CHAPTER 312. PROPERTY REDEVELOPMENT AND TAX ABATEMENT ACT

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TAX CODE

TITLE 3. LOCAL TAXATION

SUBTITLE B. SPECIAL PROPERTY TAX PROVISIONS

CHAPTER 312. PROPERTY REDEVELOPMENT AND TAX ABATEMENT ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 312.001. SHORT TITLE. This chapter may be cited as the

Property Redevelopment and Tax Abatement Act.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987.

Sec. 312.002. ELIGIBILITY OF TAXING UNIT TO PARTICIPATE IN TAX

ABATEMENT. (a) A taxing unit may not enter into a tax abatement

agreement under this chapter and the governing body of a

municipality or county may not designate an area as a

reinvestment zone unless the governing body has established

guidelines and criteria governing tax abatement agreements by the

taxing unit and a resolution stating that the taxing unit elects

to become eligible to participate in tax abatement. The

guidelines applicable to property other than property described

by Section 312.211(a) must provide for the availability of tax

abatement for both new facilities and structures and for the

expansion or modernization of existing facilities and structures.

(b) The governing body of a taxing unit may not enter into a tax

abatement agreement under this chapter unless it finds that the

terms of the agreement and the property subject to the agreement

meet the applicable guidelines and criteria adopted by the

governing body under this section.

effective for two years from the date adopted. During that

period, the guidelines and criteria may be amended or repealed

only by a vote of three-fourths of the members of the governing

body.

(d) The adoption of the guidelines and criteria by the governing

body of a taxing unit does not:

(1) limit the discretion of the governing body to decide whether

to enter into a specific tax abatement agreement;

(2) limit the discretion of the governing body to delegate to

its employees the authority to determine whether or not the

governing body should consider a particular application or

request for tax abatement; or

(3) create any property, contract, or other legal right in any

person to have the governing body consider or grant a specific

application or request for tax abatement.

(e) The guidelines and criteria adopted by the commissioners

court of a county may include a requirement that an application

or request for tax abatement submitted to the county under this

chapter must be accompanied by a reasonable application fee not

to exceed $1,000.

(f) On or after September 1, 2001, a school district may not

enter into a tax abatement agreement under this chapter.

(g) "Taxing unit" has the meaning assigned by Section 1.04,

except that for a tax abatement agreement executed on or after

September 1, 2001, the term does not include a school district

that is subject to Chapter 42, Education Code, and that is

organized primarily to provide general elementary and secondary

public education.

Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.07(a), eff. Aug.

28, 1989. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 1, eff.

Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 20, Sec. 22, eff. Aug.

26, 1991; Acts 1991, 72nd Leg., ch. 391, Sec. 26, eff. Aug. 26,

1991; Acts 1991, 72nd Leg., ch. 836, Sec. 9.2, eff. Aug. 26,

1991; Acts 1993, 73rd Leg., ch. 347, Sec. 4.13(2), eff. May 31,

1993; Acts 1997, 75th Leg., ch. 855, Sec. 9, eff. Sept. 1, 1997;

Acts 1997, 75th Leg., ch. 1333, Sec. 1, eff. Sept. 1, 1997; Acts

2001, 77th Leg., ch. 1029, Sec. 3, eff. June 15, 2001; Acts 2001,

77th Leg., ch. 1145, Sec. 1, eff. June 15, 2001; Acts 2003, 78th

Leg., ch. 1275, Sec. 2(124), eff. Sept. 1, 2003.

Sec. 312.0025. DESIGNATION OF REINVESTMENT ZONE BY SCHOOL

DISTRICT. (a) Notwithstanding any other provision of this

chapter to the contrary, the governing body of a school district,

in the manner required for official action and for purposes of

Subchapter B or C, Chapter 313, may designate an area entirely

within the territory of the school district as a reinvestment

zone if the governing body finds that, as a result of the

designation and the granting of a limitation on appraised value

under Subchapter B or C, Chapter 313, for property located in the

reinvestment zone, the designation is reasonably likely to:

(1) contribute to the expansion of primary employment in the

reinvestment zone; or

(2) attract major investment in the reinvestment zone that

would:

(A) be a benefit to property in the reinvestment zone and to the

school district; and

(B) contribute to the economic development of the region of this

state in which the school district is located.

(b) The governing body of the school district may seek the

recommendation of the commissioners court of each county and the

governing body of each municipality that has territory in the

school district before designating an area as a reinvestment zone

under Subsection (a).

Added by Acts 2001, 77th Leg., ch. 1505, Sec. 4, eff. Jan. 1,

2002.

Sec. 312.003. CONFIDENTIALITY OF PROPRIETARY INFORMATION.

Information that is provided to a taxing unit in connection with

an application or request for tax abatement under this chapter

and that describes the specific processes or business activities

to be conducted or the equipment or other property to be located

on the property for which tax abatement is sought is confidential

and not subject to public disclosure until the tax abatement

agreement is executed. That information in the custody of a

taxing unit after the agreement is executed is not confidential

under this section.

Added by Acts 1989, 71st Leg., ch. 1137, Sec. 2, eff. Sept. 1,

1989.

Sec. 312.004. TAXING UNIT WITH TAX RATE SET BY COMMISSIONERS

COURT. (a) The commissioners court of a county that enters into

a tax abatement agreement for the county may enter into a tax

abatement agreement applicable to the same property on behalf of

a taxing unit other than the county if by statute the ad valorem

tax rate of the other taxing unit is approved by the

commissioners court or the commissioners court is expressly

required by statute to levy the ad valorem taxes of the other

taxing unit. The tax abatement agreement entered into on behalf

of the other taxing unit is not required to contain the same

terms as the tax abatement agreement entered into on behalf of

the county.

(b) This section does not apply to a taxing unit because the

county tax assessor-collector is required by law to assess or

collect the taxing unit's ad valorem taxes.

Added by Acts 1989, 71st Leg., ch. 1137, Sec. 3, eff. Sept. 1,

1989. Amended by Acts 1999, 76th Leg., ch. 1039, Sec. 1, eff.

Sept. 1, 1999.

Sec. 312.005. STATE ADMINISTRATION. (a) The comptroller shall

maintain a central registry of reinvestment zones designated

under this chapter and of ad valorem tax abatement agreements

executed under this chapter. The chief appraiser of each

appraisal district that appraises property for a taxing unit that

has designated a reinvestment zone or executed a tax abatement

agreement under this chapter shall deliver to the comptroller

before July 1 of the year following the year in which the zone is

designated or the agreement is executed a report providing the

following information:

(1) for a reinvestment zone, a general description of the zone,

including its size, the types of property located in it, its

duration, and the guidelines and criteria established for the

reinvestment zone under Section 312.002, including subsequent

amendments and modifications of the guidelines or criteria;

(2) a copy of each tax abatement agreement to which a taxing

unit that participates in the appraisal district is a party; and

(3) any other information required by the comptroller to

administer this section and Subchapter F, Chapter 111.

(b) The comptroller may provide assistance to a taxing unit on

request of its governing body or the presiding officer of its

governing body relating to the administration of this chapter.

The Texas Department of Commerce and the comptroller may provide

technical assistance to a local governing body regarding the

designation of reinvestment zones, the adoption of tax abatement

guidelines, and the execution of tax abatement agreements.

comptroller shall submit a report to the legislature and to the

governor on reinvestment zones designated under this chapter and

on tax abatement agreements adopted under this chapter, including

a summary of the information reported under this section.

Added by Acts 1989, 71st Leg., ch. 1137, Sec. 4, eff. Sept. 1,

1989. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 6, Sec. 59,

eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 995, Sec. 2, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1382, Sec. 1, eff. Sept.

1, 1997; Acts 2001, 77th Leg., ch. 268, Sec. 4, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1029, Sec. 2, eff. June 15, 2001.

Sec. 312.006. EXPIRATION DATE. If not continued in effect, this

chapter expires September 1, 2019.

Added by Acts 1989, 71st Leg., ch. 1137, Sec. 5, eff. Sept. 1,

1989. Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 17, Sec.

2.16, eff. Nov. 12, 1991; Acts 1995, 74th Leg., ch. 995, Sec. 4,

eff. Aug. 31, 1995; Acts 2001, 77th Leg., ch. 1029, Sec. 1, eff.

June 15, 2001; Acts 2001, 77th Leg., ch. 1505, Sec. 5, eff. Sept.

1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

610, Sec. 1, eff. June 19, 2009.

Sec. 312.007. DEFERRAL OF COMMENCEMENT OF ABATEMENT PERIOD. (a)

In this section, "abatement period" means the period during

which all or a portion of the value of real property or tangible

personal property that is the subject of a tax abatement

agreement is exempt from taxation.

(b) Notwithstanding any other provision of this chapter, the

governing body of the taxing unit granting the abatement and the

owner of the property that is the subject of the agreement may

agree to defer the commencement of the abatement period until a

date that is subsequent to the date the agreement is entered

into, except that the duration of an abatement period may not

exceed 10 years.

Added by Acts 2009, 81st Leg., R.S., Ch.

1195, Sec. 2, eff. June 19, 2009.

Added by Acts 2009, 81st Leg., R.S., Ch.

1225, Sec. 2, eff. June 19, 2009.

SUBCHAPTER B. TAX ABATEMENT IN MUNICIPAL REINVESTMENT ZONE

Sec. 312.201. DESIGNATION OF REINVESTMENT ZONE. (a) The

governing body of a municipality by ordinance may designate as a

reinvestment zone an area, or real or personal property the use

of which is directly related to outdoor advertising, in the

taxing jurisdiction or extraterritorial jurisdiction of the

municipality that the governing body finds satisfies the

requirements of Section 312.202.

(b) The ordinance must describe the boundaries of the zone and

the eligibility of the zone for residential tax abatement or

commercial-industrial tax abatement or tax increment financing as

provided for in Chapter 311.

abatement or commercial-industrial tax abatement may be included

in an overlapping or coincidental residential or

commercial-industrial zone. In that event, the zone in which the

property is considered to be located for purposes of executing an

agreement under Section 312.204 or 312.211 is determined by the

comprehensive zoning ordinance, if any, of the municipality.

(d) The governing body may not adopt an ordinance designating an

area as a reinvestment zone until the governing body has held a

public hearing on the designation and has found that the

improvements sought are feasible and practical and would be a

benefit to the land to be included in the zone and to the

municipality after the expiration of an agreement entered into

under Section 312.204 or 312.211, as applicable. At the hearing,

interested persons are entitled to speak and present evidence for

or against the designation. Not later than the seventh day before

the date of the hearing, notice of the hearing must be:

(1) published in a newspaper having general circulation in the

municipality; and

(2) delivered in writing to the presiding officer of the

governing body of each taxing unit that includes in its

boundaries real property that is to be included in the proposed

reinvestment zone.

(e) A notice made under Subsection (d)(2) is presumed delivered

when placed in the mail postage paid and properly addressed to

the appropriate presiding officer. A notice properly addressed

and sent by registered or certified mail for which a return

receipt is received by the sender is considered to have been

delivered to the addressee.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.08(a), eff.

Aug. 28, 1989; Acts 1997, 75th Leg., ch. 855, Sec. 10, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1333, Sec. 2, eff. Sept. 1,

1997.

Sec. 312.2011. ENTERPRISE ZONE. Designation of an area as an

enterprise zone under Chapter 2303, Government Code constitutes

designation of the area as a reinvestment zone under this

subchapter without further hearing or other procedural

requirements other than those provided by Chapter 2303,

Government Code.

Added by Acts 1989, 71st Leg., ch. 1106, Sec. 28, eff. Aug. 28,

1989. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(22),

eff. Sept. 1, 1995.

Sec. 312.202. CRITERIA FOR REINVESTMENT ZONE. (a) To be

designated as a reinvestment zone under this subchapter, an area

must:

(1) substantially arrest or impair the sound growth of the

municipality creating the zone, retard the provision of housing

accommodations, or constitute an economic or social liability and

be a menace to the public health, safety, morals, or welfare in

its present condition and use because of the presence of:

(A) a substantial number of substandard, slum, deteriorated, or

deteriorating structures;

(B) the predominance of defective or inadequate sidewalks or

streets;

(D) unsanitary or unsafe conditions;

(E) the deterioration of site or other improvements;

(F) tax or special assessment delinquency exceeding the fair

value of the land;

(G) defective or unusual conditions of title;

(H) conditions that endanger life or property by fire or other

cause; or

(I) any combination of these factors;

(2) be predominantly open and, because of obsolete platting,

deterioration of structures or site improvements, or other

factors, substantially impair or arrest the sound growth of the

municipality;

(3) be in a federally assisted new community located in a

home-rule municipality or in an area immediately adjacent to a

federally assisted new community located in a home-rule

municipality;

(4) be located entirely in an area that meets the requirements

for federal assistance under Section 119 of the Housing and

Community Development Act of 1974 (42 U.S.C. Section 5318);

(5) encompass signs, billboards, or other outdoor advertising

structures designated by the governing body of the municipality

for relocation, reconstruction, or removal for the purpose of

enhancing the physical environment of the municipality, which the

legislature declares to be a public purpose; or

(6) be reasonably likely as a result of the designation to

contribute to the retention or expansion of primary employment or

to attract major investment in the zone that would be a benefit

to the property and that would contribute to the economic

development of the municipality.

(b) For purposes of this section, a federally assisted new

community is a federally assisted area:

(1) that has received or will receive assistance in the form of

loan guarantees under Title X of the National Housing Act (12

U.S.C. Section 1749aa et seq.); and

(2) a portion of which has received grants under Section 107 of

the Housing and Community Development Act of 1974 (42 U.S.C.

Section 5307) made pursuant to the authority created by that

section for grants in behalf of new communities assisted under

Title VII of the Housing and Urban Development Act of 1970 or

Title IV of the Housing and Urban Development Act of 1968 or in

behalf of new community projects assisted under Title X of the

National Housing Act (12 U.S.C. Section 1749aa et seq.).

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.09(a), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1106, Sec. 29, eff. Aug.

28, 1989.

Sec. 312.203. EXPIRATION OF REINVESTMENT ZONE. The designation

of a reinvestment zone for residential or commercial-industrial

tax abatement expires five years after the date of the

designation and may be renewed for periods not to exceed five

years, except that a reinvestment zone that is a state enterprise

zone is designated for the same period as a state enterprise zone

as provided by Chapter 2303, Government Code. The expiration of

the designation does not affect an existing tax abatement

agreement made under this subchapter.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1995, 74th Leg., ch. 985, Sec. 12, eff.

Sept. 1, 1995.

Sec. 312.204. MUNICIPAL TAX ABATEMENT AGREEMENT. (a) The

governing body of a municipality eligible to enter into tax

abatement agreements under Section 312.002 may agree in writing

with the owner of taxable real property that is located in a

reinvestment zone, but that is not in an improvement project

financed by tax increment bonds, to exempt from taxation a

portion of the value of the real property or of tangible personal

property located on the real property, or both, for a period not

to exceed 10 years, on the condition that the owner of the

property make specific improvements or repairs to the property.

The governing body of an eligible municipality may 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. A tax abatement agreement under this section

is subject to the rights of holders of outstanding bonds of the

municipality. An agreement exempting taxable real property or

leasehold interests or improvements on tax-exempt real property

may provide for the exemption of such taxable interests in each

year covered by the agreement only to the extent its value for

that year exceeds its value for the year in which the agreement

is executed. An agreement exempting tangible personal property

located on taxable or tax-exempt real property may provide for

the exemption of tangible personal property located on the real

property in each year covered by the agreement other than

tangible personal property that was located on the real property

at any time before the period covered by the agreement with the

municipality, including inventory and supplies. In a

municipality that has a comprehensive zoning ordinance, an

improvement, repair, development, or redevelopment taking place

under an agreement under this section must conform to the

comprehensive zoning ordinance.

(b) The agreements made with the owners of property in a

reinvestment zone must contain identical terms for the portion of

the value of the property that is to be exempt and the duration

of the exemption. For purposes of this subsection, if agreements

made with the owners of property in a reinvestment zone before

September 1, 1989, exceed 10 years in duration, agreements made

with owners of property in the zone on or after that date must

have a duration of 10 years.

may be located in the extraterritorial jurisdiction of the

municipality. In that event, the agreement applies to taxes of

the municipality if the municipality annexes the property during

the period specified in the agreement.

(d) Except as otherwise provided by this subsection, property

that is in a reinvestment zone and that is owned or leased by a

person who is a member of the governing body of the municipality

or a member of a zoning or planning board or commission of the

municipality is excluded from property tax abatement or tax

increment financing. Property that is subject to a tax abatement

agreement in effect when the person becomes a member of the

governing body or of the zoning or planning board or commission

does not cease to be eligible for property tax abatement under

that agreement because of the person's membership on the

governing body, board, or commission. Property that is subject to

tax increment financing when the person becomes a member of the

governing body or of the zoning or planning board or commission

does not become ineligible for tax increment financing in the

same reinvestment zone because of the person's membership on the

governing body, board, or commission.

(e) The governing body of a municipality eligible to enter into

tax abatement agreements under Section 312.002 may agree in

writing with the owner or lessee of real property that is located

in a reinvestment zone to exempt from taxation for a period not

to exceed 10 years a portion of the value of the real property or

of personal property, or both, located within the zone and owned

or leased by a certificated air carrier, on the condition that

the certificated air carrier make specific real property

improvements or lease for a term of 10 years or more real

property improvements located within the reinvestment zone. An

agreement may provide for the exemption of the real property in

each year covered by the agreement to the extent its value for

that year exceeds its value for the year in which the agreement

is executed. An agreement may provide for the exemption of the

personal property owned or leased by a certificated air carrier

located within the reinvestment zone in each year covered by the

agreement other than specific personal property that was located

within the reinvestment zone at any time before the period

covered by the agreement with the municipality.

(f) The agreements made with owners of property in an enterprise

zone that is also designated as a reinvestment zone are not

required to contain identical terms for the portion of the value

of property that is to be exempt and the duration of the

agreement.

(g) Notwithstanding the other provisions of this chapter, the

governing body of a municipality eligible to enter into tax

abatement agreements under Section 312.002 may agree in writing

with the owner of real property that is located in a reinvestment

zone to exempt from taxation for a period not to exceed five

years a portion of the value of the real property or of tangible

personal property located on the real property, or both, that is

used to provide housing for military personnel employed at a

military facility located in or near the municipality. An

agreement may provide for the exemption of the real property in

each year covered by the agreement only to the extent its value

for that year exceeds its value for the year in which the

agreement is executed. An agreement may provide for the exemption

of tangible personal property located on the real property in

each year covered by the agreement other than tangible personal

property that was located on the real property at any time before

the period covered by the agreement with the municipality and

other than inventory or supplies. The governing body of the

municipality may adopt guidelines and criteria for tax abatement

agreements entered into under this subsection that are different

from the guidelines and criteria that apply to tax abatement

agreements entered into under another provision of this section.

Tax abatement agreements entered into under this subsection are

not required to contain identical terms for the portion of the

value of the property that is to be exempt or for the duration of

the exemption as tax abatement agreements entered into with the

owners of property in the reinvestment zone under another

provision of this section.

(h) The Texas Department of Economic Development or its

successor may recommend that a taxing unit enter into a tax

abatement agreement with a person under this chapter. In

determining whether to enter into a tax abatement agreement under

this section, the governing body of a municipality shall consider

any recommendation made by the Texas Department of Economic

Development or its successor.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.10(a), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 486, Sec. 1, eff. June

14, 1989; Acts 1989, 71st Leg., ch. 1137, Sec. 6, 7, eff. Sept.

1, 1989; Acts 1995, 74th Leg., ch. 985, Sec. 13, eff. Sept. 1,

1995; Acts 2001, 77th Leg., ch. 560, Sec. 1, eff. Sept. 1, 2001;

Acts 2001, 77th Leg., ch. 640, Sec. 1, eff. June 13, 2001; Acts

2001, 77th Leg., ch. 765, Sec. 2, eff. Sept. 1, 2001; Acts 2001,

77th Leg., ch. 1016, Sec. 1, eff. Sept. 1, 2001; Acts 2001, 77th

Leg., ch. 1258, Sec. 1, eff. June 15, 2001; Acts 2003, 78th Leg.,

ch. 149, Sec. 18, eff. May 27, 2003; Acts 2003, 78th Leg., ch.

978, Sec. 5, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

412, Sec. 16, eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

728, Sec. 23.001(82), eff. September 1, 2005.

Sec. 312.2041. NOTICE OF TAX ABATEMENT AGREEMENT TO OTHER TAXING

UNITS. (a) Not later than the seventh day before the date on

which a municipality enters into an agreement under Section

312.204 or 312.211, the governing body of the municipality or a

designated officer or employee of the municipality shall deliver

to the presiding officer of the governing body of each other

taxing unit in which the property to be subject to the agreement

is located a written notice that the municipality intends to

enter into the agreement. The notice must include a copy of the

proposed agreement.

(b) A notice is presumed delivered when placed in the mail

postage paid and properly addressed to the appropriate presiding

officer. A notice properly addressed and sent by registered or

certified mail for which a return receipt is received by the

sender is considered to have been delivered to the addressee.

of the agreement.

Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.11(a), eff. Aug.

28, 1989. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 8, eff.

Sept. 1, 1989; Acts 1997, 75th Leg., ch. 855, Sec. 11, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1333, Sec. 3, eff. Sept. 1,

1997.

Sec. 312.205. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT. (a)

An agreement made under Section 312.204 or 312.211 must:

(1) list the kind, number, and location of all proposed

improvements of the property;

(2) provide access to and authorize inspection of the property

by municipal employees to ensure that the improvements or repairs

are made according to the specifications and conditions of the

agreement;

(3) limit the uses of the property consistent with the general

purpose of encouraging development or redevelopment of the zone

during the period that property tax exemptions are in effect;

(4) provide for recapturing property tax revenue lost as a

result of the agreement if the owner of the property fails to

make the improvements or repairs as provided by the agreement;

(5) contain each term agreed to by the owner of the property;

(6) require the owner of the property to certify annually to the

governing body of each taxing unit that the owner is in

compliance with each applicable term of the agreement; and

(7) provide that the governing body of the municipality may

cancel or modify the agreement if the property owner fails to

comply with the agreement.

(b) An agreement made under Section 312.204 or 312.211 may

include, at the option of the governing body of the municipality,

provisions for:

(1) improvements or repairs by the municipality to streets,

sidewalks, and utility services or facilities associated with the

property, except that the agreement may not provide for lower

charges or rates than are made for other services or properties

of a similar character;

(2) an economic feasibility study, including a detailed list of

estimated improvement costs, a description of the methods of

financing all estimated costs, and the time when related costs or

monetary obligations are to be incurred;

(3) a map showing existing uses and conditions of real property

in the reinvestment zone;

(4) a map showing proposed improvements and uses in the

reinvestment zone;

(5) proposed changes of zoning ordinances, the master plan, the

map, building codes, and city ordinances; and

(6) 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 or

interest, or both, on that recaptured property tax revenue.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1995, 74th Leg., ch. 995, Sec. 3, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 855, Sec. 12, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1333, Sec. 4, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 740, Sec. 1, eff. June 13, 2001.

Sec. 312.206. TAX ABATEMENT BY OTHER TAXING UNITS. (a) If

property taxes on property located in the taxing jurisdiction of

a municipality are abated under an agreement made under Section

312.204 or 312. 211, the governing body of each other taxing unit

eligible to enter into tax abatement agreements under Section

312.002 in which the property is located may execute a written

tax abatement agreement with the owner of the property. The

agreement is not required to contain terms identical to those

contained in the agreement with the municipality. The execution,

duration, and other terms of an agreement made under this section

are governed by the provisions of Sections 312.204, 312.205, and

312.211 applicable to a municipality. If the governing body of

the taxing unit by official action at any time before the

execution of the municipal agreement expresses an intent to be

bound by the terms of the municipal agreement if the municipality

enters into an agreement under Section 312.204 or 312.211 with

the owner relating to the property, the terms of the municipal

agreement regarding the share of the property to be exempt in

each year of the municipal agreement apply to the taxation of the

property by the taxing unit.

(b) If property taxes on property located in the taxing

jurisdiction of a municipality are abated under an agreement made

by the municipality before September 1, 1989, the terms of the

agreement with the municipality regarding the share of the

property that is to be exempt in each year of the agreement apply

to the taxation of the property by every other taxing unit, other

than a county or school district, in which the property is

located. If the agreement was made before September 1, 1987, the

terms regarding the share of the property to be exempt in each

year of the agreement also apply to the taxation of the property

by a county or school district.

reinvestment zone that includes property in the extraterritorial

jurisdiction of the municipality, the governing body of a taxing

unit eligible to enter into tax abatement agreements under

Section 312.002 in which the property is located may execute a

written agreement with the owner of the property to exempt from

its property taxes all or part of the value of the property in

the same manner and subject to the same restrictions as provided

by Section 312.204 or 312.211 for a municipality. The taxing unit

may execute an agreement even if the municipality does not

execute an agreement for the property, and the terms of the

agreement are not required to be identical to the terms of a

municipal agreement. However, if the governing body of another

eligible taxing unit has previously executed an agreement to

exempt all or part of the value of the property and that

agreement is still in effect, the terms of the subsequent

agreement relating to the share of the property that is to be

exempt in each year that the existing agreement remains in effect

must be identical to those of the existing agreement.

(d) If property taxes are abated on property in the

extraterritorial jurisdiction of a municipality due to an

agreement with a county or school district made before September

1, 1989, the terms of the agreement with the county or school

district relating to the share of the property that is to be

exempt in each year of the agreement apply to the taxation of the

property by every other taxing unit, other than a municipality,

school district, or county, in which the property is located.

(e) If property taxes on property located in an enterprise zone

are abated under this chapter, the governing body of each taxing

jurisdiction may execute a written agreement with the owner of

the property not later than the 90th day after the date the

municipal or county agreement is executed, whichever is later.

The agreement may, but is not required to, contain terms that are

identical to those contained in the agreement with the

municipality, county, or both, whichever applies, and the only

terms of the agreement that may vary are the portion of the

property that is to be exempt from taxation under the agreement

and the duration of the agreement.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.10(b), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1137, Sec. 9, eff. Sept.

1, 1989; Acts 1995, 74th Leg., ch. 985, Sec. 14, eff. Sept. 1,

1995; Acts 1997, 75th Leg., ch. 855, Sec. 13, eff. Sept. 1, 1997;

Acts 1997, 75th Leg., ch. 1333, Sec. 5, eff. Sept. 1, 1997; Acts

1999, 76th Leg., ch. 1039, Sec. 2, eff. Sept. 1, 1999; Acts 2001,

77th Leg., ch. 765, Sec. 1, eff. Sept. 1, 2001.

Sec. 312.207. APPROVAL BY GOVERNING BODY. (a) To be effective,

an agreement made under this subchapter must be approved by the

affirmative vote of a majority of the members of the governing

body of the municipality or other taxing unit at a regularly

scheduled meeting of the governing body.

(b) On approval by the governing body, an agreement may be

executed in the same manner as other contracts made by the

municipality or other taxing unit.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987.

Sec. 312.208. MODIFICATION OR TERMINATION OF AGREEMENT. (a) At

any time before the expiration of an agreement made under this

subchapter, the agreement may be modified by the parties to the

agreement to include other provisions that could have been

included in the original agreement or to delete provisions that

were not necessary to the original agreement. The modification

must be made by the same procedure by which the original

agreement was approved and executed. The original agreement may

not be modified to extend beyond 10 years from the date of the

original agreement.

(b) An agreement made under this subchapter may be terminated by

the mutual consent of the parties in the same manner that the

agreement was approved and executed.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 10, eff.

Sept. 1, 1989.

Sec. 312.209. APPLICATION OF NONSEVERABILITY PROVISION. Section

2, Article 5, Chapter 221, Acts of the 69th Legislature, Regular

Session, 1985, applies to the provisions of this subchapter that

are derived from amendments to the Property Redevelopment and Tax

Abatement Act made by Chapter 221, Acts of the 69th Legislature,

Regular Session, 1985.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987.

Sec. 312.210. AGREEMENT BY TAXING UNITS RELATING TO PROPERTY IN

CERTAIN SCHOOL DISTRICTS. (a) This section applies only to a

tax abatement agreement applicable to property located in a

reinvestment zone with respect to which a municipality, county,

and junior college district have entered into a joint agreement

to offer tax abatements exempting from taxation a specified

portion of the value of the property in the reinvestment zone.

(b) A tax abatement agreement with the owner of real property or

tangible personal property that is located in the reinvestment

zone described by Subsection (a) and in a school district that

has a wealth per student that does not exceed the equalized

wealth level must exempt from taxation:

(1) the portion of the value of the property in the amount

specified in the joint agreement among the municipality, county,

and junior college district; and

(2) an amount equal to 10 percent of the maximum portion of the

value of the property that may under Section 312.204(a) be

otherwise exempted from taxation.

level" have the meanings assigned those terms by Section 41.001,

Education Code.

Added by Acts 1995, 74th Leg., ch. 1053, Sec. 1, eff. June 17,

1995. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 6.84, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 640, Sec. 2, eff. June

13, 2001.

Sec. 312.211. AGREEMENT BY MUNICIPALITY RELATING TO PROPERTY

SUBJECT TO VOLUNTARY CLEANUP AGREEMENT. (a) This section

applies only to:

(1) real property:

(A) that is located in a reinvestment zone;

(B) that is not in an improvement project financed by tax

increment bonds; and

Section 361.606, Health and Safety Code; and

(2) tangible personal property located on the real property.

(b) The governing body of a municipality eligible to enter into

a tax abatement agreement under Section 312.002 may agree in

writing with the owner of property described by Subsection (a) to

exempt from taxation a portion of the value of the property for a

period not to exceed four years. The agreement takes effect on

January 1 of the next tax year after the date the owner receives

a certificate of completion for the property under Section

361.609, Health and Safety Code. The agreement may exempt from

taxation:

(1) not more than 100 percent of the value of the property in

the first year covered by the agreement;

(2) not more than 75 percent of the value of the property in the

second year covered by the agreement;

(3) not more than 50 percent of the value of the property in the

third year covered by the agreement; and

(4) not more than 25 percent of the value of the property in the

fourth year covered by the agreement.

section for the first tax year covered by the agreement unless

the property owner includes with the application for an exemption

under Section 11.28 filed with the chief appraiser of the

appraisal district in which the property has situs a copy of the

certificate of completion for the property.

(d) A property owner who files a copy of the certificate of

completion for property for the first tax year covered by the

agreement is not required to refile the certificate in a

subsequent tax year to receive a tax abatement under this section

for the property for that tax year.

(e) The chief appraiser shall accept a certificate of completion

filed under Subsection (c) as conclusive evidence of the facts

stated in the certificate.

(f) The governing body of the municipality may cancel or modify

the agreement if:

(1) the use of the land is changed from the use specified in the

certificate of completion; and

(2) the governing body determines that the new use may result in

an increased risk to human health or the environment.

(g) A municipality may enter into a tax abatement agreement

covering property described by Subsection (a) under this section

or under Section 312.204, but not under both sections. Section

312.204 applies to an agreement entered into under this section

except as otherwise provided by this section.

(h) A school district may not enter into a tax abatement

agreement under this section.

Added by Acts 1997, 75th Leg., ch. 855, Sec. 8, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1333, Sec. 6, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 483, Sec. 6, eff. Sept. 1,

2001.

SUBCHAPTER C. TAX ABATEMENT IN COUNTY REINVESTMENT ZONE

Sec. 312.401. DESIGNATION OF REINVESTMENT ZONE. (a) The

commissioners court of a county eligible to do so under Section

312.002 by order may designate as a reinvestment zone an area of

the county that does not include area in the taxing jurisdiction

of a municipality.

(b) The commissioners court may not designate an area as a

reinvestment zone until it holds a public hearing on the

designation and finds that the designation would contribute to

the retention or expansion of primary employment or would attract

major investment in the zone that would be a benefit to the

property to be included in the zone and would contribute to the

economic development of the county. At the hearing, interested

persons are entitled to speak and present evidence for or against

the designation. Notice of the hearing must be given in the same

manner as provided for notice of a hearing to be held by a

municipality under Section 312.201.

expires five years after the date of the designation and may be

renewed for periods not to exceed five years. The expiration of

the designation does not affect existing agreements made under

this subchapter.

(d) Property may be located both in a reinvestment zone

designated by a county under this subchapter and in a

reinvestment zone designated by a municipality under Subchapter

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.12(a), eff.

Aug. 28, 1989.

Sec. 312.4011. ENTERPRISE ZONE. Designation of an area as an

enterprise zone under Chapter 2303, Government Code constitutes

designation of the area as a reinvestment zone under this

subchapter without further hearing or other procedural

requirements other than those provided by Chapter 2303,

Government Code.

Added by Acts 1989, 71st Leg., ch. 1106, Sec. 30, eff. Aug. 28,

1989. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(22),

eff. Sept. 1, 1995.

Sec. 312.402. COUNTY TAX ABATEMENT AGREEMENT. (a) The

commissioners court may execute a tax abatement agreement with

the owner of taxable real property located in a reinvestment zone

designated under this subchapter or with the owner of tangible

personal property located on real property in a reinvestment zone

to exempt from taxation all or a portion of the value of the real

property, all or a portion of the value of the tangible personal

property located on the real property, or all or a portion of the

value of both.

(a-1) The commissioners court may execute a tax abatement

agreement with the owner of a leasehold interest in tax-exempt

real property located in a reinvestment zone designated under

this subchapter to exempt all or a portion of the value of the

leasehold interest in the real property. The court may execute a

tax abatement agreement with the owner of tangible personal

property or an improvement located on tax-exempt real property

that is located in a designated reinvestment zone to exempt all

or a portion of the value of the tangible personal property or

improvement located on the real property.

(a-2) The execution, duration, and other terms of an agreement

entered into under this section are governed by the provisions of

Sections 312.204, 312.205, and 312.211 applicable to a

municipality. Section 312.2041 applies to an agreement entered

into under this section in the same manner as that section

applies to an agreement entered into under Section 312.204 or

312.211.

(a-3) The commissioners court may execute a tax abatement

agreement with a lessee of taxable real property located in a

reinvestment zone designated under this subchapter to exempt from

taxation all or a portion of the value of the fixtures,

improvements, or other real property owned by the lessee and

located on the property that is subject to the lease, all or a

portion of the value of tangible personal property owned by the

lessee and located on the real property that is the subject of

the lease, or all or a portion of the value of both the fixtures,

improvements, or other real property and the tangible personal

property described by this subsection.

(b) A tax abatement agreement made by a county has the same

effect on the school districts and other taxing units in which

the property subject to the agreement is located as is provided

by Sections 312.206(a) and (b) for an agreement made by a

municipality to abate taxes on property located in the taxing

jurisdiction of the municipality.

agreement with a county under this section is annexed by a

municipality during the existence of the agreement, the terms of

the county agreement regarding the share of the property to be

exempt in each year of the agreement apply to the taxation of the

property by the municipality if before the annexation the

governing body of the municipality by official action expresses

an intent to enter into an agreement with the owner of the

property to abate taxes on the property if it is annexed or to be

bound by the terms of the county agreement after annexation, even

if that official action of the governing body of the municipality

expressing that intent occurs before September 1, 1989.

(d) Except as otherwise provided by this subsection, property

that is located in a reinvestment zone designated by a county

under this subchapter and that is owned or leased by a person who

is a member of the commissioners court may not be subject to a

tax abatement agreement made under this section. Property that is

subject to a tax abatement agreement under this section in effect

when the person becomes a member of the commissioners court does

not cease to be eligible for property tax abatement under that

agreement because of the person's membership on the commissioners

court.

(e) An agreement made under this section by a county or other

taxing unit may be modified or terminated in the same manner and

subject to the same limitations as provided by Section 312.208

for an agreement made under Subchapter B.

(f) The Texas Department of Economic Development or its

successor may recommend that a taxing unit enter into a tax

abatement agreement with a person under this chapter. In

determining whether to enter into a tax abatement agreement under

this section, the commissioners court of a county shall consider

any recommendation made by the Texas Department of Economic

Development or its successor.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.12(b), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1137, Sec. 11, eff.

Sept. 1, 1989; Acts 1997, 75th Leg., ch. 855, Sec. 14, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1333, Sec. 7, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 640, Sec. 3, eff. June 13, 2001;

Acts 2001, 77th Leg., ch. 1016, Sec. 2, eff. Sept. 1, 2001; Acts

2003, 78th Leg., ch. 978, Sec. 6, eff. Sept. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1195, Sec. 3, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1225, Sec. 3, eff. June 19, 2009.

Sec. 312.403. TAX ABATEMENT AGREEMENT FOR NUCLEAR ELECTRIC POWER

GENERATION FACILITY IN COUNTY REINVESTMENT ZONE. (a) In this

section, "nuclear electric power generation" has the meaning

assigned by Section 313.024(e).

(b) An agreement made under this subchapter with the owner of

property that is a nuclear electric power generation facility may

include a provision that defers the effective date of the

agreement to a later date agreed to by the taxing unit and the

owner of the property, but not later than the seventh anniversary

of the date the agreement is made.

Subsection (b), the agreement may have a term ending not later

than 10 years after the effective date of the agreement,

notwithstanding Sections 312.204 and 312.208.

Added by Acts 2007, 80th Leg., R.S., Ch.

1262, Sec. 1, eff. June 15, 2007.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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