June 22,200O 

The Honorable Chris Harris 

Chair, Administration Committee 

Texas State Senate 

P.O. Box 12068 

Austin, Texas 7871 l-2068 

Opinion No. JC-0236 

Re: Time when municipal tax abatement ends for 

a property owner elected to the city council that 

granted the abatement: Clarification of Attorney 

General Opinion JC-0155 (1999) (RQ-0177.JC) 

Dear Senator Harris: 

You request claritication ofAttorney General Opinion JC-0155 (1999), which addressed the 

following provision of chapter 312 of the Tax Code, the Property Redevelopment and Tax 

Abatement Act: 

Property that is in a reinvestment zone and that is owned or 

leased by a member of the governing body of the municipality or by 

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

municipality is excluded from property tax abatement or tax 

increment financing. 

TEX. TAX CODE ANN. 5 312.204(d) (Vernon Supp. 2000). This office concluded that the owner of 

property receiving a municipal tax abatement was not barred from serving on the city council that 

granted the abatement, but the property “maynot continue to receive amunicipal tax abatement once 

its owner is elected to the city council.” Tex. Att’y Gen. Op. No. JC-0155 (1999) at 2. 

You now ask when the tax abatement stops-at the moment of election or at the end of the 

year? The exemption for tax abatement stops when the owner of the property assumes office as a 

member of the city council. 

Chapter 3 12 of the Tax Code allows the governing body of a municipality to enter into a tax 

abatement agreement with the owner of taxable real property located in a reinvestment zone “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.” TEX. TAX CODE 

ANN. 5 312.204(a) (Vernon Supp. 2000). The tax abatement agreement entitles the property owner 

“to exemption from taxation by an incorporated city or town of all or part of the value of the 

property as provided by the agreement.” Id. 5 11.28 (Vernon 1992). The tax exemption created by 

the agreement is subject to the Tax Code provisions that generally apply to property tax exemptions. 
The Honorable Chris Harris Page 2 (X-0236) 

See Fina Oil & Chemical Co. v. Port Neches Indep. Sch. Dist., 861 S.W.2d 3, 6-7 (Tex. App.- 

Beaumont 1993, writ denied) (notice provision ofTax Code section 11.43(h) applied to cancellation 

of partial exemption created by abatement agreement). 

Eligibility for a tax exemption is usually determined by a claimant’s qualifications on 

January 1. TEX. TAX CODE ANN. 5 11.42 (Vernon Supp. 2000). If a tax exemption applicable to a 

property on January 1 is lost during the year, the tax due for the year is prorated according to section 

26.10 ofthe Tax Code. Id. 5 26.10 (Vernon Supp. 2000); see also id. 5 22.02 (Vernon 1992) (person 

who owns the property when the exemption terminates must render it for taxation within thirty days). 

The tax due on the property is prorated by determining the tax for the entire year according to the 

usual method set out in section 26.09 of the Tax Code and multiplying this amount “by a fraction, 

the denominator of which is 365 and the numerator of which is the number of days the exemption 

is not applicable.” Id. 5 26.10 (Vernon Supp. 2000). Thus, the loss of the tax exemption affects the 

tax rate as of the date the exemption is lost. 

The tax exemption at issue in Attorney General Opinion JC-0155 was lost when the owner 

of the property became a member of the governing body that granted the abatement. See id. 

5 312.204(d). An elected officer ordinarily does not assume office at the time ofthe election. Ifthe 

person is elected to a new term ofoffice, he or she may not assume office until the new term begins. 

See generally TEX. GOV’T CODE ANN. § 601.003 (Vernon 1994) (regular term of elective state, 

district, county or precinct office begins on January 1 of the year following the general election for 

state and county officers). Even if the individual is elected to till a vacancy in an unexpired term, 

he or she must qualify for office by taking the oath of office and complying with any other 

requirements. See Purcell v. Carrillo, 349 S.W.2d 263, (Tex. Civ. App.-San Antonio 1961, no 

writ); Tex. Att’y Gen. Op. No. Jlv-589 (1986) at 2. The attorney for the city in question should 

consult the city charter, ordinances, and minutes of the city council meetings to determine the date 

at which the property owner assumed office as a member of the city council. The property tax 

exemption granted by the city in the tax abatement ends as of that date. 
The Honorable Chris Harris - Page 3 (JC-0236) 

SUMMARY 

Attorney General Opinion JC-0155 (1999) determined that 

property owned or leased by a member of a municipality’s governing 

body is not eligible for a tax abatement agreement authorized by the 

Property Redevelopment and Tax Abatement Act, chapter 3 12 of the 

Tax Code. Attorney General Opinion JC-0155 is clarified by 

determining when the property loses the tax exemption granted by the 

tax abatement agreement. 

If the owner of property subject to the tax abatement 

agreement is elected to the municipality’s governing body, the tax 

exemption created by the agreement is lost on the date the property 

owner assumes offtce as a member of the governing body. The tax 

due on the property for the year is determined according to the 

method set out in section 26.10 of the Tax Code. 

Attorney General of Texas 

ANDY TAYLOR 

First Assistant Attorney General 

CLARK RENT ERVIN 

Deputy Attorney General - General Counsel 

ELIZABETH ROBINSON 

Chair, Opinion Committee 

Susan L. Garrison 

Assistant Attorney General - Opinion Committee