By: Birdwell S.B. No. 878
A BILL TO BE ENTITLED
AN ACT
relating to limitations on the use of public money under certain
economic development agreements or programs adopted by certain
political subdivisions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 380, Local Government Code, is amended
by adding Sections 380.005, 380.006, 380.007, 380.008, and 380.009
to read as follows:
Sec. 380.005. PROHIBITION ON AD VALOREM TAX RELIEF UNDER
THIS CHAPTER. (a) A municipality may not grant an exemption or
other relief from ad valorem taxation under this chapter.
(b) This section does not limit the authority of a
municipality to:
(1) make a loan or grant under this chapter:
(A) to a recipient who enters into a tax
abatement agreement with the municipality under Chapter 312, Tax
Code; or
(B) in conjunction with a tax abatement agreement
entered into by the municipality under Chapter 312, Tax Code; or
(2) use revenue in a tax increment fund created under
Chapter 311, Tax Code, to pay for a project that is part of an
agreement authorized by this chapter.
Sec. 380.006. PUBLIC MEETING AND NOTICE REQUIREMENTS. (a)
Before a municipality may make a loan or grant under this chapter,
the governing body of the municipality must hold a public hearing
regarding the proposed loan or grant at which members of the public
are given the opportunity to be heard.
(b) A municipality that maintains an Internet website shall
post the current version of the proposed loan or grant under this
chapter on the website.
(c) In addition to any other requirement of law, the public
notice of a meeting at which the governing body of a municipality
will consider the adoption of a proposed loan or grant under this
chapter must contain:
(1) the name of the recipient of the loan or grant;
(2) a general description of the public purpose for
which the loan or grant is provided; and
(3) the amount of and period of time for the loan or
grant.
(d) Except as otherwise provided by this section, a
municipality must give the notice of a meeting required by this
section in the manner provided by Chapter 551, Government Code.
(e) A municipality must give notice of a meeting required by
this section not less than 15 business days but not more than 30
business days before the meeting.
(f) If a municipality postpones a meeting required by this
section to a later date, the municipality must hold the postponed
meeting not more than 10 business days after the date for which the
meeting was originally scheduled. If the postponement would result
in the meeting being held more than 30 business days after the date
the municipality gave notice of the meeting, the municipality must
give a new notice of the meeting as provided by Subsection (e).
Sec. 380.007. PERFORMANCE METRICS REQUIREMENT. (a) An
agreement for a loan or grant under this chapter must include
appropriate performance metrics relating to the goals of an
economic development program established under this chapter.
(b) An agreement for a loan or grant under this chapter may
not be renewed under Section 380.008(b) unless the municipality
determines that the performance metrics under the agreement have
been met.
Sec. 380.008. PERIOD OF AGREEMENT; RENEWAL. (a) Except as
otherwise provided by this section, a municipality may not enter
into an agreement to make a loan or grant under this chapter for a
period exceeding 10 years.
(b) A municipality may, subject to Section 380.007(b),
renew an agreement under this chapter. An agreement may be renewed
no more than three times, and each renewal period may not exceed
five years.
(c) The total combined period for an agreement under this
chapter, including the initial agreement and renewal periods, may
not exceed 25 years.
Sec. 380.009. CONFIDENTIALITY OF PROPRIETARY INFORMATION.
Information that is provided to a municipality in connection with
an application or request for a loan or grant under this chapter and
that describes the specific processes or business activities to be
conducted or the equipment or other property to be located on the
property for which a loan or grant is sought is confidential and not
subject to public disclosure until the loan or grant agreement is
executed. Information that is in the custody of a municipality
after an agreement has been executed is not confidential under this
section.
SECTION 2. Chapter 381, Local Government Code, is amended
by adding Sections 381.006, 381.007, 381.008, 381.009, and 381.010
to read as follows:
Sec. 381.006. PROHIBITION ON AD VALOREM TAX RELIEF UNDER
THIS CHAPTER. (a) A county may not grant an exemption or other
relief from ad valorem taxation under this chapter.
(b) This section does not limit the authority of a county
to:
(1) make a loan or grant of county money under this
chapter to a recipient who enters into a tax abatement agreement
with the county under Chapter 312, Tax Code;
(2) use county money for a purpose authorized by this
chapter in conjunction with a tax abatement agreement entered into
by the county under Chapter 312, Tax Code; or
(3) use revenue in a tax increment fund created under
Chapter 311, Tax Code, to pay for a project that is part of an
agreement authorized by this chapter.
Sec. 381.007. PUBLIC MEETING AND NOTICE REQUIREMENTS. (a)
Before a county may use county money for a purpose authorized by
this chapter, the commissioners court of the county must hold a
public hearing regarding the proposed use at which members of the
public are given the opportunity to be heard.
(b) A county shall post the current version of the proposed
use of county money under this chapter on the county's Internet
website.
(c) In addition to any other requirement of law, the public
notice of a meeting at which the commissioners court of a county
will consider the adoption of a proposed use of county money under
this chapter must contain:
(1) the name of the recipient of the county money;
(2) a general description of the public purpose for
which the county money is provided; and
(3) if applicable, the amount of and period of time for
a loan or grant of county money.
(d) Except as otherwise provided by this section, a county
must give the notice of a meeting required by this section in the
manner provided by Chapter 551, Government Code.
(e) A county must give notice of a meeting required by this
section not less than 15 business days but not more than 30 business
days before the meeting.
(f) If a county postpones a meeting required by this section
to a later date, the county must hold the postponed meeting not more
than 10 business days after the date for which the meeting was
originally scheduled. If the postponement would result in the
meeting being held more than 30 business days after the date the
county gave notice of the meeting, the county must give a new notice
of the meeting as provided by Subsection (e).
Sec. 381.008. PERFORMANCE METRICS REQUIREMENT. (a) An
agreement relating to the use of county money under this chapter
must include appropriate performance metrics relating to the goals
of an economic development program established under this chapter.
(b) An agreement under this chapter may not be renewed under
Section 381.009(b) unless the county determines that the
performance metrics under the agreement have been met.
Sec. 381.009. PERIOD OF AGREEMENT; RENEWAL. (a) Except as
otherwise provided by this section, a county may not enter into an
agreement to make a loan or grant under this chapter for a period
exceeding 10 years.
(b) A county may, subject to Section 381.008(b), renew an
agreement under this chapter. An agreement may be renewed no more
than three times, and each renewal period may not exceed five years.
(c) The total combined period for an agreement under this
chapter, including the initial agreement and renewal periods, may
not exceed 25 years.
Sec. 381.010. CONFIDENTIALITY OF PROPRIETARY INFORMATION.
Information that is provided to a county in connection with an
application or request for a loan or grant under this chapter and
that describes the specific processes or business activities to be
conducted or the equipment or other property to be located on the
property for which a loan or grant is sought is confidential and not
subject to public disclosure until the loan or grant agreement is
executed. Information that is in the custody of a county after an
agreement has been executed is not confidential under this section.
SECTION 3. Subchapter A, Chapter 312, Tax Code, is amended
by adding Section 312.009 to read as follows:
Sec. 312.009. LIMITATION ON TAX ABATEMENT AGREEMENTS. In a
tax abatement agreement entered into under this chapter, a taxing
unit:
(1) may only provide an abatement of the taxing unit's
ad valorem taxes; and
(2) may not provide a loan or grant of public money
from any other source.
SECTION 4. Section 312.207, Tax Code, is amended by
amending Subsection (d) and adding Subsections (e) and (f) to read
as follows:
(d) The notice of a meeting required by this section must be
given in the manner required by Chapter 551, Government Code,
except as otherwise provided by this section [that the notice must
be provided at least 30 days before the scheduled time of the
meeting].
(e) A municipality or other taxing unit must give notice of
a meeting required by this section not less than 15 business days
but not more than 30 business days before the meeting.
(f) If a municipality or other taxing unit postpones a
meeting required by this section to a later date, the municipality
or other taxing unit must hold the postponed meeting not more than
10 business days after the date for which the meeting was originally
scheduled. If the postponement would result in the meeting being
held more than 30 business days after the date the municipality or
other taxing unit gave notice of the meeting, the municipality or
other taxing unit must give a new notice of the meeting as provided
by Subsection (e).
SECTION 5. The changes in law made by this Act apply only to
an agreement entered into on or after the effective date of this
Act. An agreement entered into before the effective date of this
Act is governed by the law applicable to the contract on the date
the contract was entered into, and that law is continued in effect
for that purpose.
SECTION 6. This Act takes effect September 1, 2025.