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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority of a taxing unit to make a loan to the |
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board of directors of a tax increment financing reinvestment zone |
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for deposit in the tax increment fund for the zone. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subsection (e), Section 311.0123, Tax Code, is |
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amended to read as follows: |
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(e) The sales and use taxes to be deposited into the tax |
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increment fund under this section may be disbursed from the fund |
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only to: |
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(1) satisfy claims of holders of tax increment bonds, |
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notes, or other obligations issued or incurred for the reinvestment |
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zone; |
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(2) pay project costs for the zone; and |
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(3) make payments in accordance with an agreement made |
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under Section 311.010(b) dedicating revenue from the tax increment |
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fund. |
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SECTION 2. Section 311.014, Tax Code, is amended by |
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amending Subsections (b) and (d) and adding Subsection (e) to read |
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as follows: |
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(b) Money may be disbursed from the fund only to satisfy |
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claims of holders of tax increment bonds or notes issued for the |
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zone, to pay project costs for the zone, [or] to make payments |
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pursuant to an agreement made under Section 311.010(b) dedicating |
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revenue from the tax increment fund, or to repay other obligations |
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incurred for the zone. |
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(d) After all project costs, [and] all tax increment bonds |
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or notes issued for a reinvestment zone, and any other obligations |
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incurred for the zone have been paid, and subject to any agreement |
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with bondholders, any money remaining in the tax increment fund |
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shall be paid to the municipality or county that created the zone |
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and other taxing units levying taxes on property in the zone in |
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proportion to the municipality's or county's and each other unit's |
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respective share of the total amount of tax increments derived from |
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taxable real property in the zone that were deposited in the fund |
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during the fund's existence. |
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(e) A taxing unit that levies taxes on real property in a |
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reinvestment zone may make a loan to the board of directors of the |
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zone for deposit in the tax increment fund for the zone if the |
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governing body of the taxing unit determines that the loan is |
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beneficial to, and serves a public purpose of, the taxing unit. The |
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loan is payable on the terms agreed to by the taxing unit, or an |
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instrumentality of the taxing unit if applicable, and the board of |
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directors of the zone. A loan under this subsection: |
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(1) is not considered to be a tax increment bond or |
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note under Section 311.015; and |
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(2) is considered to be: |
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(A) an authorized investment under Chapter 2256, |
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Government Code; and |
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(B) an obligation incurred for the zone. |
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SECTION 3. Section 311.017, Tax Code, is amended to read as |
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follows: |
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Sec. 311.017. TERMINATION OF REINVESTMENT ZONE. (a) A |
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reinvestment zone terminates on the earlier of: |
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(1) the termination date designated in the ordinance |
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or order, as applicable, creating the zone or an earlier |
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termination date designated by an ordinance or order adopted |
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subsequent to the ordinance or order creating the zone; or |
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(2) the date on which all project costs, tax increment |
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bonds[,] and interest on those bonds, and other obligations have |
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been paid in full. |
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(b) The tax increment pledged to the payment of bonds and |
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interest on the bonds and to the payment of any other obligations |
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may be discharged and the reinvestment zone may be terminated if the |
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municipality or county that created the zone deposits or causes to |
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be deposited with a trustee or other escrow agent authorized by law |
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funds in an amount that, together with the interest on the |
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investment of the funds in direct obligations of the United States, |
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will be sufficient to pay the principal of, premium, if any, and |
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interest on all bonds issued on behalf of the reinvestment zone at |
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maturity or at the date fixed for redemption of the bonds, and to |
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pay any other amounts that may become due, including compensation |
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due or to become due to the trustee or escrow agent, as well as to |
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pay the principal of and interest on any other obligations incurred |
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on behalf of the zone. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |
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