| TO: | Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations |
| FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
| IN RE: | HB1188 by Hartnett (Relating to the criteria for designation of a reinvestment zone for purposes of tax increment financing and to the powers of a municipality that has created a reinvestment zone.), As Engrossed |
The bill would expand the criteria for designation as a reinvestment zone to include the presence of certain structures that have been substantially vacant or underused for five years or more, if the municipality has a population of 100,000 or more. The bill would also assert that a project plan to alleviate certain criteria necessary to designate a reinvestment zone and to promote development or redevelopment of a reinvestment zone "serves a public purpose."
Section 11.11 of the Tax Code provides that: "property owned by this state or a political subdivision of this state is exempt from taxation if the property is used for public purposes." The section of the bill stating that a project plan to alleviate certain public health, safety, morals, or welfare-related conditions and to promote development or redevelopment "serves a public purpose" might provide the basis for a total exemption for currently taxable property used in connection with tax increment financing and tax abatement agreements.
Section 403.302 of the Government Code requires the Comptroller to conduct a property value study to determine the total taxable value for each school district. Total taxable value is an element in the state's school funding formula. Passage of this bill could cause a change in school district taxable values reported to the Commissioner of Education by the Comptroller.
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, DLBa, JRO, WP, DLBe
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