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


Office of House Bill AnalysisC.S.H.B. 1468
By: Pitts
Ways & Means
4/22/2001
Committee Report (Substituted)



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.  C.S.H.B. 1468 provides that captured 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

C.S.H.B. 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

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

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1468 modifies the original bill by providing that the Act applies
only to a taxing unit  located in a county with a population of less than
500,000.  The original bill did not include a population limitation.