HB2027

Regular Session

Relating to the authority of the Brazoria County Commissioners Court to execute tax abatement agreements for property within the Port Freeport district.

ModeratePlan for compliance

Low Cost

Effective:2025-05-29

Enforcing Agencies

Brazoria County Commissioners Court • Port Freeport District

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: May 29, 2025 (Immediate).
Compliance Deadline: Voluntary "Opt-In." To impact the 2026 Tax Year, agreements generally must be executed and assets designated before January 1, 2026.
Agency Rulemaking: No state-level rulemaking required. However, Brazoria County must apply criteria "as if it were a municipality," which may require the Commissioners Court to issue specific local guidance or amendments to their existing Chapter 312 guidelines.

Immediate Action Plan

1. Audit Capital Plans: Identify any construction or equipment procurement planned for Port Freeport land in Q3/Q4 2025. Pause procurement until abatement eligibility is assessed.
2. Initiate Port Contact: Submit a formal request to Port Freeport leadership asking them to petition the Brazoria County Commissioners Court for a Reinvestment Zone designation for your leasehold.
3. Request Guidelines: Contact the Brazoria County Clerk to obtain the current "Guidelines and Criteria for Granting Tax Abatement."
4. Draft Lease Amendments: If your current lease has fewer than 10 years remaining, draft an extension amendment to satisfy anticipated County duration requirements.

Operational Changes Required

Contracts

Ground Leases: Review existing leases with Port Freeport. If you intend to seek an abatement, your lease term must generally exceed the duration of the abatement (often 10 years). You may need to negotiate a lease extension immediately to qualify.
Construction Agreements: Insert strict completion deadlines into General Contractor agreements. Tax abatements are time-bound; if a project drags past the deadline set in the County agreement, the tax exemption for that year is forfeited.

Hiring/Training

Finance/Tax Teams: Must be trained on Chapter 312 of the Texas Tax Code. They need to separate "abatable" assets (new improvements/personal property) from "ineligible" assets (land/existing inventory) in their ledgers.
Government Relations: Staff must pivot from general lobbying to specific procurement. The law requires a written request *from* the Port *to* the County. You must successfully lobby the Port Board first.

Reporting & Record-Keeping

Reinvestment Zone Application: You must generate economic impact data (job creation, capital investment value) to support the Port’s written request to the County.
Asset Segregation: Maintain a distinct fixed asset list for improvements located within the designated zone. Commingling these assets with non-zone assets will trigger audit failures.
Annual Certification: Prepare for an annual filing with Brazoria County certifying that job creation and investment metrics are being met to avoid "clawback" of saved taxes.

Fees & Costs

Application Fees: Budget for standard reinvestment zone application fees typically charged by counties (often $1,000 - $5,000).
Legal Spend: Anticipate increased outside counsel fees to negotiate the specific terms of the abatement agreement (clawbacks, performance metrics).

Strategic Ambiguities & Considerations

The "Municipal" Standard: The statute requires the County to establish the zone using criteria "as if a municipality... were creating the zone." It is currently unclear if Brazoria County will adopt the strict procedural rules of a nearby municipality (like the City of Freeport) or create a hybrid standard. Watch for the first County agenda item regarding this to see the precedent set.
Discretionary Gatekeeping: The law states the Port "may" submit a request and the County "may" execute an agreement. This is not an entitlement. Even if you meet all financial criteria, the Port or County can deny the abatement for political or discretionary reasons without recourse.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsPort Freeport Brazoria County Special Districts & Authorities Special Districts & Authorities--navigation & Ports Taxation Taxation--county Reinvestment Zones

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 2027

By: Vasut

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

According to the comptroller of public accounts, tax abatement agreements are an economic development tool that can assists certain local governments in stimulating economic growth by attracting new businesses and encouraging the retention and expansion of existing businesses. H.B. 2027 seeks to achieve these goals in Brazoria County by authorizing the Brazoria County Commissioners Court to execute tax abatement agreements with certain property owners in the Port Freeport district.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 2027 amends the Special District Local Laws Code to authorize the Brazoria County Commissioners Court to execute a tax abatement agreement with the owner of a leasehold interest in tax-exempt real property or property owned by the Port Freeport district located in an applicable reinvestment zone to exempt all or a portion of the value of the leasehold interest in the real property. The bill also authorizes the commissioners court to execute a tax abatement agreement with the owners of tangible personal property or an improvement located on tax‑exempt real property or property owned by the district that is located in an applicable reinvestment zone to exempt all or a portion of the value of the tangible personal property or improvement located on the real property. The bill establishes that the other terms of an agreement entered into under the bill's provisions are governed by the Property Redevelopment and Tax Abatement Act.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

House Authors

Rep. Cody VasutRepublican · Primary Author

Joint Authors

Jeff Barry (R)

Senate Sponsor

Sen. Joan HuffmanRepublican · Primary Sponsor

Bill Text(with markup)

H.B. No. 2027

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the authority of the Brazoria County Commissioners
	Court to execute tax abatement agreements for property within the
	Port Freeport district.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 5002.203, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 5002.203. DESIGNATION OF REINVESTMENT ZONE. (a)
	Notwithstanding Subchapters [~~Subchapter~~] B and C, Chapter 312, Tax
	Code, the district may submit a written request to the
	commissioners court of a county in which a property owned by the
	district is located for the commissioners court to designate the
	property as a reinvestment zone [~~or area~~] for the purposes of
	Chapter 312, Tax Code. The commissioners court may designate the
	property as a reinvestment zone [~~or area~~] if the commissioners
	court finds the criteria set forth in Section 312.202, Tax Code, are
	met for the property as if a municipality in which the property is
	located were creating the zone.
	(b) The commissioners court may execute a tax abatement
	agreement with the owner of a leasehold interest in tax-exempt real
	property or property owned by the district located in a
	reinvestment zone designated under this subchapter to exempt all or
	a portion of the value of the leasehold interest in the real
	property. The court may execute a tax abatement agreement with the
	owners of tangible personal property or an improvement located on
	tax-exempt real property or property owned by the district that is
	located in a reinvestment zone designated under this subchapter to
	exempt all or a portion of the value of the tangible personal
	property or improvement located on the real property.
	(c) The other terms of an agreement entered into under this
	section are governed by Chapter 312, Tax Code.
	SECTION 2. This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 22, 2025

TO:	Honorable Morgan Meyer, Chair, House Committee on Ways & Means

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2027 by Vasut (Relating to the authority of the Brazoria County Commissioners Court to execute tax abatement agreements for property within the Port Freeport district.), As Introduced

No fiscal implication to the State is anticipated.

Local Government Impact

There could be an impact on the Brazoria County Commissioners Court if it executes tax abatement agreements on certain properties within the Port Freeport district as would be authorized by the bill.

Source Agencies:

LBB Staff:

JMc, KK, BC, CWi

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Frequently Asked Questions

Common questions about HB2027

What does Texas HB2027 do?

Effective immediately, HB2027 codifies the authority of Brazoria County to grant tax abatements for leasehold interests and tangible personal property located on Port Freeport land. This legislation creates a direct mechanism for Port tenants to reduce property tax liability on new capital investments, provided they secure a specific two-step approval from both the Port District and the County. Implementation Timeline Effective Date: May 29, 2025 (Immediate).

Who authored HB2027?

HB2027 was authored by Texas Representative Cody Vasut during the Regular Session.

When was HB2027 signed into law?

HB2027 was signed into law by Governor Greg Abbott on May 29, 2025.

Which agencies enforce HB2027?

HB2027 is enforced by Brazoria County Commissioners Court and Port Freeport District.

How urgent is compliance with HB2027?

The compliance urgency for HB2027 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB2027?

The cost impact of HB2027 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB2027 address?

HB2027 addresses topics including port freeport, brazoria county, special districts & authorities, special districts & authorities--navigation & ports and taxation.

Legislative data provided by LegiScanLast updated: November 25, 2025

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