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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation, operation, management, and programs of |
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homestead preservation districts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 373A.002, Local Government Code, is |
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amended by amending Subdivision (1) and adding Subdivisions (1-a), |
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(2-a), and (3-a) to read as follows: |
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(1) "Affordable housing" means housing that is located |
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in a district and is affordable to households earning 70 percent or |
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less of the area median family income, adjusted for household size, |
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as determined annually by the United States Department of Housing |
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and Urban Development. |
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(1-a) "Central business district" means a compact and |
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contiguous geographical area of a municipality in which at least 90 |
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percent of the land is used or zoned for commercial purposes and |
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that has historically been the primary location in the municipality |
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where business has been transacted. |
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(2-a) "County" means the county containing all or the |
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greatest portion of a homestead preservation reinvestment zone. |
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For purposes of applying other law to a district or program created |
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under this chapter, including Chapter 311, Tax Code, a reference in |
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the other law to a "county" has the meaning assigned by this |
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subdivision. |
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(3-a) "Project costs" has the meaning assigned by |
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Section 311.002(1), Tax Code. |
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SECTION 2. Section 373A.003, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.003. APPLICABILITY OF CHAPTER. This chapter |
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applies only to: |
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(1) a municipality with a population of more than |
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650,000 that is located in a uniform state service region with fewer |
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than 550,000 occupied housing units as determined by the most |
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recent United States decennial census; and |
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(2) a political subdivision with jurisdiction over |
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territory that is also part of a municipality described by |
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Subdivision (1). |
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SECTION 3. Subchapter B, Chapter 373A, Local Government |
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Code, is amended by adding Section 373A.0521 to read as follows: |
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Sec. 373A.0521. DISSOLUTION. (a) The governing body of a |
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municipality in which a district is located may adopt an ordinance |
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dissolving the district. |
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(b) On the adoption of the ordinance, the district is |
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dissolved and the municipality succeeds to the property and assets |
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of the district and assumes all bonds, debts, obligations, and |
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liabilities of the district. |
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(c) This section does not prohibit the municipality from |
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continuing to operate programs established by the municipality, |
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including programs established under Subchapter C, D, or E, in the |
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area previously included in the district that are owned and |
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operated by the municipality on the date the district is dissolved. |
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SECTION 4. Section 373A.101, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.101. CREATION. The governing body of a political |
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subdivision [municipality] by ordinance or order may create or |
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designate under this subchapter one or more homestead land trusts, |
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including a housing finance corporation established under Chapter |
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394 or a land trust operated by a community housing development |
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organization certified by the municipality, to operate in an area |
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that includes a district designated under Subchapter B [by the
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municipality]. |
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SECTION 5. Section 373A.102, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.102. NATURE OF NONPUBLIC TRUST. A trust that is |
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not created by the governing body of a political subdivision must be |
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a nonprofit organization that is: |
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(1) created to acquire and hold land for the benefit of |
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developing and preserving long-term affordable housing in the |
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district; and |
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(2) exempt from federal income taxation under Section |
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501(a), Internal Revenue Code of 1986, by being certified as an |
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exempt organization under Section 501(c)(3), Internal Revenue Code |
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of 1986. |
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SECTION 6. Section 373A.104, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.104. BOARD OF DIRECTORS. (a) A trust shall be |
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governed by a board of directors. |
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(b) [The governing body of the municipality shall appoint
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the directors of a trust created by the municipality.
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[(c)
The initial board of a trust created by the
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municipality must be composed of four members of the governing body
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of the municipality and three residents of the district.
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[(d)] If a trust holds land that provides at least 100 |
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housing units, at least one-third of the board members must reside |
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in housing units located on land held by the trust. |
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SECTION 7. Subchapter C, Chapter 373A, Local Government |
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Code, is amended by adding Section 373A.110 to read as follows: |
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Sec. 373A.110. APPLICABILITY OF SUBCHAPTER TO TRUST |
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OPERATED BY HOUSING FINANCE CORPORATION. Sections 373A.102, |
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373A.104, 373A.105(b), and 373A.106 do not apply to a trust |
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operated in the district by a housing finance corporation |
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established under Chapter 394. |
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SECTION 8. Section 373A.151, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.151. APPLICABILITY [NONAPPLICABILITY] OF OTHER |
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LAW. (a) Except as provided by this subchapter, Chapter 311, Tax |
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Code, applies [does not apply] to a homestead preservation |
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reinvestment zone created under this subchapter. To the extent of |
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any conflict between this subchapter and Chapter 311, Tax Code, |
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this subchapter prevails. |
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(b) In addition to other provisions of this subchapter that |
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modify or supersede the application of Chapter 311, Tax Code, to a |
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zone established under this subchapter, Sections 311.005 and |
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311.006, Tax Code, do not apply to a zone established under this |
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subchapter. |
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SECTION 9. Section 373A.152(a), Local Government Code, is |
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amended to read as follows: |
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(a) A municipality by ordinance may designate a contiguous |
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geographical area contained entirely within the boundaries of the |
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district as [create] a homestead preservation reinvestment zone to |
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develop or redevelop affordable housing [as provided by this
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section] if the municipality determines the zone is necessary to |
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accomplish the purposes of this chapter [finds that the area to be
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included in the zone is unproductive, underdeveloped, or blighted
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as provided by Section 1-g(b), Article VIII, Texas Constitution.
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The governing body of the municipality shall administer the zone]. |
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SECTION 10. Subchapter D, Chapter 373A, Local Government |
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Code, is amended by adding Sections 373A.1521 and 373A.1522 to read |
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as follows: |
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Sec. 373A.1521. CONTENTS OF REINVESTMENT ZONE ORDINANCE. |
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The ordinance designating the homestead preservation zone must: |
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(1) contain the information required under Sections |
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311.004(a)(1), (4), and (6), Tax Code; |
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(2) assign a name to the zone for identification, with |
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the first zone designated as "(Name of municipality) Homestead |
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Preservation Reinvestment Zone Number One," and subsequently |
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created zones assigned names in the same form numbered |
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consecutively in the order of their designation; |
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(3) specify the amount of tax increment to be |
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deposited by the municipality into the tax increment fund; and |
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(4) contain findings that the area is unproductive, |
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underdeveloped, or blighted as provided by Section 1-g(b), Article |
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VIII, Texas Constitution. |
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Sec. 373A.1522. EFFECTIVE DATE OF ZONE. The zone |
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designated by the ordinance adopted under Section 373A.1521 takes |
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effect on the date on which the county adopts a final order: |
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(1) agreeing to the creation of the zone, the zone |
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boundaries, and the zone termination date specified by the |
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municipality under Section 373A.1521(1); and |
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(2) specifying an amount of tax increment to be |
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deposited by the county into the tax increment fund that is equal to |
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the amount of the tax increment specified by the municipality under |
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Section 373A.1521(3). |
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SECTION 11. Subchapter D, Chapter 373A, Local Government |
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Code, is amended by adding Section 373A.1541 to read as follows: |
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Sec. 373A.1541. TAX INCREMENT FINANCING AND ABATEMENT. |
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Designation of an area as a homestead preservation reinvestment |
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zone is also designation of the area as a reinvestment zone for tax |
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increment financing under Chapter 311, Tax Code. |
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SECTION 12. Section 373A.155, Local Government Code, is |
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amended to read as follows: |
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Sec. 373A.155. COLLECTION AND DEPOSIT OF TAX |
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INCREMENTS. (a) The municipality designating the zone and the |
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county [Each taxing unit that taxes real property located in a zone] |
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shall provide for the collection of its taxes on real property |
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located in the zone as for any other property taxed by the |
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municipality and the county [unit]. |
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(a-1) The municipality shall pay into the tax increment fund |
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an amount specified in the ordinance designating the zone. |
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(b) The county [Except as provided by Subsection (d), each
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taxing unit] shall pay into the tax increment fund for the zone an |
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amount equal to the tax increment paid by the municipality as |
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specified in the order adopted under Section 373A.1522 [produced by
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the unit.
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[(c)
A taxing unit shall make a payment required by
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Subsection (b) not later than the 90th day after the delinquency
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date for the unit's property taxes. A delinquent payment incurs a
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penalty of five percent of the amount delinquent and accrues
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interest at an annual rate of 10 percent.
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[(d)
A taxing unit other than the municipality is not
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required to pay into the tax increment fund any of its tax increment
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produced from property located in a zone unless the taxing unit
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enters into an agreement to do so with the governing body of the
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municipality that created the zone. A taxing unit may enter into an
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agreement under this subsection at any time before or after the zone
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is created. The agreement may include conditions for payment of
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that tax increment into the fund and must specify the portion of the
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tax increment to be paid into the fund and the years for which that
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tax increment is to be paid into the fund. The agreement and the
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conditions in the agreement are binding on the taxing unit and the
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municipality]. |
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SECTION 13. Sections 373A.157(a) and (e), Local Government |
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Code, are amended to read as follows: |
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(a) The tax increment fund is administered by the governing |
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body of the municipality in accordance with the project and |
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reinvestment zone financing plans [annual plan developed by the
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municipality under Section 373A.156]. Revenue from the tax |
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increment fund must be dedicated as provided by this section to the |
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development, construction, and preservation of affordable housing |
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in the zone by a political subdivision, a community housing |
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development organization certified by the municipality, a trust |
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created or designated by a political subdivision [the
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municipality], or another entity as provided by this section. |
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(e) The municipality must spend at least 80 percent of the |
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revenue expended annually from the tax increment fund for project |
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costs, including the purchase of real property, [and] the |
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construction or rehabilitation of affordable housing in the zone, |
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and infrastructure improvements directly related to supporting the |
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construction or rehabilitation of affordable housing in the zone. |
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The municipality may spend not more than 10 percent of the revenue |
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expended annually from the tax increment fund for administration of |
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the zone. |
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SECTION 14. Sections 373A.158(a) and (b), Local Government |
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Code, are amended to read as follows: |
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(a) The county is the only taxing unit entitled to receive |
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the annual report prepared under Section 311.016(a), Tax Code. [On
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or before the 90th day following the end of the fiscal year of the
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municipality, the governing body of the municipality shall submit
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to the chief executive officer of each taxing unit that imposes
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property taxes on real property in a zone created by the
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municipality under this subchapter a detailed report on the status
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of the zone.] |
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(b) The report must include: |
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(1) the amount and source of revenue in the tax |
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increment fund established for the zone; |
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(2) the amount and purpose of expenditures from the |
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fund and the income levels of the persons who benefited from the |
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expenditures; |
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(3) the number of parcels of property purchased, |
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housing units rehabilitated, and housing units constructed and the |
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income levels of the persons residing in the housing units; |
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(4) the tax increment base and current captured |
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appraised value retained by the zone; |
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(5) the total amount of tax increments received; and |
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(6) any additional information necessary to |
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demonstrate good faith [strict] compliance with the provisions of |
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this subchapter. |
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SECTION 15. Section 311.0031, Tax Code, is amended to read |
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as follows: |
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Sec. 311.0031. ENTERPRISE ZONE. Designation of an area [as
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an enterprise zone] under the following other law [Chapter 2303,
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Government Code] constitutes designation of the area as a |
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reinvestment zone under this chapter without further hearing or |
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other procedural requirements other than those provided by the |
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other law: |
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(1) Chapter 2303, Government Code; and |
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(2) Chapter 373A, Local Government Code. |
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SECTION 16. The following laws are repealed: |
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(1) Sections 373A.152(b), (c), (d), (e), and (f), |
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Local Government Code; |
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(2) Section 373A.158(c), Local Government Code; and |
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(3) Sections 373A.108, 373A.153, 373A.154, and |
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373A.156, Local Government Code. |
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SECTION 17. This Act takes effect September 1, 2007. |
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* * * * * |