Highlights 77th Texas Legislature - Senate

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77 th Texas Legislature
Authorizes the governing body of an eligible municipality to agree in writing with the owner of a leasehold
interest in real property located in a reinvestment zone to exempt a portion of the value of the leasehold
interest, if taxable, for a period not to exceed 10 years.
Includes improvements or tangible personal property located on the real property subject to the leasehold
interest, for a period not to exceed 10 years, on certain conditions.
Authorizes the exemption in each year covered by the agreement only to the extent its value for that year
exceeds its value for the year in which the agreement is executed.
Recouping Lost Revenues from Tax Abatement Agreements - S.B. 986
by Senator Duncan
House Sponsor: Representative Yvonne Davis
Currently, Texas cities provide financial incentives through tax abatement agreements for the purpose of
job creation in their communities. However, a city has no recourse when the requisite job creation is not
fulfilled.
Gives cities the statutory authority to recapture lost property tax revenue, including penalties and interest, if:
• the owner of the commercial enterprise fails to create the number of new jobs required by the
agreement;
• the property value does not increase as expected under the agreement; or
• the owner fails to meet any other performance criteria provided by the agreement.
Franchise Taxation Exemption for Certain Insurance Companies - S.B. 1689
by Senator Ellis
House Sponsor: Representative Yvonne Davis
Under current law, a corporation that is an insurance company, surety, guaranty, or fidelity company
required to pay or who pays an annual tax measured by gross receipts is exempted from the franchise tax.
However, there is no provision that exempts from the franchise tax an insurance organization performing
management or accounting activities in this state on behalf of a nonadmitted captive insurance company.
In addition, current law is not clear as to which corporation may claim a business loss in a merger of two
corporations.
Exempts from the franchise tax an insurance organization, title insurance company, or title insurance agent
authorized to engage in insurance business in this state, rather than a corporation that is an insurance
company, surety, guaranty, or fidelity company, now required to pay an annual tax measured by its gross
premium receipts. Includes farm mutuals, local mutual aid associations, and burial associations as exempt
from the franchise tax.
Senate Research Center 295