QBfficeof the !ZlttornepQi5eneral
&date of lQexae
DAN MORALES February 7,1992
ATTORNEY
GENERAL.
Honorable A. J. (Jack) Hartel Opinion No. DM-90
Liberty County Attorney
P. 0. Box 9127 Re: Authority of a navigation district to
Liberty, Texas 77575.9127 enter into a tax abatement agreement
(RQ-251)
Dear Mr. Hartel:
You ask two questions regarding the authority of the Chambers-Liberty
Counties Navigation District (the navigation district) to enter into a tax abatement
agreement. You first ask whether the navigation district has the authority to enter
into a tax abatement agreement’ Pertaining to land that is the subject of a county tax
abatement agreement executed on November 27, 1990.2 Second, you ask whether
tire navigation district has the authority to enter into a .tax abatement agreement
with a landowner if a board member of the navigation district owns an interest in
the property receiving the tax abatement. We have determined that the navigation
district is not authorized to enter into a tax abatement agreement in the situation
‘A Iandowner who has entered into an agreement under the Property Redevelopment and
Tax Abatement Act is entitIed to an exemption from taxation of aII or part of the property as provided
in the agmmmt. Tax Code 0 11.28, ch. 312.
21, asking both of your questions you have. asked us to assume tbat “the resolution electing to
become. eIigiilc to grant tax abatement and the appropriate gui&Iioes and criteria for granting tax
abatement have been formaIIy and properly adopted by the Navigation Diitria- that the required
apphtion has been ftid with the. Navigation District by Moss Bluff Gas Storage Co., Inc [the
Iandowner in this case], that the Navigation District has approved the application for tax abatement and
that Litcrty County, acting through its Commissioners Court, granted tax abatement to Moss Bluff Gas
Storage Co., Iac oa the same property in an agreement dated 27 &wember, 1990.’ For purposes of
your sues&& we v&IIassume compliance with the procedures set forth in five sections in the Tax
Code, acctioa 11.43 ngardiaa an applicationfor a tax exemption, se&on 3l2.002 regarding the
eligSUy of a taxing unit to participate in a tax abatement agreement, section 3l2.205 regarding the
specific terms required for a tax abatement agreement, section 312.207 regarding approvaI by the
governing body of a taxing unit, and section 312.401 regarding the designation of a reinvestment zone
bythecommlssl * ‘oners court of a county.
p. 454
Honorable A. J. (Jack) Hartel - Page 2 (DM-g 0 )
you posed in your first question. This determination obviates the need to answer
your second question.
Chapter 312 of the Tax Code, the “Property Redevelopment and Tax
Abatement Act,” (the act) authorizes a county or municipality to grant tax
exemptions to owners of land that has been designated as a reinvestment zone
pursuant to section 312.201 of the Tax Code or as an enterprise zone under the
Texas Enterprise Zone Act, article 5190.7, V.T.C.S. See also Tax Code 5 312.2011.
That chapter authorizes the governing body of a municipality and the commissioners
court of a county to execute a tax abatement agreement with the owner of certain
taxable real property located in a reinvestment zone. Id. $9312.204, 312.402.
Chapter 312 does not affirmatively authorize other taxing units to enter into such
agreements; we believe a court would find the authority of other taxing units to
participate in such agreements can be inferred from provisions in chapter 312 which
state that other taxing units may not participate in tax abatement agreements unless
certain conditions are met. See id. 90 312.002,312.006,312.207(a). Section 312.402
\
of the Tax Code provides in part:
(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. The
execution, duration, and other terms of an agreement made
under this section are governed by the provisions of Sections
312.204 and 312.205 applicable to a municipality. . . .
(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.
Section 312206(a) describes the effect a municipal tax abatement agreement has on
agreements made by other taxing units. Pursuant to section 312.402(b), that
provision applies to county tax abatement agreements as well, and reads in part:
(a) If property taxes on property located in the taxing
jurisdiction of a municipality are abated under an agreement
p. 455
Honorable A. J. (Jack) Hartel - Page 3 (DM-9 0 )
made under Section 312.204, 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 agreement with the owner of the property not
later than the 90th day after the date the municipal agreement is
executed. The agreement must contain terms identical to those
contained in the agreement with the municipality providing for
the portion of the property that is to be exempt from taxation
under the agreement, the duration of the agreement, and the
provisions included in the agreement under Section 312.205,
even if the value of the property at the time the agreement is
executed is not the same as its value when tbe municipal
agreement was executed and even if improvements or repairs
have been made to the property since the municipal agreement
was executed. 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 enter into an agreement with
the owner of property under this subsection or to be bound by
the terms of the municipal agreement if the municipality enters
into an agreement under Section 312.204 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.
Section 312.206 indicates that taxing units other than counties and
municipalities can not sua sponre enter into a tax abatement agreement with
someone who owns land in a reinvestment or free enterprise zone; the tax
abatement authority of these other taxing units depends on the existence of either a
municipal or county tax abatement agreement. Indeed, the terms of a tax
abatement agreement executed by other taxing units must be supplied by the
preexisting county or municipal agreement. We find no other means in the act for a
taxing unit that is not a county or municipality to provide a tax exemption to a
landowner in a reinvestment or free enterprise xone except to do so after the
execution of a tax abatement agreement by a county or municipality as provided in
sections 312.402 and 312.204 of the Tax Code.
P. 456
Honorable A. J. (Jack) Hartel - Page 4 (DM- 9 0 1
When property that is the subject of a county or municipal abatement
agreement is located within another taxing unit, the governing body of that taxing
unit is authorized to enter into an abatement agreement pertaining to the same land
only for a period of 90 days after the date of the execution of that agreement. Thus.
in this case, the authority of the Chambers-Liberty Counties Navigation District3 to
enter into an agreement pertaining to land that is the subject of a county tax
abatement agreement executed on November 27, 1990, expired 90 days after that
date?
SUMMARY
The authority of the Chambers-Liberty Counties Navigation
District to enter into a tax abatement agreement pertain@ to
land that is the subject of a county tax abatement agreement
expired 90 days after the date of the execution of the county
agreement.
DAN MORALES
Attorney General of Texas
WJLL PRYOR
First Assistant Attorney General
tie Chambers-Liberty Counties Navigation Ditriet is a self-liquidating navigation district
operating under chapter 63 of the Water Code. See Attorney General Opinion MW-3 (1979). The
dchitioa of “taxing unit” includes a district created by or pursuant to the Water Code. Tax Code
0 l.ow).
'We havt not been iaformd of the cxlstence of a municipal tax abatement agreement
pertainiog to the land invohwl here; we limit our aoswcr to the facts preseatcd. Further, WCnote that
although a designated officer or employee of a county that intends to enter into a tax abatement
agreement is required to give written notice of that fact to tbe presiding officer of the govehog body
of each other taxing unit in which the property that is to be tbe subject of the agreement is located,
failure to deliver such notice. does not affect the validity of the agreement. Tax Code 9 3122041(a),
w
p. 457
Honorable A. J. (Jack) Hartel - Page 5 (DM- 9 0 1
MARY KELLER
Deputy Assistant Attorney General
JUDGE ZOLLIE STEAKLEY (Ret)
Special Assistant Attorney General
RENEA HICKS
Special Assistant Attorney General
MADELEINE B. JOHNSON
Chair, Opinion Committee
Pripared by Kay Guajardo
Assistant Attorney General
P. 458