Texas Senate Bill SB1633

Texas 2009 - 81st Regular

• Out of Senate Committee: 4/7/09
• Voted on by Senate: 4/16/09
• Out of House Committee: 5/18/09
• Voted on by House: 5/26/09
• Governor Action: 6/19/09
• Enrolled: 5/27/09
• Passed: 6/19/09

Caption

Relating to certain restrictions on the composition of a tax increment financing reinvestment zone.

Impact

The enactment of this bill would notably change the landscape for property development and economic strategy in Texas municipalities. By restricting the creation of TIF zones, which are often used to incentivize economic development in blighted or underdeveloped areas, SB1633 could hinder potential economic growth opportunities. Such limitations may lead to fewer local developments where economic revitalization is needed, ultimately affecting job creation and local tax revenues. Additionally, smaller or less affluent municipalities may find themselves at a disadvantage in competing for business investments compared to larger municipalities that can navigate these restrictions more effectively.

Summary

S.B. No. 1633 aims to impose restrictions on the creation of tax increment financing (TIF) reinvestment zones by municipalities in Texas. The bill delineates specific criteria regarding the use of property within a proposed reinvestment zone, particularly addressing zones with significant residential property involvement. Under the new regulations, a municipality cannot establish a reinvestment zone if more than 10 percent of the property in that zone is utilized for residential purposes. Furthermore, there are thresholds concerning the total appraised value of taxable real property within the proposed zones and existing zones, depending on the municipality's size and location in relation to major urban centers.

Contention

The discussions surrounding SB1633 indicate a clear divide among stakeholders. Proponents argue that setting these restrictions is necessary to maintain appropriate land-use balance and ensure that TIF zones are not disproportionately dominated by residential areas. They contend that the focus should remain on commercial and industrial development. Conversely, opponents raise concerns about the potential negative impact on local economies, particularly in areas that may rely more heavily on incentivized development to stimulate growth. The bill has sparked debate on how municipalities can best manage their development and economic strategies while balancing the need for residential space.