85R7707 SMH-D
By: Bettencourt S.B. No. 650
A BILL TO BE ENTITLED
AN ACT
relating to tax increment financing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 311.005, Tax Code, is amended by
amending Subsection (a) and adding Subsection (c) 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 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 or undeveloped 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 that is:
(A) 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; and
(B) unproductive, underdeveloped, or blighted.
(c) The attorney general shall determine, by application of
accepted legal principles, the meaning of "unproductive,"
"underdeveloped," and "blighted" for purposes of Subsection (a)(4)
and by rule define those terms.
SECTION 2. Section 311.0085(c), Tax Code, is amended to
read as follows:
(c) In addition to exercising the powers described by
Section 311.008, a municipality may enter into a new agreement, or
amend an existing agreement, with a school district that is located
in whole or in part in a reinvestment zone created by the
municipality to dedicate revenue from the tax increment fund to the
school district for acquiring, constructing, or reconstructing an
educational facility located in [or outside of] the zone.
SECTION 3. Section 311.010(b), Tax Code, is amended to read
as follows:
(b) The board of directors of a reinvestment zone and the
governing body of the municipality or county that creates a
reinvestment zone may each enter into agreements as the board or the
governing body considers necessary or convenient to implement the
project plan and reinvestment zone financing plan and achieve their
purposes. An agreement may provide for the regulation or
restriction of the use of land by imposing conditions,
restrictions, or covenants that run with the land. An agreement may
during the term of the agreement dedicate, pledge, or otherwise
provide for the use of revenue in the tax increment fund to pay any
project costs that benefit the reinvestment zone, including project
costs relating to the cost of buildings, schools, or other
educational facilities owned by or on behalf of a school district,
community college district, or other political subdivision of this
state, railroad or transit facilities, affordable housing, the
remediation of conditions that contaminate public or private land
or buildings, the preservation of the facade of a private or public
building, 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.
SECTION 4. Section 311.015, Tax Code, is amended by adding
Subsections (m) and (n) to read as follows:
(m) Not later than the seventh day before the date of the
meeting at which the governing body of the municipality will vote on
an ordinance to issue tax increment bonds or notes, the
municipality must provide notice of the date, time, and place of the
meeting by delivering the notice by mail to:
(1) each property owner in the municipality;
(2) the commissioners court of each county in which a
portion of the reinvestment zone is located; and
(3) each state senator and representative whose
district includes territory in a county in which a portion of the
reinvestment zone is located.
(n) At the time a municipality submits tax increment bonds
and the record of proceedings relating to the authorization of the
bonds to the attorney general under Section 1202.003, Government
Code, the municipality must deliver notice of the submission by
mail to:
(1) the commissioners court of each county in which a
portion of the reinvestment zone is located; and
(2) each state senator and representative whose
district includes territory in a county in which a portion of the
reinvestment zone is located.
SECTION 5. Chapter 311, Tax Code, is amended by adding
Section 311.0155 to read as follows:
Sec. 311.0155. ATTORNEY GENERAL DETERMINATION REGARDING
REINVESTMENT ZONE. (a) A municipality designating a reinvestment
zone may not undertake the initial issuance of tax increment bonds
for the zone unless:
(1) the municipality provides evidence to the attorney
general demonstrating that the zone:
(A) meets the requirements of Section 311.005;
and
(B) is not ineligible for designation as a
reinvestment zone under Section 311.006; and
(2) the attorney general determines that the evidence
is legally sufficient.
(b) The attorney general shall provide a legal sufficiency
determination not later than the 60th business day after the date
the evidence required by Subsection (a) is received. If the
attorney general cannot provide a legal sufficiency determination
within the 60-business-day period, the attorney general shall
notify the municipality in writing of the reason for the delay and
may extend the review period for not more than 30 business days.
(c) After the attorney general issues a legal sufficiency
determination, the municipality may supplement the evidence
submitted or amend the ordinance designating the reinvestment zone
to facilitate a redetermination by the attorney general of the
prior legal sufficiency determination issued under this section.
(d) The attorney general may adopt rules as necessary to
implement this section.
SECTION 6. Sections 311.01005 and 311.014(f), Tax Code, are
repealed.
SECTION 7. The attorney general shall adopt rules under
Section 311.005(c), Tax Code, as added by this Act, not later than
January 1, 2018.
SECTION 8. Section 311.005(a), Tax Code, as amended by this
Act, applies only to a reinvestment zone designated on or after the
date the rules adopted under Section 311.005(c), Tax Code, as added
by this Act, take effect. A reinvestment zone designated before the
date the rules adopted under Section 311.005(c), Tax Code, as added
by this Act, take effect is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 9. Sections 311.0085(c) and 311.010(b), Tax Code,
as amended by this Act, apply only to a new agreement entered into
on or after the effective date of this Act or an amendment on or
after the effective date of this Act to an existing agreement. A
new agreement entered into before the effective date of this Act or
an amendment before the effective date of this Act to an existing
agreement is governed by the law as it existed immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 10. The repeal of Section 311.01005, Tax Code, by
this Act does not affect an agreement described by former Section
311.01005(c), Tax Code, that is entered into before the effective
date of this Act. An agreement described by former Section
311.01005(c), Tax Code, that is entered into before the effective
date of this Act is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
SECTION 11. The repeal of Section 311.014(f), Tax Code, by
this Act does not affect a transfer of money described by that
subsection that occurs before the effective date of this Act. A
transfer of money described by former Section 311.014(f), Tax Code,
that occurs before the effective date of this Act is governed by the
law as it existed immediately before the effective date of this Act,
and that law is continued in effect for that purpose.
SECTION 12. Section 311.015(m), Tax Code, as added by this
Act, applies only to a meeting to vote on an ordinance to issue tax
increment bonds or notes that is held on or after the effective date
of this Act. A meeting to vote on an ordinance to issue tax
increment bonds or notes that is held before the effective date of
this Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 13. Section 311.015(n), Tax Code, as added by this
Act, applies only to tax increment bonds that are submitted to the
attorney general for approval on or after the effective date of this
Act. Tax increment bonds that are submitted to the attorney general
for approval before the effective date of this Act are governed by
the law as it existed immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 14. Section 311.0155, Tax Code, as added by this
Act, applies only to an initial issuance of tax increment bonds for
a reinvestment zone that is undertaken on or after the effective
date of this Act. An initial issuance of tax increment bonds for a
reinvestment zone that is undertaken before the effective date of
this Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 15. This Act takes effect September 1, 2017.