DAN MORALES 

ATTORNEY GENERAL. 

QBffice of the !Zlttornep Qi5eneral 

&date of lQexae 

February 7,1992 

Honorable A. J. (Jack) Hartel 

Liberty County Attorney 

P. 0. Box 9127 

Liberty, Texas 77575.9127 

Opinion No. DM-90 

Re: Authority of a navigation 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 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&II assume compliance with the procedures set forth in five sections in the Tax 

Code, acctioa 11.43 ngardiaa an 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 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. $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 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, 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 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