By: West S.B. No. 1947
A BILL TO BE ENTITLED
AN ACT
relating to the authority of two or more municipalities to
designate a joint tax increment financing reinvestment zone.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 for identification
purposes, 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 restrictions applicable to other reinvestment zones
under Section 311.006 apply to a joint reinvestment zone designated
under this section.
(d) 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.
(e) 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.
(f) 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.
(g) 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 2. 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.
COMMITTEE AMENDMENT NO. 1
Amend S.B. 1947 No. by striking all below the enacting clause
and substituting the following:
SECTION 1. Section 311.002(1), Tax Code, is amended to read
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 designating
[establishing] a reinvestment zone that are listed in the project
plan as costs of public works, [or] public improvements, programs,
or other projects benefiting [in] 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 actual costs
of the preservation of the facade of a public or private building;
the actual costs of 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) the costs of a program described by Section
311.010(h);
(L) the costs of school buildings, other
educational buildings, other educational facilities, or other
buildings owned by or on behalf of a school district, community
college district, or other political subdivision of this state;
(M) the costs of providing affordable housing or
areas of public assembly in or outside 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 to read 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 determines
that the tracts included in the area 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 of a municipality that
annexes an area in a zone after the area is included in the zone is
computed as if the area were located in the corporate limits of the
municipality at the time the area was included in the zone.
(b) Before adopting an ordinance or order designating
[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 designating [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 to read as
follows:
Sec. 311.007. CHANGING BOUNDARIES OR TERM OF EXISTING
ZONE. (a) The [Subject to the limitations provided by Section
311.006, if applicable, 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 designated [created] the zone.
(b) The governing body of the municipality or county that
designated a reinvestment zone by ordinance or resolution or by
order or resolution, respectively, may extend the term of all or a
portion of the zone after notice and hearing in the manner provided
for the designation of the zone. A taxing unit other than the
municipality or county that designated the zone is not required to
participate in the zone or portion of the zone for the extended term
unless the taxing unit enters into a written agreement to do so [may
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 by
amending Subsection (b) and adding Subsections (f) and (g) to read
as follows:
(b) A municipality or county may exercise any power
necessary and convenient to carry out this chapter, including the
power to:
(1) cause project plans to be prepared, approve and
implement the plans, and otherwise achieve the purposes of the
plan;
(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 project plans;
(3) enter into agreements, including agreements with
bondholders, determined by the governing body of the municipality
or county to be necessary or convenient to implement project plans
and achieve their purposes, which agreements may include
conditions, restrictions, or covenants that run with the land or
that by other means regulate or restrict the use of land; and
(4) consistent with the project plan for the zone:
(A) acquire blighted, deteriorated,
deteriorating, undeveloped, or inappropriately developed real
property or other property in a blighted area or in a federally
assisted new community in the zone for the preservation or
restoration of historic sites, beautification or conservation, the
provision of public works or public facilities, or other public
purposes;
(B) acquire, construct, reconstruct, or install
public works, facilities, or sites or other public improvements,
including utilities, streets, street lights, water and sewer
facilities, pedestrian malls and walkways, parks, flood and
drainage facilities, or parking facilities, but not including
educational facilities; or
(C) in a reinvestment zone created on or before
September 1, 1999, acquire, construct, or reconstruct educational
facilities in the municipality.
(f) The governing body of a municipality or county may
impose a fee:
(1) on property owners who submit a petition under
Section 311.005(a)(4) for processing the petition; or
(2) for reviewing a project designated or proposed to
be designated under this chapter.
(g) A fee under Subsection (f) must be reasonably related to
the estimated cost to the municipality or county of processing the
petition or reviewing the project, respectively.
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 designated [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 for the zone. A unit may waive its right to appoint a
director. The governing body of the municipality or county that
designated [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 municipality or county that designated
the zone may provide that the board of directors of the zone
consists of nine members appointed as provided by this subsection,
unless more than nine members are required to comply with this
subsection. Each taxing unit [school district, county, or
municipality], other than the municipality or county that
designated [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 for the zone. 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. If fewer than seven taxing units, other than the
municipality or county that designated the zone, are eligible to
appoint members of the board of directors of the zone, the
municipality or county may appoint a number of members of the board
such that the board comprises nine members. If at least seven taxing
units, other than the municipality or county that designated the
zone, are eligible to appoint members of the board of directors of
the zone, the municipality or county may appoint one member. [The
remaining members of the board arc 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 designated
[created] the zone, an individual must:
(1) if the board is covered by Subsection (a):
(A) be a resident of this state and a citizen of
the United States [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. Section 311.0091, Tax Code, is amended by
amending Subsection (f) and adding 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.
SECTION 10. Sections 311.010(b), (g), and (h), Tax Code,
are amended to read as follows:
(b) The board of directors of a reinvestment zone and the
governing body of the municipality or county that designates
[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 designated [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, in the case of a zone designated by a
municipality, or in an order, in the case of a zone designated by a
county, approving a project plan or reinvestment zone financing
plan or approving an amendment to a project plan or reinvestment
zone financing plan.
SECTION 11. Section 311.01005, Tax Code, is amended by
adding Subsection (f) to read as follows:
(f) This section does not limit the power of the board of
directors of a reinvestment zone or the governing body of the
municipality that designates a reinvestment zone to dedicate,
pledge, or otherwise provide for the use of revenue in the tax
increment fund for the zone to finance the costs of a project
involving real property located outside the zone.
SECTION 12. Section 311.011, Tax Code, is amended by
amending Subsections (a), (b), (c), (d), and (g) and adding
Subsection (h) to read 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 designated [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 description of [map showing] 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
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
designated [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) A [An amendment to the project plan or the reinvestment
zone financing plan for a zone does not apply to 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 because of 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 plan, all
amounts contained in the project plan or reinvestment zone
financing plan, including amounts of expenditures relating to
project costs and amounts relating to participation by taxing
units, are considered estimates and do not act as a limitation on
the described items.
SECTION 13. Sections 311.012(a) and (c), Tax Code, are
amended to read 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
taxable [appraised] 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 is increased by the taxable value
of the real property added to the zone for the year in which the
property was added. If the boundaries of a zone are reduced, the tax
increment base is reduced by the taxable value of the real property
removed from the zone for the year in which the property was
originally included in the zone's boundaries. If the municipality
that designates a zone does not levy an ad valorem tax in the year in
which the zone is designated, the tax increment base is determined
by the appraisal district in which the zone is located using
assumptions regarding exemptions and other relevant information
provided to the appraisal district by the municipality.
SECTION 14. Sections 311.013(f), (g), (l), and (n), Tax
Code, are amended to read 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 designated
[created] the zone. A taxing unit may enter into an agreement under
this subsection at any time before or after the zone is designated
[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 any other terms to which 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 designated [created] under this chapter an
exemption from taxation of all or part of the value of the property.
To be effective, an [Any] agreement under this subsection to exempt
real property [concerning an exemption] from ad valorem taxes 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 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 county that the
municipality or county is required to pay into the tax increment
fund for the zone. If a municipality or county does not determine
the portion of the tax increment produced by the municipality or
county that the municipality or county is required to pay into the
tax increment fund for a reinvestment zone, the municipality or
county is required to pay into the fund for the zone the entire tax
increment produced by the municipality or county, except as
provided by Subsection (b)(1).
(n) This subsection applies only to a school district whose
taxable value computed under Section 403.302(d), Government Code,
is reduced in accordance with Subdivision (4) [(5)] of that
subsection. In addition to the amount otherwise required to be paid
into the tax increment fund, the district shall pay into the fund an
amount equal to the amount by which the amount of taxes the district
would have been required to pay into the fund in the current year if
the district levied taxes at the rate the district levied in 2005
exceeds the amount the district is otherwise required to pay into
the fund in the year of the reduction[, not to exceed the amount the
school district realizes from the reduction in the school
district's taxable value under Section 403.302(d)(5), Government
Code].
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 designated 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 for the zone during the term of the zone, as it may be extended,
and for any period in which the zone remains in existence for
collection and disbursement pursuant to Section 311.017(d). 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 to read as follows:
(a) A municipality or county designating [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), 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. In lieu of issuing bonds or notes under this
subsection, a municipality may issue certificates of obligation
under Subchapter C, Chapter 271, Local Government Code, to pay the
project costs for a zone and may use tax increment from the zone to
pay debt service on the certificates.
(l) A tax increment bond or note must mature on or before the
date by which the final payments of tax increment into the tax
increment fund are due [within 20 years of the date of issue].
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 311.016(b), Tax Code, as amended by
Chapters 977 (H.B. 1820) and 1094 (H.B. 2120), Acts of the 79th
Legislature, Regular Session, 2005, is reenacted to read as
follows:
(b) The municipality or county shall send a copy of a report
made under this section to:
(1) the attorney general; and
(2) the comptroller.
SECTION 19. Section 311.017, Tax Code, is amended by
amending Subsection (a) and adding 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, designating [creating] the zone or an
earlier or later termination date designated by an ordinance or
order adopted under Section 311.007(b) [subsequent to the ordinance
or order creating the zone]; 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
designating 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 designated the zone.
(c) A zone designated under other law as described by
Section 311.0031 terminates for purposes of this chapter on the
date specified in the ordinance or order designating the zone as a
reinvestment zone under this chapter, regardless of whether the
zone has terminated under the other law under which the zone was
originally designated.
(d) Subject to Subsection (a-1), if tax increment bonds or
other obligations issued or incurred for the zone are outstanding
when the zone terminates, the zone remains 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. Those funds shall be used to pay the tax increment
bonds or other obligations issued or incurred for the zone.
Notwithstanding the other provisions of this subsection or the
extension of the term of a zone under 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, remains 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
municipality or county that designated the zone may continue the
zone for an additional period for the purpose of continuing the
implementation of the reinvestment zone project plan and financing
plan. In that event, although tax increment shall cease to be
deposited with respect to tax years following termination of the
zone, 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 20. Chapter 311, Tax Code, is amended by adding
Section 311.021 to read as follows:
Sec. 311.021. ACT OR PROCEEDING PRESUMED VALID. (a) A
governmental act or proceeding of a municipality or county, the
board of directors of a reinvestment zone, or an entity acting under
Section 311.010(f) relating to the designation, operation, or
administration of a reinvestment zone or the implementation of a
project plan or reinvestment zone financing plan under this chapter
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 the Act
enacting 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 21. Section 42.2516(b), Education Code, is amended
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 the district is
required to pay into the tax increment fund for a reinvestment zone
under Section 311.013(n), Tax Code, in the current tax year.
SECTION 22. Section 42.253, Education Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) The amounts to be paid under 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 paid under Section
42.2516(b)(4) for the preceding year. Any deficiency shall be paid
to the district at the same 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 following
year.
SECTION 23. Sections 403.302(d) and (i), Government Code,
are amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) [for a school district for which a deduction from
taxable value is made under Subdivision (4), an amount equal to the
taxable value required to generate revenue when taxed at the school
district's current tax rate in an amount that, when added to the
taxes of the district paid into a tax increment fund as described by
Subdivision (4)(B), is equal to the total amount of taxes the
district would have paid into the tax increment fund if the district
levied taxes at the rate the district levied in 2005;]
[(6)] the total dollar amount of any captured
appraised value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(6) [(7)] the total dollar amount of any exemptions
granted under Section 11.251 or 11.253, Tax Code;
(7) [(8)] the difference between the comptroller's
estimate of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) [(9)] the portion of the appraised value of
residence homesteads of individuals who receive a tax limitation
under Section 11.26, Tax Code, on which school district taxes are
not imposed in the year that is the subject of the study, calculated
as if the residence homesteads were appraised at the full value
required by law;
(9) [(10)] a portion of the market value of property
not otherwise fully taxable by the district at market value because
of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(10) [(11)] the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) [(12)] the appraised value of property the
collection of delinquent taxes on which is deferred under Section
33.06, Tax Code;
(12) [(13)] the portion of the appraised value of
property the collection of delinquent taxes on which is deferred
under Section 33.065, Tax Code; and
(13) [(14)] the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
(i) If the comptroller determines in the annual study that
the market value of property in a school district as determined by
the appraisal district that appraises property for the school
district, less the total of the amounts and values listed in
Subsection (d) as determined by that appraisal district, is valid,
the comptroller, in determining the taxable value of property in
the school district under Subsection (d), shall for purposes of
Subsection (d)(13) [(d)(14)] subtract from the market value as
determined by the appraisal district of residence homesteads to
which Section 23.23, Tax Code, applies the amount by which that
amount exceeds the appraised value of those properties as
calculated by the appraisal district under Section 23.23, Tax Code.
If the comptroller determines in the annual study that the market
value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is not valid, the
comptroller, in determining the taxable value of property in the
school district under Subsection (d), shall for purposes of
Subsection (d)(13) [(d)(14)] subtract from the market value as
estimated by the comptroller of residence homesteads to which
Section 23.23, Tax Code, applies the amount by which that amount
exceeds the appraised value of those properties as calculated by
the appraisal district under Section 23.23, Tax Code.
SECTION 24. Section 373A.151(b), Local Government Code, is
amended to read as follows:
(b) In addition to other provisions of this subchapter that
modify or supersede the application of Chapter 311, Tax Code, to a
zone established under this subchapter, Section [Sections] 311.005
[and 311.006], Tax Code, does [do] not apply to a zone established
under this subchapter.
SECTION 25. Sections 311.003(e), (f), and (g), 311.006, and
311.013(d) and (e), Tax Code, are repealed.
SECTION 26. (a) The legislature validates and confirms all
governmental acts and proceedings of a municipality or county, the
board of directors of a reinvestment zone, or an entity acting under
Section 311.010(f), Tax Code, 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
the implementation of a project plan or reinvestment zone financing
plan under Chapter 311, Tax Code, 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 30th day after 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 27. (a) Section 311.002(1), Tax Code, as amended by
this Act, applies to all costs described by that subdivision
regardless of when they were incurred.
(b) Section 311.0091, Tax Code, as amended by this Act,
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.
(c) Section 311.012(c), Tax Code, as amended by this Act,
applies only to the determination of the tax increment base of a
taxing unit for a tax year beginning on or after the effective date
of this Act, except that if the tax increment base of a taxing unit
for a tax year beginning before the effective date was determined in
the manner provided by Section 311.012(c), Tax Code, as amended by
this Act, the determination is validated as if the amendment were in
accordance with Section 311.012(c), Tax Code, as that section
existed immediately before the effective date of this Act.
SECTION 28. Section 42.2516, Education Code, as amended by
this Act, applies as if Subsection (b)(4) of that section were in
effect in the state fiscal year beginning September 1, 2006, and any
amounts due a school district under Subsection (b)(4) of that
section for the state fiscal years beginning September 1, 2006,
September 1, 2007, and September 1, 2008, shall be paid to the
district in the state fiscal year beginning September 1, 2009, at
the time payments are made to the district under Section 42.259(f),
Education Code.
SECTION 29. 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.
Oliveira