Texas House Bill HB1685

Texas 2011 - 82nd Regular

• Introduced: 2/23/11
• Refer: 3/3/11

Caption

Relating to a credit against the ad valorem taxes imposed by certain taxing units on commercial or industrial real property based on the cost of constructing a building on the property.

Impact

The bill specifically targets state tax regulations and modifies Chapter 31 of the Tax Code. It stipulates that the credit may not be applicable to school district taxes, ensuring that education funding remains intact during the implementation of this financial relief for construction projects. The credit is calculated based on the costs associated with constructing a qualifying building and is limited to a maximum duration of three tax years. Additionally, the property owner must apply for the credit with the appraisal district and provide relevant documentation regarding the construction contract and estimated timeline.

Summary

House Bill 1685 introduces a tax credit aimed at alleviating the financial burden on owners of commercial or industrial properties during the construction phase of buildings. This legislation will allow property owners to receive a credit against ad valorem taxes imposed by certain taxing units, provided that the constructed buildings are intended for commercial or industrial purposes. The measure is designed to incentivize construction activity, thereby promoting economic development in Texas by making it more financially feasible for businesses to invest in new infrastructure.

Sentiment

The sentiment around HB1685 appears to lean positively among business owners and advocates for economic growth. Supporters view the bill as a pragmatic step towards stimulating construction and promoting job creation within the commercial and industrial sectors. However, there may be concerns regarding the potential impact on local tax revenue, which could draw criticism from local governments that rely on ad valorem taxes for funding essential services.

Contention

Notable points of contention include the exclusion of school district taxes from the credit, which raises questions about the overall equity of the legislation and its implications for funding educational services. Additionally, the bill's success hinges on the approval of a constitutional amendment proposed by the 82nd Legislature, making the timing and voter sentiment surrounding this amendment crucial for the bill's implementation. If the amendment is not approved, HB1685 will not take effect, leaving the question of how to stimulate construction and economic growth through tax incentives unanswered.