The bill, S.B. 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 relief under these agreements, while still allowing them to make loans or grants in conjunction with tax abatement agreements as specified in 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. Specifically, municipalities and counties must hold public hearings, provide detailed notices about the proposed loans or grants, and adhere to strict timelines for notification.

Additionally, the bill establishes performance metrics that must be included in any agreements for loans or grants, ensuring that the objectives of economic development programs are met before any renewals can occur. The maximum duration for these agreements is set at 10 years, with the possibility of three renewals, each not exceeding five years, and a total combined period of 25 years. The bill also emphasizes the confidentiality of proprietary information related to loan or grant applications until agreements are executed. The changes will take effect on September 1, 2025, and will only apply to agreements entered into after that date.

Statutes affected:
Introduced: Tax Code 312.207 (Tax Code 312)