DAN MORALES

ATTORNEY GENERAL. 

## QBffice

ofthe !Zlttornep

Qi5eneral &date of lQexae February 7,1992

Honorable A.J. (Jack) Hartel Liberty County Attorney P.0. Box9127 Liberty, Texas 77575.9127 Opinion No.DM-90

Re: Authority ofanavigation district to 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 ataxabatement agreement’ Pertaining to land that isthe subject ofa county tax abatement agreement executed on November 27, 1990.2 Second, you ask whether tire navigation district has the authority to enter into a .taxabatement 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 TaxAbatement Act isentitIed to an exemption fromtaxation of aIIor partof the property asprovided in the agmmmt. TaxCode 0 11.28,ch. 312.
21, askingboth ofyour questions you have.asked us to assume tbat “theresolution electing to become. eIigiilc to grant tax abatement and the appropriate gui&Iioes and criteria for granting tax abatement have been formaIIyand 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 thiscase], that the Navigation District hasapproved the application fortaxabatement and that Litcrty County, acting through itsCommissioners Court, granted taxabatement 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&II assume compliance with the procedures set forth in five sections in the Tax Code,acctioa11.43 ngardiaaan application for 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 ofacounty.

p. 454Honorable A.J. (Jack) Hartel -Page 2 (DM- g0)

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 5312.2011. That chapter authorizes the governingbody ofamunicipality 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. $9**  312.204, 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 canbe inferred fromprovisions in chapter 312 which state that other taxingunits may not participate in tax abatement agreements unless certain conditions are met. Seeid. 90312.002,312.006,312.207(a). Section 312.402 ofthe Tax Code provides inpart: \

(a) The commissioners court may execute a tax abatement agreement with the owner oftaxable 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 312.204and 312.205applicable to amunicipality.

... (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 amunicipality to abate taxesonproperty located inthe taxing jurisdiction ofthe municipality.

Section 312206(a) describes the effect amunicipal taxabatement agreement has on agreements made by other taxing units. Pursuant to section 312.402(b), that provision applies to county taxabatement agreements aswell,and reads inpart:

(a) If property taxes on property located in the taxing jurisdiction of a municipality are abated under an agreement

p. 455Honorable A.J. (Jack) Hartel -Page 3 (DM- 90)

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 awritten agreement with the owner ofthe 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 ifthe 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 wasexecuted. Ifthe governingbody ofthe taxingunit by official action at any time before the execution of the municipal agreement expresses an intent to enter into an agreement with the owner ofproperty under this subsection or to be bound by the terms ofthe municipal agreement ifthe municipality enters into an agreement under Section 312.204withthe owner relating to the property, the terms ofthe municipal agreement regarding the share of the property to be exempt in each year of the municipal agreement apply to the taxation ofthe property bythe taxingunit.
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 ofthese other taxingunits depends on the existence ofeither 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 findno other means inthe 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 ofa tax abatement agreement by a county or municipality as provided in sections 312.402and 312.204ofthe TaxCode.

P. 456Honorable A.J. (Jack) Hartel -Page4 (DM-901

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 isauthorized to enter into an abatement agreement pertaining to the same land only for aperiod of90days after the date ofthe execution ofthat agreement. Thus. in this case, the authority ofthe Chambers-Liberty Counties Navigation District3to 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 ofthe 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 ofTexas

WJLLPRYOR 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 “taxingunit” 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, WC note 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 93122041(a),

w

p. 457Honorable A.J. (Jack) Hartel -Page 5 (DM-901

MARY KELLER Deputy Assistant Attorney General
JUDGE ZOLLIE STEAKLEY (Ret) SpecialAssistant Attorney General

RENEA **HICKS** SpecialAssistant Attorney General

MADELEINE B.JOHNSON Chair, Opinion Committee Pripared byKayGuajardo Assistant Attorney General

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