By: Brimer  S.B. No. 1264
         (In the Senate - Filed March 6, 2007; March 14, 2007, read
  first time and referred to Subcommittee on Emerging Technologies
  and Economic Development; March 29, 2007, reported favorably from
  Committee on Business and Commerce by the following vote:  Yeas 8,
  Nays 0; March 29, 2007, sent to printer.)
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the authority of a taxing unit to make a loan to the
  board of directors of a tax increment financing reinvestment zone
  for deposit in the tax increment fund for the zone.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (e), Section 311.0123, Tax Code, is
  amended to read as follows:
         (e)  The sales and use taxes to be deposited into the tax
  increment fund under this section may be disbursed from the fund
  only to:
               (1)  satisfy claims of holders of tax increment bonds,
  notes, or other obligations issued or incurred for the reinvestment
  zone;
               (2)  pay project costs for the zone; and
               (3)  make payments in accordance with an agreement made
  under Section 311.010(b) dedicating revenue from the tax increment
  fund.
         SECTION 2.  Section 311.014, Tax Code, is amended by
  amending Subsections (b) and (d) and adding Subsection (e) to read
  as follows:
         (b)  Money may be disbursed from the fund only to satisfy
  claims of holders of tax increment bonds or notes issued for the
  zone, to pay project costs for the zone, [or] to make payments
  pursuant to an agreement made under Section 311.010(b) dedicating
  revenue from the tax increment fund, or to repay other obligations
  incurred for the zone.
         (d)  After all project costs, [and] all tax increment bonds
  or notes issued for a reinvestment zone, and any other obligations
  incurred for the zone have been paid, and subject to any agreement
  with bondholders, any money remaining in the tax increment fund
  shall be paid to the municipality or county that created the zone
  and other taxing units levying taxes on property in the zone in
  proportion to the municipality's or county's and each other unit's
  respective share of the total amount of tax increments derived from
  taxable real property in the zone that were deposited in the fund
  during the fund's existence.
         (e)  A taxing unit that levies taxes on real property in a
  reinvestment zone may make a loan to the board of directors of the
  zone for deposit in the tax increment fund for the zone if the
  governing body of the taxing unit determines that the loan is
  beneficial to, and serves a public purpose of, the taxing unit. The
  loan is payable on the terms agreed to by the taxing unit, or an
  instrumentality of the taxing unit if applicable, and the board of
  directors of the zone. A loan under this subsection:
               (1)  is not considered to be a tax increment bond or
  note under Section 311.015; and
               (2)  is considered to be:
                     (A)  an authorized investment under Chapter 2256,
  Government Code; and
                     (B)  an obligation incurred for the zone.
         SECTION 3.  Section 311.017, Tax Code, is amended to read as
  follows:
         Sec. 311.017.  TERMINATION OF REINVESTMENT ZONE. (a)  A
  reinvestment zone terminates on the earlier of:
               (1)  the termination date designated in the ordinance
  or order, as applicable, creating the zone or an earlier
  termination date designated by an ordinance or order adopted
  subsequent to the ordinance or order creating the zone; or
               (2)  the date on which all project costs, tax increment
  bonds[,] and interest on those bonds, and other obligations have
  been paid in full.
         (b)  The tax increment pledged to the payment of bonds and
  interest on the bonds and to the payment of any other obligations
  may be discharged and the reinvestment zone may be terminated if the
  municipality or county that created the zone deposits or causes to
  be deposited with a trustee or other escrow agent authorized by law
  funds in an amount that, together with the interest on the
  investment of the funds in direct obligations of the United States,
  will be sufficient to pay the principal of, premium, if any, and
  interest on all bonds issued on behalf of the reinvestment zone at
  maturity or at the date fixed for redemption of the bonds, and to
  pay any other amounts that may become due, including compensation
  due or to become due to the trustee or escrow agent, as well as to
  pay the principal of and interest on any other obligations incurred
  on behalf of the zone.
         SECTION 4.  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, 2007.
 
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