HBA-KDB H.B. 1448 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1448 By: Oliveira Ways & Means 7/18/2001 Enrolled BACKGROUND AND PURPOSE For some time now, it has been the practice for cities and counties throughout the state of Texas to allow companies to lease city-owned or county-owned land and buildings, and provide these companies with tax abatements for equipment and other tangible personal property located on the property. However, a recent attorney general opinion determined that cities and counties did not have the authority to abate taxes for companies holding leasehold interests, which may compromise city and county tax abatement agreements. House Bill 1448 clarifies state law by authorizing the governing body of a municipality to provide a tax abatement agreement, for a period not to exceed 10 years, to an owner of a leasehold interest in specified tax-exempt 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 House Bill 1448 amends the Tax Code to authorize the governing body of an eligible municipality to agree in writing with the owner of a leasehold interest in tax-exempt real property that is located in a reinvestment zone, but that is not in an improvement project financed by tax increment bonds, to exempt a portion of the value of property subject to ad valorem taxation, including the leasehold interest, improvements, or tangible personal property located on the real property, 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 authorizes the court to execute a tax abatement agreement with the owner of a leasehold interest in tax-exempt real property or leasehold interests or improvements on tax-exempt real property that is located in a municipal reinvestment zone to exempt a portion of the value of tangible personal property or leasehold interests or improvements on tax-exempt real property located on the real property. The bill provides that an agreement with the owner of a leasehold interest in tax-exempt property to exempt a portion of the value of tangible personal property located on the real property that was entered into before the effective date of the Act is validated as of the date the agreement was entered into. EFFECTIVE DATE June 13, 2001.