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 aproperty owner elected to the city council that granted the abatement: Clarification ofAttorney 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 areinvestment zone and that is owned or

leased by amember ofthe governing body ofthe municipality orby 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. 5312.204(d) (Vernon Supp. 2000). This office concluded that the owner of property receiving amunicipal tax abatement was not barred from serving on the city council that granted the abatement, but theproperty “maynot continue toreceive 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 atthe end ofthe year? The exemption for tax abatement stops when the owner ofthe property assumes office as a member of the city council. Chapter 312ofthe Tax Code allows the governing body ofamunicipality to enter into atax abatement agreement with the owner of taxable real property located in areinvestment zone “to exempt from taxation aportion 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.5312.204(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 ofthe property asprovided 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 toproperty 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 tocancellation ofpartial 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). Ifatax exemption applicable to a property on January 1islost during the year, the tax due forthe year isprorated according to section 26.10 ofthe Tax Code. Id. 526.10 (Vernon Supp. 2000); see also id. 522.02 (Vernon 1992) (person who owns the property when the exemption terminates must render itfortaxation within thirty days). The tax due on the property isprorated by determining the tax for the entire year according to the usual method set out in section 26.09 ofthe 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 isnot applicable.” Id. 526.10 (Vernon Supp. 2000). Thus, the loss ofthe tax exemption affects the tax rate as ofthe date the exemption is lost. The tax exemption atissue 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. 5312.204(d). An elected officer ordinarily does not assume office atthe time ofthe election. Ifthe person is elected to anew 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 1ofthe year following the general election for state and county officers). Even ifthe individual is elected to till avacancy 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 ofthe 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 ofthat date.The Honorable Chris Harris - Page 3 (JC-0236)

SUMMARY Attorney General Opinion JC-0155 (1999) determined that property owned orleased by amember ofamunicipality’s governing body isnot eligible for atax abatement agreement authorized by the Property Redevelopment and Tax Abatement Act, chapter 312ofthe Tax Code. Attorney General Opinion JC-0155 is clarified by determining when theproperty loses the tax exemption granted bythe 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 amember ofthe governing body. The tax due on the property for the year is determined according to the method set out in section 26.10 ofthe Tax Code.

Attorney General ofTexas

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