CHAPTER 311. TAX INCREMENT FINANCING ACT
TAX CODE
TITLE 3. LOCAL TAXATION
SUBTITLE B. SPECIAL PROPERTY TAX PROVISIONS
CHAPTER 311. TAX INCREMENT FINANCING ACT
Sec. 311.001. SHORT TITLE. This chapter may be cited as the Tax
Increment Financing Act.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 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 or county 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 or county 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 or
county from general revenue for the implementation of the project
plan; and
(K) payments made at the discretion of the governing body of the
municipality or county that the governing body 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, Sec. 1, eff. Sept. 1,
1987.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 35, eff. September 1, 2005.
Sec. 311.003. PROCEDURE FOR CREATING REINVESTMENT ZONE. (a)
The governing body of a county by order may designate a
contiguous geographic area in the county and the governing body
of a municipality by ordinance may designate a contiguous or
noncontiguous geographic area that is in the corporate limits of
the municipality, in the extraterritorial jurisdiction of the
municipality, or in both 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. The designation of an area that is wholly or partly
located in the extraterritorial jurisdiction of a municipality is
not affected by a subsequent annexation of real property in the
reinvestment zone by the municipality.
(b) Before adopting an ordinance or order providing for a
reinvestment zone, the governing body of the municipality or
county 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 or order providing for a
reinvestment zone, the municipality or county must hold a public
hearing on the creation of the zone and its benefits to the
municipality or county 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 or
county.
(d) A municipality or county proposing to designate a
reinvestment zone 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 or county must notify in writing the governing body
of each other 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 municipality,
county, and school district, other than the municipality or
county proposing to designate a reinvestment zone, 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 or county proposing to
designate a reinvestment zone. The governing body of the
municipality or county shall provide the information requested to
the extent practicable. In addition to the notice required by
Subsection (e), the governing body of the municipality or county
proposing to designate a reinvestment zone shall make a formal
presentation to the governing body of each municipality, county,
or school district, other than the municipality or county
proposing to designate the zone, 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 or county shall notify each other taxing unit that
levies real property taxes in the proposed zone of each
presentation to be made to a municipality, 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 municipalities, county, or school districts involved,
the governing body of the municipality or county proposing to
designate a reinvestment zone may make a single presentation to
more than one municipal, 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 or county proposing to designate a
reinvestment zone to discuss the project plan and the
reinvestment zone financing plan and shall notify the governing
body of the municipality or county 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 or county proposing to
designate a reinvestment zone may call a meeting of the
representatives of the taxing units. The governing body of the
municipality or county 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 or county 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 or county calling the meeting, any other matter
relevant to the proposed reinvestment zone may be discussed.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 16, eff.
Sept. 1, 1989; Acts 1999, 76th Leg., ch. 983, Sec. 14, eff. June
18, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 36, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch.
910, Sec. 1, eff. June 19, 2009.
Sec. 311.0031. ENTERPRISE ZONE. Designation of an area under the
following other law constitutes designation of the area as a
reinvestment zone under this chapter without further hearing or
other procedural requirements other than those provided by the
other law:
(1) Chapter 2303, Government Code; and
(2) Chapter 373A, Local Government Code.
Added by Acts 1989, 71st Leg., ch. 1106, Sec. 26, eff. Aug. 28,
1989. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(22),
eff. Sept. 1, 1995.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1175, Sec. 16, eff. September 1, 2007.
Sec. 311.004. CONTENTS OF REINVESTMENT ZONE ORDINANCE OR ORDER.
(a) The ordinance or order 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 or order;
(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 or county designated as
"Reinvestment Zone Number One, City (or Town, as applicable) of
(name of municipality)," or "Reinvestment Zone Number One, (name
of county) County," as applicable, 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 or county; and
(B) the area meets the requirements of Section 311.005.
(b) For purposes of complying with Subsection (a)(7)(A), the
ordinance or order 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)(4), the governing body of a municipality or county
must specify in the ordinance or order that the reinvestment zone
is designated under that section.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 17, eff.
Sept. 1, 1989; Acts 1999, 76th Leg., ch. 983, Sec. 1, eff. June
18, 1999; Acts 2001, 77th Leg., ch. 1162, Sec. 1, eff. Sept. 1,
2001.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 36, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.002, eff. September 1, 2007.
Sec. 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 or county 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;
(H) conditions that endanger life or property by fire or other
cause; or
(I) structures, other than single-family residential structures,
less than 10 percent of the square footage of which has been used
for commercial, industrial, or residential purposes during the
preceding 12 years, if the municipality has a population of
100,000 or more;
(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 county;
(3) be in a federally assisted new community located in the
municipality or county or in an area immediately adjacent to a
federally assisted new community; or
(4) 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 or county 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.
(a-1) Notwithstanding Subsection (a), if the proposed project
plan for a potential zone includes the use of land in the zone in
connection with the operation of an existing or proposed regional
commuter or mass transit rail system, or for a structure or
facility that is necessary, useful, or beneficial to such a
regional rail system, the governing body of a municipality may
designate an area as a reinvestment zone.
(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, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.05(a), eff.
Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1106, Sec. 27, eff. Aug.
28, 1989; Acts 1989, 71st Leg., ch. 1137, Sec. 18, eff. Sept. 1,
1989.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 37, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1347, Sec. 1, eff. June 18, 2005.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.003, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
1361, Sec. 1, eff. June 15, 2007.
Sec. 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:
(A) 20 percent of the total appraised value of taxable real
property in the municipality and in the industrial districts
created by the municipality, if the municipality is the county
seat of a county:
(i) that is adjacent to a county with a population of 3.3
million or more; and
(ii) in which a planned community is located that has 20,000 or
more acres of land, that was originally established under the
Urban Growth and New Community Development Act of 1970 (42 U.S.C.
Section 4501 et seq.), and that is subject to restrictive
covenants containing ad valorem or annual variable budget-based
assessments on real property; or
(B) 15 percent of the total appraised value of taxable real
property in the municipality and in the industrial districts
created by the municipality, if Paragraph (A) does not apply to
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)(4).
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 19, eff.
Sept. 1, 1989.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.004, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
543, Sec. 1, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
910, Sec. 2, eff. June 19, 2009.
Sec. 311.007. CHANGING BOUNDARIES OF EXISTING ZONE. (a) Subject
to the limitations provided by Section 311.006, if applicable,
the boundaries of an existing reinvestment zone may be reduced or
enlarged by ordinance or resolution of the governing body of the
municipality or by order or resolution of the governing body of
the county that created the zone.
(b) The governing body of the municipality or county 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
or county 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, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 20, eff.
Sept. 1, 1989.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 38, eff. September 1, 2005.
Sec. 311.008. POWERS OF MUNICIPALITY OR COUNTY. (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 or county and an independent school district.
(b) A municipality or county 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
or county 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 or county may make available to the public on
request financial information regarding the acquisition by the
municipality or county of land in the zone when the municipality
or county acquires the land.
(e) The implementation of a project plan to alleviate a
condition described by Section 311.005(a)(1), (2), or (3) and to
promote development or redevelopment of a reinvestment zone in
accordance with this chapter serves a public purpose.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 44, Sec. 2,
eff. Oct. 20, 1987; Acts 1999, 76th Leg., ch. 1521, Sec. 1, eff.
June 19, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 39, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1094, Sec. 40, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1347, Sec. 2, eff. June 18, 2005.
Sec. 311.0085. POWER OF CERTAIN MUNICIPALITIES. (a) This
section applies only to a municipality with a population of less
than 130,000 as shown by the 2000 federal decennial census that
has territory in three counties.
(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, Sec. 1, eff. Sept. 1,
2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
38, Sec. 1, eff. May 19, 2009.
Sec. 311.0087. RESTRICTION ON POWERS OF CERTAIN MUNICIPALITIES.
(a) This section applies only to a proposed reinvestment zone:
(1) the designation of which is requested in a petition
submitted under Section 311.005(a)(4) before July 31, 2004, to
the governing body of a home-rule municipality that:
(A) has a population of more than 1.1 million;
(B) is located primarily in a county with a population of 1.5
million or less; and
(C) has created at least 20 reinvestment zones under this
chapter; and
(2) that is the subject of a resolution of intent that was
adopted before October 31, 2004, by the governing body of the
municipality.
(b) If the municipality imposes a fee of more than $25,000 for
processing the petition, the municipality may not require a
property owner who submitted the petition, as a condition of
designating the reinvestment zone or approving a development
agreement, interlocal agreement, or project plan for the proposed
reinvestment zone:
(1) to waive any rights of the owner under Chapter 245, Local
Government Code, or under any agreed order or settlement
agreement to which the municipality is a party;
(2) to dedicate more than 20 percent of the owner's land in the
area described in the petition as open-space land; or
(3) to use a nonconventional use pattern for a development to be
located within the proposed reinvestment zone.
Added by Acts 2005, 79th Leg., Ch.
1347, Sec. 3, eff. June 18, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.005, eff. September 1, 2007.
Sec. 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 the
municipality or county that created the zone 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 or county 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 or county, the governing body of the
municipality or county 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)(4), the
board of directors of the zone consists of nine members. Each
school district, county, or municipality, other than the
municipality or county that created the zone, that levies taxes
on real property in the zone may appoint one member of the board
if the school district, county, or municipality 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 or county 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 or county that created the zone, an
individual must:
(1) if the board is covered by Subsection (a):
(A) be a qualified voter of the municipality or county, as
applicable; 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 county; 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 or county
that created the zone 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, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 21, eff.
Sept. 1, 1989; Acts 1999, 76th Leg., ch. 983, Sec. 2, eff. June
18, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 41, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.006, eff. September 1, 2007.
Sec. 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)(4), 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, Sec. 2, eff. Sept. 1,
2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.007, eff. September 1, 2007.
Sec. 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 or
county that created the zone concerning the administration of
this chapter in the zone. The governing body of the municipality
by ordinance or resolution or the county by order or resolution
may authorize the board to exercise any of the municipality's or
county'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 or county 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.
(b) The board of directors of a reinvestment zone and the
governing body of the municipality or county 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, the demolition of
public or private buildings, or the construction of a road,
sidewalk, or other public infrastructure in or out of the zone,
including the cost of acquiring the real property necessary for
the construction of the road, sidewalk, or other public
infrastructure. 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.
(c) Subject to the approval of the governing body of the
municipality that created the zone, the board of a zone
designated by the governing body of a municipality under Section
311.005(a)(4) 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 or county by Section 311.008,
except that:
(1) the municipality or county that created the reinvestment
zone by ordinance, resolution, or order may restrict any power
granted to the board by this chapter; and
(2) the board may exercise a power granted to a municipality or
county under Section 311.008(b)(2) only with the consent of the
governing body of the municipality or county.
(e) After the governing body of a municipality by ordinance or
the governing body of a county by order 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 or county that created the
zone may enter into a contract with a local government
corporation or a political subdivision 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 or county
under Chapter 431, Transportation Code.
(g) Chapter 252, Local Government Code, does not apply to a
dedication, pledge, or other use of revenue in the tax increment
fund for a reinvestment zone by the board of directors of the
zone in carrying out its powers under Subsection (b).
(h) Subject to the approval of the governing body of the
municipality that created the zone, the board of directors of a
reinvestment zone, as necessary or convenient to implement the
project plan and reinvestment zone financing plan and achieve
their purposes, may establish and provide for the administration
of one or more programs for the public purposes of developing and
diversifying the economy of the zone, eliminating unemployment
and underemployment in the zone, and developing or expanding
transportation, business, and commercial activity in the zone,
including programs to make grants and loans from the tax
increment fund of the zone in an aggregate amount not to exceed
the amount of the tax increment produced by the municipality and
paid into the tax increment fund for the zone for activities that
benefit the zone and stimulate business and commercial activity
in the zone. For purposes of this subsection, on approval of the
municipality, the board of directors of the zone has all the
powers of a municipality under Chapter 380, Local Government
Code.
(i) The board of directors of a reinvestment zone or a local
government corporation administering a reinvestment zone may
contract with the municipality that created the zone to allocate
from the tax increment fund for the zone an amount equal to the
tax increment produced by the municipality and paid into the tax
increment fund for the zone to pay the incremental costs of
providing municipal services incurred as a result of the creation
of the zone or the development or redevelopment of the land in
the zone, regardless of whether the costs of those services are
identified in the project plan or reinvestment zone financing
plan for the zone.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 22, eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, Sec. 58,
eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(23),
eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 983, Sec. 3, eff.
June 18, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 42, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1347, Sec. 4, eff. June 18, 2005.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.008, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1358, Sec. 1, eff. June 19, 2009.
Sec. 311.01005. COSTS ASSOCIATED WITH TRANSPORTATION OR TRANSIT
PROJECTS. (a) In this section:
(1) "Bus rapid transit project" means a mass transportation
facility designed to give preferential treatment to buses on a
roadway in order to reduce bus travel time, improve service
reliability, increase the convenience of users, and increase bus
ridership, including:
(A) a fixed guideway, high occupancy vehicle lane, bus way, or
bus lane;
(B) a transit center or station;
(C) a maintenance facility; and
(D) other real property associated with a bus rapid transit
operation.
(2) "Rail transportation project" means a passenger rail
facility, including:
(A) tracks;
(B) a rail line;
(C) a depot;
(D) a maintenance facility; and
(E) other real property associated with a passenger rail
operation.
(b) This section does not affect the power of the board of
directors of a reinvestment zone or the governing body of the
municipality that creates a reinvestment zone to enter into an
agreement under Section 311.010(b) to dedicate, pledge, or
otherwise provide for the use of revenue in the tax increment
fund to pay the costs of acquiring, constructing, operating, or
maintaining property located in the zone or to acquire or
reimburse acquisition costs of real property outside the zone for
right-of-way or easements necessary to construct public
rights-of-way or infrastructure that benefits the zone.
(c) An agreement under Section 311.010(b) may dedicate, pledge,
or otherwise provide for the use of revenue in the tax increment
fund to pay the costs of acquiring land, or the development
rights or a conservation easement in land, located outside the
reinvestment zone, if:
(1) the zone is or will be served by a rail transportation
project or bus rapid transit project;
(2) the land or the development rights or conservation easement
in the land is acquired for the purpose of preserving the land in
its natural or undeveloped condition; and
(3) the land is located in the county in which the zone is
located.
(d) The board of directors of a reinvestment zone, if all of the
members of the board are appointed by the municipality that
creates the zone, or the governing body of the municipality that
creates a reinvestment zone may enter into an agreement described
by Subsection (c) only if:
(1) the board or the governing body determines that the
acquisition of the land, or the development rights or
conservation easement in the land, located outside the zone
benefits or will benefit the zone by facilitating the
preservation of regional open space in order to balance the
regional effects of urban development promoted by the rail
transportation project or bus rapid transit project; and
(2) the municipality that creates the reinvestment zone and the
county in which the zone is located pay the same portion of their
tax increment into the tax increment fund for the zone.
(e) Property acquired under Subsection (c) may not be acquired
through condemnation.
Added by Acts 2005, 79th Leg., Ch.
1134, Sec. 1, eff. June 18, 2005.
Sec. 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)(4) 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, Sec. 23, eff. Sept. 1,
1989.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.009, eff. September 1, 2007.
Sec. 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 or
county 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, other municipal ordinances, and
subdivision rules and regulations, if any, of the county, if
applicable;
(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 or county that
created the zone must approve a project plan or reinvestment zone
financing plan after its adoption by the board. The approval
must be by ordinance, in the case of a municipality, or by order,
in the case of a county, that finds that the plan is feasible and
conforms to the master plan, if any, of the municipality or to
subdivision rules and regulations, if any, of the county.
(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 or county that
created the zone. That approval must be by ordinance, in the
case of a municipality, or by order, in the case of a county. 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 or county, the approval must be
by ordinance or order, as applicable, 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)(4) 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 or county creating
the zone to issue additional tax increment bonds or notes.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 1137, Sec. 24, eff.
Sept. 1, 1989; Acts 1999, 76th Leg., ch. 983, Sec. 4, eff. June
18, 1999; Acts 2001, 77th Leg., ch. 669, Sec. 120, eff. Sept. 1,
2001.
Amended by:
Acts 2005, 79th Leg., Ch.
1094, Sec. 43, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 14.010, eff. September 1, 2007.
Sec. 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 assessed by the unit for that
year on the captured appraised value of real property taxable by
the unit and located in a reinvestment zone or 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. The governing body of a
taxing unit shall determine which of the methods specified by
this subsection is used to calculate the amount of the unit's tax
increment.
(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, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1999, 76th Leg., ch. 983, Sec. 5, eff. June
18, 1999.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
910, Sec. 3, eff. June 19, 2009.
Sec. 311.0123. SALES TAX INCREMENT. (a) In this section,
"sales tax base" for a reinvestment zone means the amount of
municipal sales and use taxes attributable to the zone for the
year in which the zone was designated under this chapter.
(b) The governing body of a municipality may determine, in an
ordinance designating an area as a reinvestment zone or in an
ordinance adopted subsequent to the designation of a zone, the
portion or amount of tax increment generated from municipal sales
and use taxes attributable to the zone, above the sales tax base,
to be deposited into the tax increment fund. Nothing in this
section requires a municipality to contribute sales tax increment
into a tax increment fund.
(c) Before the issuance of a bond, note, or other obligation
under this chapter that pledges the payments into the tax
increment fund under Subsection (b), the governing body of a
municipality may enter into an agreement, under Subchapter E,
Chapter 271, Local Government Code, to authorize and direct the
comptroller to:
(1) withhold from any payment to which the municipality may be
entitled the amount of the payment into the tax increment fund
under Subsection (b);
(2) deposit that amount into the tax increment fund; and
(3) continue withholding and making additional payments into the
tax increment fund until an amount sufficient to satisfy the
amount due has been met.
(d) A local government corporation created under Chapter 431,
Transportation Code, that has contracted with a reinvestment zone
and a municipality under Section 311.010(f) may be a party to an
agreement under Subsection (c) and the agreement may provide for
payments to be made to a paying agent of the local government
corporation.
(e) The sales and use taxes to be deposited into the tax
increment fund under this section may be disbursed from the fund
only to:
(1) satisfy claims of holders of tax increment bonds, notes, or
other obligations issued or incurred for the reinvestment zone;
(2) pay project costs for the zone; and
(3) make payments in accordance with an agreement made under
Section 311.010(b) dedicating revenue from the tax increment
fund.
Added by Acts 2005, 79th Leg., Ch.
114, Sec. 1, eff. May 20, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
189, Sec. 1, eff. May 23, 2007.
Sec. 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 th