Untitled Texas Attorney General Opinion ( 2000 )

June 22,200O
The Honorable Chris Harris Opinion No. JC-0236
Chair, Administration Committee
Texas State Senate Re: Time when municipal tax abatement ends for
P.O. Box 12068 a property owner elected to the city council that
Austin, Texas 7871 l-2068 granted the abatement: Clarification of Attorney
General Opinion JC-0155 (1999) (RQ-0177.JC)
Dear Senator Harris:
You request claritication ofAttorney General Opinion JC-0155 (1999), which addressed the
following provision of chapter 312 of the Tax Code, the Property Redevelopment and Tax
Abatement Act:
Property that is in a reinvestment zone and that is owned or
leased by a member of the governing body of the municipality or by
a member of a zoning or planning board or commission of the
municipality is excluded from property tax abatement or tax
increment financing.
TEX. TAX CODE ANN. 5 312.204(d) (Vernon Supp. 2000). This office concluded that the owner of
property receiving a municipal tax abatement was not barred from serving on the city council that
granted the abatement, but the property “maynot continue to receive amunicipal tax abatement once
its owner is elected to the city council.” Tex. Att’y Gen. Op. No. JC-0155 (1999) at 2.
You now ask when the tax abatement stops-at the moment of election or at the end of the
year? The exemption for tax abatement stops when the owner of the property assumes office as a
member of the city council.
Chapter 3 12 of the Tax Code allows the governing body of a municipality to enter into a tax
abatement agreement with the owner of taxable real property 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. 5 312.204(a) (Vernon Supp. 2000). The tax abatement agreement entitles the property owner
“to exemption from taxation by an incorporated city or town of all or part of the value of the
property as provided by the agreement.” Id. 5 11.28 (Vernon 1992). The tax exemption created by
the agreement is subject to the Tax Code provisions that generally apply to property tax exemptions.
The Honorable Chris Harris Page 2 (X-0236)
See Fina Oil & Chemical Co. v. Port Neches Indep. Sch. Dist., 861 S.W.2d 3, 6-7 (Tex. App.-
Beaumont 1993, writ denied) (notice provision ofTax Code section 11.43(h) applied to cancellation
of partial exemption created by abatement agreement).
Eligibility for a tax exemption is usually determined by a claimant’s qualifications on
January 1. TEX. TAX CODE ANN. 5 11.42 (Vernon Supp. 2000). If a tax exemption applicable to a
property on January 1 is lost during the year, the tax due for the year is prorated according to section
26.10 ofthe Tax Code. Id. 5 26.10 (Vernon Supp. 2000); see also id. 5 22.02 (Vernon 1992) (person
who owns the property when the exemption terminates must render it for taxation within thirty days).
The tax due on the property is prorated by determining the tax for the entire year according to the
usual method set out in section 26.09 of the Tax Code and multiplying this amount “by a fraction,
the denominator of which is 365 and the numerator of which is the number of days the exemption
is not applicable.” Id. 5 26.10 (Vernon Supp. 2000). Thus, the loss of the tax exemption affects the
tax rate as of the date the exemption is lost.
The tax exemption at issue in Attorney General Opinion JC-0155 was lost when the owner
of the property became a member of the governing body that granted the abatement. See id.
5 312.204(d). An elected officer ordinarily does not assume office at the time ofthe election. Ifthe
person is elected to a new term ofoffice, he or she may not assume office until the new term begins.
See generally TEX. GOV’T CODE ANN. § 601.003 (Vernon 1994) (regular term of elective state,
district, county or precinct office begins on January 1 of the year following the general election for
state and county officers). Even if the individual is elected to till a vacancy in an unexpired term,
he or she must qualify for office by taking the oath of office and complying with any other
requirements. See Purcell v. Carrillo, 349 S.W.2d 263, (Tex. Civ. App.-San Antonio 1961, no
writ); Tex. Att’y Gen. Op. No. Jlv-589 (1986) at 2. The attorney for the city in question should
consult the city charter, ordinances, and minutes of the city council meetings to determine the date
at which the property owner assumed office as a member of the city council. The property tax
exemption granted by the city in the tax abatement ends as of that date.
The Honorable Chris Harris - Page 3 (JC-0236)
SUMMARY
Attorney General Opinion JC-0155 (1999) determined that
property owned or leased by a member of a municipality’s governing
body is not eligible for a tax abatement agreement authorized by the
Property Redevelopment and Tax Abatement Act, chapter 3 12 of the
Tax Code. Attorney General Opinion JC-0155 is clarified by
determining when the property loses the tax exemption granted by the
tax abatement agreement.
If the owner of property subject to the tax abatement
agreement is elected to the municipality’s governing body, the tax
exemption created by the agreement is lost on the date the property
owner assumes offtce as a member of the governing body. The tax
due on the property for the year is determined according to the
method set out in section 26.10 of the Tax Code.
Attorney General of Texas
ANDY TAYLOR
First Assistant Attorney General
CLARK RENT ERVIN
Deputy Attorney General - General Counsel
ELIZABETH ROBINSON
Chair, Opinion Committee
Susan L. Garrison
Assistant Attorney General - Opinion Committee