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  By: Brimer, Shapleigh S.B. No. 1266
 
 
A BILL TO BE ENTITLED
AN ACT
relating to pass-through financing and the creation and operation
of the transportation reinvestment fund.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subchapter E, Chapter 222, Transportation Code,
is amended by adding Sections 222.105, 222.106, and 222.107 to read
as follows:
       Sec. 222.105.  TRANSPORTATION REINVESTMENT FUND. (a)  In
this section, "fund" means the transportation reinvestment fund.
       (b)  The fund is a special account in the state treasury
administered by the comptroller.  The fund is exempt from the
application of Section 403.095, Government Code. Interest earned
on money in the fund shall be credited to the fund.
       (c)  The fund consists of money received under Section
222.106 or 222.107. Any amount deposited to the credit of the fund
may be used only for the purpose of funding projects authorized by
Section 222.104, as determined by the department.
       Sec. 222.106.  MUNICIPAL TRANSPORTATION REINVESTMENT ZONES.
(a)  In this section:
             (1)  the amount of a municipality's tax increment for a
year is the amount of ad valorem taxes levied and collected by the
municipality for that year on the captured appraised value of real
property taxable by the municipality and located in a
transportation reinvestment zone under this section;
             (2)  the captured appraised value of real property
taxable by a municipality for a year is the total appraised value of
all real property taxable by the municipality and located in a
transportation reinvestment zone for that year less the tax
increment base of the municipality; and
             (3)  the tax increment base of a municipality is the
total appraised value of all real property taxable by the
municipality and located in a transportation reinvestment zone for
the year in which the zone was designated under this section.
       (b)  This section applies only to a municipality the
governing body of which has entered into an agreement with the
department under Section 222.104.
       (c)  If the governing body determines the area to be
unproductive, underdeveloped, or blighted, the governing body of
the municipality by ordinance may designate a contiguous geographic
area in the jurisdiction of the municipality to be a transportation
reinvestment zone to promote a transportation project described by
Section 222.104 that cultivates development or redevelopment of the
area.
       (d)  In determining whether an area is unproductive,
underdeveloped, or blighted, the governing body of the municipality
may:
             (1)  use the criteria established by Section
311.005(a), Tax Code; or
             (2)  use other criteria that the governing body
reasonably determines, in good faith, provide a basis for making
the determination.
       (e)  Not later than the seventh day before the date the
governing body of the municipality proposes to adopt an ordinance
designating an area as a transportation reinvestment zone under
this section, the governing body must hold a public hearing on the
creation of the zone and its benefits to the municipality and to
property in the proposed zone. At the hearing an interested person
may speak for or against the creation of the zone or its boundaries.
Not later than the seventh day before the date of the hearing,
notice of the hearing must be published in a newspaper having
general circulation in the municipality.
       (f)  Designation of an area as a transportation reinvestment
zone under this section constitutes designation of the area as a
reinvestment zone under Chapters 311 and 312, Tax Code, without
further hearings or other procedural requirements.
       (g)  The ordinance designating an area as a transportation
reinvestment zone must:
             (1)  describe the boundaries of the zone with
sufficient definiteness to identify with ordinary and reasonable
certainty the territory included in the zone;
             (2)  provide that the zone takes effect immediately on
passage of the ordinance;
             (3)  assign a name to the zone for identification, with
the first zone created by a municipality designated as
"Transportation Reinvestment Zone Number One, City (or Town, as
applicable) of (name of municipality)," and subsequently created
zones assigned names in the same form, numbered consecutively in
the order of their creation;
             (4)  establish an ad valorem tax increment fund for the
zone; and
             (5)  contain findings that:
                   (A)  promotion of the transportation project will
cultivate development or redevelopment of the zone; and
                   (B)  the zone meets the requirements of Subsection
(d).
       (h)  From taxes collected on property in the zone, the
municipality shall pay into the tax increment fund for a zone an
amount equal to the tax increment produced by the municipality.
       (i)  The governing body of the municipality, by ordinance or
resolution, may enter into an agreement with the department under
which not more than one-half of the money deposited to the credit of
the tax increment fund established for the transportation
reinvestment zone will be used to reimburse the department an
amount that is not greater than 50 percent of the aggregate amount
of any payments made by the department to the municipality under the
agreement under Section 222.104.  Any remaining amount in the tax
increment fund may be used for any municipal purpose in the zone.
       (j)  Money received by the department under Subsection (i)
shall be deposited to the credit of the transportation reinvestment
fund under Section 222.105 and may be used only for a purpose
specified by that section and, until the eighth anniversary of the
date the transportation reinvestment zone was created, used only in
connection with a project that is located in the department
district in which the zone is located.
       (k)  A transportation reinvestment zone terminates on
December 31 of the year in which the municipality ceases to be
required to make reimbursement payments to the department under
Subsection (i).  Any surplus remaining on termination of the zone
may be used for transportation projects of the municipality in or
outside of the zone.
       Sec. 222.107.  COUNTY TRANSPORTATION REINVESTMENT ZONES;
TAX ABATEMENTS; ROAD UTILITY DISTRICTS. (a)  In this section:
             (1)  the amount of a county's tax increment for a year
is the amount of ad valorem taxes levied and collected by the county
for that year on the captured appraised value of real property
taxable by the county and located in a transportation reinvestment
zone under this section;
             (2)  the captured appraised value of real property
taxable by a county for a year is the total appraised value of all
real property taxable by the county and located in a transportation
reinvestment zone for that year less the tax increment base of the
county; and
             (3)  the tax increment base of a county is the total
appraised value of all real property taxable by the county and
located in a transportation reinvestment zone for the year in which
the zone was designated under this section.
       (b)  This section applies only to a county the commissioners
court of which has entered into a pass-through toll agreement with
the department under Section 222.104.
       (c)  The commissioners court of the county by order or
resolution may designate a contiguous geographic area in the
jurisdiction of the county to be a transportation reinvestment zone
to promote a transportation project described by Section 222.104
that cultivates development or redevelopment of the area and for
the purpose of abating ad valorem taxes imposed by the county on
real property located in the zone.
       (d)  Not later than the seventh day before the date the
commissioners court proposes to designate an area as a
transportation reinvestment zone under this section, the
commissioners court must hold a public hearing on the creation of
the zone, its benefits to the county and to property in the proposed
zone, and the abatement of ad valorem taxes imposed by the county on
real property located in the zone. At the hearing an interested
person may speak for or against the creation of the zone, its
boundaries, or the abatement of county taxes on real property in the
zone. Not later than the seventh day before the date of the
hearing, notice of the hearing must be published in a newspaper
having general circulation in the county.
       (e)  The order or resolution designating an area as a
transportation reinvestment zone must:
             (1)  describe the boundaries of the zone with
sufficient definiteness to identify with ordinary and reasonable
certainty the territory included in the zone;
             (2)  provide that the zone takes effect immediately on
adoption of the order or resolution; and
             (3)  assign a name to the zone for identification, with
the first zone created by a county designated as "Transportation
Reinvestment Zone Number One, County of (name of county)," and
subsequently created zones assigned names in the same form numbered
consecutively in the order of their creation.
       (f)  Designation of an area as a transportation reinvestment
zone under this section constitutes designation of the area as a
reinvestment zone under Chapters 311 and 312, Tax Code, without
further hearings or other procedural requirements.
       (g)  The commissioners court by order or resolution may enter
into an agreement with the owner of any real property located in the
transportation reinvestment zone to abate a portion of the ad
valorem taxes imposed by the county on the owner's property. In the
alternative, the commissioners court by order or resolution may
elect to abate a portion of the ad valorem taxes imposed by the
county on all real property located in the zone. In any ad valorem
tax year, the total amount of the taxes abated under this section
may not exceed the amount calculated under Subsection (a)(1) for
that year.
       (h)  To assist the county in complying with the terms or
conditions of an agreement with the department under Section
222.104, a road utility district may be formed under Chapter 441
that has the same boundaries as a transportation reinvestment zone
created under this section.
       (i)  In any ad valorem tax year, a road utility district
formed as provided by Subsection (h) may impose taxes on property in
the district at a rate that when applied to the property in the
district would impose taxes in an amount equal to the amount of
taxes abated by the commissioners court of the county under
Subsection (g). Notwithstanding Section 441.192(a), an election is
not required to approve the imposition of the taxes.
       (j)  A road utility district formed as provided by Subsection
(h) may enter into an agreement with the county to assume the
obligation, if any, of the county to reimburse the department an
amount that is not greater than 50 percent of the aggregate amount
of any payments made by the department to the county under an
agreement under Section 222.104. Any amount paid to the department
under this subsection is considered to be an operating expense of
the district.  Any taxes collected by the district that are not paid
to the department under this subsection may be used for any district
purpose.
       (k)  Money received by the department under Subsection (j)
shall be deposited to the credit of the transportation reinvestment
fund under Section 222.105 and may be used only for a purpose
specified by that section and, until the eighth anniversary of the
date the road utility district was created, used only in connection
with a project that is located in the department district in which
the road utility district is located.
       (l)  A tax abatement agreement entered into under Subsection
(g), or an order or resolution on the abatement of taxes under that
subsection, terminates on December 31 of the year in which the
county ceases to be required to make reimbursement payments to the
department under the agreement entered into under Section 222.104.
       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, 2007.