By:  Ellis                                                        S.B. No. 1198


A BILL TO BE ENTITLED

AN ACT

relating to the determination of the portion of the tax increment 
produced by a municipality that the municipality is required to pay 
into the tax increment fund for a reinvestment zone.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 311.013, Tax Code, is amended by 
amending Subsection (b) and adding Subsections (l) and (m) to read as
follows:
	(b)  Each taxing unit shall pay into the tax increment fund 
for the zone an amount equal to the tax increment produced by the 
unit, less the sum of:
		(1)  property taxes produced from the tax increments 
that are, by contract executed before the designation of the area as 
a reinvestment zone, required to be paid by the unit to another 
political subdivision; and
		(2)  for a taxing unit other than the municipality that 
created the zone, a portion, not to exceed 15 percent, of the tax 
increment produced by the unit as provided by the reinvestment zone 
financing plan or a larger portion as provided by Subsection (f).
	(l)  The governing body of a municipality that designates an 
area as a reinvestment zone may determine in the designating 
ordinance the portion of the tax increment produced by the 
municipality that the municipality is required to pay into the tax 
increment fund for the zone.  If a municipality does not determine 
the portion of the tax increment produced by the municipality that 
the municipality is required to pay into the tax increment fund for 
a reinvestment zone, the municipality is required to pay into the 
fund for the zone the entire tax increment produced by the 
municipality, except as provided by Subsection (b)(1).
	(m)  The governing body of a municipality that is located in 
a county with a population of 3.3 million or more may, in an 
ordinance adopted after the zone is designated, reduce the portion 
of the tax increment produced by the municipality that the 
municipality is required to pay into the tax increment fund for the 
zone.   The portion of the tax increment produced by a municipality 
that the municipality is required to pay into the tax increment fund 
for a reinvestment zone, together with all other revenues required 
to be paid into the fund, must be sufficient to complete and pay for 
the estimated costs of projects listed in the reinvestment zone 
financing plan and pay any tax increment bonds or notes issued for 
the zone, and any other obligations of the zone.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.