79R3086 SMH-D

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 Subsection (l) 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 or in an ordinance adopted after the zone is designated, 
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).  A municipality that has determined 
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 by ordinance may reduce the portion of the tax 
increment produced by the municipality that the municipality is 
required to pay into the 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 pay the estimated project costs of the zone as 
shown in the reinvestment zone financing plan, 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.