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


Office of House Bill AnalysisH.B. 1468
By: Pitts
Ways & Means
3/8/2001
Introduced



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.  Under current law, the total taxable value for a unit that
participates in a Tax Increment Refinance Zone (TIRZ) includes captured
value.  Including the captured value in the total tax value causes the
taxing unit to have an artificially low effective and rollback tax rate,
which is especially detrimental to small communities and counties that are
unable to absorb its effects.   School districts are the only units allowed
to remove the captured value from the calculation of effective and rollback
tax rates.  House Bill 1468 provides that captured value of any unit that
participates in a TIRZ 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 do not apply to school
districts. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.