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