Senate Bill No. 878 introduces new regulations regarding the use of public funds in economic development agreements by municipalities and counties in Texas. It prohibits municipalities and counties from granting ad valorem tax exemptions or relief under the respective chapters, while still allowing them to make loans or grants in conjunction with tax abatement agreements under Chapter 312 of the Tax Code. The bill mandates public meetings and notice requirements before any loans or grants can be made, ensuring transparency and public participation. Additionally, it establishes performance metrics that must be included in agreements, which must be met for any renewal of the agreements.

The bill also sets limitations on the duration of agreements, capping them at a maximum of 10 years, with the possibility of three renewals not exceeding five years each, and a total combined period of 25 years. Furthermore, it emphasizes the confidentiality of proprietary information related to loan or grant applications until agreements are executed. The changes will apply only to agreements entered into after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Tax Code 312.207 (Tax Code 312)
Senate Committee Report: Tax Code 312.207 (Tax Code 312)
Engrossed: Tax Code 312.207 (Tax Code 312)