C.S.H.B. 390 78(R)    BILL ANALYSIS


C.S.H.B. 390
By: Pitts
Local Government Ways and Means
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Section 26.03 of the Property Tax Code was added by HB 1468, 77th Texas
Legislative Session.  This law enables taxing units who have captured
appraised value that exists in a tax increment reinvestment zone to deduct
the captured appraised value from the calculation of their tax rates since
that value is dedicated to the zone and unavailable to the taxing unit.  

One consequence of the creation of this law was that when calculating
their tax rates, taxing units became able to deduct new improvement value
in one area of the tax rate calculation and then again because new
improvement value may also exist within captured appraised value.  CSHB
390 seeks to change a taxing unit's ability to deduct new improvement
value twice. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

Amends Section 26.03(c), Tax Code, to exclude the portion of the captured
appraised value of real property that is taxable and that corresponds to
the portion of the tax increment of the unit from property which the unit
has agreed to pay into the tax increment fund for a reinvestment zone and
that is not included in the calculation of "new property value" from the
taxable value of property. 

EFFECTIVE DATE

January 1, 2004.  Applicable only to tax calculations under Chapter 26,
Tax Code, and for a tax year that begins on or after the effective date of
this Act. 


COMPARISON OF ORIGINAL TO SUBSTITUTE

The introduced bill added Subsection (c-1) to Section 26.03 to say that
new property value does not include the portion of the captured appraised
value 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.  The substitute amends 26.03(c), Tax Code,
to exclude captured appraised value that is not included in the
calculation of "new property value" from the taxable value of the
property.