HBA-JRA H.B. 2684 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2684 By: Coleman Ways & Means 3/28/1999 Introduced BACKGROUND AND PURPOSE A tax increment reinvestment zone is a special district created by a local governmental entity to revitalize an area by using the tax increment generated by economic development to finance debt service on bonds used to revitalize the zone. H.B. 2684 authorizes the municipality of a reinvestment zone, as well as a reinvestment board, to implement project plans, and authorizes a reinvestment board to enter into tax abatement agreements. It also further specifies the powers and duties of a local government corporation acting of behalf of local government. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 311.010(b), Tax Code, to authorize the municipality of a reinvestment zone to enter into agreements on the conditions and for a term the board of directors of the reinvestment zone (board) or municipality considers necessary or convenient to implement the project plan and reinvestment zone financing plan and achieve their purposes. Authorizes an agreement to pledge revenue in the tax increment fund for the term of the agreement to be used to pay any project costs which benefit the reinvestment zone, whether located within or outside the zone, including the cost of school buildings and other educational facilities, rail or transit facilities, affordable housing, remediating conditions contaminating public or private land or buildings, preserving the facades of demolishing public or private buildings, as well as replacing housing or areas of public assembly. SECTION 2. Amends Section 311.011, Tax Code, by adding Subsections (d), (e), (f), and (g), as follows: (d) Authorizes the board to exercise any of the powers granted to the municipality by Section 311.008 (Powers of Municipality) and the municipality to restrict by ordinance or resolution any power the board is granted by this chapter (Tax Increment Financing Act). (e) Authorizes a taxing unit to enter into a tax abatement agreement with personal or real property owners in the reinvestment zone after it has agreed to pay its tax increments into the tax increment fund. Provides that such an agreement must be approved by the board. (f) Authorizes the board to exercise the powers set forth in this section after the municipality adopts an ordinance creating the zone notwithstanding any charter provisions of the municipality to the contrary. (g) Authorizes the board and the municipality to contract with a local government corporation created by the municipality pursuant to Chapter 431 (Texas Transportation Corporation Act), Transportation Code, to manage the reinvestment zone and implement the project plan for the term and on such conditions as the parties agree. SECTION 3. Amends Section 311.011(f), Tax Code, to delete the provision that the project plan of a county with a population of more than 2.1 million must exempt at least one third of the surface area of the zone, excluding certain roadways and public areas, from ad valorem taxation and be dedicated to residential housing. Provides that at least one-third of the tax increment must be used, rather than dedicated, to provide affordable, rather than low-income, housing. SECTION 4. Amends Section 311.014, Tax Code, by adding Subsection (j), as follows: (j) Authorizes a taxing unit to retain from the amount otherwise required to be paid into the tax incremental fund of a reinvestment zone created on or after September 1, 1999, the amount resulting from the levy of a tax on the captured appraised value of the zone at the rate the taxing unit levies to pay its bonds or other obligations. Prohibits the taxing unit from retaining such a tax increment in a reinvestment zone created before September 1, 1999, unless the taxing unit retained that right in the agreement to participate in the zone. SECTION 5. Amends Section 431.101, Transportation Code, as follows: Sec. 431.101. CREATION AND DISSOLUTION OF LOCAL GOVERNMENT CORPORATION. (a) Provides that the governing body of the local government must approve the articles of incorporation and the bylaws of any local government corporation acting on its behalf. (b) Provides that a local government corporation has the powers of a non-profit corporation created under Article 1396-101 et seq., V.T.C.S. (Texas Non-Profit Corporation Act), to the extent that the provisions of that Act are not inconsistent with this chapter. Makes this provisions of that Act applicable to the directors and officers standards of conduct, interests in contracts, and powers. (c) Provides that the provisions of this chapter relating to the creation, dissolution, administration, and supervision of a corporation by the Texas Transportation Commissioner (commissioner) are not applicable to a local government corporation. (d) Provides that the provisions of Section 394.904 (Exemption from Requirements and Restrictions Applying to Public Property), Local Government Code, are applicable to contracts awarded by a local government corporation and to property or improvements owned by the local government corporation. (e) Authorizes the persons appointed to the board of directors of a local government corporation to be the same persons as serve on the board of a reinvestment zone created by a municipality. Provides that the members of the board of directors of the reinvestment zone and of the board of directors of the local government corporation are not public officers. Authorizes a director of a local government corporation to receive fee for the director's service and reimbursement of expenses as provided by Section 49.060 (Fees of Office; Reimbursement), Water Code. Deletes text making provisions of the Texas Non-Profit Corporation Act relating to standards of conduct applicable to the members of the board of directors of a local government corporation. SECTION 6.Emergency clause. Effective date: upon passage.