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  By: Brimer  S.B. No. 1266
         (In the Senate - Filed March 6, 2007; March 14, 2007, read
  first time and referred to Committee on Transportation and Homeland
  Security; April 3, 2007, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 8, Nays 0;
  April 3, 2007, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1266 By:  Brimer
 
 
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.
 
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