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


Office of House Bill AnalysisS.B. 985
By: Duncan
Ways & Means
5/4/2001
Engrossed



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.  Senate Bill 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

Senate Bill 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 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 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.