1-1                                   AN ACT
 1-2     relating to the contracting authority of, authorized uses for tax
 1-3     proceeds by, and eligibility for participation in tax increment
 1-4     financing of Bexar County Hospital District, Nueces County Hospital
 1-5     District, El Paso County Hospital District, and Harris County
 1-6     Hospital District.
 1-7           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-8           SECTION 1.  Subchapter E, Chapter 281, Health and Safety
 1-9     Code, is amended by adding Section 281.095 to read as follows:
1-10           Sec. 281.095.  PROHIBITION AGAINST PARTICIPATION IN TAX
1-11     INCREMENT FINANCING BY CERTAIN HOSPITAL DISTRICTS.  (a)  In this
1-12     section, "district" means Bexar County Hospital District, Nueces
1-13     County Hospital District, El Paso County Hospital District, or
1-14     Harris County Hospital District.
1-15           (b)  The district may not enter into a contract or agreement
1-16     to pay into a tax increment fund any of the district's tax
1-17     increment produced from property located in a reinvestment zone
1-18     under Chapter 311, Tax Code.  This subsection does not affect the
1-19     validity of an agreement entered into by the district before
1-20     September 1, 2001, to pay a portion of the district's tax increment
1-21     into a tax increment fund under Chapter 311, Tax Code.
1-22           (c)  The proceeds of a tax imposed under Section 281.121 may
1-23     not be used to make a payment into a tax increment fund under
1-24     Chapter 311, Tax Code, if that payment is prohibited by this
1-25     section.
 2-1           (d)  A project plan or reinvestment zone financing plan
 2-2     approved under Section 311.011, Tax Code, on or after September 1,
 2-3     2001, may not include any of the district's tax increment or any
 2-4     other funds derived from the district as a source of revenue to
 2-5     finance or pay project costs.
 2-6           (e)  A project plan or reinvestment zone financing plan
 2-7     approved under Section 311.011, Tax Code, before September 1, 2001,
 2-8     may not be amended on or after September 1, 2001, to:
 2-9                 (1)  increase the percentage of the district's tax
2-10     increment to be contributed to a tax increment fund;
2-11                 (2)  increase the time during which the district is to
2-12     contribute any of the district's tax increment to a tax increment
2-13     fund;
2-14                 (3)  allow or require the district, if it was not
2-15     included in the originally approved project plan or reinvestment
2-16     zone financing plan, to contribute any of the district's tax
2-17     increment or other money to a tax increment fund; or
2-18                 (4)  allow the district to pay into a tax increment
2-19     fund any of the district's tax increment derived from property
2-20     added to the reinvestment zone on or after September 1, 2001.
2-21           (f)  An agreement entered into by the district under Section
2-22     311.013(f), Tax Code, before September 1, 2001, may not be amended
2-23     on or after September 1, 2001, to include any of the conditions
2-24     prohibited by Subsection (e).
2-25           SECTION 2.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 274 passed the Senate on
         February 26, 2001, by a viva-voce vote; and that the Senate
         concurred in House amendment on May 17, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 274 passed the House, with
         amendment, on May 5, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor