House Bill No. 5169 introduces new regulations regarding agreements between municipalities and businesses that involve rebates of municipal sales and use taxes, or grants and loans based on those taxes. The bill adds Section 321.006 to the Tax Code, which stipulates that if a business relocates from one municipality to another, the amount of any rebate, grant, or loan provided by the new municipality cannot exceed the amount offered by the municipality from which the business is relocating. Additionally, the duration of such agreements is limited to not exceed the duration of similar agreements from the previous municipality.

Furthermore, if a business is relocating from multiple municipalities, the new municipality's financial incentives must be based on a weighted average of the rebates, grants, and loans from the previous municipalities, taking into account the amount of taxes collected by the business in each location. The provisions of this new section will not apply to agreements made before the effective date of the Act, but will apply to any renewals, modifications, or extensions of those agreements after the effective date, which is set for September 1, 2025.

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