LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 6, 2009 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB1159 by Kuempel (Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.), As Introduced To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state. The bill would amend Chapter 311 of the Tax Code, regarding the Tax Increment Financing Act. The bill would allow the termination date for a reinvestment zone to be extended by the creating unit. A taxing unit other than the zone's creating unit would not be required to continue to participate. Under a tax increment financing agreement all or a portion of the incremental taxes collected in the zone are forwarded into a Tax Increment Fund (TIF). Under the hold harmless provisions of HB 1, 79th Legislature, Third Called Session (2006), school district taxes that are forwarded into a TIF are subtracted from school district collections, increasing state funding. To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state. Neither the future actions of cities and counties regarding reinvestment zone extensions nor the future decisions of school districts about whether to continue participating in extended reinvestment zones can be predicted. As a result, the cost of the proposed bill cannot be estimated. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2009. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, MN, SD, SJS, TP, JRO
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 6, 2009
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB1159 by Kuempel (Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.), As Introduced
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB1159 by Kuempel (Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.), As Introduced
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB1159 by Kuempel (Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.), As Introduced
HB1159 by Kuempel (Relating to the extension of the term of a reinvestment zone created under the Tax Increment Financing Act.), As Introduced
To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state.
To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state.
The bill would amend Chapter 311 of the Tax Code, regarding the Tax Increment Financing Act. The bill would allow the termination date for a reinvestment zone to be extended by the creating unit. A taxing unit other than the zone's creating unit would not be required to continue to participate. Under a tax increment financing agreement all or a portion of the incremental taxes collected in the zone are forwarded into a Tax Increment Fund (TIF). Under the hold harmless provisions of HB 1, 79th Legislature, Third Called Session (2006), school district taxes that are forwarded into a TIF are subtracted from school district collections, increasing state funding. To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state. Neither the future actions of cities and counties regarding reinvestment zone extensions nor the future decisions of school districts about whether to continue participating in extended reinvestment zones can be predicted. As a result, the cost of the proposed bill cannot be estimated. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2009.
The bill would amend Chapter 311 of the Tax Code, regarding the Tax Increment Financing Act.
The bill would allow the termination date for a reinvestment zone to be extended by the creating unit. A taxing unit other than the zone's creating unit would not be required to continue to participate.
Under a tax increment financing agreement all or a portion of the incremental taxes collected in the zone are forwarded into a Tax Increment Fund (TIF). Under the hold harmless provisions of HB 1, 79th Legislature, Third Called Session (2006), school district taxes that are forwarded into a TIF are subtracted from school district collections, increasing state funding.
To the extent that school districts agree to continue participating in reinvestment zones for which the originating city or county has extended the termination date, there would be a cost to the state. Neither the future actions of cities and counties regarding reinvestment zone extensions nor the future decisions of school districts about whether to continue participating in extended reinvestment zones can be predicted. As a result, the cost of the proposed bill cannot be estimated.
The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2009.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, MN, SD, SJS, TP, JRO
JOB, MN, SD, SJS, TP, JRO