encourage local governments to more responsibly use public resources.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1340 amends the Government Code to expand the scope of the Chapter 380 and 381 Agreement Database by including among the local development agreements required to be included in the database an agreement entered into by a local government under the Property Redevelopment and Tax Abatement Act. Accordingly, the bill renames the database as the Local Development Agreement Database and requires that the database be a consolidated searchable data tool. The bill does the following with respect to the required contents of the database:

· revises the requirement for the database to include the name of any entity that entered into the applicable agreement with the local government so as to require the name and contact information of any such entity or of the entity's agency be entered into the database, including the business address and any assumed names of the entity; and

· requires the database to include the following additional information for each applicable agreement:

o the terms on which the agreement expires;

o the total monetary value of the agreement; and

o the source of the money used or type of tax implicated by the agreement, including a sales and use tax, property tax, or hotel occupancy tax.

The bill authorizes the comptroller of public accounts to prescribe the form and manner in which a local government must submit the information required to be included in the database for a particular agreement.

S.B. 1340 amends the Tax Code to require a taxing unit that maintains a website and that executes a tax abatement agreement under the Property Redevelopment and Tax Abatement Act to provide on the website a direct link to the location of the agreement information published on the comptroller's website as part of the Local Development Agreement Database.

S.B. 1340 applies only to an agreement entered into on or after the bill's effective date.

EFFECTIVE DATE

January 1, 2024.