HBA-JRA H.B. 1934 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1934
By: Lewis, Glenn
Ways & Means
4/19/1999
Introduced



BACKGROUND AND PURPOSE 

The use of Tax Increment Financing (TIF) as an economic development tool
has become more prevalent as a means of focused reinvestment in a defined
geographical area of a city.  Current statutes governing the creation and
administration of the TIF zones are dominated by the municipal perspective
primarily because only cities can create them.  However, since other taxing
entities are expected to participate in TIF, additional clarification and
latitude may benefit other participating taxing entities.   

Currently, the TIF statute is not specific as to who may serve on the
governing board of directors for TIF districts.  Also, when TIF is
designated solely by a municipality, a taxing unit has only 60 days from
adoption of the finance plan to notify the municipality, in writing, of the
level of its participation.  Otherwise, the taxing unit is automatically in
the TIF at 100 percent participation. Current statutes also do not make it
clear that a taxing unit does not have to make a payment of tax increment
dollars into a TIF fund until those taxes are actually collected.  It is
the current position of some that, as long as the taxes have been levied,
they are included in the captured appraised value formula and payable to
the tax increment fund, regardless of whether or not they have actually
been collected. 

H.B. 1934 provides that a person is not ineligible for appointment to the
board of directors of a reinvestment zone because the person is a member of
the governing body of taxing unit that levies taxes on real property in the
zone, deletes the 60-day time limit for notification of level of
participation, and provides that a taxing unit is not required to pay into
a tax increment fund the applicable portion of a tax increment attributable
to delinquent taxes until those taxes are collected. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 311.009, Tax Code, by adding Subsection (g), as
follows: 

(g)  Provides that a person is not ineligible for appointment to the board
of directors of a reinvestment zone because the person is a member of the
governing body of a taxing unit that levies taxes on real property in the
zone. 

SECTION 2.  Amends Sections 311.013(b) and (f)-(i), Tax Code, to delete
text relating to the portion of the tax increment produced by the taxing
unit that the taxing unit will retain, notification requirements, and a
prohibition against decreasing that portion after a project plan's
approval. Provides that a taxing unit is not required to pay into a tax
increment fund the applicable portion of a tax increment attributable to
delinquent taxes until those taxes are collected.  Redesignates existing
Subsections (g)-(i) to Subsections (f)-(h).  Makes conforming changes. 

SECTION 3.  Emergency clause.
  Effective date: upon passage.