TAX CODE
SUBTITLE B. SPECIAL PROPERTY TAX PROVISIONS
CHAPTER 311. TAX INCREMENT FINANCING ACT
§ 311.001. SHORT TITLE. This chapter may be cited as
the Tax Increment Financing Act.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 311.002. DEFINITIONS. In this chapter:
(1) "Project costs" means the expenditures made or
estimated to be made and monetary obligations incurred or estimated
to be incurred by the municipality establishing a reinvestment zone
that are listed in the project plan as costs of public works or
public improvements in the zone, plus other costs incidental to
those expenditures and obligations. "Project costs" include:
(A) capital costs, including the actual costs of
the acquisition and construction of public works, public
improvements, new buildings, structures, and fixtures; the actual
costs of the acquisition, demolition, alteration, remodeling,
repair, or reconstruction of existing buildings, structures, and
fixtures; and the actual costs of the acquisition of land and
equipment and the clearing and grading of land;
(B) financing costs, including all interest paid
to holders of evidences of indebtedness or other obligations issued
to pay for project costs and any premium paid over the principal
amount of the obligations because of the redemption of the
obligations before maturity;
(C) real property assembly costs;
(D) professional service costs, including those
incurred for architectural, planning, engineering, and legal
advice and services;
(E) imputed administrative costs, including
reasonable charges for the time spent by employees of the
municipality in connection with the implementation of a project
plan;
(F) relocation costs;
(G) organizational costs, including the costs of
conducting environmental impact studies or other studies, the cost
of publicizing the creation of the zone, and the cost of
implementing the project plan for the zone;
(H) interest before and during construction and
for one year after completion of construction, whether or not
capitalized;
(I) the cost of operating the reinvestment zone
and project facilities;
(J) the amount of any contributions made by the
municipality from general revenue for the implementation of the
project plan; and
(K) payments made at the discretion of the
governing body of the municipality that the municipality finds
necessary or convenient to the creation of the zone or to the
implementation of the project plans for the zone.
(2) "Project plan" means the project plan for the
development or redevelopment of a reinvestment zone approved under
this chapter, including all amendments of the plan approved as
provided by this chapter.
(3) "Reinvestment zone financing plan" means the
financing plan for a reinvestment zone described by this chapter.
(4) "Taxing unit" has the meaning assigned by Section
1.04.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 311.003. PROCEDURE FOR CREATING REINVESTMENT
ZONE. (a) The governing body of a municipality by ordinance may
designate a contiguous geographic area in the jurisdiction of the
municipality to be a reinvestment zone to promote development or
redevelopment of the area if the governing body determines that
development or redevelopment would not occur solely through private
investment in the reasonably foreseeable future.
(b) Before adopting an ordinance providing for a
reinvestment zone, the governing body of the municipality must
prepare a preliminary reinvestment zone financing plan. As soon as
the plan is completed, a copy of the plan must be sent to the
governing body of each taxing unit that levies taxes on real
property in the proposed zone.
(c) Before adopting an ordinance providing for a
reinvestment zone, the municipality must hold a public hearing on
the creation of the zone and its benefits to the municipality and to
property in the proposed zone. At the hearing an interested person
may speak for or against the creation of the zone, its boundaries,
or the concept of tax increment financing. Not later than the
seventh day before the date of the hearing, notice of the hearing
must be published in a newspaper having general circulation in the
municipality.
(d) A municipality must provide a reasonable opportunity
for the owner of property to protest the inclusion of the property
in a proposed reinvestment zone.
(e) Not later than the 60th day before the date of the public
hearing required by Subsection (c), the governing body of the
municipality must notify in writing the governing body of each
taxing unit that levies real property taxes in the proposed
reinvestment zone that it intends to establish the zone. The notice
must contain a description of the proposed boundaries of the zone,
the tentative plans for the development or redevelopment of the
zone, and an estimate of the general impact of the proposed zone on
property values and tax revenues. The notice may be given later
than the 60th day before the date of the public hearing if the
governing body of each county and school district that levies real
property taxes in the proposed zone agrees to waive the
requirement.
(f) A taxing unit may request additional information from
the governing body of the municipality. The governing body of the
municipality shall provide the information requested to the extent
practicable. In addition to the notice required by Subsection (e),
the governing body of the municipality shall make a formal
presentation to the governing body of each county or school
district that levies real property taxes in the proposed
reinvestment zone. The presentation must include a description of
the proposed boundaries of the zone, the tentative plans for the
development or redevelopment of the zone, and an estimate of the
general impact of the proposed zone on property values and tax
revenues. The governing body of the municipality shall notify each
taxing unit that levies real property taxes in the proposed zone of
each presentation to be made to a county or school district under
this subsection. Members of the governing body of each taxing unit
that levies real property taxes in the proposed zone may attend a
presentation under this subsection. If agreed to by the county or
school districts involved, the governing body of the municipality
may make a single presentation to more than one county or school
district governing body.
(g) Not later than the 15th day after the date on which the
notice required by Subsection (e) is given, each taxing unit that
levies real property taxes in the proposed reinvestment zone shall
designate a representative to meet with the governing body of the
municipality to discuss the project plan and the reinvestment zone
financing plan and shall notify the governing body of the
municipality of its designation. At any time after the 15th day
after the date on which the notice required by Subsection (e) has
been given to every taxing unit, the governing body of the
municipality may call a meeting of the representatives of the
taxing units. The governing body of the municipality may call as
many meetings as it considers necessary. Each representative shall
be notified of each meeting in advance. At the meetings the
governing body of the municipality and the representatives of the
other taxing units may discuss the boundaries of the zone,
development in the zone, the tax increment that each taxing unit
will contribute to the tax increment fund, the retention by a taxing
unit of a portion of its tax increment as permitted by Section
311.013, the exclusion of particular parcels of property from the
zone, the board of directors for the zone, and tax collection for
the zone. On the motion of the governing body of the municipality
calling the meeting, any other matter relevant to the proposed
reinvestment zone may be discussed.
(h) Repealed by Acts 1999, 76th Leg., ch. 983, § 14, eff.
June 18, 1999.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 16, eff. Sept. 1,
1989; Acts 1999, 76th Leg., ch. 983, § 14, eff. June 18, 1999.
§ 311.0031. ENTERPRISE ZONE. Designation of an area as
an enterprise zone under Chapter 2303, Government Code constitutes
designation of the area as a reinvestment zone under this chapter
without further hearing or other procedural requirements other than
those provided by Chapter 2303, Government Code.
Added by Acts 1989, 71st Leg., ch. 1106, § 26, eff. Aug. 28,
1989. Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(22), eff.
Sept. 1, 1995.
§ 311.004. CONTENTS OF REINVESTMENT ZONE
ORDINANCE. (a) The ordinance designating an area as a
reinvestment zone must:
(1) describe the boundaries of the zone with
sufficient definiteness to identify with ordinary and reasonable
certainty the territory included in the zone;
(2) create a board of directors for the zone and
specify the number of directors of the board as provided by Section
311.009 or 311.0091, as applicable;
(3) provide that the zone take effect immediately upon
passage of the ordinance;
(4) provide a date for termination of the zone;
(5) assign a name to the zone for identification, with
the first zone created by a municipality designated as
"Reinvestment Zone Number One, City (or Town, as applicable) of
(name of municipality)" and subsequently created zones assigned
names in the same form numbered consecutively in the order of their
creation;
(6) establish a tax increment fund for the zone; and
(7) contain findings that:
(A) improvements in the zone will significantly
enhance the value of all the taxable real property in the zone and
will be of general benefit to the municipality; and
(B) the area meets the requirements of Section
311.005.
(b) For purposes of complying with Subsection (a)(7)(A),
the ordinance is not required to identify the specific parcels of
real property to be enhanced in value.
(c) To designate a reinvestment zone under Section
311.005(a)(5), the governing body of a municipality must specify in
the ordinance that the reinvestment zone is designated under that
section.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 17, eff. Sept. 1,
1989; Acts 1999, 76th Leg., ch. 983, § 1, eff. June 18, 1999;
Acts 2001, 77th Leg., ch. 1162, § 1, eff. Sept. 1, 2001.
§ 311.005. CRITERIA FOR REINVESTMENT ZONE. (a) To be
designated as a reinvestment zone, an area must:
(1) substantially arrest or impair the sound growth of
the municipality creating the zone, retard the provision of housing
accommodations, or constitute an economic or social liability and
be a menace to the public health, safety, morals, or welfare in its
present condition and use because of the presence of:
(A) a substantial number of substandard, slum,
deteriorated, or deteriorating structures;
(B) the predominance of defective or inadequate
sidewalk or street layout;
(C) faulty lot layout in relation to size,
adequacy, accessibility, or usefulness;
(D) unsanitary or unsafe conditions;
(E) the deterioration of site or other
improvements;
(F) tax or special assessment delinquency
exceeding the fair value of the land;
(G) defective or unusual conditions of title; or
(H) conditions that endanger life or property by
fire or other cause;
(2) be predominantly open and, because of obsolete
platting, deterioration of structures or site improvements, or
other factors, substantially impair or arrest the sound growth of
the municipality; or
(3) be in a federally assisted new community located
in the municipality or in an area immediately adjacent to a
federally assisted new community;
(4) Deleted by Acts 1989, 71st Leg., ch. 1106, § 27;
or
(5) be an area described in a petition requesting that
the area be designated as a reinvestment zone, if the petition is
submitted to the governing body of the municipality by the owners of
property constituting at least 50 percent of the appraised value of
the property in the area according to the most recent certified
appraisal roll for the county in which the area is located.
(b) In this section, "federally assisted new community"
means a federally assisted area that has received or will receive
assistance in the form of loan guarantees under Title X of the
National Housing Act, if a portion of the federally assisted area
has received grants under Section 107(a)(1) of the Housing and
Community Development Act of 1974.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.05(a), eff. Aug. 28,
1989; Acts 1989, 71st Leg., ch. 1106, § 27, eff. Aug. 28, 1989;
Acts 1989, 71st Leg., ch. 1137, § 18, eff. Sept. 1, 1989.
§ 311.006. RESTRICTIONS ON COMPOSITION OF REINVESTMENT
ZONE. (a) A municipality may not create a reinvestment zone if:
(1) more than 10 percent of the property in the
proposed zone, excluding property that is publicly owned, is used
for residential purposes; or
(2) the total appraised value of taxable real property
in the proposed zone and in existing reinvestment zones exceeds 15
percent of the total appraised value of taxable real property in the
municipality and in the industrial districts created by the
municipality.
(b) A municipality may not change the boundaries of an
existing reinvestment zone to include property more than 10 percent
of which, excluding property dedicated to public use, is used for
residential purposes or to include more than 15 percent of the total
appraised value of taxable real property in the municipality and in
the industrial districts created by the municipality.
(c) A municipality may not create a reinvestment zone or
change the boundaries of an existing reinvestment zone if the
proposed zone or proposed boundaries of the zone contain more than
15 percent of the total appraised value of real property taxable by
a county or school district.
(d) For purposes of this section, property is used for
residential purposes if it is occupied by a house having fewer than
five living units, and the appraised value is determined according
to the most recent appraisal rolls of the municipality.
(e) Subsection (a)(1) does not apply to a reinvestment zone
designated under Section 311.005(a)(5).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 19, eff. Sept. 1,
1989.
§ 311.007. CHANGING BOUNDARIES OF EXISTING
ZONE. (a) Subject to the limitations provided by Section
311.006, the boundaries of an existing reinvestment zone may be
reduced or enlarged by ordinance or resolution of the governing
body of the municipality that created the zone.
(b) The governing body of the municipality may enlarge an
existing reinvestment zone to include an area described in a
petition requesting that the area be included in the zone if the
petition is submitted to the governing body of the municipality by
the owners of property constituting at least 50 percent of the
appraised value of the property in the area according to the most
recent certified appraisal roll for the county in which the area is
located. The composition of the board of directors of the zone
continues to be governed by Section 311.009(a) or (b), whichever
applied to the zone immediately before the enlargement of the zone,
except that the membership of the board must conform to the
requirements of the applicable subsection of Section 311.009 as
applied to the zone after its enlargement. The provision of Section
311.006(b) relating to the amount of property used for residential
purposes that may be included in the zone does not apply to the
enlargement of a zone under this subsection.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 20, eff. Sept. 1,
1989.
§ 311.008. POWERS OF MUNICIPALITY. (a) In this
section, "educational facility" includes equipment, real property,
and other facilities, including a public school building, that are
used or intended to be used jointly by the municipality and an
independent school district.
(b) A municipality may exercise any power necessary and
convenient to carry out this chapter, including the power to:
(1) cause project plans to be prepared, approve and
implement the plans, and otherwise achieve the purposes of the
plan;
(2) acquire real property by purchase, condemnation,
or other means to implement project plans and sell that property on
the terms and conditions and in the manner it considers advisable;
(3) enter into agreements, including agreements with
bondholders, determined by the governing body of the municipality
to be necessary or convenient to implement project plans and
achieve their purposes, which agreements may include conditions,
restrictions, or covenants that run with the land or that by other
means regulate or restrict the use of land; and
(4) consistent with the project plan for the zone:
(A) acquire blighted, deteriorated,
deteriorating, undeveloped, or inappropriately developed real
property or other property in a blighted area or in a federally
assisted new community in the zone for the preservation or
restoration of historic sites, beautification or conservation, the
provision of public works or public facilities, or other public
purposes;
(B) acquire, construct, reconstruct, or install
public works, facilities, or sites or other public improvements,
including utilities, streets, street lights, water and sewer
facilities, pedestrian malls and walkways, parks, flood and
drainage facilities, or parking facilities, but not including
educational facilities; or
(C) in a reinvestment zone created on or before
September 1, 1999, acquire, construct, or reconstruct educational
facilities in the municipality.
(c) The powers authorized by Subsection (b)(2) prevail over
any law or municipal charter to the contrary.
(d) A municipality may make available to the public on
request financial information regarding the acquisition by the
municipality of land in the zone when the municipality acquires the
land.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 44, § 2, eff. Oct.
20, 1987; Acts 1999, 76th Leg., ch. 1521, § 1, eff. June 19,
1999.
§ 311.0085. POWER OF CERTAIN MUNICIPALITIES. (a) This
section applies only to a municipality that has:
(1) territory in three counties; and
(2) a population of less than 120,000.
(b) In this section, "educational facility" has the meaning
assigned by Section 311.008.
(c) In addition to exercising the powers described by
Section 311.008, a municipality may enter into a new agreement, or
amend an existing agreement, with a school district that is located
in whole or in part in a reinvestment zone created by the
municipality to dedicate revenue from the tax increment fund to the
school district for acquiring, constructing, or reconstructing an
educational facility located in or outside of the zone.
Added by Acts 2001, 77th Leg., ch. 1133, § 1, eff. Sept. 1, 2001.
§ 311.009. COMPOSITION OF BOARD OF
DIRECTORS. (a) Except as provided by Subsection (b), the board of
directors of a reinvestment zone consists of at least five and not
more than 15 members, unless more than 15 members are required to
satisfy the requirements of this subsection.
Each taxing unit other than a municipality that levies taxes
on real property in the zone may appoint one member of the board. A
unit may waive its right to appoint a director. The governing body
of the municipality that created the zone may appoint not more than
10 directors to the board; except that if there are fewer than five
directors appointed by taxing units other than the municipality,
the governing body of the municipality may appoint more than 10
members as long as the total membership of the board does not exceed
15.
(b) If the zone was designated under Section 311.005(a)(5),
the board of directors of the zone consists of nine members. Each
school district or county that levies taxes on real property in the
zone may appoint one member of the board if the school district or
county has approved the payment of all or part of the tax increment
produced by the unit. The member of the state senate in whose
district the zone is located is a member of the board, and the
member of the state house of representatives in whose district the
zone is located is a member of the board, except that either may
designate another individual to serve in the member's place at the
pleasure of the member. If the zone is located in more than one
senate or house district, this subsection applies only to the
senator or representative in whose district a larger portion of the
zone is located than any other senate or house district, as
applicable. The remaining members of the board are appointed by the
governing body of the municipality that created the zone.
(c) Members of the board are appointed for terms of two
years unless longer terms are provided under Article XI, Section
11, of the Texas Constitution. Terms of members may be staggered.
(d) A vacancy on the board is filled for the unexpired term
by appointment of the governing body of the taxing unit that
appointed the director who served in the vacant position.
(e) To be eligible for appointment to the board by the
governing body of the municipality, an individual must:
(1) if the board is covered by Subsection (a):
(A) be a qualified voter of the municipality; or
(B) be at least 18 years of age and own real
property in the zone, whether or not the individual resides in the
municipality; or
(2) if the board is covered by Subsection (b):
(A) be at least 18 years of age; and
(B) own real property in the zone or be an
employee or agent of a person that owns real property in the zone.
(f) Each year the governing body of the municipality shall
appoint one member of the board to serve as chairman for a term of
one year that begins on January 1 of the following year. The board
of directors may elect a vice-chairman to preside in the absence of
the chairman or when there is a vacancy in the office of chairman.
The board may elect other officers as it considers appropriate.
(g) A member of the board of directors of a reinvestment
zone:
(1) is not a public official by virtue of that
position; and
(2) unless otherwise ineligible, may be appointed to
serve concurrently on the board of directors of a local government
corporation created under Subchapter D, Chapter 431,
Transportation Code.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 21, eff. Sept. 1,
1989; Acts 1999, 76th Leg., ch. 983, § 2, eff. June 18, 1999.
§ 311.0091. COMPOSITION OF BOARD OF DIRECTORS OF CERTAIN
REINVESTMENT ZONES. (a) This section applies to a reinvestment
zone designated by a municipality which is wholly or partially
located in a county with a population of less than 1.4 million in
which the principal municipality has a population of 1.1 million or
more.
(b) Except as provided by Subsection (c), the board of
directors of a reinvestment zone consists of at least five and not
more than 15 members, unless more than 15 members are required to
satisfy the requirements of this subsection. Each taxing unit that
approves the payment of all or part of its tax increment into the
tax increment fund is entitled to appoint a number of members to the
board in proportion to the taxing unit's pro rata share of the total
anticipated tax increment to be deposited into the tax increment
fund during the term of the zone. In determining the number of
members a taxing unit may appoint to the board, the taxing unit's
percentage of anticipated pro rata contributions to the tax
increment fund is multiplied by the number of members of the board,
and a number containing a fraction that is one-half or greater shall
be rounded up to the next whole number. Notwithstanding any other
provision of this subsection, each taxing unit that approves the
payment of all or part of its tax increment into the tax increment
fund is entitled to appoint at least one member of the board, and
the municipality that designated the zone is entitled to appoint at
least as many members of the board as any other participating taxing
unit. A taxing unit may waive its right to appoint a director.
(c) If the zone was designated under Section 311.005(a)(5),
the board of directors of the zone consists of nine members, unless
a greater number of members is necessary to comply with this
subsection. Each taxing unit that approves the payment of all or
part of its tax increment into the tax increment fund is entitled to
appoint a number of members to the board in proportion to the taxing
unit's pro rata share of the total anticipated tax increment to be
deposited into the tax increment fund during the term of the zone.
In determining the number of members a taxing unit may appoint to
the board, the taxing unit's percentage of anticipated pro rata
contributions to the tax increment fund is multiplied by nine, and a
number containing a fraction that is one-half or greater shall be
rounded up to the next whole number. Notwithstanding any other
provision of this subsection, each taxing unit that approves the
payment of all or part of its tax increment into the tax increment
fund is entitled to appoint at least one member of the board, and
the municipality that designated the zone is entitled to appoint at
least as many members of the board as any other participating taxing
unit. A taxing unit may waive its right to appoint a director. The
member of the state senate in whose district the zone is located is
a member of the board, and the member of the state house of
representatives in whose district the zone is located is a member of
the board, except that either may designate another individual to
serve in the member's place at the pleasure of the member. If the
zone is located in more than one senate or house district, this
subsection applies only to the senator or representative in whose
district a larger portion of the zone is located than any other
senate or house district, as applicable.
(d) Members of the board are appointed for terms of two
years unless longer terms are provided under Section 11, Article
XI, Texas Constitution. Terms of members may be staggered.
(e) A vacancy on the board is filled for the unexpired term
by appointment of the governing body of the taxing unit that
appointed the director who served in the vacant position.
(f) To be eligible for appointment to the board, an
individual must:
(1) be a qualified voter of the municipality; or
(2) be at least 18 years of age and own real property
in the zone or be an employee or agent of a person that owns real
property in the zone.
(g) Each year the board of directors of a reinvestment zone
shall elect one of its members to serve as presiding officer for a
term of one year. The board of directors may elect an assistant
presiding officer to preside in the absence of the presiding
officer or when there is a vacancy in the office of presiding
officer. The board may elect other officers as it considers
appropriate.
(h) A member of the board of directors of a reinvestment
zone:
(1) is not a public official by virtue of that
position; and
(2) unless otherwise ineligible, may be appointed to
serve concurrently on the board of directors of a local government
corporation created under Subchapter D, Chapter 431,
Transportation Code.
Added by Acts 2001, 77th Leg., ch. 1162, § 2, eff. Sept. 1, 2001.
§ 311.010. POWERS AND DUTIES OF BOARD OF
DIRECTORS. (a) The board of directors of a reinvestment zone
shall make recommendations to the governing body of the
municipality that created the zone concerning the administration of
this chapter in the zone. The governing body of the municipality by
ordinance or resolution may authorize the board to exercise any of
the municipality's powers with respect to the administration,
management, or operation of the zone or the implementation of the
project plan for the zone, except that the governing body may not
authorize the board to:
(1) issue bonds;
(2) impose taxes or fees;
(3) exercise the power of eminent domain; or
(4) give final approval to the project plan.
(b) The board of directors of a reinvestment zone and the
governing body of the municipality that creates a reinvestment zone
may each enter into agreements as the board or the governing body
considers necessary or convenient to implement the project plan and
reinvestment zone financing plan and achieve their purposes. An
agreement may provide for the regulation or restriction of the use
of land by imposing conditions, restrictions, or covenants that run
with the land. An agreement may during the term of the agreement
dedicate, pledge, or otherwise provide for the use of revenue in the
tax increment fund to pay any project costs that benefit the
reinvestment zone, including project costs relating to the cost of
buildings, schools, or other educational facilities owned by or on
behalf of a school district, community college district, or other
political subdivision of this state, railroad or transit
facilities, affordable housing, the remediation of conditions that
contaminate public or private land or buildings, the preservation
of the facade of a private or public building, or the demolition of
public or private buildings. An agreement may dedicate revenue
from the tax increment fund to pay the costs of providing affordable
housing or areas of public assembly in or out of the zone. An
agreement may dedicate revenue from the tax increment fund to pay a
neighborhood enterprise association for providing services or
carrying out projects authorized under Subchapters E and G, Chapter
2303, Government Code , in the zone. The term of an agreement with a
neighborhood enterprise association may not exceed 10 years.
(c) Subject to the approval of the governing body of the
municipality that created the zone, the board of a zone designated
under Section 311.005(a)(5) may exercise the power granted by
Chapter 211, Local Government Code, to the governing body of the
municipality that created the zone to restrict the use or uses of
property in the zone. The board may provide that a restriction
adopted by the board continues in effect after the termination of
the zone. In that event, after termination of the zone the
restriction is treated as if it had been adopted by the governing
body of the municipality.
(d) The board of directors of a reinvestment zone may
exercise any power granted to a municipality by Section 311.008,
except that:
(1) the municipality that created the reinvestment
zone by ordinance or resolution may restrict any power granted to
the board by this chapter; and
(2) the board may exercise a power granted to a
municipality under Section 311.008(a)(2) only with the consent of
the governing body of the municipality.
(e) After the governing body of a municipality by ordinance
creates a reinvestment zone under this chapter, the board of
directors of the zone may exercise any power granted to a board
under this chapter.
(f) The board of directors of a reinvestment zone and the
governing body of the municipality may enter into a contract with a
local government corporation to manage the reinvestment zone or
implement the project plan and reinvestment zone financing plan for
the term of the agreement. In this subsection, "local government
corporation" means a local government corporation created by the
municipality under Chapter 431, Transportation Code.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 22, eff. Sept. 1,
1989; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, § 58, eff. Sept. 1,
1991; Acts 1995, 74th Leg., ch. 76, § 5.95(23), eff. Sept. 1,
1995; Acts 1999, 76th Leg., ch. 983, § 3, eff. June 18, 1999.
§ 311.0101. PARTICIPATION OF DISADVANTAGED BUSINESSES
IN CERTAIN ZONES. (a) It is the goal of the legislature, subject
to the constitutional requirements spelled out by the United States
Supreme Court in J. A. Croson Company v. City of Richmond (822 F.2d
1355) and as hereafter further elaborated by federal and state
courts, that all disadvantaged businesses in the zone designated
under Section 311.005(a)(5) be given full and complete access to
the procurement process whereby supplies, materials, services, and
equipment are acquired by the board. It is also the intent of the
legislature that to the extent constitutionally permissible, a
preference be given to disadvantaged businesses. The board and
general contractor shall give preference, among bids or other
proposals that are otherwise comparable, to a bid or other proposal
by a disadvantaged business having its home office located in this
state.
(b) It is the intent of the legislature that the zone shall:
(1) implement a program or programs targeted to
disadvantaged businesses in order to inform them fully about the
zone procurement process and the requirements for their
participation in that process;
(2) implement such steps as are necessary to ensure
that all disadvantaged businesses are made fully aware of
opportunities in the zone, including but not limited to specific
opportunities to submit bids and proposals. Steps that may be
appropriate in certain circumstances include mailing requests for
proposals or notices inviting bids to all disadvantaged businesses
in the county;
(3) require prime contractors, as part of their
responses to requests for proposals or bids, to make a specific
showing of how they intend to maximize participation by
disadvantaged businesses as subcontractors. The zone shall be
required to evaluate such actions by prime contractors as a factor
in the award of contracts within the zone procurement process;
(4) identify disadvantaged businesses in the county
that provide or have the potential to provide supplies, materials,
services, and equipment to the zone; and
(5) identify barriers to participation by
disadvantaged businesses in the zone procurement process, such as
bonding, insurance, and working capital requirements that may be
imposed on businesses.
(c) It is the intent of the legislature that the zone shall
be required to develop a program pursuant to this Act for the
purchase of supplies, materials, services, and equipment and that
the board of the zone compile a report on an annual basis listing
the total number and dollar amount of contracts awarded to
disadvantaged businesses during the previous year as well as the
total number and dollar amount of all contracts awarded. Such
annual report shall be available for inspection by the general
public during regular business hours.
(d) The board by rule shall adopt goals for the
participation of minority business enterprises and women-owned
business enterprises in the awarding of state contracts for
professional services. To implement the participation goals, the
board shall encourage each issuer to award to minority business
enterprises and women-owned business enterprises not less than 15
percent of the total value of all professional services contract
awards that the issuer expects to make in its fiscal year.
Added by Acts 1989, 71st Leg., ch. 1137, § 23, eff. Sept. 1,
1989.
§ 311.011. PROJECT AND FINANCING PLANS. (a) The board
of directors of a reinvestment zone shall prepare and adopt a
project plan and a reinvestment zone financing plan for the zone and
submit the plans to the governing body of the municipality that
created the zone. The plans must be as consistent as possible with
the preliminary plans developed for the zone before the creation of
the board.
(b) The project plan must include:
(1) a map showing existing uses and conditions of real
property in the zone and a map showing proposed improvements to and
proposed uses of that property;
(2) proposed changes of zoning ordinances, the master
plan of the municipality, building codes, and other municipal
ordinances;
(3) a list of estimated nonproject costs; and
(4) a statement of a method of relocating persons to be
displaced as a result of implementing the plan.
(c) The reinvestment zone financing plan must include:
(1) a detailed list describing the estimated project
costs of the zone, including administrative expenses;
(2) a statement listing the kind, number, and location
of all proposed public works or public improvements in the zone;
(3) an economic feasibility study;
(4) the estimated amount of bonded indebtedness to be
incurred;
(5) the time when related costs or monetary
obligations are to be incurred;
(6) a description of the methods of financing all
estimated project costs and the expected sources of revenue to
finance or pay project costs, including the percentage of tax
increment to be derived from the property taxes of each taxing unit
that levies taxes on real property in the zone;
(7) the current total appraised value of taxable real
property in the zone;
(8) the estimated captured appraised value of the zone
during each year of its existence; and
(9) the duration of the zone.
(d) The governing body of the municipality must approve a
project plan or reinvestment zone financing plan after its adoption
by the board. The approval must be by ordinance that finds that the
plan is feasible and conforms to the master plan, if any, of the
municipality.
(e) The board of directors of the zone at any time may adopt
an amendment to the project plan consistent with the requirements
and limitations of this chapter. The amendment takes effect on
approval by the governing body of the municipality. That approval
must be by ordinance. If an amendment reduces or increases the
geographic area of the zone, increases the amount of bonded
indebtedness to be incurred, increases or decreases the percentage
of a tax increment to be contributed by a taxing unit, increases the
total estimated project costs, or designates additional property in
the zone to be acquired by the municipality, the approval must be by
ordinance adopted after a public hearing that satisfies the
procedural requirements of Sections 311.003(c) and (d).
(f) In a zone designated under Section 311.005(a)(5) that is
located in a county with a population of 3.3 million or more, the
project plan must provide that at least one-third of the tax
increment of the zone be used to provide affordable housing during
the term of the zone.
(g) An amendment to the project plan or the reinvestment
zone financing plan for a zone does not apply to a school district
that participates in the zone unless the governing body of the
school district by official action approves the amendment, if the
amendment:
(1) has the effect of directly or indirectly
increasing the percentage or amount of the tax increment to be
contributed by the school district; or
(2) requires or authorizes the municipality creating
the zone to issue additional tax increment bonds or notes.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 24, eff. Sept. 1,
1989; Acts 1999, 76th Leg., ch. 983, § 4, eff. June 18, 1999;
Acts 2001, 77th Leg., ch. 669, § 120, eff. Sept. 1, 2001.
§ 311.012. DETERMINATION OF AMOUNT OF TAX
INCREMENT. (a) The amount of a taxing unit's tax increment for a
year is the amount of property taxes levied and collected by the
unit for that year on the captured appraised value of real property
taxable by the unit and located in a reinvestment zone.
(b) The captured appraised value of real property taxable by
a taxing unit for a year is the total appraised value of all real
property taxable by the unit and located in a reinvestment zone for
that year less the tax increment base of the unit.
(c) The tax increment base of a taxing unit is the total
appraised value of all real property taxable by the unit and located
in a reinvestment zone for the year in which the zone was designated
under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1999, 76th Leg., ch. 983, § 5, eff. June 18,
1999.
§ 311.0125. TAX ABATEMENT
AGREEMENTS. (a) Notwithstanding any provision in this chapter to
the contrary, a taxing unit other than a school district may enter
into a tax abatement agreement with an owner of real or personal
property in a reinvestment zone, regardless of whether the taxing
unit deposits or agrees to deposit any portion of its tax increment
into the tax increment fund.
(b) To be effective, an agreement to abate taxes on real
property in a reinvestment zone must be approved by:
(1) the board of directors of the reinvestment zone;
and
(2) the governing body of each taxing unit that
imposes taxes on real property in the reinvestment zone and
deposits or agrees to deposit any of its tax increment into the tax
increment fund for the zone.
(c) In any contract entered into by the board of directors
of a reinvestment zone in connection with bonds or other
obligations, the board may convenant that the board will not
approve a tax abatement agreement that applies to real property in
that zone.
(d) If a taxing unit enters into a tax abatement agreement
authorized by this section, taxes that are abated under that
agreement are not considered taxes to be imposed or produced by that
taxing unit in calculating the amount of:
(1) the tax increment of that taxing unit; or
(2) that taxing unit's deposit to the tax increment
fund for the reinvestment zone.
(e) The Texas Department of Economic Development or its
successor may recommend that a taxing unit enter into a tax
abatement agreement with a person under this chapter. In
determining whether to approve an agreement to abate taxes on real
property in a reinvestment zone under Subsection (b), the board of
directors of the reinvestment zone and the governing body of a
taxing unit shall consider any recommendation made by the Texas
Department of Economic Development or its successor.
Added by Acts 1999, 76th Leg., ch. 983, § 6, eff. June 18, 1999.
Amended by Acts 2003, 78th Leg., ch. 978, § 4, eff. Sept. 1,
2003.
§ 311.013. COLLECTION AND DEPOSIT OF TAX
INCREMENTS. (a) Each taxing unit that taxes real property
located in a reinvestment zone shall provide for the collection of
its taxes in the zone as for any other property taxed by the unit.
(b) Each taxing unit shall pay into the tax increment fund
for the zone an amount equal to the tax increment produced by the
unit, less the sum of:
(1) property taxes produced from the tax increments
that are, by contract executed before the designation of the area as
a reinvestment zone, required to be paid by the unit to another
political subdivision; and
(2) a portion, not to exceed 15 percent, of the tax
increment produced by the unit as provided by the reinvestment zone
financing plan or a larger portion as provided by Subsection (f).
(c) A taxing unit shall make a payment required by
Subsection (b) not later than the 90th day after the delinquency
date for the unit's property taxes. A delinquent payment incurs a
penalty of five percent of the amount delinquent and accrues
interest at an annual rate of 10 percent.
(d) If the reinvestment zone is created on or after August
29, 1983, a taxing unit is not required to pay a tax increment into
the tax increment fund of the zone after three years from the date
the zone is created unless the following conditions exist or have
been met within the three-year period:
(1) bonds have been issued for the zone under Section
311.015;
(2) the municipality has acquired property in the zone
pursuant to the project plan; or
(3) construction of improvements pursuant to the
project plan has begun in the zone.
(e) If the reinvestment zone was created before August 29,
1983, a taxing unit is not required to pay a tax increment into the
tax increment fund of the zone after September 1, 1986, unless the
following conditions existed or were met before September 1, 1986:
(1) bonds were issued for the zone under Section
311.015;
(2) the municipality acquired property in the zone
pursuant to the project plan; or
(3) construction of improvements pursuant to the
project plan has begun in the zone.
(f) A taxing unit is not required to pay into the tax
increment fund any of its tax increment produced from property
located in a reinvestment zone designated under Section 311.005(a)
or in an area added to a reinvestment zone under Section 311.007
unless the taxing unit enters into an agreement to do so with the
governing body of the municipality that created the zone. A taxing
unit may enter into an agreement under this subsection at any time
before or after the zone is created or enlarged. The agreement may
include conditions for payment of that tax increment into the fund
and must specify the portion of the tax increment to be paid into
the fund and the years for which that tax increment is to be paid
into the fund. The agreement and the conditions in the agreement
are binding on the taxing unit, the municipality, and the board of
directors of the zone.
(g) Subject to the provisions of Section 311.0125, in lieu
of permitting a portion of its tax increment to be paid into the tax
increment fund, and notwithstanding the provisions of Section
312.203, a taxing unit, other than a city, may elect to offer the
owners of taxable real property in a reinvestment zone created
under this chapter an exemption from taxation of all or part of the
value of the property. Any agreement concerning an exemption from
ad valorem taxes shall be executed in the manner and subject to the
limitations of Chapter 312; provided, however, the property
covered by the agreement need not be in a zone created pursuant to
Chapter 312. A taxing unit may not offer a tax abatement agreement
to property owners in the zone after it has entered into an
agreement that its tax increments would be paid into the tax
increment fund pursuant to Subsection (f).
(h) Repealed by Acts 2003, 78th Leg., ch. 8, § 1, eff.
April 24, 2003.
(i) Notwithstanding Subsection (c), 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.
(j) Section 26.05(f) does not prohibit a taxing unit from
depositing all of the tax increment produced by the taxing unit in a
reinvestment zone into the tax increment fund for that zone.
(k) A school district is not required to pay into the tax
increment fund any of its tax increment produced from property
located in an area added to the reinvestment zone under Section
311.007(a) or (b) unless the governing body of the school district
enters into an agreement to do so with the governing body of the
municipality that created the zone, including a municipality
described by Subsection (h). The governing body of a school
district may enter into an agreement under this subsection at any
time before or after the zone is created or enlarged. The agreement
may include conditions for payment of that tax increment into the
fund and must specify the portion of the tax increment to be paid
into the fund and the years for which that tax increment is to be
paid into the fund. The agreement and the conditions in the
agreement are binding on the school district, the municipality, and
the board of directors of the zone.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 25, eff. Sept. 1,
1989; Acts 1991, 72nd Leg., ch. 16, § 17.06, eff. Aug. 26, 1991;
Acts 1993, 73rd Leg., ch. 112, § 1, eff. Aug. 30, 1993; Acts
1999, 76th Leg., ch. 983, § 7, eff. June 18, 1999; Acts 2003,
78th Leg., ch. 8, § 1, eff. April 24, 2003.
§ 311.014. TAX INCREMENT FUND. (a) In addition to the
deposits required by Section 311.013, all revenues from the sale of
tax increment bonds or notes, revenues from the sale of any property
acquired as part of the tax increment financing plan, and other
revenues to be used in the reinvestment zone shall be deposited in
the tax increment fund for the zone.
(b) Money may be disbursed from the fund only to satisfy
claims of holders of tax increment bonds or notes issued for the
zone, to pay project costs for the zone, or to make payments
pursuant to an agreement made under Section 311.010(b) dedicating
revenue from the tax increment fund.
(c) Subject to an agreement with the holders of tax
increment bonds or notes, money in a tax increment fund may be
temporarily invested in the same manner as other funds of the
municipality.
(d) After all project costs and all tax increment bonds or
notes issued for a reinvestment zone have been paid, and subject to
any agreement with bondholders, any money remaining in the tax
increment fund shall be paid to the municipality and other taxing
units levying taxes on property in the zone in proportion to the
municipality's and each unit's respective share of the total amount
of tax increments derived from taxable real property in the zone
that were deposited in the fund during the fund's existence.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1137, § 26, eff. Sept. 1,
1989.
§ 311.015. TAX INCREMENT BONDS AND NOTES. (a) A
municipality creating a reinvestment zone may issue tax increment
bonds or notes, the proceeds of which may be used to pay project
costs for the reinvestment zone on behalf of which the bonds or
notes were issued or to satisfy claims of holders of the bonds or
notes. The municipality may issue refunding bonds or notes for the
payment or retirement of tax increment bonds or notes previously
issued by it.
(b) Tax increment bonds and notes are payable, as to both
principal and interest, solely from the tax increment fund
established for the reinvestment zone. The governing body of the
municipality may pledge irrevocably all or part of the fund for
payment of tax increment bonds or notes. The part of the fund
pledged in payment may be used only for the payment of the bonds or
notes or interest on the bonds or notes until the bonds or notes
have been fully paid. A holder of the bonds or notes or of coupons
issued on the bonds has a lien against the fund for payment of the
bonds or notes and interest on the bonds or notes and may protect or
enforce the lien at law or in equity.
(c) Tax increment bonds are issued by ordinance of the
municipality without any additional approval other than that of the
attorney general.
(d) Tax increment bonds or notes, together with the interest
on and income from those bonds or notes, are exempt from all taxes.
(e) The issuing municipality may provide in the contract
with the owners or holders of tax increment bonds that it will pay
into the tax increment fund all or any part of the revenue produced
or received from the operation or sale of a facility acquired,
improved, or constructed pursuant to a project plan, to be used to
pay principal and interest on the bonds. If the municipality
agrees, the owners or holders of tax increment bonds may have a lien
or mortgage on a facility acquired, improved, or constructed with
the proceeds of the bonds.
(f) Tax increment bonds may be issued in one or more series.
The ordinance approving a tax increment bond or note, or the trust
indenture or mortgage issued in connection with the bond or note,
shall provide:
(1) the date that the bond or note bears;
(2) that the bond or note is payable on demand or at a
specified time;
(3) the interest rate that the bond or note bears;
(4) the denomination of the bond or note;
(5) whether the bond or note is in coupon or registered
form;
(6) the conversion or registration privileges of the
bond or note;
(7) the rank or priority of the bond or note;
(8) the manner of execution of the bond or note;
(9) the medium of payment in which and the place or
places at which the bond or note is payable;
(10) the terms of redemption, with or without premium,
to which the bond or note is subject;
(11) the manner in which the bond or note is secured;
and
(12) any other characteristic of the bond or note.
(g) A bond or note issued under this chapter is fully
negotiable. In a suit, action, or other proceeding involving the
validity or enforceability of a bond or note issued under this
chapter or the security of a bond or note issued under this chapter,
if the bond or note recites in substance that it was issued by the
municipality for a reinvestment zone, the bond or note is
conclusively deemed to have been issued for that purpose, and the
development or redevelopment of the zone is conclusively deemed to
have been planned, located, and carried out as provided by this
chapter.
(h) A bank, trust company, savings bank or institution,
savings and loan association, investment company or other person
carrying on a banking or investment business; an insurance
company, insurance association, or other person carrying on an
insurance business; or an executor, administrator, curator,
trustee, or other fiduciary may invest any sinking funds, money, or
other funds belonging to it or in its control in tax increment bonds
or notes issued under this chapter. Tax increment bonds or notes
are authorized security for all public deposits. A person,
political subdivision, or public or private officer may use funds
owned or controlled by the person, political subdivision, or
officer to purchase tax increment bonds or notes. This chapter does
not relieve any person of the duty to exercise reasonable care in
selecting securities.
(i) A tax increment bond or note is not a general obligation
of the municipality issuing the bond or note. A tax increment bond
or note does not give rise to a charge against the general credit or
taxing powers of the municipality and is not payable except as
provided by this chapter. A tax increment bond or note issued under
this chapter must state the restrictions of this subsection on its
face.
(j) A tax increment bond or note may not be included in any
computation of the debt of the issuing municipality.
(k) A municipality may not issue tax increment bonds or
notes in an amount that exceeds the total cost of implementing the
project plan for the reinvestment zone for which the bonds or notes
are issued.
(l ) A tax increment bond or note must mature within 20 years
of the date of issue.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 311.016. ANNUAL REPORT BY MUNICIPALITY. (a) On or
before the 90th day following the end of the fiscal year of the
municipality, the governing body of a municipality shall submit to
the chief executive officer of each taxing unit that levies
property taxes on real property in a reinvestment zone created by
the municipality a report on the status of the zone. The report
must include:
(1) the amount and source of revenue in the tax
increment fund established for the zone;
(2) the amount and purpose of expenditures from the
fund;
(3) the amount of principal and interest due on
outstanding bonded indebtedness;
(4) the tax increment base and current captured
appraised value retained by the zone; and
(5) the captured appraised value shared by the
municipality and other taxing units, the total amount of tax
increments received, and any additional information necessary to
demonstrate compliance with the tax increment financing plan
adopted by the governing body of the municipality.
(b) The municipality shall send a copy of a report made
under this section to:
(1) the attorney general; and
(2) the comptroller.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.06(a), eff. Aug. 28,
1989; Acts 2001, 77th Leg., ch. 471, § 1, eff. June 11, 2001;
Acts 2001, 77th Leg., ch. 471, § 2, eff. June 11, 2001.
§ 311.0163. ANNUAL REPORT BY COMPTROLLER. (a) Not
later than December 31 of each even-numbered year, the comptroller
shall submit a report to the legislature and to the governor on
reinvestment zones designated under this chapter and on project
plans and reinvestment zone financing plans adopted under this
chapter.
(b) A report submitted under this section must include, for
each reinvestment zone designated under this chapter, a summary of
the information reported under Section 311.016.
Added by Acts 2001, 77th Leg., ch. 471, § 3, eff. June 11, 2001.
§ 311.017. TERMINATION OF REINVESTMENT ZONE. (a) A
reinvestment zone terminates on the earlier of:
(1) the termination date designated in the ordinance
creating the zone or an earlier termination date designated by an
ordinance adopted subsequent to the ordinance creating the zone;
or
(2) the date on which all project costs, tax increment
bonds, and interest on those bonds have been paid in full.
(b) The tax increment pledged to the payment of bonds and
interest on the bonds may be discharged and the reinvestment zone
may be terminated if the municipality that created the zone
deposits or causes to be deposited with a trustee or other escrow
agent authorized by law funds in an amount that, together with the
interest on the investment of the funds in direct obligations of the
United States, will be sufficient to pay the principal of, premium,
if any, and interest on all bonds issued on behalf of the
reinvestment zone at maturity or at the date fixed for redemption of
the bonds, and to pay any other amounts that may become due,
including compensation due or to become due to the trustee or escrow
agent.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 311.018. CONFLICTS WITH MUNICIPAL CHARTER. To the
extent of a conflict between this chapter and a municipal charter,
this chapter controls.
Added by Acts 1999, 76th Leg., ch. 983, § 8, eff. June 18, 1999.
§ 311.019. CENTRAL REGISTRY. (a) The comptroller
shall maintain a central registry of:
(1) reinvestment zones designated under this chapter;
(2) project plans and reinvestment zone financing
plans adopted under this chapter; and
(3) annual reports submitted under Section 311.016.
(b) A municipality that designates a reinvestment zone or
approves a project plan or reinvestment zone financing plan under
this chapter shall deliver to the comptroller before April 1 of the
year following the year in which the zone is designated or the plan
is approved a report containing:
(1) a general description of each zone, including:
(A) the size of the zone;
(B) the types of property located in the zone;
(C) the duration of the zone; and
(D) the guidelines and criteria established for
the zone under Section 311.005;
(2) a copy of each project plan or reinvestment zone
financing plan adopted; and
(3) any other information required by the comptroller
to administer this section and Subchapter F, Chapter 111.
(c) A municipality that amends or modifies a project plan or
reinvestment zone financing plan adopted under this chapter shall
deliver a copy of the amendment or modification to the comptroller
before April 1 of the year following the year in which the plan was
amended or modified.
(d) Not later than April 1, 2002, each municipality that
designated a reinvestment zone or approved a project plan or
reinvestment zone financing plan under this chapter before January
1, 2001, shall deliver to the comptroller a report containing the
information described by Subsection (b) for each zone or plan. This
subsection expires January 1, 2003.
Added by Acts 2001, 77th Leg., ch. 471, § 4, eff. June 11, 2001.
§ 311.020. STATE ASSISTANCE. (a) On request of the
governing body of a municipality or of the presiding officer of the
governing body, the comptroller may provide assistance to a
municipality relating to the administration of this chapter.
(b) The Texas Department of Economic Development and the
comptroller may provide technical assistance to a municipality
regarding:
(1) the designation of reinvestment zones under this
chapter; and
(2) the adoption and execution of project plans or
reinvestment zone financing plans under this chapter.
Added by Acts 2001, 77th Leg., ch. 471, § 4, eff. June 11, 2001.
