Texas 2009 - 81st Regular

Texas House Bill HB4613 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Oliveira, Smith of Tarrant, Villarreal, H.B. No. 4613
2	2	Isett, Kuempel
3	3	Substitute the following for H.B. No. 4613:
4	4	By: Otto C.S.H.B. No. 4613
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the creation, operations and financing of tax increment
10	10	reinvestment zones.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 311.002(1), Tax Code, is amended as
13	13	follows:
14	14	(1) "Project costs" means the expenditures made or
15	15	estimated to be made and monetary obligations incurred or estimated
16	16	to be incurred by the municipality or county establishing a
17	17	reinvestment zone that are listed in the project plan as costs of
18	18	public works or public improvements, programs, or other projects
19	19	[in] benefitting the zone, plus other costs incidental to those
20	20	expenditures and obligations. "Project costs" include:
21	21	(A) capital costs, including the actual costs of
22	22	the acquisition and construction of public works, public
23	23	improvements, new buildings, structures, and fixtures; the actual
24	24	costs of the acquisition, demolition, alteration, remodeling,
25	25	repair, or reconstruction of existing buildings, structures, and
26	26	fixtures; the actual costs of the remediation of conditions that
27	27	contaminate public or private land or buildings, the preservation
28	28	of the faade of a private or public building, and the demolition of
29	29	public or private buildings; and the actual costs of the
30	30	acquisition of land and equipment and the clearing and grading of
31	31	land;
32	32	(B) financing costs, including all interest paid
33	33	to holders of evidences of indebtedness or other obligations issued
34	34	to pay for project costs and any premium paid over the principal
35	35	amount of the obligations because of the redemption of the
36	36	obligations before maturity;
37	37	(C) real property assembly costs;
38	38	(D) professional service costs, including those
39	39	incurred for architectural, planning, engineering, and legal
40	40	advice and services;
41	41	(E) imputed administrative costs, including
42	42	reasonable charges for the time spent by employees of the
43	43	municipality or county in connection with the implementation of a
44	44	project plan;
45	45	(F) relocation costs;
46	46	(G) organizational costs, including the costs of
47	47	conducting environmental impact studies or other studies, the cost
48	48	of publicizing the creation of the zone, and the cost of
49	49	implementing the project plan for the zone;
50	50	(H) interest before and during construction and
51	51	for one year after completion of construction, whether or not
52	52	capitalized;
53	53	(I) the cost of operating the reinvestment zone
54	54	and project facilities;
55	55	(J) the amount of any contributions made by the
56	56	municipality or county from general revenue for the implementation
57	57	of the project plan; [and]
58	58	(K) a program described in Section 311.010(h) of
59	59	this chapter;
60	60	(L) costs of buildings, schools, or other
61	61	educational buildings, or other educational facilities owned by or
62	62	on behalf of a school district, community college district or other
63	63	political subdivision of this state;
64	64	(M) costs of providing affordable housing or
65	65	areas of public assembly in or out of the zone; and
66	66	(N) payments made at the discretion of the
67	67	governing body of the municipality or county that the governing
68	68	body finds necessary or convenient to the creation of the zone or to
69	69	the implementation of the project plans for the zone.
70	70	SECTION 2. Sections 311.003(a) and (b), Tax Code, are
71	71	amended as follows:
72	72	(a) The governing body of a county by order may designate a
73	73	geographic area in the county or the governing body of a
74	74	municipality by ordinance [or the governing body of a county by
75	75	order] may designate a [contiguous] geographic area that is in the
76	76	corporate limits of the municipality, in the extraterritorial
77	77	jurisdiction of the municipality, or in both [in the jurisdiction
78	78	of the municipality or county] to be a reinvestment zone to promote
79	79	development or redevelopment of the area if the governing body
80	80	determines that development or redevelopment would not occur solely
81	81	through private investment in the reasonably foreseeable future.
82	82	The area need not be contiguous if the governing body finds that the
83	83	areas are substantially related. The designation of an area that is
84	84	wholly or partly located in the extraterritorial jurisdiction of a
85	85	municipality is not affected by a subsequent annexation of real
86	86	property in the reinvestment zone by the municipality. The tax
87	87	increment base for an area in a zone subsequently annexed into a
88	88	municipality shall be computed with reference to the determination
89	89	of taxable value of the area had it been in the municipality in the
90	90	year in which it was included in the zone.
91	91	(b) Before adopting an ordinance or order providing for a
92	92	reinvestment zone, the governing body of the municipality or county
93	93	must prepare a preliminary reinvestment zone financing plan. [As
94	94	soon as the plan is completed, a copy of the plan must be sent to the
95	95	governing body of each taxing unit that levies taxes on real
96	96	property in the proposed zone.]
97	97	SECTION 3. Chapter 311, Tax Code, is amended by adding
98	98	Section 311.0035 to read as follows:
99	99	Sec. 311.0035. PROCEDURE FOR DESIGNATING JOINT
100	100	REINVESTMENT ZONE. (a) The governing bodies of two or more
101	101	municipalities by ordinance adopted by each municipality may
102	102	designate a contiguous area in the jurisdiction of each of the
103	103	municipalities to be a joint reinvestment zone. Except as
104	104	otherwise provided by this section, each of the municipalities must
105	105	follow the procedures provided by Section 311.003 to designate an
106	106	area as a joint reinvestment zone. The ordinances adopted by all of
107	107	the municipalities designating an area as a joint reinvestment zone
108	108	must contain the same terms and must:
109	109	(1) describe the boundaries of the zone with
110	110	sufficient definiteness to identify with ordinary and reasonable
111	111	certainty the territory included in the zone;
112	112	(2) create a board of directors for the zone and
113	113	specify:
114	114	(A) the number of directors;
115	115	(B) the qualifications of directors;
116	116	(C) the manner in which directors are appointed;
117	117	(D) the terms of directors;
118	118	(E) the manner in which vacancies on the board
119	119	are filled; and
120	120	(F) the manner by which officers of the board are
121	121	selected;
122	122	(3) provide that the zone takes effect immediately on
123	123	adoption of the ordinance by the last of the municipalities in the
124	124	jurisdiction of which the area contained in the zone is located;
125	125	(4) provide a termination date for the zone;
126	126	(5) assign a name to the zone which may include the
127	127	name of one or more of the designating municipalities and may
128	128	contain a number;
129	129	(6) establish a tax increment fund for the zone; and
130	130	(7) contain findings that:
131	131	(A) improvements in the zone will significantly
132	132	enhance the value of all taxable real property in the zone and will
133	133	be of general benefit to the municipalities; and
134	134	(B) the area meets the requirements of Sections
135	135	311.005(a)(1) and (2) and (a-1).
136	136	(b) For purposes of complying with Subsection (a)(7)(A),
137	137	the ordinances are not required to identify the specific parcels of
138	138	real property to be enhanced in value.
139	139	(c) The boundaries of a joint reinvestment zone may be
140	140	enlarged or reduced by ordinance of the governing bodies of the
141	141	municipalities that designated the zone, subject to the
142	142	restrictions contained in this section.
143	143	(d) The municipalities designating a joint reinvestment
144	144	zone may exercise any power necessary and convenient to carry out
145	145	this section and the other provisions of this chapter, including
146	146	the powers listed in Section 311.008.
147	147	(e) Except as otherwise provided by this section, the board
148	148	of directors of a joint reinvestment zone has the same powers and
149	149	duties and is subject to the same limitations as the board of
150	150	directors of a reinvestment zone designated by a single
151	151	municipality. Sections 311.011, 311.012, 311.0123, 311.013,
152	152	311.014, 311.015, 311.016, 311.0163, and 311.018 apply to the
153	153	municipalities designating a joint reinvestment zone, except that a
154	154	reference in those sections to a municipality means all of the
155	155	municipalities designating a joint reinvestment zone and an action
156	156	required of a municipality under those sections is considered to be
157	157	required of all of the municipalities designating a joint
158	158	reinvestment zone.
159	159	(f) Expenditures from tax increment financing funds or
160	160	bonds secured by tax increment financing may be made without regard
161	161	to the location from which the funds were derived or the location
162	162	within the joint reinvestment zone at which the funds are spent, but
163	163	only if those expenditures are authorized as required by this
164	164	chapter.
165	165	SECTION 4. Section 311.005(a), Tax Code, is amended to read
166	166	as follows:
167	167	(a) To be designated as a reinvestment zone, an area must:
168	168	(1) substantially arrest or impair the sound growth of
169	169	the municipality or county creating the zone, retard the provision
170	170	of housing accommodations, or constitute an economic or social
171	171	liability and be a menace to the public health, safety, morals, or
172	172	welfare in its present condition and use because of the presence of:
173	173	(A) a substantial number of substandard, slum,
174	174	deteriorated, or deteriorating structures;
175	175	(B) the predominance of defective or inadequate
176	176	sidewalk or street layout;
177	177	(C) faulty lot layout in relation to size,
178	178	adequacy, accessibility, or usefulness;
179	179	(D) unsanitary or unsafe conditions;
180	180	(E) the deterioration of site or other
181	181	improvements;
182	182	(F) tax or special assessment delinquency
183	183	exceeding the fair value of the land;
184	184	(G) defective or unusual conditions of title;
185	185	(H) conditions that endanger life or property by
186	186	fire or other cause; or
187	187	(I) structures, other than single-family
188	188	residential structures, less than 10 percent of the square footage
189	189	of which has been used for commercial, industrial, or residential
190	190	purposes during the preceding 12 years, if the municipality has a
191	191	population of 100,000 or more;
192	192	(2) be predominantly open, undeveloped, or
193	193	underdeveloped and, because of obsolete platting, deterioration of
194	194	structures or site improvements, or other factors, substantially
195	195	impair or arrest the sound growth of the municipality or county;
196	196	(3) be in a federally assisted new community located
197	197	in the municipality or county or in an area immediately adjacent to
198	198	a federally assisted new community; or
199	199	(4) be an area described in a petition requesting that
200	200	the area be designated as a reinvestment zone, if the petition is
201	201	submitted to the governing body of the municipality or county by the
202	202	owners of property constituting at least 50 percent of the
203	203	appraised value of the property in the area according to the most
204	204	recent certified appraisal roll for the county in which the area is
205	205	located.
206	206	SECTION 5. Section 311.007, Tax Code, is amended as
207	207	follows:
208	208	SEC. 311.007. CHANGING BOUNDARIES OR TERM OF EXISTING ZONE.
209	209	(a)[Subject to the limitations provided by Section 311.006, if
210	210	applicable, the] The boundaries of an existing reinvestment zone
211	211	may be reduced or enlarged by ordinance or resolution of the
212	212	governing body of the municipality or by order or resolution of the
213	213	governing body of the county that created the zone.
214	214	(b) The governing body of the municipality or county [may]
215	215	that created an existing reinvestment zone may by ordinance, order,
216	216	or resolution extend the term of all or a portion of the zone after
217	217	notice and hearing in the same manner as provided for the creation
218	218	of the zone; provided that no other taxing entity shall be required
219	219	to participate in the extended portion of the zone for the extended
220	220	term except by written agreement. [enlarge an existing reinvestment
221	221	zone to include an area described in a petition requesting that the
222	222	area be included in the zone if the petition is submitted to the
223	223	governing body of the municipality or county by the owners of
224	224	property constituting at least 50 percent of the appraised value of
225	225	the property in the area according to the most recent certified
226	226	appraisal roll for the county in which the area is located. The
227	227	composition of the board of directors of the zone continues to be
228	228	governed by Section 311.009(a) or (b), whichever applied to the
229	229	zone immediately before the enlargement of the zone, except that
230	230	the membership of the board must conform to the requirements of the
231	231	applicable subsection of Section 311.009 as applied to the zone
232	232	after its enlargement. The provision of Section 311.006(b)
233	233	relating to the amount of property used for residential purposes
234	234	that may be included in the zone does not apply to the enlargement
235	235	of a zone under this subsection.]
236	236	SECTION 6. Section 311.008, Tax Code, is amended to amend
237	237	Subsection (b)(2) and add a new Subsection (f) as follows:
238	238	(2) acquire real property by purchase, condemnation,
239	239	or other means [to implement project plans] and sell real [that]
240	240	property, on the terms and conditions and in the manner it considers
241	241	advisable to implement the project plans;
242	242	(f) The governing body of a municipality or county may
243	243	impose a fee reasonably related to the estimated costs of the
244	244	municipality or county on property owners who submit a petition
245	245	under Section 311.005(a)(4) for processing a petition, or for
246	246	reviewing a project designated or proposed to be designated
247	247	pursuant to this chapter.
248	248	SECTION 7. Section 311.0085(a), Tax Code, is amended to
249	249	read as follows:
250	250	(a) This section applies only to a municipality with a
251	251	population of less than 130,000 as shown by the 2000 federal
252	252	decennial census that has[:
253	253	[(1)] territory in three counties[; and
254	254	[(2) a population of less than 120,000].
255	255	SECTION 8. Sections 311.009(a), (b), and (e), Tax Code, are
256	256	amended to read as follows:
257	257	(a) Except as provided by Subsection (b), the board of
258	258	directors of a reinvestment zone consists of at least five and not
259	259	more than 15 members, unless more than 15 members are required to
260	260	satisfy the requirements of this subsection. Each taxing unit
261	261	other than the municipality or county that created the zone that
262	262	levies taxes on real property in the zone may appoint one member of
263	263	the board if the taxing unit has approved the payment of all or part
264	264	of the tax increment produced by the unit into the tax increment
265	265	fund. A unit may waive its right to appoint a director. The
266	266	governing body of the municipality or county that created the zone
267	267	may appoint not more than 10 directors to the board; except that if
268	268	there are fewer than five directors appointed by taxing units other
269	269	than the municipality or county, the governing body of the
270	270	municipality or county may appoint more than 10 members as long as
271	271	the total membership of the board does not exceed 15.
272	272	(b) If the zone was designated under Section 311.005(a)(4),
273	273	the governing body of the city or county that created the zone may
274	274	provide that the board of directors of the zone consists of nine
275	275	members and be composed as described in this subsection. Each
276	276	taxing unit [school district, county, or municipality,] other than
277	277	the municipality or county that created the zone, that levies taxes
278	278	on real property in the zone may appoint one member of the board if
279	279	the taxing unit [school district, county, or municipality] has
280	280	approved the payment of all or part of the tax increment produced by
281	281	the unit into the tax increment fund. The member of the state
282	282	senate in whose district the zone is located is a member of the
283	283	board, and the member of the state house of representatives in whose
284	284	district the zone is located is a member of the board, except that
285	285	either may designate another individual to serve in the member's
286	286	place at the pleasure of the member. If the zone is located in more
287	287	than one senate or house district, this subsection applies only to
288	288	the senator or representative in whose district a larger portion of
289	289	the zone is located than any other senate or house district, as
290	290	applicable. The remaining members of the board are appointed by the
291	291	governing body of the municipality or county that created the zone.
292	292	(e) To be eligible for appointment to the board by the
293	293	governing body of the municipality or county that created the zone,
294	294	an individual must:
295	295	(1) if the board is covered by Subsection (a):
296	296	(A) be a resident citizen of the State of Texas
297	297	[qualified voter of the municipality or county, as applicable]; and
298	298	[or]
299	299	(B) be at least 18 years of age [and own real
300	300	property in the zone, whether or not the individual resides in the
301	301	municipality or county]; or
302	302	(2) if the board is covered by Subsection (b):
303	303	(A) be at least 18 years of age; and
304	304	(B) own real property in the zone or be an
305	305	employee, tenant, or agent of a person that owns real property in
306	306	the zone.
307	307	SECTION 9. (a) Section 311.0091, Tax Code, is amended by
308	308	amending Subsection (f) and adding a new Subsection (i) to read as
309	309	follows:
310	310	(f) Except as provided by Subsection (i), to [To] be
311	311	eligible for appointment to the board, an individual must:
312	312	(1) be a qualified voter of the municipality; or
313	313	(2) be at least 18 years of age and own real property
314	314	in the zone or be an employee or agent of a person that owns real
315	315	property in the zone.
316	316	(i) The eligibility criteria for appointment to the board
317	317	specified by Subsection (f) do not apply to an individual appointed
318	318	by a conservation and reclamation district:
319	319	(1) created under Section 59, Article XVI, Texas
320	320	Constitution; and
321	321	(2) the jurisdiction of which covers four counties.
322	322	(b) Section 311.0091, Tax Code, as amended by this section,
323	323	applies only to an individual appointed by a conservation and
324	324	reclamation district to the board of directors of a reinvestment
325	325	zone on or after the effective date of this Act. An individual
326	326	appointed by a conservation and reclamation district to the board
327	327	of a reinvestment zone before the effective date of this Act is
328	328	governed by Section 311.0091, Tax Code, as that section existed
329	329	immediately before the effective date of this Act, and the former
330	330	law is continued in effect for that purpose.
331	331	SECTION 10. Section 311.010, Tax Code, is amended to amend
332	332	Subsections (b), (g), and (h) to read as follows:
333	333	(b) The board of directors of a reinvestment zone and the
334	334	governing body of the municipality or county that creates a
335	335	reinvestment zone may each enter into agreements as the board or the
336	336	governing body considers necessary or convenient to implement the
337	337	project plan and reinvestment zone financing plan and achieve their
338	338	purposes. An agreement may provide for the regulation or
339	339	restriction of the use of land by imposing conditions,
340	340	restrictions, or covenants that run with the land. An agreement may
341	341	during the term of the agreement dedicate, pledge, or otherwise
342	342	provide for the use of revenue in the tax increment fund to pay any
343	343	project costs that benefit the reinvestment zone, including project
344	344	costs relating to the cost of buildings, schools, or other
345	345	educational facilities owned by or on behalf of a school district,
346	346	community college district, or other political subdivision of this
347	347	state, railroad or transit facilities, affordable housing, the
348	348	remediation of conditions that contaminate public or private land
349	349	or buildings, the preservation of the facade of a private or public
350	350	building, [or] the demolition of public or private buildings, or
351	351	the construction of a road, sidewalk, or other public
352	352	infrastructure in or out of the zone, including the cost of
353	353	acquiring the real property necessary for the construction of the
354	354	road, sidewalk, or other public infrastructure. An agreement may
355	355	dedicate revenue from the tax increment fund to pay the costs of
356	356	providing affordable housing or areas of public assembly in or out
357	357	of the zone. [An agreement may dedicate revenue from the tax
358	358	increment fund to pay a neighborhood enterprise association for
359	359	providing services or carrying out projects authorized under
360	360	Subchapters E and G, Chapter 2303, Government Code, in the zone.
361	361	The term of an agreement with a neighborhood enterprise association
362	362	may not exceed 10 years.]
363	363	(g) Chapter 252, Local Government Code, does not apply to a
364	364	dedication, pledge, or other use of revenue in the tax increment
365	365	fund for a reinvestment zone [by the board of directors of the zone
366	366	in carrying out its powers] under Subsection (b).
367	367	(h) Subject to the approval of the governing body of the
368	368	municipality or county that created the zone, the board of
369	369	directors of a reinvestment zone, as necessary or convenient to
370	370	implement the project plan and reinvestment zone financing plan and
371	371	achieve their purposes, may establish and provide for the
372	372	administration of one or more programs for the public purposes of
373	373	developing and diversifying the economy of the zone, eliminating
374	374	unemployment and underemployment in the zone, and developing or
375	375	expanding transportation, business, and commercial activity in the
376	376	zone, including programs to make grants and loans [from the tax
377	377	increment fund of the zone in an aggregate amount not to exceed the
378	378	amount of the tax increment produced by the municipality and paid
379	379	into the tax increment fund for the zone] for activities that
380	380	benefit the zone and stimulate business and commercial activity in
381	381	the zone. For purposes of this subsection, on approval of the
382	382	municipality or county, the board of directors of the zone has all
383	383	the powers of a municipality under Chapter 380, Local Government
384	384	Code. The approval required by this subsection may be granted in an
385	385	ordinance or order approving a project plan and reinvestment zone
386	386	financing plan or an amendment to a project plan and reinvestment
387	387	zone financing plan.
388	388	SECTION 11. Section 311.01005, Tax Code, is amended to add a
389	389	new Subsection (f) as follows:
390	390	(f) This section shall not be construed to limit the general
391	391	ability of a zone to finance project costs outside the zone as
392	392	provided in Section 311.002.
393	393	SECTION 12. Section 311.011, Tax Code, is amended by
394	394	amending Subsections (a), (b), (c), (d), and (g) and adding a new
395	395	Subsection (h) as follows:
396	396	(a) The board of directors of a reinvestment zone shall
397	397	prepare and adopt a project plan and a reinvestment zone financing
398	398	plan for the zone and submit the plans to the governing body of the
399	399	municipality or county that created the zone. [The plans must be as
400	400	consistent as possible with the preliminary plans developed for the
401	401	zone before the creation of the board.]
402	402	(b) The project plan must include:
403	403	(1) a [map showing] description of existing uses and
404	404	conditions of real property in the zone and [a map showing] proposed
405	405	[improvements to and proposed] uses of that property;
406	406	(2) proposed changes of zoning ordinances, [the master
407	407	plan of the municipality,] building codes, other municipal
408	408	ordinances, and subdivision rules and regulations, if any, of the
409	409	[municipality or the] county, if applicable; and
410	410	(3) [a list of estimated nonproject costs; and
411	411	[(4)] a statement of a method of relocating persons to
412	412	be displaced, if any, as a result of implementing the plan.
413	413	(c) The reinvestment zone financing plan must include:
414	414	(1) a detailed list describing the estimated project
415	415	costs of the zone, including administrative expenses;
416	416	(2) a statement listing the proposed kind, number, and
417	417	location of all [proposed] public works or public improvements to
418	418	be financed by [in] the zone;
419	419	(3) a finding that the plan is economically feasible
420	420	[an economic feasibility study];
421	421	(4) the estimated amount of bonded indebtedness to be
422	422	incurred;
423	423	(5) the estimated time when related costs or monetary
424	424	obligations are to be incurred;
425	425	(6) a description of the methods of financing all
426	426	estimated project costs and the expected sources of revenue to
427	427	finance or pay project costs, including the percentage of tax
428	428	increment to be derived from the property taxes of each taxing unit
429	429	anticipated to contribute tax increment to the zone that levies
430	430	taxes on real property in the zone;
431	431	(7) the current total appraised value of taxable real
432	432	property in the zone;
433	433	(8) the estimated captured appraised value of the zone
434	434	during each year of its existence; and
435	435	(9) the duration of the zone.
436	436	(d) The governing body of the municipality or county that
437	437	created the zone must approve a project plan or reinvestment zone
438	438	financing plan after its adoption by the board. The approval must
439	439	be by ordinance, in the case of a municipality, or by order, in the
440	440	case of a county, that finds that the plan is feasible [and conforms
441	441	to the master plan, if any, of the municipality or to subdivision
442	442	rules and regulations, if any, of the county].
443	443	(g) [An amendment to the project plan or the reinvestment
444	444	zone financing plan for a zone does not apply to a] A school
445	445	district that participates in a [the] zone is not required to
446	446	increase the percentage or amount of the tax increment to be
447	447	contributed by the school district due to an amendment to the
448	448	project plan or reinvestment zone financing plan for the zone
449	449	unless the governing body of the school district by official action
450	450	approves the amendment[, if the amendment:
451	451	[(1) has the effect of directly or indirectly
452	452	increasing the percentage or amount of the tax increment to be
453	453	contributed by the school district; or
454	454	[(2) requires or authorizes the municipality or county
455	455	creating the zone to issue additional tax increment bonds or
456	456	notes].
457	457	(h) Unless specifically provided otherwise in the project
458	458	plan and reinvestment zone financing plan, all figures contained in
459	459	the plan shall be considered estimates, and shall not act as a
460	460	limitation on the described items, including without limitation
461	461	expenditures relating to project costs and participation by taxing
462	462	units.
463	463	SECTION 13. Section 311.012, Tax Code, is amended to amend
464	464	Subsections (a) and (c) as follows:
465	465	(a) The amount of a taxing unit's tax increment for a year is
466	466	the amount of property taxes levied and assessed by the unit for
467	467	that year on the captured appraised value of real property taxable
468	468	by the unit and located in a reinvestment zone or the amount of
469	469	property taxes levied and collected by the unit for that year on the
470	470	captured appraised value of real property taxable by the unit and
471	471	located in a reinvestment zone. The governing body of a taxing unit
472	472	shall determine which of the methods specified by this subsection
473	473	is used to calculate the amount of the unit's tax increment.
474	474	(c) The tax increment base of a taxing unit is the total
475	475	[appraised] taxable value of all real property taxable by the unit
476	476	and located in a reinvestment zone for the year in which the zone
477	477	was designated under this chapter. If the boundaries of a zone are
478	478	enlarged, the tax increment base shall be increased by the taxable
479	479	value of the real property added to the zone for the year in which
480	480	such property was added. If the boundaries of a zone are reduced,
481	481	the tax increment base shall be reduced by the taxable value of the
482	482	real property removed from the zone for the year in which such
483	483	property was originally included within the zone's boundaries. If
484	484	the municipality creating a zone does not levy an ad valorem tax in
485	485	the year the zone is created, the tax increment base shall be
486	486	determined by the applicable county appraisal district using
487	487	assumptions regarding exemptions and other relevant information
488	488	provided to it by the municipality.
489	489	SECTION 14. Sections 311.013(f), (g) and (l), Tax Code, are
490	490	amended as follows:
491	491	(f) A taxing unit is not required to pay into the tax
492	492	increment fund any of its tax increment produced from property
493	493	located in a reinvestment zone designated under Section 311.005(a)
494	494	or in an area added to a reinvestment zone under Section 311.007
495	495	unless the taxing unit enters into an agreement to do so with the
496	496	governing body of the municipality or county that created the zone.
497	497	A taxing unit may enter into an agreement under this subsection at
498	498	any time before or after the zone is created or enlarged. The
499	499	agreement may include conditions for payment of that tax increment
500	500	into the fund and must specify the portion of the tax increment to
501	501	be paid into the fund and the years for which that tax increment is
502	502	to be paid into the fund. In addition to such other terms as the
503	503	parties may agree, the agreement may specify the projects to which a
504	504	participating taxing unit's tax increment will be dedicated, and
505	505	that the taxing unit's participation may be computed with respect
506	506	to a base year later than the original base year of the zone. The
507	507	agreement and the conditions in the agreement are binding on the
508	508	taxing unit, the municipality or county, and the board of directors
509	509	of the zone.
510	510	(g) Subject to the provisions of Section 311.0125, in lieu
511	511	of permitting a portion of its tax increment to be paid into the tax
512	512	increment fund, and notwithstanding the provisions of Section
513	513	312.203, a taxing unit, including [other than] a municipality
514	514	[city], may elect to offer the owners of taxable real property in a
515	515	reinvestment zone created under this chapter an exemption from
516	516	taxation of all or part of the value of the property. To be
517	517	effective, an [Any] agreement to exempt real property [concerning
518	518	an exemption] from ad valorem taxes under this subsection must be
519	519	approved by:
520	520	(1) the board of directors of the reinvestment zone;
521	521	and
522	522	(2) the governing body of each taxing unit that
523	523	imposes taxes on real property in the reinvestment zone and
524	524	deposits or agrees to deposit any of its tax increment into
525	525	the tax increment fund for the zone [shall be executed in the
526	526	manner and subject to the limitations of Chapter 312;
527	527	provided, however, the property covered by the agreement need
528	528	not be in a zone created pursuant to Chapter 312. A taxing
529	529	unit may not offer a tax abatement agreement to property
530	530	owners in the zone after it has entered into an agreement that
531	531	its tax increments would be paid into the tax increment fund
532	532	pursuant to Subsection (f)].
533	533	(l) The governing body of a municipality or a county that
534	534	designates an area as a reinvestment zone may determine, in the
535	535	designating ordinance or order adopted under Section 311.003 or in
536	536	the ordinance or order adopted under Section 311.011 approving the
537	537	reinvestment zone financing plan for the zone, the portion of the
538	538	tax increment produced by the municipality or the county that the
539	539	municipality or the county is required to pay into the tax increment
540	540	fund for the zone. If a municipality or a county does not determine
541	541	the portion of the tax increment produced by the municipality or the
542	542	county that the municipality or the county is required to pay into
543	543	the tax increment fund for a reinvestment zone, the municipality or
544	544	the county is required to pay into the fund for the zone the entire
545	545	tax increment produced by the municipality or the county, except as
546	546	provided by Subsection (b)(1).
547	547	SECTION 15. Section 311.014(b), Tax Code, is amended to
548	548	read as follows:
549	549	(b) Tax increment and other funds deposited in the tax
550	550	increment fund of the zone shall be administered by the governing
551	551	body of the municipality or county that created the zone or, if
552	552	delegated by the governing body, by the board of directors of the
553	553	zone, to implement the project plan and reinvestment zone financing
554	554	plan of the zone during the life of the zone, as it may be extended,
555	555	and for any period of time the zone remains in existence for
556	556	collection and disbursement pursuant to subsection (d) of Section
557	557	311.016. Money may be disbursed from the fund only to satisfy
558	558	claims of holders of tax increment bonds or notes issued for the
559	559	zone, to pay project costs for the zone, to make payments pursuant
560	560	to an agreement made under Section 311.010(b) or a program under
561	561	Section 311.010(h) dedicating revenue from the tax increment fund,
562	562	or to repay other obligations incurred for the zone.
563	563	SECTION 16. Sections 311.015(a) and (l), Tax Code, are
564	564	amended as follows:
565	565	(a) A municipality or county creating a reinvestment zone
566	566	may issue tax increment bonds or notes, the proceeds of which may be
567	567	used to make payments pursuant to agreements made under Section
568	568	311.010(b), to make payments pursuant to programs under Section
569	569	311.010(h), and to pay project costs for the reinvestment zone on
570	570	behalf of which the bonds or notes were issued, or to satisfy claims
571	571	of holders of the bonds or notes. The municipality or county may
572	572	issue refunding bonds or notes for the payment or retirement of tax
573	573	increment bonds or notes previously issued by it. A municipality
574	574	may issue certificates of obligation under Subchapter C of Chapter
575	575	271, Local Government Code, to pay a zone's project costs in lieu of
576	576	bonds or notes under this subsection, and may use tax increment from
577	577	the zone to pay debt service on the certificates.
578	578	(l) A tax increment bond or note must mature within 20 years
579	579	of the date of issueon or before the date by which the final
580	580	payments of tax increment into the tax increment fund are due.
581	581	SECTION 17. Section 311.016(a), Tax Code, is amended to
582	582	read as follows:
583	583	(a) On or before the 150th [90th] day following the end of
584	584	the fiscal year of the municipality or county, the governing body of
585	585	a municipality or county shall submit to the chief executive
586	586	officer of each taxing unit that levies property taxes on real
587	587	property in a reinvestment zone created by the municipality or
588	588	county a report on the status of the zone. The report must include:
589	589	(1) the amount and source of revenue in the tax
590	590	increment fund established for the zone;
591	591	(2) the amount and purpose of expenditures from the
592	592	fund;
593	593	(3) the amount of principal and interest due on
594	594	outstanding bonded indebtedness;
595	595	(4) the tax increment base and current captured
596	596	appraised value retained by the zone; and
597	597	(5) the captured appraised value shared by the
598	598	municipality or county and other taxing units, the total amount of
599	599	tax increments received, and any additional information necessary
600	600	to demonstrate compliance with the tax increment financing plan
601	601	adopted by the governing body of the municipality or county.
602	602	SECTION 18. Section 311.017, Tax Code, is amended by
603	603	amending Subsection (a) and adding new Subsections (a-1), (c), (d),
604	604	and (e) to read as follows:
605	605	(a) A reinvestment zone terminates on the earlier of:
606	606	(1) the termination date designated in the ordinance
607	607	or order, as applicable, creating the zone or an earlier or later
608	608	termination date designated by an ordinance or order adopted
609	609	[subsequent to the ordinance or order creating the zone] under
610	610	Section 311.007(b); or
611	611	(2) the date on which all project costs, tax increment
612	612	bonds and interest on those bonds, and other obligations have been
613	613	paid in full.
614	614	(a-1) Notwithstanding the designation of a later
615	615	termination date under Section 311.007(b), a taxing unit that taxes
616	616	real property located in the zone, other than the municipality or
617	617	county that created the zone, is not required to pay any of its tax
618	618	increment into the tax increment fund for the zone for any tax year
619	619	after the termination date designated in the ordinance or order
620	620	creating the zone unless the governing body of the taxing unit
621	621	enters into an agreement to do so with the governing body of the
622	622	municipality or county that created the zone.
623	623	(c) With respect to a zone established under Section
624	624	311.0031, the tax increment reinvestment zone shall terminate on
625	625	the date specified in the ordinance or order designating the zone as
626	626	a tax increment reinvestment zone for the expiration of the tax
627	627	increment aspects of the zone, notwithstanding the prior expiration
628	628	of the original designation of the area under the specified law.
629	629	(d) Subject to the provisions of subsection (a-1), if tax
630	630	increment bonds or obligations of the zone are outstanding when the
631	631	zone terminates, the zone shall remain in existence solely for the
632	632	purpose of collecting and disbursing tax increment with respect to
633	633	tax years during the designated term of the zone, as it may have
634	634	been extended. Such funds shall be used to pay its obligations or
635	635	the tax increment bonds. Notwithstanding the provisions of this
636	636	subsection, or the extension to the term of a zone pursuant to
637	637	Section 311.007, the termination date of a zone for purposes of any
638	638	contract entered into by the board, or by the municipality or county
639	639	that designated the zone, shall remain the termination date
640	640	designated by ordinance or order in effect on the date the contract
641	641	was executed, unless a subsequent amendment to the contract
642	642	expressly provides otherwise.
643	643	(e) After termination of the zone, the governing body of the
644	644	city or the county that created the zone, may continue the zone for
645	645	an additional period for the purpose of continuing the
646	646	implementation of the project plan and reinvestment zone financing
647	647	plan. In such event, although tax increment shall cease to be
648	648	deposited with respect to tax years following termination, the zone
649	649	shall retain all remaining funds, property and assets of the zone to
650	650	be used to implement the plans as authorized by the governing body.
651	651	SECTION 19. Chapter 311, Tax Code, is amended by adding a
652	652	new Section 311.021, as follows:
653	653	Sec. 311.021. ACT OR PROCEEDING PRESUMED VALID. (a) A
654	654	governmental act or proceeding relating to the designation,
655	655	operation, or administration of a reinvestment zone or
656	656	implementation of a project plan or reinvestment zone financing
657	657	plan under this chapter of a municipality or county, zone board, or
658	658	an entity acting pursuant to Section 311.010(f), is conclusively
659	659	presumed, as of the date it occurred, valid and to have occurred in
660	660	accordance with all applicable statutes and rules if:
661	661	(1) the second anniversary of the effective date of
662	662	the act or proceeding has expired; and
663	663	(2) a lawsuit to annul or invalidate the act or
664	664	proceeding has not been filed on or before the later of that second
665	665	anniversary or August 1, 2009.
666	666	(b) This section does not apply to:
667	667	(1) an act or proceeding that was void at the time it
668	668	occurred;
669	669	(2) an act or proceeding that, under a statute of this
670	670	state or the United States, was a misdemeanor or felony at the time
671	671	the act or proceeding occurred;
672	672	(3) a rule that, at the time it was passed, was
673	673	preempted by a statute of this state or the United States, including
674	674	Section 1.06 or 109.57, Alcoholic Beverage Code; or
675	675	(4) a matter that on the effective date of this
676	676	section:
677	677	(A) is involved in litigation if the litigation
678	678	ultimately results in the matter being held invalid by a final
679	679	judgment of a court; or
680	680	(B) has been held invalid by a final judgment of a
681	681	court.
682	682	SECTION 20. (a) The following provisions of the Tax Code
683	683	are repealed:
684	684	(1) Section 311.003(e), (f), and (g);
685	685	(2) Section 311.006;
686	686	(3) Sections 311.013(d) and (e); and
687	687	(4) Section 311.016(b) as amended by Acts 2005, 79th
688	688	Leg., R.S., Ch. 977, Sec. 2.
689	689	(b) Section 403.302(d)(5), Government Code, is repealed.
690	690	SECTION 21. Section 42.2516, Education Code, is amended by
691	691	amending subsection (b) to read as follows:
692	692	(b) Subject to Subsections (b-1), (b-2), (f-1), (g), and
693	693	(h), but notwithstanding any other provision of this title, a
694	694	school district is entitled to state revenue necessary to provide
695	695	the district with the sum of:
696	696	(1) the amount of state revenue necessary to maintain
697	697	state and local revenue per student in weighted average daily
698	698	attendance in the amount equal to the greater of:
699	699	(A) the amount of state and local revenue per
700	700	student in weighted average daily attendance for the maintenance
701	701	and operations of the district available to the district for the
702	702	2005-2006 school year;
703	703	(B) the amount of state and local revenue per
704	704	student in weighted average daily attendance for the maintenance
705	705	and operations of the district to which the district would have been
706	706	entitled for the 2006-2007 school year under this chapter, as it
707	707	existed on January 1, 2006, or, if the district would have been
708	708	subject to Chapter 41, as that chapter existed on January 1, 2006,
709	709	the amount to which the district would have been entitled under that
710	710	chapter, based on the funding elements in effect for the 2005-2006
711	711	school year, if the district imposed a maintenance and operations
712	712	tax at the rate adopted by the district for the 2005 tax year; or
713	713	(C) the amount of state and local revenue per
714	714	student in weighted average daily attendance for the maintenance
715	715	and operations of the district to which the district would have been
716	716	entitled for the 2006-2007 school year under this chapter, as it
717	717	existed on January 1, 2006, or, if the district would have been
718	718	subject to Chapter 41, as that chapter existed on January 1, 2006,
719	719	the amount to which the district would have been entitled under that
720	720	chapter, based on the funding elements in effect for the 2005-2006
721	721	school year, if the district imposed a maintenance and operations
722	722	tax at the rate equal to the rate described by Section 26.08(i) or
723	723	(k)(1), Tax Code, as applicable, for the 2006 tax year;
724	724	(2) an amount equal to the product of $2,500
725	725	multiplied by the number of classroom teachers, full-time
726	726	librarians, full-time counselors certified under Subchapter B,
727	727	Chapter 21, and full-time school nurses employed by the district
728	728	and entitled to a minimum salary under Section 21.402; [and]
729	729	(3) an amount equal to the product of $275 multiplied
730	730	by the number of students in average daily attendance in grades nine
731	731	through 12 in the district; and
732	732	(4) an amount equal to the amount a district was
733	733	contractually obligated to pay into a tax increment fund for a
734	734	reinvestment zone under Section 311, Tax Code, at the tax rate
735	735	adopted for the 2005 tax year less the amount the district was
736	736	contractually obligated to pay into the tax increment fund in the
737	737	current year at the tax rate adopted for the current year.
738	738	SECTION 22. Section 42.253, Education Code, is amended by
739	739	adding a new subsection (c-1) as follows:
740	740	(c-1) The amounts to be paid pursuant to Section
741	741	42.2516(b)(4) shall be paid at the same time as other state revenue
742	742	is paid to the district. Payments shall be based on amounts to be
743	743	paid pursuant to Section 42.2516(b)(4) of the previous year. Any
744	744	deficiency shall be paid to the district at the time the final
745	745	amount to be paid to the district is determined and any overpayment
746	746	shall be deducted from the payments the district would otherwise
747	747	receive in the next year.
748	748	SECTION 23. (a) The legislature validates and confirms all
749	749	governmental acts and proceedings that were taken before the
750	750	effective date of this Act and relate to or are associated with the
751	751	designation, operation, or administration of a reinvestment zone or
752	752	implementation of a project plan or reinvestment zone financing
753	753	plan under Chapter 311, Tax Code, of a municipality or county, zone
754	754	board, or an entity acting pursuant to Section 311.010(f),
755	755	including the extension of the term of a reinvestment zone, as of
756	756	the dates on which they occurred. The acts and proceedings may not
757	757	be held invalid because they were not in accordance with Chapter
758	758	311, Tax Code, or other law.
759	759	(b) Subsection (a) of this section does not apply to any
760	760	matter that on the thirtieth day following the effective date of
761	761	this Act:
762	762	(1) is involved in litigation if the litigation
763	763	ultimately results in the matter being held invalid by a final
764	764	judgment of a court; or
765	765	(2) has been held invalid by a final judgment of a
766	766	court.
767	767	SECTION 24. APPLICATION OF CERTAIN PROVISIONS. Section 1,
768	768	amending Section 311.002(1), Tax Code, shall apply to all tax
769	769	increment reinvestment zones expenditures, regardless of when they
770	770	were incurred. Section 13, amending Section 311.012(c), Tax Code,
771	771	shall apply only to base years established after the effective date
772	772	of this Act; provided that any tax increment reinvestment zone base
773	773	years established prior to the effective date of this Act using the
774	774	base year as established in the amendment in Section 13 are
775	775	validated and shall continue in effect as if established after the
776	776	effective date of this Act.
777	777	SECTION 25. EFFECTIVE DATE. This Act takes effect
778	778	immediately if it receives a vote of two-thirds of all the members
779	779	elected to each house, as provided by Section 39, Article III, Texas
780	780	Constitution. If this Act does not receive the vote necessary for
781	781	immediate effect, this Act takes effect September 1, 2009.