Texas 2025 - 89th Regular

Texas House Bill HB2878

Filed

2/14/25

Out of House Committee

Voted on by House

Out of Senate Committee

Voted on by Senate

Governor Action

Bill Becomes Law

Caption

Relating to the use of revenue in the tax increment fund for certain tax increment financing reinvestment zones for the acquisition, construction, or reconstruction of an educational facility.

Impact

The enactment of HB2878 modifies Chapter 311 of the Texas Tax Code, introducing Section 311.0086. This section specifies the conditions under which municipalities and counties may collaborate with school districts for the repurposing of tax increment funds. Starting in the 2025-2026 school year, it ensures that a school district will receive state funds equivalent to the contributions it must make to the tax increment fund, thereby easing potential financial burdens on the districts involved in such agreements. This local-state financial synergy could enhance the capacity of districts to expand or improve their facilities.

Summary

House Bill 2878 addresses the utilization of revenue generated in tax increment financing reinvestment zones specifically for educational facilities. The bill establishes provisions that permit municipalities and counties to enter agreements with school districts to allocate funds from the tax increment fund for the procurement, development, or renovation of educational facilities. This aligns state financial resources with local education needs, allowing for more targeted investment in educational infrastructure in designated areas. The proposal particularly focuses on larger zones and properties that have been committed to school district purposes.

Contention

While the bill is aimed at strengthening educational facilities, there may be opposition regarding the potential over-reliance on tax increment financing as a primary source of funding for education. Critics might argue that linking educational funding too closely to real estate development initiatives could divert attention from other essential funding sources, creating disparities in educational quality depending on local financial interests. Furthermore, this bill could raise questions about the autonomy of school districts in managing their financial affairs without excessive influence from municipal or county decisions.

Texas Constitutional Statutes Affected

Tax Code

Chapter 311. Tax Increment Financing Act
- Section: New Section

Education Code

Chapter 48. Foundation School Program
- Section: New Section

Companion Bills

No companion bills found.

Previously Filed As

TX HB4433

Relating to the authority of the board of directors of a tax increment financing reinvestment zone to use money in the tax increment fund established for the zone to compensate certain homeowners for the increase in taxes associated with the zone.

TX SB1096

Relating to the treatment of certain residence homesteads for purposes of the Tax Increment Financing Act.

TX HB4473

Relating to the calculation of ad valorem tax rates by certain taxing units that participate in one or more reinvestment zones for tax increment financing.

TX HB774

Relating to the ad valorem tax appraisal of an older residence homestead located in or near a tax increment financing reinvestment zone.

TX SB42

Relating to the calculation of certain ad valorem tax rates of a taxing unit for a year in which a property owner provides notice that the owner intends to appeal an order of an appraisal review board determining a protest by the owner regarding the appraisal of the owner's property.

TX HB5012

Relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects.

TX HB2993

Relating to the eligibility of certain property located in a reinvestment zone for certain ad valorem tax incentives.

TX HB739

Relating to provisions applicable to affordable housing located in a reinvestment zone in certain areas of the state; authorizing a fee.

TX HB4429

Relating to the duty of a school district to enter into an ad valorem tax abatement agreement under the Property Redevelopment and Tax Abatement Act for certain property.

TX HB5

Relating to agreements authorizing a limitation on taxable value of certain property to provide for the creation of jobs and the generation of state and local tax revenue; authorizing fees; authorizing penalties.