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.