76R12031 E
By Coleman H.B. No. 2684
Substitute the following for H.B. No. 2684:
By Oliveira C.S.H.B. No. 2684
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to reinvestment zones and tax increment financing under
1-3 the Tax Increment Financing Act, tax abatement agreements within
1-4 those zones, and the administration of certain local government
1-5 corporations.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Section 311.002(1), Tax Code, is amended to read
1-8 as follows:
1-9 (1) "Project costs" means the expenditures made or
1-10 estimated to be made and monetary obligations incurred or estimated
1-11 to be incurred by the municipality establishing a reinvestment zone
1-12 that are listed in the project plan as costs of public works or
1-13 public improvements inside or outside [in] the zone, plus other
1-14 costs incidental to those expenditures and obligations. "Project
1-15 costs" include:
1-16 (A) capital costs, including the actual costs of
1-17 the acquisition and construction of public works, public
1-18 improvements, new buildings, structures, and fixtures; the actual
1-19 costs of the acquisition, demolition, alteration, remodeling,
1-20 repair, or reconstruction of existing buildings, structures, and
1-21 fixtures; and the actual costs of the acquisition of land and
1-22 equipment and the clearing and grading of land;
1-23 (B) financing costs, including all interest paid
1-24 to holders of evidences of indebtedness or other obligations issued
2-1 to pay for project costs and any premium paid over the principal
2-2 amount of the obligations because of the redemption of the
2-3 obligations before maturity;
2-4 (C) real property assembly costs;
2-5 (D) professional service costs, including those
2-6 incurred for architectural, planning, engineering, and legal advice
2-7 and services;
2-8 (E) imputed administrative costs, including
2-9 reasonable charges for the time spent by employees of the
2-10 municipality in connection with the implementation of a project
2-11 plan;
2-12 (F) relocation costs;
2-13 (G) organizational costs, including the costs of
2-14 conducting environmental impact studies or other studies, the cost
2-15 of publicizing the creation of the zone, and the cost of
2-16 implementing the project plan for the zone;
2-17 (H) interest before and during construction and
2-18 for one year after completion of construction, whether or not
2-19 capitalized;
2-20 (I) the cost of operating the reinvestment zone
2-21 and project facilities;
2-22 (J) the amount of any contributions made by the
2-23 municipality from general revenue for the implementation of the
2-24 project plan; and
2-25 (K) payments made at the discretion of the
2-26 governing body of the municipality that the municipality finds
2-27 necessary or convenient to the creation of the zone or to the
3-1 implementation of the project plans for the zone.
3-2 SECTION 2. Section 311.009, Tax Code, is amended by adding
3-3 Subsection (g) to read as follows:
3-4 (g) A member of the board of directors of a reinvestment
3-5 zone:
3-6 (1) is not a public official by virtue of that
3-7 position; and
3-8 (2) unless otherwise ineligible, may be appointed to
3-9 serve concurrently on the board of directors of a local government
3-10 corporation created under Subchapter D, Chapter 431, Transportation
3-11 Code.
3-12 SECTION 3. Section 311.010, Tax Code, is amended by amending
3-13 Subsections (a) and (b) and adding Subsections (d)-(f) to read as
3-14 follows:
3-15 (a) The board of directors of a reinvestment zone shall make
3-16 recommendations to the governing body of the municipality that
3-17 created the zone concerning the administration of this chapter in
3-18 the zone. The [In addition to the powers granted to the board
3-19 under this chapter, the] governing body of the municipality by
3-20 ordinance or resolution may authorize [delegate to] the board to
3-21 exercise any of the municipality's powers with respect to the
3-22 administration, management, or operation of the zone or [and duties
3-23 relating to] the implementation of the project plan for the zone,
3-24 except that the governing body may not authorize the board to:
3-25 (1) issue bonds;
3-26 (2) impose taxes; or
3-27 (3) give final approval to the project plan [considers
4-1 advisable].
4-2 (b) The board of directors of a reinvestment zone and the
4-3 governing body of the municipality that creates a reinvestment zone
4-4 may each enter into agreements as the board or the governing body
4-5 considers necessary or convenient to implement the project plan and
4-6 reinvestment zone financing plan and achieve their purposes. An
4-7 agreement may provide for the regulation or restriction of the use
4-8 of land by imposing conditions, restrictions, or covenants that run
4-9 with the land. An agreement may during the term of the agreement
4-10 dedicate, pledge, or otherwise provide for the use of revenue in
4-11 [from] the tax increment fund to pay any project [the] costs that
4-12 benefit the reinvestment zone, regardless of whether the public
4-13 works or public improvements are inside or outside the zone,
4-14 including project costs relating to the cost of buildings, schools,
4-15 or other educational facilities owned by or on behalf of a school
4-16 district, community college district, or other political
4-17 subdivision of this state, railroad or transit facilities,
4-18 affordable housing, the remediation of conditions that contaminate
4-19 public or private land or buildings, the preservation of the facade
4-20 of a private or public building, the demolition of public or
4-21 private buildings, or the replacement of [replacing] housing or
4-22 areas of public assembly [in or out of the zone]. Project costs
4-23 associated with public works or public improvements that are
4-24 located outside a reinvestment zone must be approved by each taxing
4-25 unit that deposits or agrees to deposit any part of its tax
4-26 increment into the tax increment fund for the zone. An agreement
4-27 may dedicate revenue from the tax increment fund to pay a
5-1 neighborhood enterprise association for providing services or
5-2 carrying out projects authorized under Subchapters E and G, Chapter
5-3 2303, Government Code, in the zone. The term of an agreement with
5-4 a neighborhood enterprise association may not exceed 10 years.
5-5 (d) The board of directors of a reinvestment zone may
5-6 exercise any power granted to a municipality by Section 311.008,
5-7 except that:
5-8 (1) the municipality that created the reinvestment
5-9 zone by ordinance or resolution may restrict any power granted to
5-10 the board by this chapter; and
5-11 (2) the board may exercise a power granted to a
5-12 municipality under Section 311.008(a)(2) only with the consent of
5-13 the governing body of the municipality.
5-14 (e) After the governing body of a municipality by ordinance
5-15 creates a reinvestment zone under this chapter, the board of
5-16 directors of the zone may exercise any power granted to a board
5-17 under this chapter.
5-18 (f) The board of directors of a reinvestment zone and the
5-19 governing body of the municipality may enter into a contract with a
5-20 local government corporation to manage the reinvestment zone or
5-21 implement the project plan and reinvestment zone financing plan for
5-22 the term of the agreement. In this subsection, "local government
5-23 corporation" means a local government corporation created by the
5-24 municipality under Chapter 431, Transportation Code.
5-25 SECTION 4. Section 311.011(f), Tax Code, is amended to read
5-26 as follows:
5-27 (f) In a zone designated under Section 311.005(a)(5) that is
6-1 located in a county with a population of 2.1 million or more, the
6-2 project plan must provide that at least one-third of the [surface
6-3 area of the zone, excluding roads, streets, highways, utility
6-4 rights-of-way, and other public areas or areas exempt from ad
6-5 valorem taxation, be dedicated to residential housing and that at
6-6 least one-third of the] tax increment of the zone be used to
6-7 provide affordable [dedicated to providing low-income] housing
6-8 during the term of the zone.
6-9 SECTION 5. Chapter 311, Tax Code, is amended by adding
6-10 Section 311.0125 to read as follows:
6-11 Sec. 311.0125. TAX ABATEMENT AGREEMENTS. (a)
6-12 Notwithstanding any provision in this chapter to the contrary, a
6-13 taxing unit other than a school district may enter into a tax
6-14 abatement agreement with an owner of real or personal property in a
6-15 reinvestment zone, regardless of whether the taxing unit deposits
6-16 or agrees to deposit any portion of its tax increment into the tax
6-17 increment fund.
6-18 (b) To be effective, an agreement to abate taxes on real
6-19 property in a reinvestment zone must be approved by:
6-20 (1) the board of directors of the reinvestment zone;
6-21 and
6-22 (2) the governing body of each taxing unit that
6-23 imposes taxes on real property in the reinvestment zone and
6-24 deposits or agrees to deposit any of its tax increment into the tax
6-25 increment fund for the zone.
6-26 (c) In any contract entered into by the board of directors
6-27 of a reinvestment zone in connection with bonds or other
7-1 obligations, the board may covenant that the board will not approve
7-2 a tax abatement agreement that applies to real property in that
7-3 zone.
7-4 (d) If a taxing unit enters into a tax abatement agreement
7-5 authorized by this section, taxes that are abated under that
7-6 agreement are not considered taxes to be imposed or produced by
7-7 that taxing unit in calculating the amount of:
7-8 (1) the tax increment of that taxing unit; or
7-9 (2) that taxing unit's deposit to the tax increment
7-10 fund for the reinvestment zone.
7-11 SECTION 6. Section 311.013, Tax Code, is amended by adding
7-12 Subsection (j) to read as follows:
7-13 (j) Section 26.05(f) does not prohibit a taxing unit from
7-14 depositing all of the tax increment produced by the taxing unit in
7-15 a reinvestment zone into the tax increment fund for that zone.
7-16 SECTION 7. Section 431.101, Transportation Code, is amended
7-17 to read as follows:
7-18 Sec. 431.101. CREATION OF LOCAL GOVERNMENT CORPORATION.
7-19 (a) A local government corporation may be created to aid and act
7-20 on behalf of one or more local governments to accomplish any
7-21 governmental purpose of those local governments. To be effective,
7-22 the articles of incorporation and the bylaws of a local government
7-23 corporation must be approved by ordinance, resolution, or order
7-24 adopted by the governing body of each local government for which
7-25 the corporation is created to aid and act on behalf of.
7-26 (b) A local government corporation has the powers of a
7-27 corporation authorized for creation by the commission under this
8-1 chapter.
8-2 (c) The provisions of the Texas Non-Profit Corporation Act
8-3 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes),
8-4 relating to powers, standards of conduct, and interests in
8-5 contracts, apply to the directors and officers of the local
8-6 government corporation.
8-7 (d) A provision of this chapter relating to the creation,
8-8 dissolution, administration, or supervision of a corporation by the
8-9 commission does not apply to a local government corporation.
8-10 (e) Section 394.904(a), Local Government Code, applies to
8-11 property and improvements owned by a local government corporation.
8-12 Section 394.904(b) of that code applies to each contract awarded by
8-13 the local government corporation.
8-14 (f) A member of the board of directors of a local government
8-15 corporation:
8-16 (1) is not a public official by virtue of that
8-17 position; and
8-18 (2) unless otherwise ineligible, may be appointed to
8-19 serve concurrently on the board of directors of a reinvestment zone
8-20 created under Chapter 311, Tax Code.
8-21 SECTION 8. Chapter 311, Tax Code, is amended by adding
8-22 Section 311.018 to read as follows:
8-23 Sec. 311.018. CONFLICTS WITH MUNICIPAL CHARTER. To the
8-24 extent of a conflict between this chapter and a municipal charter,
8-25 this chapter controls.
8-26 SECTION 9. Section 311.003(h), Tax Code, is repealed.
8-27 SECTION 10. Section 431.102(a), Transportation Code, is
9-1 amended to read as follows:
9-2 (a) Except as provided in Subsection (c), in [In] the manner
9-3 in which Chapter 394, Local Government Code, applies to a
9-4 corporation created under that chapter, that chapter applies to:
9-5 (1) the manner in which a local government corporation
9-6 is created and dissolved;
9-7 (2) the appointment of the board of a local government
9-8 corporation and the members' terms of service;
9-9 (3) the manner and the conditions under which the
9-10 board serves; and
9-11 (4) the form, execution, approval, filing, and
9-12 amending of the articles of incorporation and bylaws of a local
9-13 government corporation.
9-14 SECTION 11. Section 431.102, Transportation Code, is amended
9-15 by adding Subsection (c) to read as follows:
9-16 (c) The requirement of Section 394.021(a), Local Government
9-17 Code, that all directors must be residents of the local government
9-18 shall not be applicable to directors of a local government
9-19 corporation except that a person may not be appointed to the board
9-20 of a local government corporation if the appointment of that person
9-21 would result in less than a majority of the board members being
9-22 residents of the local government.
9-23 SECTION 12. Nothing in this Act is intended to have any
9-24 effect on the calculation of the taxable value of a school district
9-25 under Section 403.302, Government Code, or to prohibit a member of
9-26 a governing body of a taxing unit that levies taxes on real
9-27 property in the reinvestment zone from serving as a member of the
10-1 board of directors of a reinvestment zone under the Tax Increment
10-2 Financing Act (Chapter 311, Tax Code).
10-3 SECTION 13. The importance of this legislation and the
10-4 crowded condition of the calendars in both houses create an
10-5 emergency and an imperative public necessity that the
10-6 constitutional rule requiring bills to be read on three several
10-7 days in each house be suspended, and this rule is hereby suspended,
10-8 and that this Act take effect and be in force from and after its
10-9 passage, and it is so enacted.