Court Opinion

ID: 4130091
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:00:08.528806+00
Date Added: 2024-06-11T12:44:39.234403
License: Public Domain

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