HBA-KDB H.B. 1448 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1448
By: Oliveira
Ways & Means
3/25/2001
Committee Report (Amended)



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 current 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 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 that is located
in a municipal reinvestment zone to exempt a portion of the value of
tangible personal property located on the real property. 

EFFECTIVE DATE

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

EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 adds to the bill 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.