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.