Court Opinion

ID: 4128244
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:37:16.880692+00
Date Added: 2024-06-11T14:31:22.216587
License: Public Domain

ATTORNEY GENERAL OF TEXAS
                                                GREG         ABBOTT

                                                    August 6, 2009

The Honorable Tom Maness                                         Opinion No. GA-0734
Jefferson County Criminal District Attorney
Jefferson County Courthouse                                      Re:     Calculation of the maximum time
1001 Pearl Street, 3rd Floor                                     allowable for tax abatement under Tax Code
Beaumont, Texas 77701-3545                                       section 312.204(d) (RQ-0784-GA)

Dear Mr. Maness:

        On behalf of a navigation district, you ask whether under Tax Code section 312.204(a), "the
10-year maximum allowable term of abatement begin[ s] at the date of' substantial completion of the
project' or ... as ofthe date of execution ofthe agreement providing for the abatement[.]"l Section
312.204(a) authorizes an eligible city to "agree in writing with the owner of taxable real property that
is 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. § 312.204(a) (Vernon 2008) (emphasis added).2 While
section 312.204(a) limits the authorized exemption of the property from taxes-the tax
abatement-to a maximum often years, it does not specify the date from which the maximum ten-
year abatement period must be calculated.

        Your request for an opinion was submitted to this office before the Eighty-first Legislature
specifically addressed the issue you raise by enacting section 312.007. See Act of May 29,2009,
81st Leg., R.S., H.B. 3896, § 2; Act of May 30, 2009, 81st Leg., R.S., S.B. 1458, § 2 (both
containing identical language and to be codified at TEX. TAX CODE ANN. § 312.007) (effective June
19,2009) [hereinafter H.B. 3896 and S.B. 1458]. Section 312.007(a) defines the term "abatement
period" to mean "the period during which all or a portion of the value of real property or tangible
personal property that is the subject of a tax abatement agreement is exempt from taxation." H.B.
3896, § 2; S.B. 1458 § 2 (emphasis added). Section 312.007(b) then provides:

         lRequest Letter at 1 (available at http://www.texasattorneygeneral.gov).

          2Iftaxes on property located in a city's taxing jurisdiction are abated pursuant to section 312.204, other eligible
taxing units in which the property is located may also execute a tax abatement agreement with the owner ofthe property.
TEX. TAX CODE ANN. § 312.206(a)(Vernon2008); see also id §§ 312.206(a)("The execution, duration, and other terms
of an agreement made under this section are governed by ... Section[] 312.204 ...."), 312.002(g)(stating that '" [t]axing
unit' has the meaning assigned by [Tax Code] Section 1.04"). You tell us that the navigation district is a taxing unit for
the purposes of chapter 312. See Request Letter at 1.
The Honorable Tom Maness - Page 2                (GA-0734)

                        Notwithstanding any other provision of this chapter, the
                governing body of the taxing unit granting the abatement and the
                owner of the property that is the subject of the agreement may agree
                to defer the commencement ofthe abatement period until a date that
                is subsequent to the date the agreement is entered into, except that the
                duration ofan abatement period may not exceed 10 years.

H.B. 3896 § 2; S.B. 1458 § 2 (emphasis added).

         Section 312.007 plainly allows a taxing unit and a property owner to agree to defer the start
of the tax abatement period to a date after the date of the agreement covering the abatement. See
H.B. 3896, § 2; S.B. 1458 § 2; see also Lelandv. Brandal, 257 S.W.3d204,206 (Tex. 2008) (stating
that to determine and give effect to the Legislature's intent, the court "look[s] first to the statute's
language" and "[i]fthe statute's language is unambiguous, its plain meaning will prevail"). The
statute also plainly states that the tax abatement period-the period during which the property subject
to the agreement is tax exempt-.may not exceed ten years. See H.B. 3896, § 2; S.B. 1458, § 2;
Leland, 257 S.W.3d at 206. In short, section 312.007 now expressly (i) provides that the maximum
ten-year limit applies to the period during which the property covered by the agreement is actually
exempt from taxes, i.e., the abatement period; (ii) permits the abatement period to start at a date later
than the date of the agreement; and (iii) applies "notwithstanding any other provision of [chapter
312]." See H.B. 3896, § 2; S.B. 1458, § 2; see also H.B. 3896, § 4; S.B. 1458, § 6 ("Section 312.007
... is intended to clarify rather than change existing law.").

        Accordingly, we conclude that the maximum ten-year tax abatement period authorized under
section 312.204(a) may commence in a year subsequent to the year in which the agreement providing
for the abatement is entered into by the taxing unit and the owner of the property subject to the
agreement.
The Honorable Tom Maness - Page 3             (GA-0734)

                                      SUMMARY

                       The maximum ten-year tax abatement period authorized under
               Tax Code section 312.204(a) may commence in a year subsequent to
               the year in which an agreement providing for the tax abatement is
               entered into by the taxing unit and the owner of the property subject
               to the agreement.

ANDREW WEBER
First Assistant Attorney General

JONATHANK. FRELS
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

SheelaRai
Assistant Attorney General, Opinion Committee