Basics
What is a tax abatement?
A local property tax exemption on the increased value of improvements for up to 10 years.
What is a reinvestment zone?
A designated area where tax abatements can be granted under Chapter 312.
What must be adopted before a taxing unit can offer abatements?
Guidelines and criteria under § 312.002.
What must be published 30 days before approving an agreement?
A public notice with project details.
When is the Chapter 312 program currently set to expire?
September 1, 2029.
What’s the maximum number of years an abatement can last under Chapter 312?
10 years.
What must a city or county do before designating a reinvestment zone?
Hold a public hearing and pass an ordinance.
What must all abatement agreements include per § 312.205?
Recapture clauses, performance standards, access for inspection, and termination provisions.
What entity must be notified when a new agreement is signed?
The Texas Comptroller.
Who is responsible for monitoring compliance with the agreement?
The local taxing unit that granted the abatement.
Which types of property are commonly eligible for abatement?
Real and tangible personal property
What’s a key economic requirement for creating a reinvestment zone?
The area must impair growth or be underdeveloped.
Can an agreement be modified after it's signed?
Yes, but it must follow the same procedures as a new agreement.
What must a taxing unit submit to the Comptroller annually?
An annual report of active abatement agreements.
What happens if a project fails to meet performance benchmarks?
The agreement may be terminated and taxes recaptured.
Is school district property tax eligible for abatement under Chapter 312?
No, school districts are excluded.
How long can a reinvestment zone designation last initially?
Up to 5 years (with renewal possible).
What must be included in the legal description of an agreement?
The exact location and boundaries of the project site.
What is the purpose of publishing guidelines and criteria every 2 years?
To maintain eligibility and transparency.
What’s one consequence of non-compliance that affects the tax benefit?
Loss of abatement and repayment of taxes (clawback).
Which 2023 bill extended Chapter 312’s expiration to 2029 and added more oversight?
House Bill 3143.
What if a zone doesn’t meet statutory qualifications for designation?
The abatement is invalid.
Can a project begin construction before an agreement is finalized?
No, doing so disqualifies the project from abatement.
What’s required in the notice published before approving an agreement?
Owner/applicant name, property location, estimated cost, and type of improvements.
What is a common audit finding related to Chapter 312 compliance?
Missing documentation or failure to file required reports with the Comptroller.