Office of House Bill AnalysisH.B. 2684
By: Coleman
Ways & Means


A tax increment reinvestment zone is a special district created by a local
governmental entity to revitalize an area by using the tax increment
generated by economic development to finance debt service on bonds used to
revitalize the zone.  H.B. 2684 authorizes the municipality of a
reinvestment zone, as well as a reinvestment board, to implement project
plans, and authorizes a reinvestment board to enter into tax abatement
agreements.  It also further specifies the powers and duties of a local
government corporation acting of behalf of local government. 


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 1.  Amends Section 311.010(b), Tax Code, to authorize the
municipality of a reinvestment zone to enter into agreements on the
conditions and for a term the board of directors of the reinvestment zone
(board) or municipality considers necessary or convenient to implement the
project plan and reinvestment zone financing plan and achieve their
purposes.  Authorizes an agreement to pledge revenue in the tax increment
fund for the term of the agreement to be used to pay any project costs
which benefit the reinvestment zone, whether located within or outside the
zone, including the cost of school buildings and other educational
facilities, rail or transit facilities, affordable housing, remediating
conditions contaminating public or private land or buildings, preserving
the facades of demolishing public or private buildings, as well as
replacing housing or areas of public assembly. 

SECTION 2.  Amends Section 311.011, Tax Code, by adding Subsections (d),
(e), (f), and (g), as follows: 

(d)  Authorizes the board to exercise any of the powers granted to the
municipality by Section 311.008 (Powers of Municipality) and the
municipality to restrict by ordinance or resolution any power the board is
granted by this chapter (Tax Increment Financing Act). 

(e)  Authorizes a taxing unit to enter into a tax abatement agreement with
personal or real property owners in the reinvestment zone after it has
agreed to pay its tax increments into the tax increment fund.  Provides
that such an agreement must be approved by the board. 

(f)  Authorizes the board to exercise the powers set forth in this section
after the municipality adopts an ordinance creating the zone
notwithstanding any charter provisions of the municipality to the contrary. 

(g)  Authorizes the board and the municipality to contract with a local
government corporation created by the municipality pursuant to Chapter 431
(Texas Transportation Corporation Act), Transportation Code, to manage the
reinvestment zone and implement the project plan for the term and on such
conditions as the parties agree. 

SECTION 3.  Amends Section 311.011(f), Tax Code, to delete the provision
that the project plan  of a county with a population of more than 2.1
million must exempt at least one third of the surface area of the zone,
excluding certain roadways and public areas, from ad valorem taxation and
be dedicated to residential housing.  Provides that at least one-third of
the tax increment must be used, rather than dedicated, to provide
affordable, rather than low-income, housing. 

SECTION 4.  Amends Section 311.014, Tax Code, by adding Subsection (j), as

(j)  Authorizes a taxing unit to retain from the amount otherwise required
to be paid into the tax incremental fund of a reinvestment zone created on
or after September 1, 1999, the amount resulting from the levy of a tax on
the captured appraised value of the zone at the rate the taxing unit levies
to pay its bonds or other obligations.  Prohibits the taxing unit from
retaining such a tax increment in a reinvestment zone created before
September 1, 1999, unless the taxing unit retained that right in the
agreement to participate in the zone. 

SECTION 5.  Amends Section 431.101, Transportation Code, as follows:

(a)  Provides that the governing body of the local government must approve
the articles of incorporation and the bylaws of any local government
corporation acting on its behalf. 

(b)  Provides that a local government corporation has the powers of a
non-profit corporation created under Article 1396-101 et seq., V.T.C.S.
(Texas Non-Profit Corporation Act), to the extent that the provisions of
that Act are not inconsistent with this chapter.  Makes this provisions of
that Act applicable to the directors and officers standards of conduct,
interests in contracts, and powers. 

(c)  Provides that the provisions of this chapter relating to the creation,
dissolution, administration, and supervision of a corporation by the Texas
Transportation Commissioner (commissioner) are not applicable to a local
government corporation. 

(d)  Provides that the provisions of Section 394.904 (Exemption from
Requirements and Restrictions Applying to Public Property), Local
Government Code, are applicable to contracts awarded by a local government
corporation and to property or improvements owned by the local government

(e)  Authorizes the persons appointed to the board of directors of a local
government corporation to be the same persons as serve on the board of a
reinvestment zone created by a municipality.  Provides that the members of
the board of directors of the reinvestment zone and of the board of
directors of the local government corporation are not public officers.
Authorizes a director of a local government corporation to receive fee for
the director's service and reimbursement of expenses as provided by Section
49.060 (Fees of Office;  Reimbursement), Water Code.  Deletes text making
provisions of the Texas Non-Profit Corporation Act relating to standards of
conduct applicable to the members of the board of directors of a local
government corporation. 

SECTION 6.Emergency clause.
  Effective date: upon passage.