By: Oliveira, Smith of Tarrant, Villarreal, H.B. No. 4613
Isett, Kuempel
Substitute the following for H.B. No. 4613:
By: Otto C.S.H.B. No. 4613
A BILL TO BE ENTITLED
AN ACT
relating to the creation, operations and financing of tax increment
reinvestment zones.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 311.002(1), Tax Code, is amended as
follows:
(1) "Project costs" means the expenditures made or
estimated to be made and monetary obligations incurred or estimated
to be incurred by the municipality or county establishing a
reinvestment zone that are listed in the project plan as costs of
public works or public improvements, programs, or other projects
[in] benefitting the zone, plus other costs incidental to those
expenditures and obligations. "Project costs" include:
(A) capital costs, including the actual costs of
the acquisition and construction of public works, public
improvements, new buildings, structures, and fixtures; the actual
costs of the acquisition, demolition, alteration, remodeling,
repair, or reconstruction of existing buildings, structures, and
fixtures; the actual costs of the remediation of conditions that
contaminate public or private land or buildings, the preservation
of the faade of a private or public building, and the demolition of
public or private buildings; and the actual costs of the
acquisition of land and equipment and the clearing and grading of
land;
(B) financing costs, including all interest paid
to holders of evidences of indebtedness or other obligations issued
to pay for project costs and any premium paid over the principal
amount of the obligations because of the redemption of the
obligations before maturity;
(C) real property assembly costs;
(D) professional service costs, including those
incurred for architectural, planning, engineering, and legal
advice and services;
(E) imputed administrative costs, including
reasonable charges for the time spent by employees of the
municipality or county in connection with the implementation of a
project plan;
(F) relocation costs;
(G) organizational costs, including the costs of
conducting environmental impact studies or other studies, the cost
of publicizing the creation of the zone, and the cost of
implementing the project plan for the zone;
(H) interest before and during construction and
for one year after completion of construction, whether or not
capitalized;
(I) the cost of operating the reinvestment zone
and project facilities;
(J) the amount of any contributions made by the
municipality or county from general revenue for the implementation
of the project plan; [and]
(K) a program described in Section 311.010(h) of
this chapter;
(L) costs of buildings, schools, or other
educational buildings, or other educational facilities owned by or
on behalf of a school district, community college district or other
political subdivision of this state;
(M) costs of providing affordable housing or
areas of public assembly in or out of the zone; and
(N) payments made at the discretion of the
governing body of the municipality or county that the governing
body finds necessary or convenient to the creation of the zone or to
the implementation of the project plans for the zone.
SECTION 2. Sections 311.003(a) and (b), Tax Code, are
amended as follows:
(a) The governing body of a county by order may designate a
geographic area in the county or the governing body of a
municipality by ordinance [or the governing body of a county by
order] may designate a [contiguous] geographic area that is in the
corporate limits of the municipality, in the extraterritorial
jurisdiction of the municipality, or in both [in the jurisdiction
of the municipality or county] to be a reinvestment zone to promote
development or redevelopment of the area if the governing body
determines that development or redevelopment would not occur solely
through private investment in the reasonably foreseeable future.
The area need not be contiguous if the governing body finds that the
areas are substantially related. The designation of an area that is
wholly or partly located in the extraterritorial jurisdiction of a
municipality is not affected by a subsequent annexation of real
property in the reinvestment zone by the municipality. The tax
increment base for an area in a zone subsequently annexed into a
municipality shall be computed with reference to the determination
of taxable value of the area had it been in the municipality in the
year in which it was included in the zone.
(b) Before adopting an ordinance or order providing for a
reinvestment zone, the governing body of the municipality or county
must prepare a preliminary reinvestment zone financing plan. [As
soon as the plan is completed, a copy of the plan must be sent to the
governing body of each taxing unit that levies taxes on real
property in the proposed zone.]
SECTION 3. Chapter 311, Tax Code, is amended by adding
Section 311.0035 to read as follows:
Sec. 311.0035. PROCEDURE FOR DESIGNATING JOINT
REINVESTMENT ZONE. (a) The governing bodies of two or more
municipalities by ordinance adopted by each municipality may
designate a contiguous area in the jurisdiction of each of the
municipalities to be a joint reinvestment zone. Except as
otherwise provided by this section, each of the municipalities must
follow the procedures provided by Section 311.003 to designate an
area as a joint reinvestment zone. The ordinances adopted by all of
the municipalities designating an area as a joint reinvestment zone
must contain the same terms and must:
(1) describe the boundaries of the zone with
sufficient definiteness to identify with ordinary and reasonable
certainty the territory included in the zone;
(2) create a board of directors for the zone and
specify:
(A) the number of directors;
(B) the qualifications of directors;
(C) the manner in which directors are appointed;
(D) the terms of directors;
(E) the manner in which vacancies on the board
are filled; and
(F) the manner by which officers of the board are
selected;
(3) provide that the zone takes effect immediately on
adoption of the ordinance by the last of the municipalities in the
jurisdiction of which the area contained in the zone is located;
(4) provide a termination date for the zone;
(5) assign a name to the zone which may include the
name of one or more of the designating municipalities and may
contain a number;
(6) establish a tax increment fund for the zone; and
(7) contain findings that:
(A) improvements in the zone will significantly
enhance the value of all taxable real property in the zone and will
be of general benefit to the municipalities; and
(B) the area meets the requirements of Sections
311.005(a)(1) and (2) and (a-1).
(b) For purposes of complying with Subsection (a)(7)(A),
the ordinances are not required to identify the specific parcels of
real property to be enhanced in value.
(c) The boundaries of a joint reinvestment zone may be
enlarged or reduced by ordinance of the governing bodies of the
municipalities that designated the zone, subject to the
restrictions contained in this section.
(d) The municipalities designating a joint reinvestment
zone may exercise any power necessary and convenient to carry out
this section and the other provisions of this chapter, including
the powers listed in Section 311.008.
(e) Except as otherwise provided by this section, the board
of directors of a joint reinvestment zone has the same powers and
duties and is subject to the same limitations as the board of
directors of a reinvestment zone designated by a single
municipality. Sections 311.011, 311.012, 311.0123, 311.013,
311.014, 311.015, 311.016, 311.0163, and 311.018 apply to the
municipalities designating a joint reinvestment zone, except that a
reference in those sections to a municipality means all of the
municipalities designating a joint reinvestment zone and an action
required of a municipality under those sections is considered to be
required of all of the municipalities designating a joint
reinvestment zone.
(f) Expenditures from tax increment financing funds or
bonds secured by tax increment financing may be made without regard
to the location from which the funds were derived or the location
within the joint reinvestment zone at which the funds are spent, but
only if those expenditures are authorized as required by this
chapter.
SECTION 4. Section 311.005(a), Tax Code, is amended to read
as follows:
(a) To be designated as a reinvestment zone, an area must:
(1) substantially arrest or impair the sound growth of
the municipality or county creating the zone, retard the provision
of housing accommodations, or constitute an economic or social
liability and be a menace to the public health, safety, morals, or
welfare in its present condition and use because of the presence of:
(A) a substantial number of substandard, slum,
deteriorated, or deteriorating structures;
(B) the predominance of defective or inadequate
sidewalk or street layout;
(C) faulty lot layout in relation to size,
adequacy, accessibility, or usefulness;
(D) unsanitary or unsafe conditions;
(E) the deterioration of site or other
improvements;
(F) tax or special assessment delinquency
exceeding the fair value of the land;
(G) defective or unusual conditions of title;
(H) conditions that endanger life or property by
fire or other cause; or
(I) structures, other than single-family
residential structures, less than 10 percent of the square footage
of which has been used for commercial, industrial, or residential
purposes during the preceding 12 years, if the municipality has a
population of 100,000 or more;
(2) be predominantly open, undeveloped, or
underdeveloped and, because of obsolete platting, deterioration of
structures or site improvements, or other factors, substantially
impair or arrest the sound growth of the municipality or county;
(3) be in a federally assisted new community located
in the municipality or county or in an area immediately adjacent to
a federally assisted new community; or
(4) be an area described in a petition requesting that
the area be designated as a reinvestment zone, if the petition is
submitted to the governing body of the municipality or county by the
owners of property constituting at least 50 percent of the
appraised value of the property in the area according to the most
recent certified appraisal roll for the county in which the area is
located.
SECTION 5. Section 311.007, Tax Code, is amended as
follows:
SEC. 311.007. CHANGING BOUNDARIES OR TERM OF EXISTING ZONE.
(a)[Subject to the limitations provided by Section 311.006, if
applicable, the] The boundaries of an existing reinvestment zone
may be reduced or enlarged by ordinance or resolution of the
governing body of the municipality or by order or resolution of the
governing body of the county that created the zone.
(b) The governing body of the municipality or county [may]
that created an existing reinvestment zone may by ordinance, order,
or resolution extend the term of all or a portion of the zone after
notice and hearing in the same manner as provided for the creation
of the zone; provided that no other taxing entity shall be required
to participate in the extended portion of the zone for the extended
term except by written agreement. [enlarge an existing reinvestment
zone to include an area described in a petition requesting that the
area be included in the zone if the petition is submitted to the
governing body of the municipality or county by the owners of
property constituting at least 50 percent of the appraised value of
the property in the area according to the most recent certified
appraisal roll for the county in which the area is located. The
composition of the board of directors of the zone continues to be
governed by Section 311.009(a) or (b), whichever applied to the
zone immediately before the enlargement of the zone, except that
the membership of the board must conform to the requirements of the
applicable subsection of Section 311.009 as applied to the zone
after its enlargement. The provision of Section 311.006(b)
relating to the amount of property used for residential purposes
that may be included in the zone does not apply to the enlargement
of a zone under this subsection.]
SECTION 6. Section 311.008, Tax Code, is amended to amend
Subsection (b)(2) and add a new Subsection (f) as follows:
(2) acquire real property by purchase, condemnation,
or other means [to implement project plans] and sell real [that]
property, on the terms and conditions and in the manner it considers
advisable to implement the project plans;
(f) The governing body of a municipality or county may
impose a fee reasonably related to the estimated costs of the
municipality or county on property owners who submit a petition
under Section 311.005(a)(4) for processing a petition, or for
reviewing a project designated or proposed to be designated
pursuant to this chapter.
SECTION 7. Section 311.0085(a), Tax Code, is amended to
read as follows:
(a) This section applies only to a municipality with a
population of less than 130,000 as shown by the 2000 federal
decennial census that has[:
[(1)] territory in three counties[; and
[(2) a population of less than 120,000].
SECTION 8. Sections 311.009(a), (b), and (e), Tax Code, are
amended to read as follows:
(a) Except as provided by Subsection (b), the board of
directors of a reinvestment zone consists of at least five and not
more than 15 members, unless more than 15 members are required to
satisfy the requirements of this subsection. Each taxing unit
other than the municipality or county that created the zone that
levies taxes on real property in the zone may appoint one member of
the board if the taxing unit has approved the payment of all or part
of the tax increment produced by the unit into the tax increment
fund. A unit may waive its right to appoint a director. The
governing body of the municipality or county that created the zone
may appoint not more than 10 directors to the board; except that if
there are fewer than five directors appointed by taxing units other
than the municipality or county, the governing body of the
municipality or county may appoint more than 10 members as long as
the total membership of the board does not exceed 15.
(b) If the zone was designated under Section 311.005(a)(4),
the governing body of the city or county that created the zone may
provide that the board of directors of the zone consists of nine
members and be composed as described in this subsection. Each
taxing unit [school district, county, or municipality,] other than
the municipality or county that created the zone, that levies taxes
on real property in the zone may appoint one member of the board if
the taxing unit [school district, county, or municipality] has
approved the payment of all or part of the tax increment produced by
the unit into the tax increment fund. The member of the state
senate in whose district the zone is located is a member of the
board, and the member of the state house of representatives in whose
district the zone is located is a member of the board, except that
either may designate another individual to serve in the member's
place at the pleasure of the member. If the zone is located in more
than one senate or house district, this subsection applies only to
the senator or representative in whose district a larger portion of
the zone is located than any other senate or house district, as
applicable. The remaining members of the board are appointed by the
governing body of the municipality or county that created the zone.
(e) To be eligible for appointment to the board by the
governing body of the municipality or county that created the zone,
an individual must:
(1) if the board is covered by Subsection (a):
(A) be a resident citizen of the State of Texas
[qualified voter of the municipality or county, as applicable]; and
[or]
(B) be at least 18 years of age [and own real
property in the zone, whether or not the individual resides in the
municipality or county]; or
(2) if the board is covered by Subsection (b):
(A) be at least 18 years of age; and
(B) own real property in the zone or be an
employee, tenant, or agent of a person that owns real property in
the zone.
SECTION 9. (a) Section 311.0091, Tax Code, is amended by
amending Subsection (f) and adding a new Subsection (i) to read as
follows:
(f) Except as provided by Subsection (i), to [To] be
eligible for appointment to the board, an individual must:
(1) be a qualified voter of the municipality; or
(2) be at least 18 years of age and own real property
in the zone or be an employee or agent of a person that owns real
property in the zone.
(i) The eligibility criteria for appointment to the board
specified by Subsection (f) do not apply to an individual appointed
by a conservation and reclamation district:
(1) created under Section 59, Article XVI, Texas
Constitution; and
(2) the jurisdiction of which covers four counties.
(b) Section 311.0091, Tax Code, as amended by this section,
applies only to an individual appointed by a conservation and
reclamation district to the board of directors of a reinvestment
zone on or after the effective date of this Act. An individual
appointed by a conservation and reclamation district to the board
of a reinvestment zone before the effective date of this Act is
governed by Section 311.0091, Tax Code, as that section existed
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 10. Section 311.010, Tax Code, is amended to amend
Subsections (b), (g), and (h) to read as follows:
(b) The board of directors of a reinvestment zone and the
governing body of the municipality or county that creates a
reinvestment zone may each enter into agreements as the board or the
governing body considers necessary or convenient to implement the
project plan and reinvestment zone financing plan and achieve their
purposes. An agreement may provide for the regulation or
restriction of the use of land by imposing conditions,
restrictions, or covenants that run with the land. An agreement may
during the term of the agreement dedicate, pledge, or otherwise
provide for the use of revenue in the tax increment fund to pay any
project costs that benefit the reinvestment zone, including project
costs relating to the cost of buildings, schools, or other
educational facilities owned by or on behalf of a school district,
community college district, or other political subdivision of this
state, railroad or transit facilities, affordable housing, the
remediation of conditions that contaminate public or private land
or buildings, the preservation of the facade of a private or public
building, [or] the demolition of public or private buildings, or
the construction of a road, sidewalk, or other public
infrastructure in or out of the zone, including the cost of
acquiring the real property necessary for the construction of the
road, sidewalk, or other public infrastructure. An agreement may
dedicate revenue from the tax increment fund to pay the costs of
providing affordable housing or areas of public assembly in or out
of the zone. [An agreement may dedicate revenue from the tax
increment fund to pay a neighborhood enterprise association for
providing services or carrying out projects authorized under
Subchapters E and G, Chapter 2303, Government Code, in the zone.
The term of an agreement with a neighborhood enterprise association
may not exceed 10 years.]
(g) Chapter 252, Local Government Code, does not apply to a
dedication, pledge, or other use of revenue in the tax increment
fund for a reinvestment zone [by the board of directors of the zone
in carrying out its powers] under Subsection (b).
(h) Subject to the approval of the governing body of the
municipality or county that created the zone, the board of
directors of a reinvestment zone, as necessary or convenient to
implement the project plan and reinvestment zone financing plan and
achieve their purposes, may establish and provide for the
administration of one or more programs for the public purposes of
developing and diversifying the economy of the zone, eliminating
unemployment and underemployment in the zone, and developing or
expanding transportation, business, and commercial activity in the
zone, including programs to make grants and loans [from the tax
increment fund of the zone in an aggregate amount not to exceed the
amount of the tax increment produced by the municipality and paid
into the tax increment fund for the zone] for activities that
benefit the zone and stimulate business and commercial activity in
the zone. For purposes of this subsection, on approval of the
municipality or county, the board of directors of the zone has all
the powers of a municipality under Chapter 380, Local Government
Code. The approval required by this subsection may be granted in an
ordinance or order approving a project plan and reinvestment zone
financing plan or an amendment to a project plan and reinvestment
zone financing plan.
SECTION 11. Section 311.01005, Tax Code, is amended to add a
new Subsection (f) as follows:
(f) This section shall not be construed to limit the general
ability of a zone to finance project costs outside the zone as
provided in Section 311.002.
SECTION 12. Section 311.011, Tax Code, is amended by
amending Subsections (a), (b), (c), (d), and (g) and adding a new
Subsection (h) as follows:
(a) The board of directors of a reinvestment zone shall
prepare and adopt a project plan and a reinvestment zone financing
plan for the zone and submit the plans to the governing body of the
municipality or county that created the zone. [The plans must be as
consistent as possible with the preliminary plans developed for the
zone before the creation of the board.]
(b) The project plan must include:
(1) a [map showing] description of existing uses and
conditions of real property in the zone and [a map showing] proposed
[improvements to and proposed] uses of that property;
(2) proposed changes of zoning ordinances, [the master
plan of the municipality,] building codes, other municipal
ordinances, and subdivision rules and regulations, if any, of the
[municipality or the] county, if applicable; and
(3) [a list of estimated nonproject costs; and
[(4)] a statement of a method of relocating persons to
be displaced, if any, as a result of implementing the plan.
(c) The reinvestment zone financing plan must include:
(1) a detailed list describing the estimated project
costs of the zone, including administrative expenses;
(2) a statement listing the proposed kind, number, and
location of all [proposed] public works or public improvements to
be financed by [in] the zone;
(3) a finding that the plan is economically feasible
[an economic feasibility study];
(4) the estimated amount of bonded indebtedness to be
incurred;
(5) the estimated time when related costs or monetary
obligations are to be incurred;
(6) a description of the methods of financing all
estimated project costs and the expected sources of revenue to
finance or pay project costs, including the percentage of tax
increment to be derived from the property taxes of each taxing unit
anticipated to contribute tax increment to the zone that levies
taxes on real property in the zone;
(7) the current total appraised value of taxable real
property in the zone;
(8) the estimated captured appraised value of the zone
during each year of its existence; and
(9) the duration of the zone.
(d) The governing body of the municipality or county that
created the zone must approve a project plan or reinvestment zone
financing plan after its adoption by the board. The approval must
be by ordinance, in the case of a municipality, or by order, in the
case of a county, that finds that the plan is feasible [and conforms
to the master plan, if any, of the municipality or to subdivision
rules and regulations, if any, of the county].
(g) [An amendment to the project plan or the reinvestment
zone financing plan for a zone does not apply to a] A school
district that participates in a [the] zone is not required to
increase the percentage or amount of the tax increment to be
contributed by the school district due to an amendment to the
project plan or reinvestment zone financing plan for the zone
unless the governing body of the school district by official action
approves the amendment[, if the amendment:
[(1) has the effect of directly or indirectly
increasing the percentage or amount of the tax increment to be
contributed by the school district; or
[(2) requires or authorizes the municipality or county
creating the zone to issue additional tax increment bonds or
notes].
(h) Unless specifically provided otherwise in the project
plan and reinvestment zone financing plan, all figures contained in
the plan shall be considered estimates, and shall not act as a
limitation on the described items, including without limitation
expenditures relating to project costs and participation by taxing
units.
SECTION 13. Section 311.012, Tax Code, is amended to amend
Subsections (a) and (c) as follows:
(a) The amount of a taxing unit's tax increment for a year is
the amount of property taxes levied and assessed by the unit for
that year on the captured appraised value of real property taxable
by the unit and located in a reinvestment zone or the amount of
property taxes levied and collected by the unit for that year on the
captured appraised value of real property taxable by the unit and
located in a reinvestment zone. The governing body of a taxing unit
shall determine which of the methods specified by this subsection
is used to calculate the amount of the unit's tax increment.
(c) The tax increment base of a taxing unit is the total
[appraised] taxable value of all real property taxable by the unit
and located in a reinvestment zone for the year in which the zone
was designated under this chapter. If the boundaries of a zone are
enlarged, the tax increment base shall be increased by the taxable
value of the real property added to the zone for the year in which
such property was added. If the boundaries of a zone are reduced,
the tax increment base shall be reduced by the taxable value of the
real property removed from the zone for the year in which such
property was originally included within the zone's boundaries. If
the municipality creating a zone does not levy an ad valorem tax in
the year the zone is created, the tax increment base shall be
determined by the applicable county appraisal district using
assumptions regarding exemptions and other relevant information
provided to it by the municipality.
SECTION 14. Sections 311.013(f), (g) and (l), Tax Code, are
amended as follows:
(f) A taxing unit is not required to pay into the tax
increment fund any of its tax increment produced from property
located in a reinvestment zone designated under Section 311.005(a)
or in an area added to a reinvestment zone under Section 311.007
unless the taxing unit enters into an agreement to do so with the
governing body of the municipality or county that created the zone.
A taxing unit may enter into an agreement under this subsection at
any time before or after the zone is created or enlarged. The
agreement may include conditions for payment of that tax increment
into the fund and must specify the portion of the tax increment to
be paid into the fund and the years for which that tax increment is
to be paid into the fund. In addition to such other terms as the
parties may agree, the agreement may specify the projects to which a
participating taxing unit's tax increment will be dedicated, and
that the taxing unit's participation may be computed with respect
to a base year later than the original base year of the zone. The
agreement and the conditions in the agreement are binding on the
taxing unit, the municipality or county, and the board of directors
of the zone.
(g) Subject to the provisions of Section 311.0125, in lieu
of permitting a portion of its tax increment to be paid into the tax
increment fund, and notwithstanding the provisions of Section
312.203, a taxing unit, including [other than] a municipality
[city], may elect to offer the owners of taxable real property in a
reinvestment zone created under this chapter an exemption from
taxation of all or part of the value of the property. To be
effective, an [Any] agreement to exempt real property [concerning
an exemption] from ad valorem taxes under this subsection must be
approved by:
(1) the board of directors of the reinvestment zone;
and
(2) the governing body of each taxing unit that
imposes taxes on real property in the reinvestment zone and
deposits or agrees to deposit any of its tax increment into
the tax increment fund for the zone [shall be executed in the
manner and subject to the limitations of Chapter 312;
provided, however, the property covered by the agreement need
not be in a zone created pursuant to Chapter 312. A taxing
unit may not offer a tax abatement agreement to property
owners in the zone after it has entered into an agreement that
its tax increments would be paid into the tax increment fund
pursuant to Subsection (f)].
(l) The governing body of a municipality or a county that
designates an area as a reinvestment zone may determine, in the
designating ordinance or order adopted under Section 311.003 or in
the ordinance or order adopted under Section 311.011 approving the
reinvestment zone financing plan for the zone, the portion of the
tax increment produced by the municipality or the county that the
municipality or the county is required to pay into the tax increment
fund for the zone. If a municipality or a county does not determine
the portion of the tax increment produced by the municipality or the
county that the municipality or the county is required to pay into
the tax increment fund for a reinvestment zone, the municipality or
the county is required to pay into the fund for the zone the entire
tax increment produced by the municipality or the county, except as
provided by Subsection (b)(1).
SECTION 15. Section 311.014(b), Tax Code, is amended to
read as follows:
(b) Tax increment and other funds deposited in the tax
increment fund of the zone shall be administered by the governing
body of the municipality or county that created the zone or, if
delegated by the governing body, by the board of directors of the
zone, to implement the project plan and reinvestment zone financing
plan of the zone during the life of the zone, as it may be extended,
and for any period of time the zone remains in existence for
collection and disbursement pursuant to subsection (d) of Section
311.016. Money may be disbursed from the fund only to satisfy
claims of holders of tax increment bonds or notes issued for the
zone, to pay project costs for the zone, to make payments pursuant
to an agreement made under Section 311.010(b) or a program under
Section 311.010(h) dedicating revenue from the tax increment fund,
or to repay other obligations incurred for the zone.
SECTION 16. Sections 311.015(a) and (l), Tax Code, are
amended as follows:
(a) A municipality or county creating a reinvestment zone
may issue tax increment bonds or notes, the proceeds of which may be
used to make payments pursuant to agreements made under Section
311.010(b), to make payments pursuant to programs under Section
311.010(h), and to pay project costs for the reinvestment zone on
behalf of which the bonds or notes were issued, or to satisfy claims
of holders of the bonds or notes. The municipality or county may
issue refunding bonds or notes for the payment or retirement of tax
increment bonds or notes previously issued by it. A municipality
may issue certificates of obligation under Subchapter C of Chapter
271, Local Government Code, to pay a zone's project costs in lieu of
bonds or notes under this subsection, and may use tax increment from
the zone to pay debt service on the certificates.
(l) A tax increment bond or note must mature within 20 years
of the date of issueon or before the date by which the final
payments of tax increment into the tax increment fund are due.
SECTION 17. Section 311.016(a), Tax Code, is amended to
read as follows:
(a) On or before the 150th [90th] day following the end of
the fiscal year of the municipality or county, the governing body of
a municipality or county shall submit to the chief executive
officer of each taxing unit that levies property taxes on real
property in a reinvestment zone created by the municipality or
county a report on the status of the zone. The report must include:
(1) the amount and source of revenue in the tax
increment fund established for the zone;
(2) the amount and purpose of expenditures from the
fund;
(3) the amount of principal and interest due on
outstanding bonded indebtedness;
(4) the tax increment base and current captured
appraised value retained by the zone; and
(5) the captured appraised value shared by the
municipality or county and other taxing units, the total amount of
tax increments received, and any additional information necessary
to demonstrate compliance with the tax increment financing plan
adopted by the governing body of the municipality or county.
SECTION 18. Section 311.017, Tax Code, is amended by
amending Subsection (a) and adding new Subsections (a-1), (c), (d),
and (e) to read as follows:
(a) A reinvestment zone terminates on the earlier of:
(1) the termination date designated in the ordinance
or order, as applicable, creating the zone or an earlier or later
termination date designated by an ordinance or order adopted
[subsequent to the ordinance or order creating the zone] under
Section 311.007(b); or
(2) the date on which all project costs, tax increment
bonds and interest on those bonds, and other obligations have been
paid in full.
(a-1) Notwithstanding the designation of a later
termination date under Section 311.007(b), a taxing unit that taxes
real property located in the zone, other than the municipality or
county that created the zone, is not required to pay any of its tax
increment into the tax increment fund for the zone for any tax year
after the termination date designated in the ordinance or order
creating the zone unless the governing body of the taxing unit
enters into an agreement to do so with the governing body of the
municipality or county that created the zone.
(c) With respect to a zone established under Section
311.0031, the tax increment reinvestment zone shall terminate on
the date specified in the ordinance or order designating the zone as
a tax increment reinvestment zone for the expiration of the tax
increment aspects of the zone, notwithstanding the prior expiration
of the original designation of the area under the specified law.
(d) Subject to the provisions of subsection (a-1), if tax
increment bonds or obligations of the zone are outstanding when the
zone terminates, the zone shall remain in existence solely for the
purpose of collecting and disbursing tax increment with respect to
tax years during the designated term of the zone, as it may have
been extended. Such funds shall be used to pay its obligations or
the tax increment bonds. Notwithstanding the provisions of this
subsection, or the extension to the term of a zone pursuant to
Section 311.007, the termination date of a zone for purposes of any
contract entered into by the board, or by the municipality or county
that designated the zone, shall remain the termination date
designated by ordinance or order in effect on the date the contract
was executed, unless a subsequent amendment to the contract
expressly provides otherwise.
(e) After termination of the zone, the governing body of the
city or the county that created the zone, may continue the zone for
an additional period for the purpose of continuing the
implementation of the project plan and reinvestment zone financing
plan. In such event, although tax increment shall cease to be
deposited with respect to tax years following termination, the zone
shall retain all remaining funds, property and assets of the zone to
be used to implement the plans as authorized by the governing body.
SECTION 19. Chapter 311, Tax Code, is amended by adding a
new Section 311.021, as follows:
Sec. 311.021. ACT OR PROCEEDING PRESUMED VALID. (a) A
governmental act or proceeding relating to the designation,
operation, or administration of a reinvestment zone or
implementation of a project plan or reinvestment zone financing
plan under this chapter of a municipality or county, zone board, or
an entity acting pursuant to Section 311.010(f), is conclusively
presumed, as of the date it occurred, valid and to have occurred in
accordance with all applicable statutes and rules if:
(1) the second anniversary of the effective date of
the act or proceeding has expired; and
(2) a lawsuit to annul or invalidate the act or
proceeding has not been filed on or before the later of that second
anniversary or August 1, 2009.
(b) This section does not apply to:
(1) an act or proceeding that was void at the time it
occurred;
(2) an act or proceeding that, under a statute of this
state or the United States, was a misdemeanor or felony at the time
the act or proceeding occurred;
(3) a rule that, at the time it was passed, was
preempted by a statute of this state or the United States, including
Section 1.06 or 109.57, Alcoholic Beverage Code; or
(4) a matter that on the effective date of this
section:
(A) is involved in litigation if the litigation
ultimately results in the matter being held invalid by a final
judgment of a court; or
(B) has been held invalid by a final judgment of a
court.
SECTION 20. (a) The following provisions of the Tax Code
are repealed:
(1) Section 311.003(e), (f), and (g);
(2) Section 311.006;
(3) Sections 311.013(d) and (e); and
(4) Section 311.016(b) as amended by Acts 2005, 79th
Leg., R.S., Ch. 977, Sec. 2.
(b) Section 403.302(d)(5), Government Code, is repealed.
SECTION 21. Section 42.2516, Education Code, is amended by
amending subsection (b) to read as follows:
(b) Subject to Subsections (b-1), (b-2), (f-1), (g), and
(h), but notwithstanding any other provision of this title, a
school district is entitled to state revenue necessary to provide
the district with the sum of:
(1) the amount of state revenue necessary to maintain
state and local revenue per student in weighted average daily
attendance in the amount equal to the greater of:
(A) the amount of state and local revenue per
student in weighted average daily attendance for the maintenance
and operations of the district available to the district for the
2005-2006 school year;
(B) the amount of state and local revenue per
student in weighted average daily attendance for the maintenance
and operations of the district to which the district would have been
entitled for the 2006-2007 school year under this chapter, as it
existed on January 1, 2006, or, if the district would have been
subject to Chapter 41, as that chapter existed on January 1, 2006,
the amount to which the district would have been entitled under that
chapter, based on the funding elements in effect for the 2005-2006
school year, if the district imposed a maintenance and operations
tax at the rate adopted by the district for the 2005 tax year; or
(C) the amount of state and local revenue per
student in weighted average daily attendance for the maintenance
and operations of the district to which the district would have been
entitled for the 2006-2007 school year under this chapter, as it
existed on January 1, 2006, or, if the district would have been
subject to Chapter 41, as that chapter existed on January 1, 2006,
the amount to which the district would have been entitled under that
chapter, based on the funding elements in effect for the 2005-2006
school year, if the district imposed a maintenance and operations
tax at the rate equal to the rate described by Section 26.08(i) or
(k)(1), Tax Code, as applicable, for the 2006 tax year;
(2) an amount equal to the product of $2,500
multiplied by the number of classroom teachers, full-time
librarians, full-time counselors certified under Subchapter B,
Chapter 21, and full-time school nurses employed by the district
and entitled to a minimum salary under Section 21.402; [and]
(3) an amount equal to the product of $275 multiplied
by the number of students in average daily attendance in grades nine
through 12 in the district; and
(4) an amount equal to the amount a district was
contractually obligated to pay into a tax increment fund for a
reinvestment zone under Section 311, Tax Code, at the tax rate
adopted for the 2005 tax year less the amount the district was
contractually obligated to pay into the tax increment fund in the
current year at the tax rate adopted for the current year.
SECTION 22. Section 42.253, Education Code, is amended by
adding a new subsection (c-1) as follows:
(c-1) The amounts to be paid pursuant to Section
42.2516(b)(4) shall be paid at the same time as other state revenue
is paid to the district. Payments shall be based on amounts to be
paid pursuant to Section 42.2516(b)(4) of the previous year. Any
deficiency shall be paid to the district at the time the final
amount to be paid to the district is determined and any overpayment
shall be deducted from the payments the district would otherwise
receive in the next year.
SECTION 23. (a) The legislature validates and confirms all
governmental acts and proceedings that were taken before the
effective date of this Act and relate to or are associated with the
designation, operation, or administration of a reinvestment zone or
implementation of a project plan or reinvestment zone financing
plan under Chapter 311, Tax Code, of a municipality or county, zone
board, or an entity acting pursuant to Section 311.010(f),
including the extension of the term of a reinvestment zone, as of
the dates on which they occurred. The acts and proceedings may not
be held invalid because they were not in accordance with Chapter
311, Tax Code, or other law.
(b) Subsection (a) of this section does not apply to any
matter that on the thirtieth day following the effective date of
this Act:
(1) is involved in litigation if the litigation
ultimately results in the matter being held invalid by a final
judgment of a court; or
(2) has been held invalid by a final judgment of a
court.
SECTION 24. APPLICATION OF CERTAIN PROVISIONS. Section 1,
amending Section 311.002(1), Tax Code, shall apply to all tax
increment reinvestment zones expenditures, regardless of when they
were incurred. Section 13, amending Section 311.012(c), Tax Code,
shall apply only to base years established after the effective date
of this Act; provided that any tax increment reinvestment zone base
years established prior to the effective date of this Act using the
base year as established in the amendment in Section 13 are
validated and shall continue in effect as if established after the
effective date of this Act.
SECTION 25. EFFECTIVE DATE. 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, 2009.