HBA-KDB C.S.S.B. 985 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 985
By: Duncan
Ways & Means
5/11/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, the governing body of a municipality is authorized to
grant a tax abatement to the owner of taxable real property  that is
located in a reinvestment zone.  However, the owner of a leasehold interest
in real property that is located in a reinvestment zone is not authorized
to receive a tax abatement.  C.S.S.B. 985 authorizes the governing body of
a municipality to enter into a tax abatement agreement with the owner of a
leasehold interest in real property that is located in a reinvestment zone. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.S.B. 985 amends the Tax Code to authorize the governing body of a
municipality eligible to enter into a tax abatement agreement to agree in
writing with the owner of a leasehold interest in real property that is
located in a reinvestment zone to exempt a portion of the value of the
leasehold interest, if taxable, or of improvements or tangible personal
property located on the real property subject to the leasehold interest,
for a period not to exceed 10 years, on the condition that the owner of the
leasehold interest make specific improvements or repairs to the real
property.  The bill provides that such a tax abatement agreement is subject
to the rights of holders of outstanding bonds of the municipality. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 985 modifies the original by providing that a portion of the value
of the leasehold interest, if taxable, or of improvements located on the
real property in a reinvestment zone may be exempted from property taxes.