Texas 2009 - 81st Regular

Texas House Bill HB3484 Compare Versions

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1	1	81R30885 SMH/JJT-D
2	2	By: Coleman, Oliveira, Madden H.B. No. 3484
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain acts and proceedings of certain local
8	8	governments, including those related to tax increment financing,
9	9	and the validity of certain acts and proceedings.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	ARTICLE 1. VALIDITY OF CERTAIN ACTS OR PROCEEDINGS OF MUNICIPAL
12	12	MANAGEMENT DISTRICTS
13	13	SECTION 1.01. Subchapter A, Chapter 375, Local Government
14	14	Code, is amended by adding Section 375.005 to read as follows:
15	15	Sec. 375.005. PRESUMPTION OF VALIDITY OF ACT OR PROCEEDING.
16	16	(a) This section applies to:
17	17	(1) a district created under this chapter; and
18	18	(2) a district created under a local law that in
19	19	accordance with that local law operates wholly or partly under this
20	20	chapter.
21	21	(b) On and after the second anniversary of the effective
22	22	date of a governmental act or proceeding of a district, including a
23	23	governmental act or proceeding related to the district's creation,
24	24	boundaries, operation, administration, annexation or exclusion of
25	25	land or other property, levy or collection of ad valorem taxes, or
26	26	adoption or implementation of a service and improvement plan and
27	27	the determination, levy, and collection of assessments pursuant to
28	28	the plan, the governmental act or proceeding is conclusively
29	29	presumed, as of the date it occurred, to be valid and to have
30	30	occurred in accordance with law.
31	31	(c) The presumption provided by Subsection (b) does not
32	32	apply to a governmental act or proceeding of a district regarding
33	33	which a lawsuit to annul or invalidate the act or proceeding is
34	34	filed on or before the second anniversary of the effective date of
35	35	the governmental act or proceeding.
36	36	(d) The presumption provided by Subsection (b) does not
37	37	apply to:
38	38	(1) a governmental act or proceeding of a district
39	39	that at the time the act or proceeding occurred was a misdemeanor or
40	40	felony under a statute of this state or the United States; or
41	41	(2) a district rule that, at the time it was passed,
42	42	was preempted by a statute of this state or the United States,
43	43	including Section 1.06 or 109.57, Alcoholic Beverage Code.
44	44	SECTION 1.02. The presumption provided by Section
45	45	375.005(b), Local Government Code, as added by this Act, does not
46	46	apply to:
47	47	(1) a governmental act or proceeding of a district
48	48	regarding which a lawsuit to annul or invalidate the act or
49	49	proceeding is filed on or before August 31, 2009; or
50	50	(2) a matter that on September 1, 2009:
51	51	(A) is involved in litigation, if the litigation
52	52	ultimately results in the matter being held invalid by a final
53	53	judgment of a court; or
54	54	(B) has been held invalid by a final judgment of a
55	55	court.
56	56	SECTION 1.03. (a) The legislature validates and confirms,
57	57	as of the dates on which they occurred, all governmental acts or
58	58	proceedings of a district created under Chapter 375, Local
59	59	Government Code, or a district that is created by a local law and
60	60	that operates wholly or partly under Chapter 375, Local Government
61	61	Code, including governmental acts and proceedings related to the
62	62	district's creation, boundaries, operation, administration,
63	63	annexation or exclusion of land or other property, levy or
64	64	collection of ad valorem taxes, or adoption or implementation of a
65	65	service and improvement plan and the determination, levy, and
66	66	collection of assessments pursuant to the plan, that were taken
67	67	before the effective date of this Act.
68	68	(b) Subsection (a) of this section does not apply to a
69	69	matter that on the 30th day after the effective date of this Act:
70	70	(1) is involved in litigation, if the litigation
71	71	ultimately results in the matter being held invalid by a final
72	72	judgment of a court; or
73	73	(2) has been held invalid by a final judgment of a
74	74	court.
75	75	ARTICLE 2. TAX INCREMENT FINANCING
76	76	SECTION 2.01. Section 311.002(1), Tax Code, is amended to
77	77	read as follows:
78	78	(1) "Project costs" means the expenditures made or
79	79	estimated to be made and monetary obligations incurred or estimated
80	80	to be incurred by the municipality or county designating
81	81	[establishing] a reinvestment zone that are listed in the project
82	82	plan as costs of public works, [or] public improvements, programs,
83	83	or other projects benefiting [in] the zone, plus other costs
84	84	incidental to those expenditures and obligations. "Project costs"
85	85	include:
86	86	(A) capital costs, including the actual costs of
87	87	the acquisition and construction of public works, public
88	88	improvements, new buildings, structures, and fixtures; the actual
89	89	costs of the acquisition, demolition, alteration, remodeling,
90	90	repair, or reconstruction of existing buildings, structures, and
91	91	fixtures; the actual costs of the remediation of conditions that
92	92	contaminate public or private land or buildings; the actual costs
93	93	of the preservation of the facade of a public or private building;
94	94	the actual costs of the demolition of public or private buildings;
95	95	and the actual costs of the acquisition of land and equipment and
96	96	the clearing and grading of land;
97	97	(B) financing costs, including all interest paid
98	98	to holders of evidences of indebtedness or other obligations issued
99	99	to pay for project costs and any premium paid over the principal
100	100	amount of the obligations because of the redemption of the
101	101	obligations before maturity;
102	102	(C) real property assembly costs;
103	103	(D) professional service costs, including those
104	104	incurred for architectural, planning, engineering, and legal
105	105	advice and services;
106	106	(E) imputed administrative costs, including
107	107	reasonable charges for the time spent by employees of the
108	108	municipality or county in connection with the implementation of a
109	109	project plan;
110	110	(F) relocation costs;
111	111	(G) organizational costs, including the costs of
112	112	conducting environmental impact studies or other studies, the cost
113	113	of publicizing the creation of the zone, and the cost of
114	114	implementing the project plan for the zone;
115	115	(H) interest before and during construction and
116	116	for one year after completion of construction, whether or not
117	117	capitalized;
118	118	(I) the cost of operating the reinvestment zone
119	119	and project facilities;
120	120	(J) the amount of any contributions made by the
121	121	municipality or county from general revenue for the implementation
122	122	of the project plan; [and]
123	123	(K) the costs of a program described by Section
124	124	311.010(h);
125	125	(L) the costs of school buildings, other
126	126	educational buildings, other educational facilities, or other
127	127	buildings owned by or on behalf of a school district, community
128	128	college district, or other political subdivision of this state;
129	129	(M) the costs of providing affordable housing or
130	130	areas of public assembly in or outside of the zone; and
131	131	(N) payments made at the discretion of the
132	132	governing body of the municipality or county that the governing
133	133	body finds necessary or convenient to the creation of the zone or to
134	134	the implementation of the project plans for the zone.
135	135	SECTION 2.02. Sections 311.003(a) and (b), Tax Code, are
136	136	amended to read as follows:
137	137	(a) The governing body of a county by order may designate a
138	138	geographic area in the county or the governing body of a
139	139	municipality by ordinance [or the governing body of a county by
140	140	order] may designate a [contiguous] geographic area that is in the
141	141	corporate limits of the municipality, in the extraterritorial
142	142	jurisdiction of the municipality, or in both [in the jurisdiction
143	143	of the municipality or county] to be a reinvestment zone to promote
144	144	development or redevelopment of the area if the governing body
145	145	determines that development or redevelopment would not occur solely
146	146	through private investment in the reasonably foreseeable future.
147	147	The area need not be contiguous if the governing body determines
148	148	that the tracts included in the area are substantially related. The
149	149	designation of an area that is wholly or partly located in the
150	150	extraterritorial jurisdiction of a municipality is not affected by
151	151	a subsequent annexation of real property in the reinvestment zone
152	152	by the municipality. The tax increment base of a municipality that
153	153	annexes an area in a zone after the area is included in the zone is
154	154	computed as if the area were located in the corporate limits of the
155	155	municipality at the time the area was included in the zone.
156	156	(b) Before adopting an ordinance or order designating
157	157	[providing for] a reinvestment zone, the governing body of the
158	158	municipality or county must prepare a preliminary reinvestment zone
159	159	financing plan. [As soon as the plan is completed, a copy of the
160	160	plan must be sent to the governing body of each taxing unit that
161	161	levies taxes on real property in the proposed zone.]
162	162	SECTION 2.03. Chapter 311, Tax Code, is amended by adding
163	163	Section 311.0035 to read as follows:
164	164	Sec. 311.0035. PROCEDURE FOR DESIGNATING JOINT
165	165	REINVESTMENT ZONE. (a) The governing bodies of two or more
166	166	municipalities by ordinance adopted by each municipality may
167	167	designate a contiguous area in the jurisdiction of each of the
168	168	municipalities to be a joint reinvestment zone. Except as
169	169	otherwise provided by this section, each of the municipalities must
170	170	follow the procedures provided by Section 311.003 to designate an
171	171	area as a joint reinvestment zone. The ordinances adopted by all of
172	172	the municipalities designating an area as a joint reinvestment zone
173	173	must contain the same terms and must:
174	174	(1) describe the boundaries of the zone with
175	175	sufficient definiteness to identify with ordinary and reasonable
176	176	certainty the territory included in the zone;
177	177	(2) create a board of directors for the zone and
178	178	specify:
179	179	(A) the number of directors;
180	180	(B) the qualifications of directors;
181	181	(C) the manner in which directors are appointed;
182	182	(D) the terms of directors;
183	183	(E) the manner in which vacancies on the board
184	184	are filled; and
185	185	(F) the manner by which officers of the board are
186	186	selected;
187	187	(3) provide that the zone takes effect immediately on
188	188	adoption of the ordinance by the last of the municipalities in the
189	189	jurisdiction of which the area contained in the zone is located;
190	190	(4) provide a termination date for the zone;
191	191	(5) assign a name to the zone, which may include the
192	192	name of one or more of the designating municipalities and may
193	193	contain a number;
194	194	(6) establish a tax increment fund for the zone; and
195	195	(7) contain findings that:
196	196	(A) improvements in the zone will significantly
197	197	enhance the value of all taxable real property in the zone and will
198	198	be of general benefit to the municipalities; and
199	199	(B) the area meets the requirements of Sections
200	200	311.005(a)(1) and (2) and (a-1).
201	201	(b) For purposes of complying with Subsection (a)(7)(A),
202	202	the ordinances are not required to identify the specific parcels of
203	203	real property to be enhanced in value.
204	204	(c) The boundaries of a joint reinvestment zone may be
205	205	enlarged or reduced by ordinance of the governing bodies of the
206	206	municipalities that designated the zone, subject to the
207	207	restrictions contained in this section.
208	208	(d) The municipalities designating a joint reinvestment
209	209	zone may exercise any power necessary and convenient to carry out
210	210	this section and the other provisions of this chapter, including
211	211	the powers listed in Section 311.008.
212	212	(e) Except as otherwise provided by this section, the board
213	213	of directors of a joint reinvestment zone has the same powers and
214	214	duties and is subject to the same limitations as the board of
215	215	directors of a reinvestment zone designated by a single
216	216	municipality. Sections 311.011, 311.012, 311.0123, 311.013,
217	217	311.014, 311.015, 311.016, 311.0163, and 311.018 apply to the
218	218	municipalities designating a joint reinvestment zone, except that a
219	219	reference in those sections to a municipality means all of the
220	220	municipalities designating a joint reinvestment zone and an action
221	221	required of a municipality under those sections is considered to be
222	222	required of all of the municipalities designating a joint
223	223	reinvestment zone.
224	224	(f) Expenditures from tax increment financing funds or
225	225	bonds secured by tax increment financing may be made without regard
226	226	to the location from which the funds were derived or the location
227	227	within the joint reinvestment zone at which the funds are spent, but
228	228	only if those expenditures are authorized as required by this
229	229	chapter.
230	230	SECTION 2.04. Section 311.005(a), Tax Code, is amended to
231	231	read as follows:
232	232	(a) To be designated as a reinvestment zone, an area must:
233	233	(1) substantially arrest or impair the sound growth of
234	234	the municipality or county designating [creating] the zone, retard
235	235	the provision of housing accommodations, or constitute an economic
236	236	or social liability and be a menace to the public health, safety,
237	237	morals, or welfare in its present condition and use because of the
238	238	presence of:
239	239	(A) a substantial number of substandard, slum,
240	240	deteriorated, or deteriorating structures;
241	241	(B) the predominance of defective or inadequate
242	242	sidewalk or street layout;
243	243	(C) faulty lot layout in relation to size,
244	244	adequacy, accessibility, or usefulness;
245	245	(D) unsanitary or unsafe conditions;
246	246	(E) the deterioration of site or other
247	247	improvements;
248	248	(F) tax or special assessment delinquency
249	249	exceeding the fair value of the land;
250	250	(G) defective or unusual conditions of title;
251	251	(H) conditions that endanger life or property by
252	252	fire or other cause; or
253	253	(I) structures, other than single-family
254	254	residential structures, less than 10 percent of the square footage
255	255	of which has been used for commercial, industrial, or residential
256	256	purposes during the preceding 12 years, if the municipality has a
257	257	population of 100,000 or more;
258	258	(2) be predominantly open, undeveloped, or
259	259	underdeveloped and, because of obsolete platting, deterioration of
260	260	structures or site improvements, or other factors, substantially
261	261	impair or arrest the sound growth of the municipality or county;
262	262	(3) be in a federally assisted new community located
263	263	in the municipality or county or in an area immediately adjacent to
264	264	a federally assisted new community; or
265	265	(4) be an area described in a petition requesting that
266	266	the area be designated as a reinvestment zone, if the petition is
267	267	submitted to the governing body of the municipality or county by the
268	268	owners of property constituting at least 50 percent of the
269	269	appraised value of the property in the area according to the most
270	270	recent certified appraisal roll for the county in which the area is
271	271	located.
272	272	SECTION 2.05. Section 311.007, Tax Code, is amended to read
273	273	as follows:
274	274	Sec. 311.007. CHANGING BOUNDARIES OR TERM OF EXISTING ZONE.
275	275	(a) The [Subject to the limitations provided by Section 311.006, if
276	276	applicable, the] boundaries of an existing reinvestment zone may be
277	277	reduced or enlarged by ordinance or resolution of the governing
278	278	body of the municipality or by order or resolution of the governing
279	279	body of the county that designated [created] the zone.
280	280	(b) The governing body of the municipality or county that
281	281	designated a reinvestment zone by ordinance or resolution or by
282	282	order or resolution, respectively, may extend the term of all or a
283	283	portion of the zone after notice and hearing in the manner provided
284	284	for the designation of the zone. A taxing unit other than the
285	285	municipality or county that designated the zone is not required to
286	286	participate in the zone or portion of the zone for the extended term
287	287	unless the taxing unit enters into a written agreement to do so [may
288	288	enlarge an existing reinvestment zone to include an area described
289	289	in a petition requesting that the area be included in the zone if
290	290	the petition is submitted to the governing body of the municipality
291	291	or county by the owners of property constituting at least 50 percent
292	292	of the appraised value of the property in the area according to the
293	293	most recent certified appraisal roll for the county in which the
294	294	area is located. The composition of the board of directors of the
295	295	zone continues to be governed by Section 311.009(a) or (b),
296	296	whichever applied to the zone immediately before the enlargement of
297	297	the zone, except that the membership of the board must conform to
298	298	the requirements of the applicable subsection of Section 311.009 as
299	299	applied to the zone after its enlargement. The provision of Section
300	300	311.006(b) relating to the amount of property used for residential
301	301	purposes that may be included in the zone does not apply to the
302	302	enlargement of a zone under this subsection].
303	303	SECTION 2.06. Section 311.008, Tax Code, is amended by
304	304	amending Subsection (b) and adding Subsections (f) and (g) to read
305	305	as follows:
306	306	(b) A municipality or county may exercise any power
307	307	necessary and convenient to carry out this chapter, including the
308	308	power to:
309	309	(1) cause project plans to be prepared, approve and
310	310	implement the plans, and otherwise achieve the purposes of the
311	311	plan;
312	312	(2) acquire real property by purchase, condemnation,
313	313	or other means [to implement project plans] and sell real [that]
314	314	property, on the terms and conditions and in the manner it considers
315	315	advisable, to implement project plans;
316	316	(3) enter into agreements, including agreements with
317	317	bondholders, determined by the governing body of the municipality
318	318	or county to be necessary or convenient to implement project plans
319	319	and achieve their purposes, which agreements may include
320	320	conditions, restrictions, or covenants that run with the land or
321	321	that by other means regulate or restrict the use of land; and
322	322	(4) consistent with the project plan for the zone:
323	323	(A) acquire blighted, deteriorated,
324	324	deteriorating, undeveloped, or inappropriately developed real
325	325	property or other property in a blighted area or in a federally
326	326	assisted new community in the zone for the preservation or
327	327	restoration of historic sites, beautification or conservation, the
328	328	provision of public works or public facilities, or other public
329	329	purposes;
330	330	(B) acquire, construct, reconstruct, or install
331	331	public works, facilities, or sites or other public improvements,
332	332	including utilities, streets, street lights, water and sewer
333	333	facilities, pedestrian malls and walkways, parks, flood and
334	334	drainage facilities, or parking facilities, but not including
335	335	educational facilities; or
336	336	(C) in a reinvestment zone designated [created]
337	337	on or before September 1, 1999, acquire, construct, or reconstruct
338	338	educational facilities in the municipality.
339	339	(f) The governing body of a municipality or county may
340	340	impose a fee:
341	341	(1) on property owners who submit a petition under
342	342	Section 311.005(a)(4) for processing the petition; or
343	343	(2) for reviewing a project designated or proposed to
344	344	be designated under this chapter.
345	345	(g) A fee under Subsection (f) must be reasonably related to
346	346	the estimated cost to the municipality or county of processing the
347	347	petition or reviewing the project, respectively.
348	348	SECTION 2.07. Section 311.0085(a), Tax Code, is amended to
349	349	read as follows:
350	350	(a) This section applies only to a municipality with a
351	351	population of less than 130,000 as shown by the 2000 federal
352	352	decennial census that has[:
353	353	[(1)] territory in three counties[; and
354	354	[(2) a population of less than 120,000].
355	355	SECTION 2.08. Sections 311.009(a), (b), and (e), Tax Code,
356	356	are amended to read as follows:
357	357	(a) Except as provided by Subsection (b), the board of
358	358	directors of a reinvestment zone consists of at least five and not
359	359	more than 15 members, unless more than 15 members are required to
360	360	satisfy the requirements of this subsection. Each taxing unit
361	361	other than the municipality or county that designated [created] the
362	362	zone that levies taxes on real property in the zone may appoint one
363	363	member of the board if the taxing unit has approved the payment of
364	364	all or part of the tax increment produced by the unit into the tax
365	365	increment fund for the zone. A unit may waive its right to appoint a
366	366	director. The governing body of the municipality or county that
367	367	designated [created] the zone may appoint not more than 10
368	368	directors to the board; except that if there are fewer than five
369	369	directors appointed by taxing units other than the municipality or
370	370	county, the governing body of the municipality or county may
371	371	appoint more than 10 members as long as the total membership of the
372	372	board does not exceed 15.
373	373	(b) If the zone was designated under Section 311.005(a)(4),
374	374	the governing body of the municipality or county that designated
375	375	the zone may provide that the board of directors of the zone
376	376	consists of nine members appointed as provided by this subsection,
377	377	unless more than nine members are required to comply with this
378	378	subsection. Each taxing unit [school district, county, or
379	379	municipality], other than the municipality or county that
380	380	designated [created] the zone, that levies taxes on real property
381	381	in the zone may appoint one member of the board if the taxing unit
382	382	[school district, county, or municipality] has approved the payment
383	383	of all or part of the tax increment produced by the unit into the tax
384	384	increment fund for the zone. The member of the state senate in
385	385	whose district the zone is located is a member of the board, and the
386	386	member of the state house of representatives in whose district the
387	387	zone is located is a member of the board, except that either may
388	388	designate another individual to serve in the member's place at the
389	389	pleasure of the member. If the zone is located in more than one
390	390	senate or house district, this subsection applies only to the
391	391	senator or representative in whose district a larger portion of the
392	392	zone is located than any other senate or house district, as
393	393	applicable. If fewer than seven taxing units, other than the
394	394	municipality or county that designated the zone, are eligible to
395	395	appoint members of the board of directors of the zone, the
396	396	municipality or county may appoint a number of members of the board
397	397	such that the board comprises nine members. If at least seven
398	398	taxing units, other than the municipality or county that designated
399	399	the zone, are eligible to appoint members of the board of directors
400	400	of the zone, the municipality or county may appoint one member.
401	401	[The remaining members of the board are appointed by the governing
402	402	body of the municipality or county that created the zone.]
403	403	(e) To be eligible for appointment to the board by the
404	404	governing body of the municipality or county that designated
405	405	[created] the zone, an individual must:
406	406	(1) if the board is covered by Subsection (a):
407	407	(A) be a resident of this state and a citizen of
408	408	the United States [qualified voter of the municipality or county,
409	409	as applicable]; and [or]
410	410	(B) be at least 18 years of age [and own real
411	411	property in the zone, whether or not the individual resides in the
412	412	municipality or county]; or
413	413	(2) if the board is covered by Subsection (b):
414	414	(A) be at least 18 years of age; and
415	415	(B) own real property in the zone or be an
416	416	employee, tenant, or agent of a person that owns real property in
417	417	the zone.
418	418	SECTION 2.09. Section 311.0091, Tax Code, is amended by
419	419	amending Subsection (f) and adding Subsection (i) to read as
420	420	follows:
421	421	(f) Except as provided by Subsection (i), to [To] be
422	422	eligible for appointment to the board, an individual must:
423	423	(1) be a qualified voter of the municipality; or
424	424	(2) be at least 18 years of age and own real property
425	425	in the zone or be an employee or agent of a person that owns real
426	426	property in the zone.
427	427	(i) The eligibility criteria for appointment to the board
428	428	specified by Subsection (f) do not apply to an individual appointed
429	429	by a conservation and reclamation district:
430	430	(1) created under Section 59, Article XVI, Texas
431	431	Constitution; and
432	432	(2) the jurisdiction of which covers four counties.
433	433	SECTION 2.10. Sections 311.010(b), (g), and (h), Tax Code,
434	434	are amended to read as follows:
435	435	(b) The board of directors of a reinvestment zone and the
436	436	governing body of the municipality or county that designates
437	437	[creates] a reinvestment zone may each enter into agreements as the
438	438	board or the governing body considers necessary or convenient to
439	439	implement the project plan and reinvestment zone financing plan and
440	440	achieve their purposes. An agreement may provide for the
441	441	regulation or restriction of the use of land by imposing
442	442	conditions, restrictions, or covenants that run with the land. An
443	443	agreement may during the term of the agreement dedicate, pledge, or
444	444	otherwise provide for the use of revenue in the tax increment fund
445	445	to pay any project costs that benefit the reinvestment zone,
446	446	including project costs relating to the cost of buildings, schools,
447	447	or other educational facilities owned by or on behalf of a school
448	448	district, community college district, or other political
449	449	subdivision of this state, railroad or transit facilities,
450	450	affordable housing, the remediation of conditions that contaminate
451	451	public or private land or buildings, the preservation of the facade
452	452	of a private or public building, [or] the demolition of public or
453	453	private buildings, or the construction of a road, sidewalk, or
454	454	other public infrastructure in or out of the zone, including the
455	455	cost of acquiring the real property necessary for the construction
456	456	of the road, sidewalk, or other public infrastructure. An
457	457	agreement may dedicate revenue from the tax increment fund to pay
458	458	the costs of providing affordable housing or areas of public
459	459	assembly in or out of the zone. [An agreement may dedicate revenue
460	460	from the tax increment fund to pay a neighborhood enterprise
461	461	association for providing services or carrying out projects
462	462	authorized under Subchapters E and G, Chapter 2303, Government
463	463	Code, in the zone. The term of an agreement with a neighborhood
464	464	enterprise association may not exceed 10 years.]
465	465	(g) Chapter 252, Local Government Code, does not apply to a
466	466	dedication, pledge, or other use of revenue in the tax increment
467	467	fund for a reinvestment zone [by the board of directors of the zone
468	468	in carrying out its powers] under Subsection (b).
469	469	(h) Subject to the approval of the governing body of the
470	470	municipality or county that designated [created] the zone, the
471	471	board of directors of a reinvestment zone, as necessary or
472	472	convenient to implement the project plan and reinvestment zone
473	473	financing plan and achieve their purposes, may establish and
474	474	provide for the administration of one or more programs for the
475	475	public purposes of developing and diversifying the economy of the
476	476	zone, eliminating unemployment and underemployment in the zone, and
477	477	developing or expanding transportation, business, and commercial
478	478	activity in the zone, including programs to make grants and loans
479	479	[from the tax increment fund of the zone in an aggregate amount not
480	480	to exceed the amount of the tax increment produced by the
481	481	municipality and paid into the tax increment fund for the zone] for
482	482	activities that benefit the zone and stimulate business and
483	483	commercial activity in the zone. For purposes of this subsection,
484	484	on approval of the municipality or county, the board of directors of
485	485	the zone has all the powers of a municipality under Chapter 380,
486	486	Local Government Code. The approval required by this subsection
487	487	may be granted in an ordinance, in the case of a zone designated by a
488	488	municipality, or in an order, in the case of a zone designated by a
489	489	county, approving a project plan or reinvestment zone financing
490	490	plan or approving an amendment to a project plan or reinvestment
491	491	zone financing plan.
492	492	SECTION 2.11. Section 311.01005, Tax Code, is amended by
493	493	adding Subsection (f) to read as follows:
494	494	(f) This section does not limit the power of the board of
495	495	directors of a reinvestment zone or the governing body of the
496	496	municipality that designates a reinvestment zone to dedicate,
497	497	pledge, or otherwise provide for the use of revenue in the tax
498	498	increment fund for the zone to finance the costs of a project
499	499	involving real property located outside the zone.
500	500	SECTION 2.12. Section 311.011, Tax Code, is amended by
501	501	amending Subsections (a), (b), (c), (d), and (g) and adding
502	502	Subsection (h) to read as follows:
503	503	(a) The board of directors of a reinvestment zone shall
504	504	prepare and adopt a project plan and a reinvestment zone financing
505	505	plan for the zone and submit the plans to the governing body of the
506	506	municipality or county that designated [created] the zone. [The
507	507	plans must be as consistent as possible with the preliminary plans
508	508	developed for the zone before the creation of the board.]
509	509	(b) The project plan must include:
510	510	(1) a description of [map showing] existing uses and
511	511	conditions of real property in the zone and [a map showing] proposed
512	512	[improvements to and proposed] uses of that property;
513	513	(2) proposed changes of zoning ordinances, [the master
514	514	plan of the municipality,] building codes, other municipal
515	515	ordinances, and subdivision rules and regulations, if any, of the
516	516	county, if applicable; and
517	517	(3) [a list of estimated nonproject costs; and
518	518	[(4)] a statement of a method of relocating persons to
519	519	be displaced, if any, as a result of implementing the plan.
520	520	(c) The reinvestment zone financing plan must include:
521	521	(1) a detailed list describing the estimated project
522	522	costs of the zone, including administrative expenses;
523	523	(2) a statement listing the proposed kind, number, and
524	524	location of all [proposed] public works or public improvements to
525	525	be financed by [in] the zone;
526	526	(3) a finding that the plan is economically feasible
527	527	[an economic feasibility study];
528	528	(4) the estimated amount of bonded indebtedness to be
529	529	incurred;
530	530	(5) the estimated time when related costs or monetary
531	531	obligations are to be incurred;
532	532	(6) a description of the methods of financing all
533	533	estimated project costs and the expected sources of revenue to
534	534	finance or pay project costs, including the percentage of tax
535	535	increment to be derived from the property taxes of each taxing unit
536	536	anticipated to contribute tax increment to the zone that levies
537	537	taxes on real property in the zone;
538	538	(7) the current total appraised value of taxable real
539	539	property in the zone;
540	540	(8) the estimated captured appraised value of the zone
541	541	during each year of its existence; and
542	542	(9) the duration of the zone.
543	543	(d) The governing body of the municipality or county that
544	544	designated [created] the zone must approve a project plan or
545	545	reinvestment zone financing plan after its adoption by the
546	546	board. The approval must be by ordinance, in the case of a
547	547	municipality, or by order, in the case of a county, that finds that
548	548	the plan is feasible [and conforms to the master plan, if any, of
549	549	the municipality or to subdivision rules and regulations, if any,
550	550	of the county].
551	551	(g) A [An amendment to the project plan or the reinvestment
552	552	zone financing plan for a zone does not apply to a] school district
553	553	that participates in a [the] zone is not required to increase the
554	554	percentage or amount of the tax increment to be contributed by the
555	555	school district because of an amendment to the project plan or
556	556	reinvestment zone financing plan for the zone unless the governing
557	557	body of the school district by official action approves the
558	558	amendment[, if the amendment:
559	559	[(1) has the effect of directly or indirectly
560	560	increasing the percentage or amount of the tax increment to be
561	561	contributed by the school district; or
562	562	[(2) requires or authorizes the municipality or county
563	563	creating the zone to issue additional tax increment bonds or
564	564	notes].
565	565	(h) Unless specifically provided otherwise in the plan, all
566	566	amounts contained in the project plan or reinvestment zone
567	567	financing plan, including amounts of expenditures relating to
568	568	project costs and amounts relating to participation by taxing
569	569	units, are considered estimates and do not act as a limitation on
570	570	the described items.
571	571	SECTION 2.13. Sections 311.012(a) and (c), Tax Code, are
572	572	amended to read as follows:
573	573	(a) The amount of a taxing unit's tax increment for a year is
574	574	the amount of property taxes levied and assessed by the unit for
575	575	that year on the captured appraised value of real property taxable
576	576	by the unit and located in a reinvestment zone or the amount of
577	577	property taxes levied and collected by the unit for that year on the
578	578	captured appraised value of real property taxable by the unit and
579	579	located in a reinvestment zone. The governing body of a taxing unit
580	580	shall determine which of the methods specified by this subsection
581	581	is used to calculate the amount of the unit's tax increment.
582	582	(c) The tax increment base of a taxing unit is the total
583	583	taxable [appraised] value of all real property taxable by the unit
584	584	and located in a reinvestment zone for the year in which the zone
585	585	was designated under this chapter. If the boundaries of a zone are
586	586	enlarged, the tax increment base is increased by the taxable value
587	587	of the real property added to the zone for the year in which the
588	588	property was added. If the boundaries of a zone are reduced, the
589	589	tax increment base is reduced by the taxable value of the real
590	590	property removed from the zone for the year in which the property
591	591	was originally included in the zone's boundaries. If the
592	592	municipality that designates a zone does not levy an ad valorem tax
593	593	in the year in which the zone is designated, the tax increment base
594	594	is determined by the appraisal district in which the zone is located
595	595	using assumptions regarding exemptions and other relevant
596	596	information provided to the appraisal district by the municipality.
597	597	SECTION 2.14. Sections 311.013(f), (g), (l), and (n), Tax
598	598	Code, are amended to read as follows:
599	599	(f) A taxing unit is not required to pay into the tax
600	600	increment fund any of its tax increment produced from property
601	601	located in a reinvestment zone designated under Section 311.005(a)
602	602	or in an area added to a reinvestment zone under Section 311.007
603	603	unless the taxing unit enters into an agreement to do so with the
604	604	governing body of the municipality or county that designated
605	605	[created] the zone. A taxing unit may enter into an agreement under
606	606	this subsection at any time before or after the zone is designated
607	607	[created] or enlarged. The agreement may include conditions for
608	608	payment of that tax increment into the fund and must specify the
609	609	portion of the tax increment to be paid into the fund and the years
610	610	for which that tax increment is to be paid into the fund. In
611	611	addition to any other terms to which the parties may agree, the
612	612	agreement may specify the projects to which a participating taxing
613	613	unit's tax increment will be dedicated and that the taxing unit's
614	614	participation may be computed with respect to a base year later than
615	615	the original base year of the zone. The agreement and the
616	616	conditions in the agreement are binding on the taxing unit, the
617	617	municipality or county, and the board of directors of the zone.
618	618	(g) Subject to the provisions of Section 311.0125, in lieu
619	619	of permitting a portion of its tax increment to be paid into the tax
620	620	increment fund, and notwithstanding the provisions of Section
621	621	312.203, a taxing unit, including [other than] a municipality
622	622	[city], may elect to offer the owners of taxable real property in a
623	623	reinvestment zone designated [created] under this chapter an
624	624	exemption from taxation of all or part of the value of the property.
625	625	To be effective, an [Any] agreement under this subsection to exempt
626	626	real property [concerning an exemption] from ad valorem taxes must
627	627	be approved by:
628	628	(1) the board of directors of the reinvestment zone;
629	629	and
630	630	(2) the governing body of each taxing unit that
631	631	imposes taxes on real property in the reinvestment zone and
632	632	deposits or agrees to deposit any of its tax increment into the tax
633	633	increment fund for the zone [shall be executed in the manner and
634	634	subject to the limitations of Chapter 312; provided, however, the
635	635	property covered by the agreement need not be in a zone created
636	636	pursuant to Chapter 312. A taxing unit may not offer a tax
637	637	abatement agreement to property owners in the zone after it has
638	638	entered into an agreement that its tax increments would be paid into
639	639	the tax increment fund pursuant to Subsection (f)].
640	640	(l) The governing body of a municipality or county that
641	641	designates an area as a reinvestment zone may determine, in the
642	642	designating ordinance or order adopted under Section 311.003 or in
643	643	the ordinance or order adopted under Section 311.011 approving the
644	644	reinvestment zone financing plan for the zone, the portion of the
645	645	tax increment produced by the municipality or county that the
646	646	municipality or county is required to pay into the tax increment
647	647	fund for the zone. If a municipality or county does not determine
648	648	the portion of the tax increment produced by the municipality or
649	649	county that the municipality or county is required to pay into the
650	650	tax increment fund for a reinvestment zone, the municipality or
651	651	county is required to pay into the fund for the zone the entire tax
652	652	increment produced by the municipality or county, except as
653	653	provided by Subsection (b)(1).
654	654	(n) This subsection applies only to a school district whose
655	655	taxable value computed under Section 403.302(d), Government Code,
656	656	is reduced in accordance with Subdivision (4) [(5)] of that
657	657	subsection. In addition to the amount otherwise required to be paid
658	658	into the tax increment fund, the district shall pay into the fund an
659	659	amount equal to the amount by which the amount of taxes the district
660	660	would have been required to pay into the fund in the current year if
661	661	the district levied taxes at the rate the district levied in 2005
662	662	exceeds the amount the district is otherwise required to pay into
663	663	the fund in the year of the reduction[, not to exceed the amount the
664	664	school district realizes from the reduction in the school
665	665	district's taxable value under Section 403.302(d)(5), Government
666	666	Code].
667	667	SECTION 2.15. Section 311.014(b), Tax Code, is amended to
668	668	read as follows:
669	669	(b) Tax increment and other funds deposited in the tax
670	670	increment fund of the zone shall be administered by the governing
671	671	body of the municipality or county that designated the zone or, if
672	672	delegated by the governing body, by the board of directors of the
673	673	zone, to implement the project plan and reinvestment zone financing
674	674	plan for the zone during the term of the zone, as it may be extended,
675	675	and for any period in which the zone remains in existence for
676	676	collection and disbursement pursuant to Section 311.017(d). Money
677	677	may be disbursed from the fund only to satisfy claims of holders of
678	678	tax increment bonds or notes issued for the zone, to pay project
679	679	costs for the zone, to make payments pursuant to an agreement made
680	680	under Section 311.010(b) or a program under Section 311.010(h)
681	681	dedicating revenue from the tax increment fund, or to repay other
682	682	obligations incurred for the zone.
683	683	SECTION 2.16. Sections 311.015(a) and (l), Tax Code, are
684	684	amended to read as follows:
685	685	(a) A municipality or county designating [creating] a
686	686	reinvestment zone may issue tax increment bonds or notes, the
687	687	proceeds of which may be used to make payments pursuant to
688	688	agreements made under Section 311.010(b), to make payments pursuant
689	689	to programs under Section 311.010(h), to pay project costs for the
690	690	reinvestment zone on behalf of which the bonds or notes were issued,
691	691	or to satisfy claims of holders of the bonds or notes. The
692	692	municipality or county may issue refunding bonds or notes for the
693	693	payment or retirement of tax increment bonds or notes previously
694	694	issued by it. In lieu of issuing bonds or notes under this
695	695	subsection, a municipality may issue certificates of obligation
696	696	under Subchapter C, Chapter 271, Local Government Code, to pay the
697	697	project costs for a zone and may use tax increment from the zone to
698	698	pay debt service on the certificates.
699	699	(l) A tax increment bond or note must mature on or before the
700	700	date by which the final payments of tax increment into the tax
701	701	increment fund are due [within 20 years of the date of issue].
702	702	SECTION 2.17. Section 311.016(a), Tax Code, is amended to
703	703	read as follows:
704	704	(a) On or before the 150th [90th] day following the end of
705	705	the fiscal year of the municipality or county, the governing body of
706	706	a municipality or county shall submit to the chief executive
707	707	officer of each taxing unit that levies property taxes on real
708	708	property in a reinvestment zone designated [created] by the
709	709	municipality or county a report on the status of the zone. The
710	710	report must include:
711	711	(1) the amount and source of revenue in the tax
712	712	increment fund established for the zone;
713	713	(2) the amount and purpose of expenditures from the
714	714	fund;
715	715	(3) the amount of principal and interest due on
716	716	outstanding bonded indebtedness;
717	717	(4) the tax increment base and current captured
718	718	appraised value retained by the zone; and
719	719	(5) the captured appraised value shared by the
720	720	municipality or county and other taxing units, the total amount of
721	721	tax increments received, and any additional information necessary
722	722	to demonstrate compliance with the tax increment financing plan
723	723	adopted by the governing body of the municipality or county.
724	724	SECTION 2.18. Section 311.016(b), Tax Code, as amended by
725	725	Chapters 977 (H.B. 1820) and 1094 (H.B. 2120), Acts of the 79th
726	726	Legislature, Regular Session, 2005, is reenacted to read as
727	727	follows:
728	728	(b) The municipality or county shall send a copy of a report
729	729	made under this section to:
730	730	(1) the attorney general; and
731	731	(2) the comptroller.
732	732	SECTION 2.19. Section 311.017, Tax Code, is amended by
733	733	amending Subsection (a) and adding Subsections (a-1), (c), (d), and
734	734	(e) to read as follows:
735	735	(a) A reinvestment zone terminates on the earlier of:
736	736	(1) the termination date designated in the ordinance
737	737	or order, as applicable, designating [creating] the zone or an
738	738	earlier or later termination date designated by an ordinance or
739	739	order adopted under Section 311.007(b) [subsequent to the ordinance
740	740	or order creating the zone]; or
741	741	(2) the date on which all project costs, tax increment
742	742	bonds and interest on those bonds, and other obligations have been
743	743	paid in full.
744	744	(a-1) Notwithstanding the designation of a later
745	745	termination date under Section 311.007(b), a taxing unit that taxes
746	746	real property located in the zone, other than the municipality or
747	747	county that designated the zone, is not required to pay any of its
748	748	tax increment into the tax increment fund for the zone for any tax
749	749	year after the termination date designated in the ordinance or
750	750	order designating the zone unless the governing body of the taxing
751	751	unit enters into an agreement to do so with the governing body of
752	752	the municipality or county that designated the zone.
753	753	(c) A zone designated under other law as described by
754	754	Section 311.0031 terminates for purposes of this chapter on the
755	755	date specified in the ordinance or order designating the zone as a
756	756	reinvestment zone under this chapter, regardless of whether the
757	757	zone has terminated under the other law under which the zone was
758	758	originally designated.
759	759	(d) Subject to Subsection (a-1), if tax increment bonds or
760	760	other obligations issued or incurred for the zone are outstanding
761	761	when the zone terminates, the zone remains in existence solely for
762	762	the purpose of collecting and disbursing tax increment with respect
763	763	to tax years during the designated term of the zone, as it may have
764	764	been extended. Those funds shall be used to pay the tax increment
765	765	bonds or other obligations issued or incurred for the zone.
766	766	Notwithstanding the other provisions of this subsection or the
767	767	extension of the term of a zone under Section 311.007, the
768	768	termination date of a zone for purposes of any contract entered into
769	769	by the board, or by the municipality or county that designated the
770	770	zone, remains the termination date designated by ordinance or order
771	771	in effect on the date the contract was executed unless a subsequent
772	772	amendment to the contract expressly provides otherwise.
773	773	(e) After termination of the zone, the governing body of the
774	774	municipality or county that designated the zone may continue the
775	775	zone for an additional period for the purpose of continuing the
776	776	implementation of the reinvestment zone project plan and financing
777	777	plan. In that event, although tax increment shall cease to be
778	778	deposited with respect to tax years following termination of the
779	779	zone, the zone shall retain all remaining funds, property, and
780	780	assets of the zone to be used to implement the plans as authorized
781	781	by the governing body.
782	782	SECTION 2.20. Chapter 311, Tax Code, is amended by adding
783	783	Section 311.021 to read as follows:
784	784	Sec. 311.021. ACT OR PROCEEDING PRESUMED VALID. (a) A
785	785	governmental act or proceeding of a municipality or county, the
786	786	board of directors of a reinvestment zone, or an entity acting under
787	787	Section 311.010(f) relating to the designation, operation, or
788	788	administration of a reinvestment zone or the implementation of a
789	789	project plan or reinvestment zone financing plan under this chapter
790	790	is conclusively presumed, as of the date it occurred, valid and to
791	791	have occurred in accordance with all applicable statutes and rules
792	792	if:
793	793	(1) the second anniversary of the effective date of
794	794	the act or proceeding has expired; and
795	795	(2) a lawsuit to annul or invalidate the act or
796	796	proceeding has not been filed on or before the later of that second
797	797	anniversary or August 1, 2009.
798	798	(b) This section does not apply to:
799	799	(1) an act or proceeding that was void at the time it
800	800	occurred;
801	801	(2) an act or proceeding that, under a statute of this
802	802	state or the United States, was a misdemeanor or felony at the time
803	803	the act or proceeding occurred;
804	804	(3) a rule that, at the time it was passed, was
805	805	preempted by a statute of this state or the United States, including
806	806	Section 1.06 or 109.57, Alcoholic Beverage Code; or
807	807	(4) a matter that on the effective date of the Act
808	808	enacting this section:
809	809	(A) is involved in litigation if the litigation
810	810	ultimately results in the matter being held invalid by a final
811	811	judgment of a court; or
812	812	(B) has been held invalid by a final judgment of a
813	813	court.
814	814	SECTION 2.21. Section 42.2516(b), Education Code, is
815	815	amended to read as follows:
816	816	(b) Subject to Subsections (b-1), (b-2), (f-1), (g), and
817	817	(h), but notwithstanding any other provision of this title, a
818	818	school district is entitled to state revenue necessary to provide
819	819	the district with the sum of:
820	820	(1) the amount of state revenue necessary to maintain
821	821	state and local revenue per student in weighted average daily
822	822	attendance in the amount equal to the greater of:
823	823	(A) the amount of state and local revenue per
824	824	student in weighted average daily attendance for the maintenance
825	825	and operations of the district available to the district for the
826	826	2005-2006 school year;
827	827	(B) the amount of state and local revenue per
828	828	student in weighted average daily attendance for the maintenance
829	829	and operations of the district to which the district would have been
830	830	entitled for the 2006-2007 school year under this chapter, as it
831	831	existed on January 1, 2006, or, if the district would have been
832	832	subject to Chapter 41, as that chapter existed on January 1, 2006,
833	833	the amount to which the district would have been entitled under that
834	834	chapter, based on the funding elements in effect for the 2005-2006
835	835	school year, if the district imposed a maintenance and operations
836	836	tax at the rate adopted by the district for the 2005 tax year; or
837	837	(C) the amount of state and local revenue per
838	838	student in weighted average daily attendance for the maintenance
839	839	and operations of the district to which the district would have been
840	840	entitled for the 2006-2007 school year under this chapter, as it
841	841	existed on January 1, 2006, or, if the district would have been
842	842	subject to Chapter 41, as that chapter existed on January 1, 2006,
843	843	the amount to which the district would have been entitled under that
844	844	chapter, based on the funding elements in effect for the 2005-2006
845	845	school year, if the district imposed a maintenance and operations
846	846	tax at the rate equal to the rate described by Section 26.08(i) or
847	847	(k)(1), Tax Code, as applicable, for the 2006 tax year;
848	848	(2) an amount equal to the product of $2,500
849	849	multiplied by the number of classroom teachers, full-time
850	850	librarians, full-time counselors certified under Subchapter B,
851	851	Chapter 21, and full-time school nurses employed by the district
852	852	and entitled to a minimum salary under Section 21.402; [and]
853	853	(3) an amount equal to the product of $275 multiplied
854	854	by the number of students in average daily attendance in grades nine
855	855	through 12 in the district; and
856	856	(4) an amount equal to the amount the district is
857	857	required to pay into the tax increment fund for a reinvestment zone
858	858	under Section 311.013(n), Tax Code, in the current tax year.
859	859	SECTION 2.22. Section 42.253, Education Code, is amended by
860	860	adding Subsection (c-1) to read as follows:
861	861	(c-1) The amounts to be paid under Section 42.2516(b)(4)
862	862	shall be paid at the same time as other state revenue is paid to the
863	863	district. Payments shall be based on amounts paid under Section
864	864	42.2516(b)(4) for the preceding year. Any deficiency shall be paid
865	865	to the district at the same time the final amount to be paid to the
866	866	district is determined, and any overpayment shall be deducted from
867	867	the payments the district would otherwise receive in the following
868	868	year.
869	869	SECTION 2.23. Sections 403.302(d) and (i), Government Code,
870	870	are amended to read as follows:
871	871	(d) For the purposes of this section, "taxable value" means
872	872	the market value of all taxable property less:
873	873	(1) the total dollar amount of any residence homestead
874	874	exemptions lawfully granted under Section 11.13(b) or (c), Tax
875	875	Code, in the year that is the subject of the study for each school
876	876	district;
877	877	(2) one-half of the total dollar amount of any
878	878	residence homestead exemptions granted under Section 11.13(n), Tax
879	879	Code, in the year that is the subject of the study for each school
880	880	district;
881	881	(3) the total dollar amount of any exemptions granted
882	882	before May 31, 1993, within a reinvestment zone under agreements
883	883	authorized by Chapter 312, Tax Code;
884	884	(4) subject to Subsection (e), the total dollar amount
885	885	of any captured appraised value of property that:
886	886	(A) is within a reinvestment zone designated
887	887	[created] on or before May 31, 1999, or is proposed to be included
888	888	within the boundaries of a reinvestment zone as the boundaries of
889	889	the zone and the proposed portion of tax increment paid into the tax
890	890	increment fund by a school district are described in a written
891	891	notification provided by the municipality or the board of directors
892	892	of the zone to the governing bodies of the other taxing units in the
893	893	manner provided by Section 311.003(e), Tax Code, before May 31,
894	894	1999, and within the boundaries of the zone as those boundaries
895	895	existed on September 1, 1999, including subsequent improvements to
896	896	the property regardless of when made;
897	897	(B) generates taxes paid into a tax increment
898	898	fund created under Chapter 311, Tax Code, under a reinvestment zone
899	899	financing plan approved under Section 311.011(d), Tax Code, on or
900	900	before September 1, 1999; and
901	901	(C) is eligible for tax increment financing under
902	902	Chapter 311, Tax Code;
903	903	(5) [for a school district for which a deduction from
904	904	taxable value is made under Subdivision (4), an amount equal to the
905	905	taxable value required to generate revenue when taxed at the school
906	906	district's current tax rate in an amount that, when added to the
907	907	taxes of the district paid into a tax increment fund as described by
908	908	Subdivision (4)(B), is equal to the total amount of taxes the
909	909	district would have paid into the tax increment fund if the district
910	910	levied taxes at the rate the district levied in 2005;]
911	911	[(6)] the total dollar amount of any captured
912	912	appraised value of property that:
913	913	(A) is within a reinvestment zone:
914	914	(i) designated [created] on or before
915	915	December 31, 2008, by a municipality with a population of less than
916	916	18,000; and
917	917	(ii) the project plan for which includes
918	918	the alteration, remodeling, repair, or reconstruction of a
919	919	structure that is included on the National Register of Historic
920	920	Places and requires that a portion of the tax increment of the zone
921	921	be used for the improvement or construction of related facilities
922	922	or for affordable housing;
923	923	(B) generates school district taxes that are paid
924	924	into a tax increment fund created under Chapter 311, Tax Code; and
925	925	(C) is eligible for tax increment financing under
926	926	Chapter 311, Tax Code;
927	927	(6) [(7)] the total dollar amount of any exemptions
928	928	granted under Section 11.251 or 11.253, Tax Code;
929	929	(7) [(8)] the difference between the comptroller's
930	930	estimate of the market value and the productivity value of land that
931	931	qualifies for appraisal on the basis of its productive capacity,
932	932	except that the productivity value estimated by the comptroller may
933	933	not exceed the fair market value of the land;
934	934	(8) [(9)] the portion of the appraised value of
935	935	residence homesteads of individuals who receive a tax limitation
936	936	under Section 11.26, Tax Code, on which school district taxes are
937	937	not imposed in the year that is the subject of the study, calculated
938	938	as if the residence homesteads were appraised at the full value
939	939	required by law;
940	940	(9) [(10)] a portion of the market value of property
941	941	not otherwise fully taxable by the district at market value because
942	942	of:
943	943	(A) action required by statute or the
944	944	constitution of this state that, if the tax rate adopted by the
945	945	district is applied to it, produces an amount equal to the
946	946	difference between the tax that the district would have imposed on
947	947	the property if the property were fully taxable at market value and
948	948	the tax that the district is actually authorized to impose on the
949	949	property, if this subsection does not otherwise require that
950	950	portion to be deducted; or
951	951	(B) action taken by the district under Subchapter
952	952	B or C, Chapter 313, Tax Code;
953	953	(10) [(11)] the market value of all tangible personal
954	954	property, other than manufactured homes, owned by a family or
955	955	individual and not held or used for the production of income;
956	956	(11) [(12)] the appraised value of property the
957	957	collection of delinquent taxes on which is deferred under Section
958	958	33.06, Tax Code;
959	959	(12) [(13)] the portion of the appraised value of
960	960	property the collection of delinquent taxes on which is deferred
961	961	under Section 33.065, Tax Code; and
962	962	(13) [(14)] the amount by which the market value of a
963	963	residence homestead to which Section 23.23, Tax Code, applies
964	964	exceeds the appraised value of that property as calculated under
965	965	that section.
966	966	(i) If the comptroller determines in the annual study that
967	967	the market value of property in a school district as determined by
968	968	the appraisal district that appraises property for the school
969	969	district, less the total of the amounts and values listed in
970	970	Subsection (d) as determined by that appraisal district, is valid,
971	971	the comptroller, in determining the taxable value of property in
972	972	the school district under Subsection (d), shall for purposes of
973	973	Subsection (d)(13) [(d)(14)] subtract from the market value as
974	974	determined by the appraisal district of residence homesteads to
975	975	which Section 23.23, Tax Code, applies the amount by which that
976	976	amount exceeds the appraised value of those properties as
977	977	calculated by the appraisal district under Section 23.23, Tax Code.
978	978	If the comptroller determines in the annual study that the market
979	979	value of property in a school district as determined by the
980	980	appraisal district that appraises property for the school district,
981	981	less the total of the amounts and values listed in Subsection (d) as
982	982	determined by that appraisal district, is not valid, the
983	983	comptroller, in determining the taxable value of property in the
984	984	school district under Subsection (d), shall for purposes of
985	985	Subsection (d)(13) [(d)(14)] subtract from the market value as
986	986	estimated by the comptroller of residence homesteads to which
987	987	Section 23.23, Tax Code, applies the amount by which that amount
988	988	exceeds the appraised value of those properties as calculated by
989	989	the appraisal district under Section 23.23, Tax Code.
990	990	SECTION 2.24. Section 373A.151(b), Local Government Code,
991	991	is amended to read as follows:
992	992	(b) In addition to other provisions of this subchapter that
993	993	modify or supersede the application of Chapter 311, Tax Code, to a
994	994	zone established under this subchapter, Section [Sections] 311.005
995	995	[and 311.006], Tax Code, does [do] not apply to a zone established
996	996	under this subchapter.
997	997	SECTION 2.25. Sections 311.003(e), (f), and (g), 311.006,
998	998	and 311.013(d) and (e), Tax Code, are repealed.
999	999	SECTION 2.26. (a) The legislature validates and confirms
1000	1000	all governmental acts and proceedings of a municipality or county,
1001	1001	the board of directors of a reinvestment zone, or an entity acting
1002	1002	under Section 311.010(f), Tax Code, that were taken before the
1003	1003	effective date of this article and relate to or are associated with
1004	1004	the designation, operation, or administration of a reinvestment
1005	1005	zone or the implementation of a project plan or reinvestment zone
1006	1006	financing plan under Chapter 311, Tax Code, including the extension
1007	1007	of the term of a reinvestment zone, as of the dates on which they
1008	1008	occurred. The acts and proceedings may not be held invalid because
1009	1009	they were not in accordance with Chapter 311, Tax Code, or other
1010	1010	law.
1011	1011	(b) Subsection (a) of this section does not apply to any
1012	1012	matter that on the 30th day after the effective date of this
1013	1013	article:
1014	1014	(1) is involved in litigation if the litigation
1015	1015	ultimately results in the matter being held invalid by a final
1016	1016	judgment of a court; or
1017	1017	(2) has been held invalid by a final judgment of a
1018	1018	court.
1019	1019	SECTION 2.27. (a) Section 311.002(1), Tax Code, as amended
1020	1020	by this Act, applies to all costs described by that subdivision
1021	1021	regardless of when they were incurred.
1022	1022	(b) Section 311.0091, Tax Code, as amended by this Act,
1023	1023	applies only to an individual appointed by a conservation and
1024	1024	reclamation district to the board of directors of a reinvestment
1025	1025	zone on or after the effective date of this article. An individual
1026	1026	appointed by a conservation and reclamation district to the board
1027	1027	of a reinvestment zone before the effective date of this article is
1028	1028	governed by Section 311.0091, Tax Code, as that section existed
1029	1029	immediately before the effective date of this article, and the
1030	1030	former law is continued in effect for that purpose.
1031	1031	(c) Section 311.012(c), Tax Code, as amended by this Act,
1032	1032	applies only to the determination of the tax increment base of a
1033	1033	taxing unit for a tax year beginning on or after the effective date
1034	1034	of this article, except that if the tax increment base of a taxing
1035	1035	unit for a tax year beginning before the effective date was
1036	1036	determined in the manner provided by Section 311.012(c), Tax Code,
1037	1037	as amended by this Act, the determination is validated as if the
1038	1038	amendment were in accordance with Section 311.012(c), Tax Code, as
1039	1039	that section existed immediately before the effective date of this
1040	1040	article.
1041	1041	SECTION 2.28. Section 42.2516, Education Code, as amended
1042	1042	by this Act, applies as if Subsection (b)(4) of that section were in
1043	1043	effect in the state fiscal year beginning September 1, 2006, and any
1044	1044	amounts due a school district under Subsection (b)(4) of that
1045	1045	section for the state fiscal years beginning September 1, 2006,
1046	1046	September 1, 2007, and September 1, 2008, shall be paid to the
1047	1047	district in the state fiscal year beginning September 1, 2009, at
1048	1048	the time payments are made to the district under Section 42.259(f),
1049	1049	Education Code.
1050	1050	SECTION 2.29. This article takes effect immediately if this
1051	1051	Act receives a vote of two-thirds of all the members elected to each
1052	1052	house, as provided by Section 39, Article III, Texas Constitution.
1053	1053	If this Act does not receive the vote necessary for immediate
1054	1054	effect, this article takes effect September 1, 2009.
1055	1055	ARTICLE 3. EFFECTIVE DATE
1056	1056	SECTION 3.01. Except as otherwise provided by this Act,
1057	1057	this Act takes effect September 1, 2009.