HBA-GUM S.B. 1771 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1771 By: Shapiro Natural Resources 5/5/1999 Engrossed BACKGROUND AND PURPOSE The Dallas County Utility and Reclamation District (district) was created in 1972 as a Texas Water Code Chapter 4 District, and was originally named the Dallas County Municipal Utility District #1. In 1983, the district was converted to a Special Law District by the 68th Texas Legislature. Additional legislation has authorized the district to enter into tax abatement agreements for as long as thirty years. S.B. 1771 revises the tax abatement procedures and agreements and validates certain acts of the district. 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 4B, Chapter 628, Acts of the 68th Legislature, Regular Session, 1983, by amending Subdivisions (3) and (5)-(8) and adding Subdivisions (9)-(15), as follows: (3) Adds language to provide that the reinvestment zone which the Dallas County Utility and Reclamation District's (district) governing body is authorized to designate under this subdivision is for a period of 50 years or until the termination of all outstanding tax abatement agreements, whichever occurs last. (5) Requires, rather than authorizes, the district to enter into tax abatement agreements for single-family residential property, as defined by the district, for periods of 50 years, and for property other than single family residential property for certain other periods. (6) Provides that a tax abatement agreement is subject to the rights of credit providers of the district, including holders of tax-supported bonds, rather than outstanding tax-supported bonds, regardless of when the bonds were issued. (7) Requires a tax abatement agreement to provide that the portion of the taxable value of the property subject to the agreement, that exceeds the taxable value of the property for the year in which notice for the project to which the agreement pertains is submitted, is subject to a certain specified effective tax rate and exempt from taxation, if the property is singlefamily residential property, except as provided by Subdivision (8). (8) Provides that this subdivision applies only to a tax abatement agreement pertaining to a project for which notice is submitted in 2001 or later, but does not apply to single-family residential property. Provides that the applicable effective tax rate under Subdivision (7) is increased by the amount that the district's debt rate at the time the notice for the project to which the tax abatement agreement pertains is submitted, exceeds 90 cents for each $100 of taxable value of property, but may not exceed 75cents for each $100 of taxable value of property. (9) Authorizes the district to enter into tax abatement agreements with owners of real and personal property within the district for a proposed projects, rather than enter tax abatement agreements relative to real property and to all personal property. (10) Requires the district to adopt guidelines and criteria governing tax abatement agreements by the district. Provides that the guidelines and criteria must specify the criteria for an eligible project. Provides that the guidelines and criteria are effective until the termination of all outstanding tax abatement agreements. Authorizes the district to amend the guidelines and criteria by a vote of a majority of the members of the board of directors of the district. (11) Requires the district to adopt a form of tax abatement agreement to be used by the district. (12) Sets forth certain restrictions on a tax abatement agreement entered into by the district, and authorizes the agreement to include certain specified information. (13) Redesignated from Subdivision (6). Adds language to provide that tax abatement agreements entered into by the district are not required to contain identical terms as other tax abatement agreements, covering the same property entered into by other taxing units, or different property entered into by the district. (14)-(15) Redesignated from Subdivisions (7) and (8). Makes conforming and nonsubstantive changes. SECTION 2. Provides that the creation of the Dallas County Utility and Reclamation District and all elections held, all contracts executed, all bonds and other obligations issued by the district and the expenditure of funds in payment or satisfaction thereof, all sales and donations of assets, all tax rate reduction agreements, and all governmental and proprietary actions, are validated, ratified, and confirmed. Authorizes all bonds and maintenance taxes approved at elections held within the district before the effective date of this Act to be issued, levied, and collected by the board of directors of the district without the necessity of any further elections. Provides that the form of tax abatement agreements adopted by the board of the district is validated, ratified, and confirmed. SECTION 3. Provides that all legal requirements and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished. SECTION 4. Effective date: September 1, 1999. SECTION 5. Emergency clause.