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.