HBA-KDB H.B. 1468 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1468
By: Pitts
Ways & Means
67/8/14/2001
Enrolled



BACKGROUND AND PURPOSE 

Tax increment financing is a tool used by local governments to fund
development by borrowing against the future tax collections from a
property.  Prior to the 77th Legislature, the total taxable value for a
unit that participated in a Tax Increment Refinance Zone (TIRZ) included
captured appraised value.  Including the captured appraised value in the
total tax value caused the taxing unit to have an artificially low
effective and rollback tax rate, which was especially detrimental to small
communities and counties that are unable to absorb its effects.   School
districts were the only units allowed to remove the captured appraised
value from the calculation of effective and rollback tax rates.  House Bill
1468 provides that captured appraised value of any unit, other than a
school district, that participates in a TIRZ and that is located in a
county with a population of less than 500,000 is excluded from the total
taxable value. 

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. 

ANALYSIS

House Bill 1468 amends the Tax Code to provide that the portion of the
captured appraised value of real property taxable by a taxing unit that
corresponds to the portion of the tax increment of the unit from that
property that the unit has agreed to pay into the tax increment fund for a
reinvestment zone is excluded from the value of the property taxable by the
unit in any tax rate calculation under provisions relating to tax
assessment.  The bill provides that the portion of the tax increment of a
taxing unit that the unit has agreed to pay into the tax increment fund for
a reinvestment zone is excluded from the amount of taxes imposed or
collected by the unit in any tax rate calculation under provisions relating
to tax assessment.  The provisions of the bill apply only to a taxing unit,
other than a school district, that is located in a county with a population
of less than 500,000. 

EFFECTIVE DATE

September 1, 2001.