HBA-JLV C.S.S.B. 986 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 986
By: Duncan
Ways & Means
5/10/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, Texas cities provide financial incentives by way of tax
abatement agreements for the purpose of job creation in their communities.
However, a city has no recourse when the requisite job creation is not
fulfilled.  C.S.S.B. 986 gives cities the statutory authority to recapture
lost property tax revenue if the owner of the commercial enterprise fails
to create the number of new jobs required by the agreement, the property
value does not increase as expected under the agreement, or the owner fails
to meet any other performance criteria provided by the agreement. 

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. 986 amends the Tax Code to provide that certain tax abatement
agreements may include, at the option of the governing body of the
municipality, provisions for 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 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, interest, or both, on that recaptured property tax
revenue.  

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. 986 modifies the original to provide, at the option of the
governing body of the municipality, provisions for the recapture of all or
a portion of property tax revenue lost as a result of the agreement if the
owner fails to meet any other performance criteria provided by the
agreement.