SRC-SEW H.B. 1468 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1468
By: Pitts (Cain)
Intergovernmental Relations
5/11/2001
Engrossed


DIGEST AND PURPOSE 

Tax increment financing is a tool used by local governments to fund
development by borrowing against the future tax collections from a
property. Under current law, the total taxable value for a unit that
participates in a Tax Increment Refinance Zone (TIRZ) includes captured
value. Including the captured value in the total tax value causes the
taxing unit to have an artificially low effective and rollback tax rate,
which is especially detrimental to small communities and counties that are
unable to absorb its effects. School districts are the only units allowed
to remove the captured value from the calculation of effective and rollback
tax rates.  H.B. 1468 provides that captured value of any unit, other than
a school district, that participates in a TIRZ and that is located in a
county with a population of less than 500,000 is excluded from the total
taxable value.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 26, Tax Code, by adding Section 26.03, as
follows: 

Sec. 26.03.  TREATMENT OF CAPTURED APPRAISED VALUE AND TAX INCREMENT.
Defines "captured appraised value," "reinvestment zone," "tax increment,"
and "tax increment fund."  Provides that this section applies only to
certain taxing units.  Provides that the portion of the captured appraised
value of real property taxable by a taxing unit that corresponds to the
portion of the tax increment of the unit from that property that the unit
has agreed to pay into the tax increment fund for a reinvestment zone is
excluded from the value of property taxable by the unit in any tax rate
calculation under this chapter.  Provides that the portion of the tax
increment of a taxing unit that the unit has agreed to pay into the tax
increment fund for a reinvestment zone is excluded from the amount of taxes
imposed or collected by the unit in any tax rate calculation under this
chapter. 
 
SECTION 2.  (a) Provides that, except as provided by Subsection (b) of this
section, this Act applies to the tax rate calculations under Chapter 26,
Tax Code, for a taxing unit only for a tax year that begins on or after the
effective date of this Act. 
 
(b)  Provides that this Act applies to the tax rate calculations under
Chapter 26, Tax Code, for a taxing unit for the 2001 tax year under certain
conditions. 
  
SECTION 3.  Effective date: upon passage or September 1, 2001.