Texas House Bill HB1159

Texas 2009 - 81st Regular

Caption

Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.

Impact

The proposed legislation has significant implications for local governments and their ability to finance economic development projects through tax increment financing. By providing greater clarity on the termination and extension processes for reinvestment zones, it aims to facilitate ongoing development initiatives, especially in areas identified as needing economic stimulation. This could lead to increased investment in local infrastructure and projects that contribute to community growth.

Summary

House Bill 1159 pertains to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act. The bill amends the Tax Code to provide a clear framework for the termination and extension of reinvestment zones. It stipulates that a reinvestment zone will terminate either on the designated date in the creating ordinance or when all project costs and obligations have been fulfilled. Furthermore, the bill allows for a taxing unit to be exempt from paying tax increments after the termination date unless a separate agreement is made with the municipality that created the zone.

Contention

One potential point of contention surrounding HB 1159 could arise from the implications of exempting taxing units from paying tax increments after termination dates, unless otherwise agreed upon. Critics may argue that this provision could limit funding for ongoing projects within reinvestment zones, potentially resulting in funding shortfalls for communities depending on these financial mechanisms. There could be concerns about the balance of power between local governments and the state in managing these zones, especially whether municipalities will be able to extend their authority effectively without state interference.