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A BILL TO BE ENTITLED
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AN ACT
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relating to the treatment of certain residence homesteads for |
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purposes of the Tax Increment Financing Act. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 311.002(1), Tax Code, is amended to read |
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as follows: |
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(1) "Project costs" means the expenditures made or |
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estimated to be made and monetary obligations incurred or estimated |
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to be incurred by the municipality or county designating a |
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reinvestment zone that are listed in the project plan as costs of |
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public works, public improvements, programs, or other projects |
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benefiting the zone, plus other costs incidental to those |
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expenditures and obligations. "Project costs" include: |
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(A) capital costs, including the actual costs of |
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the acquisition and construction of public works, public |
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improvements, new buildings, structures, and fixtures; the actual |
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costs of the acquisition, demolition, alteration, remodeling, |
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repair, or reconstruction of existing buildings, structures, and |
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fixtures; the actual costs of the remediation of conditions that |
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contaminate public or private land or buildings; the actual costs |
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of the preservation of the facade of a public or private building; |
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the actual costs of the demolition of public or private buildings; |
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and the actual costs of the acquisition of land and equipment and |
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the clearing and grading of land; |
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(B) financing costs, including all interest paid |
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to holders of evidences of indebtedness or other obligations issued |
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to pay for project costs and any premium paid over the principal |
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amount of the obligations because of the redemption of the |
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obligations before maturity; |
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(C) real property assembly costs; |
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(D) professional service costs, including those |
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incurred for architectural, planning, engineering, and legal |
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advice and services; |
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(E) imputed administrative costs, including |
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reasonable charges for the time spent by employees of the |
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municipality or county in connection with the implementation of a |
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project plan; |
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(F) relocation costs; |
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(G) organizational costs, including the costs of |
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conducting environmental impact studies or other studies, the cost |
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of publicizing the creation of the zone, and the cost of |
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implementing the project plan for the zone; |
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(H) interest before and during construction and |
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for one year after completion of construction, whether or not |
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capitalized; |
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(I) the cost of operating the reinvestment zone |
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and project facilities; |
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(J) the amount of any contributions made by the |
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municipality or county from general revenue for the implementation |
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of the project plan; |
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(K) the costs of school buildings, other |
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educational buildings, other educational facilities, or other |
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buildings owned by or on behalf of a school district, community |
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college district, or other political subdivision of this state; |
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[and] |
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(L) payments made at the discretion of the |
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governing body of the municipality or county that the governing |
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body finds necessary or convenient to the creation of the zone or to |
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the implementation of the project plans for the zone; and |
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(M) payments made as part of a reinvestment zone |
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stability program established under Section 311.0111. |
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SECTION 2. Section 311.006(a), Tax Code, is amended to read |
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as follows: |
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(a) A municipality may not designate a reinvestment zone if: |
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(1) more than 40 [30] percent of the property in the |
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proposed zone[, excluding property that is publicly owned,] is used |
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for residential purposes, excluding property that is: |
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(A) publicly owned; or |
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(B) a residence homestead owned by a legacy |
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homeowner, as those terms are defined by Section 311.0111; or |
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(2) the total appraised value of taxable real property |
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in the proposed zone and in existing reinvestment zones exceeds: |
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(A) 25 percent of the total appraised value of |
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taxable real property in the municipality and in the industrial |
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districts created by the municipality, if the municipality has a |
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population of 100,000 or more; or |
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(B) 50 percent of the total appraised value of |
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taxable real property in the municipality and in the industrial |
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districts created by the municipality, if the municipality has a |
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population of less than 100,000. |
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SECTION 3. Chapter 311, Tax Code, is amended by adding |
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Section 311.0111 to read as follows: |
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Sec. 311.0111. REINVESTMENT ZONE STABILITY PROGRAM. (a) |
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In this section: |
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(1) "Legacy homeowner" means the owner of a residence |
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homestead located in a reinvestment zone who has continuously |
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resided in and received an exemption under Section 11.13 for the |
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homestead for at least seven years preceding the date the governing |
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body of the county or municipality designated the zone in which the |
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homestead is located. |
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(2) "Program" means a reinvestment zone stability |
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program established under this section. |
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(3) "Residence homestead" has the meaning assigned by |
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Section 11.13. |
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(b) The project plan prepared and adopted by the board of |
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directors of a reinvestment zone under Section 311.011 may |
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authorize the board of directors to establish a reinvestment zone |
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stability program, the purpose of which is to ensure that all |
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residents of the zone benefit from its designation. The governing |
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body of the county or municipality that designated the zone and any |
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affiliated community organizations may participate in the |
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development of the program. As part of a program established under |
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this section, the board may dedicate, pledge, or otherwise provide |
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for the use of money in the tax increment fund established for the |
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zone to prevent homeowner displacement by providing annual payments |
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on behalf of legacy homeowners to offset the increase in ad valorem |
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taxes imposed on the residence homesteads of those homeowners that |
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is attributable to the increase in property values associated with |
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the development or redevelopment of property in the zone. |
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(c) If the project plan for a reinvestment zone authorizes |
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annual payments on behalf of legacy homeowners, the plan must |
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provide that: |
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(1) the amount of an annual payment made under the |
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program to a legacy homeowner may not exceed the amount determined |
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for that homeowner under Subsection (d); and |
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(2) the period of time for which annual payments may be |
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made on behalf of a legacy homeowner may not exceed 10 years. |
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(d) The maximum amount of an annual payment that may be made |
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on behalf of a legacy homeowner for a tax year is equal to the |
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positive difference, if any, between the following amounts: |
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(1) the ad valorem taxes due on the homeowner's |
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homestead for that tax year; and |
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(2) the ad valorem taxes due on the homeowner's |
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homestead for the tax year in which the reinvestment zone in which |
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the homestead is located was designated. |
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SECTION 4. This Act takes effect September 1, 2023. |