By: Nichols S.B. No. 1110
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the purposes and designation of a transportation
  reinvestment zone.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 222, Transportation Code,
  is amended by adding Section 222.1001 to read as follows:
         Sec. 222.1001.  DEFINITION. In this subchapter,
  "transportation project" has the meaning assigned by Section
  370.003.
         SECTION 2.  Section 222.105, Transportation Code, is amended
  to read as follows:
         Sec. 222.105.  PURPOSES.  The purposes of Sections 222.106
  and 222.107 are to:
               (1)  promote public safety;
               (2)  facilitate the improvement, development, or
  redevelopment of property;
               (3)  facilitate the movement of traffic; and
               (4)  enhance a local entity's ability to sponsor a
  transportation project [authorized under Section 222.104].
         SECTION 3.  Subsections (b), (c), (g), (i), (i-1), (i-2),
  and (j), Section 222.106, Transportation Code, are amended to read
  as follows:
         (b)  This section applies only to a municipality in which a
  transportation project is to be developed under Section 222.104 or
  222.108.
         (c)  If the governing body determines an area to be
  unproductive and underdeveloped and that action under this section
  will further the purposes stated in Section 222.105, the governing
  body of the municipality by ordinance may designate a contiguous
  geographic area in the jurisdiction of the municipality to be a
  transportation reinvestment zone to promote one or more [a]
  transportation projects [project].
         (g)  The ordinance designating an area as a transportation
  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)  provide that the zone takes effect immediately on
  passage of the ordinance and that the base year shall be the year of
  passage of the ordinance or some year in the future;
               (3)  assign a name to the zone for identification, with
  the first zone designated by a municipality designated as
  "Transportation Reinvestment Zone Number One, (City or Town, as
  applicable) of (name of municipality)," and subsequently
  designated zones assigned names in the same form, numbered
  consecutively in the order of their designation;
               (4)  designate the base year for purposes of
  establishing the tax increment base of the municipality;
               (5)  establish a tax increment account for the zone;
  and
               (6)  contain findings that promotion of the
  transportation project or projects will cultivate the improvement,
  development, or redevelopment of the zone.
         (i)  All or the portion specified by the municipality of the
  money deposited to a tax increment account must be used to fund the
  transportation project or projects for which the zone was
  designated, as well as aesthetic improvements within the zone.  Any
  remaining money deposited to the tax increment account may be used
  for other purposes as determined by the municipality.  A
  municipality may issue bonds to pay all or part of the cost of a
  [the] transportation project and may pledge and assign all or a
  specified amount of money in the tax increment account to secure
  repayment of those bonds.
         (i-1)  The governing body of a municipality may contract with
  a public or private entity to develop, redevelop, or improve a
  transportation project in a transportation reinvestment zone and
  may pledge and assign all or a specified amount of money in the tax
  increment account to that entity.  After a pledge or assignment is
  made, [if the entity that received the pledge or assignment has
  itself pledged or assigned that amount to secure bonds or other
  obligations issued to obtain funding for the transportation
  project,] the governing body of the municipality may not rescind
  its pledge or assignment until the contractual commitments that are
  the subject of [bonds or other obligations secured by] the pledge or
  assignment have been satisfied [paid or discharged].
         (i-2)  To accommodate changes in the limits of a [the]
  project for which a reinvestment zone was designated, the
  boundaries of a zone may be amended at any time, except that:
               (1)  property may not be removed or excluded from a
  designated zone if any part of the tax increment account has been
  assigned or pledged directly by the municipality or through another
  entity to secure bonds or other obligations issued to:
                     (A)  obtain financing [funding] of the project; or
                     (B)  provide funding for the development of a
  project;[,] and
               (2)  property may not be added to a designated zone
  unless the governing body of the municipality complies with
  Subsections (e) and (g).
         (j)  Except as provided by Subsections (i-1) and (k), a
  transportation reinvestment zone terminates on December 31 of the
  year in which the municipality completes:
               (1)  all [a] contractual requirements [requirement, if
  any,] that included the pledge or assignment of all or a portion of
  money deposited to a tax increment account; or
               (2)  the repayment of money owed under an agreement for
  development, redevelopment, or improvement of the project or
  projects for which the zone was designated.
         SECTION 4.  Subsections (b), (c), (e), (f), (k-1), and (l),
  Section 222.107, Transportation Code, are amended to read as
  follows:
         (b)  This section applies only to a county in which a
  transportation project is to be developed under Section 222.104 or
  222.108.
         (c)  The commissioners court of the county, after
  determining that an area is unproductive and underdeveloped and
  that action under this section would further the purposes described
  by Section 222.105, by order or resolution may designate a
  contiguous geographic area in the jurisdiction of the county to be a
  transportation reinvestment zone to promote one or more [a]
  transportation projects [project and for the purpose of abating ad
  valorem taxes or granting other relief from taxes imposed by the
  county on real property located in the zone].
         (e)  Not later than the 30th day before the date the
  commissioners court proposes to designate an area as a
  transportation reinvestment zone under this section, the
  commissioners court must hold a public hearing on the creation of
  the zone, its benefits to the county and to property in the proposed
  zone, and the possible abatement of ad valorem taxes or the grant of
  other relief from ad valorem taxes imposed by the county on real
  property located in the zone.  At the hearing an interested person
  may speak for or against the designation of the zone, its
  boundaries, or the possible abatement of or the relief from county
  taxes on real property in the zone.  Not later than the seventh day
  before the date of the hearing, notice of the hearing and the intent
  to create a zone must be published in a newspaper having general
  circulation in the county.
         (f)  The order or resolution designating an area as a
  transportation 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)  provide that the zone takes effect immediately on
  adoption of the order or resolution and that the base year shall be
  the year of passage of the order or resolution or some year in the
  future;
               (3)  assign a name to the zone for identification, with
  the first zone designated by a county designated as "Transportation
  Reinvestment Zone Number One, County of (name of county)," and
  subsequently designated zones assigned names in the same form
  numbered consecutively in the order of their designation;
               (4)  designate the base year for purposes of
  establishing the tax increment base of the county; [and]
               (5)  establish an ad valorem tax increment account for
  the zone; and
               (6)  contain findings that promotion of the
  transportation project or projects will cultivate the improvement,
  development, or redevelopment of the zone.
         (k-1)  To accommodate changes in the limits of a [the]
  project for which a reinvestment zone was designated, the
  boundaries of a zone may be amended at any time, except that:
               (1)  property may not be removed or excluded from a
  designated zone if any part of the tax increment or assessment has
  been assigned or pledged directly by the county or through another
  entity to secure bonds or other obligations issued to:
                     (A)  obtain financing [funding] of a [the]
  project; or
                     (B)  provide funding for the development of a
  project;[,] and
               (2)  property may not be added to a designated zone
  unless the commissioners court of the county complies with
  Subsections (e) and (f).
         (l)  Except as provided by Subsection (m), a transportation
  reinvestment zone, a tax abatement agreement entered into under
  Subsection (h), or an order or resolution on the abatement of taxes
  or the grant of relief from taxes under that subsection[,]
  terminates on December 31 of the year in which the county completes:
               (1)  all [any] contractual requirements [requirement]
  that included the pledge or assignment of all or a portion of:
                     (A)  money deposited to a tax increment account;
  or
                     (B)  the assessments collected under this
  section; or
               (2)  the repayment of money owed under an agreement for
  the development, redevelopment, or improvement of the project for
  which the zone was designated.
         SECTION 5.  Subsection (h), Section 222.107, Transportation
  Code, as amended by Chapters 475 (H.B. 563) and 1345 (S.B. 1420),
  Acts of the 82nd Legislature, Regular Session, 2011, is reenacted
  to read as follows:
         (h)  The commissioners court may:
               (1)  from taxes collected on property in a zone, pay
  into a tax increment account for the zone an amount equal to the tax
  increment produced by the county less any amounts allocated under
  previous agreements, including agreements under Section 381.004,
  Local Government Code, or Chapter 312, Tax Code;
               (2)  by order or resolution enter into an agreement
  with the owner of any real property located in the transportation
  reinvestment zone to abate all or a portion of the ad valorem taxes
  or to grant other relief from the taxes imposed by the county on the
  owner's property in an amount not to exceed the amount calculated
  under Subsection (a)(1) for that year;
               (3)  by order or resolution elect to abate all or a
  portion of the ad valorem taxes imposed by the county on all real
  property in a zone; or
               (4)  grant other relief from ad valorem taxes on
  property in a zone.
         SECTION 6.  Subsection (h-1), Section 222.107,
  Transportation Code, as added by Chapter 1345 (S.B. 1420), Acts of
  the 82nd Legislature, Regular Session, 2011, is reenacted and
  amended to conform to Subsection (h), Section 222.107,
  Transportation Code, as amended by Chapter 475 (H.B. 563), Acts of
  the 82nd Legislature, Regular Session, 2011, to read as follows:
         (h-1)  All abatements or other relief granted by the
  commissioners court in a transportation reinvestment zone must be
  equal in rate. In any ad valorem tax year, the total amount of the
  taxes abated or the total amount of relief granted under this
  section may not exceed the amount calculated under Subsection
  (a)(1) for that year, less any amounts allocated under previous
  agreements, including agreements under Chapter 381 [Section
  381.004], Local Government Code, or Chapter 312, Tax Code.
         SECTION 7.  Subsection (h-1), Section 222.107,
  Transportation Code, as added by Chapter 475 (H.B. 563), Acts of the
  82nd Legislature, Regular Session, 2011, is redesignated as
  Subsection (h-2), Section 222.107, Transportation Code, and
  amended to read as follows:
         (h-2) [(h-1)]  To further the development of the
  transportation project or projects for which the transportation
  reinvestment zone was designated, a county may assess all or part of
  the cost of the transportation project or projects against property
  within the zone.  The assessment against each property in the zone
  may be levied and payable in installments in the same manner as
  provided by Sections 372.016-372.018, Local Government Code,
  provided that the installments do not exceed the total amount of the
  tax abatement or other relief granted under Subsection (h).  The
  county may elect to adopt and apply the provisions of Sections
  372.015-372.020 and 372.023, Local Government Code, to the
  assessment of costs and Sections 372.024-372.030, Local Government
  Code, to the issuance of bonds by the county to pay the cost of a
  transportation project.  The commissioners court of the county may
  contract with a public or private entity to develop, redevelop, or
  improve a transportation project in the transportation
  reinvestment zone, including aesthetic improvements, and may
  pledge and assign to that entity all or a specified amount of the
  revenue the county receives from the tax increment or the
  installment payments of the assessments for the payment of the
  costs of that transportation project.  After a pledge or assignment
  is made, [if the entity that received the pledge or assignment has
  itself pledged or assigned that amount to secure bonds or other
  obligations issued to obtain funding for the transportation
  project,] the commissioners court of the county may not rescind its
  pledge or assignment until the contractual commitments that are the
  subject of [bonds or other obligations secured by] the pledge or
  assignment have been satisfied [paid or discharged].  Any amount
  received from the tax increment or the installment payments of the
  assessments not pledged or assigned in connection with a [the]
  transportation project may be used for other purposes as determined
  by the commissioners court [associated with the transportation
  project or in the zone].
         SECTION 8.  Subsection (a), Section 222.108, Transportation
  Code, is amended to read as follows:
         (a)  A [Notwithstanding the requirement in Sections
  222.106(b) and 222.107(b) that a transportation reinvestment zone
  be established in connection with a project under Section 222.104,
  a] municipality or county may establish a transportation
  reinvestment zone for one or more [any] transportation projects 
  [project].  If all or part of a [the] transportation project is
  subject to oversight by the department, at the option of the
  governing body of the municipality or county, the department, to
  the extent permitted by law, shall delegate full responsibility for
  the development, design, letting of bids, and construction of the
  project, including project inspection, to the municipality or
  county.  After assuming responsibility for a project under this
  subsection, a municipality or county shall enter into an agreement
  with the department that prescribes:
               (1)  the development process;
               (2)  the roles and responsibilities of the parties; and
               (3)  the timelines for any required reviews or
  approvals.
         SECTION 9.  Subsection (e), Section 222.110, Transportation
  Code, is amended to read as follows:
         (e)  The sales and use taxes to be deposited into the tax
  increment account under this section may be disbursed from the
  account only to:
               (1)  pay for projects authorized under Section 222.104
  or 222.108[, including the repayment of amounts owed under an
  agreement entered into under that section]; and
               (2)  notwithstanding Sections 321.506 and 323.505, Tax
  Code, satisfy claims of holders of tax increment bonds, notes, or
  other obligations issued or incurred for projects authorized under
  Section 222.104 or 222.108.
         SECTION 10.  Subchapter E, Chapter 222, Transportation Code,
  is amended by adding Section 222.111 to read as follows:
         Sec. 222.111.  JOINT ADMINISTRATION OF TRANSPORTATION
  REINVESTMENT ZONES. (a)  The governing bodies of two or more local
  governments that have designated a transportation reinvestment
  zone under Section 222.106 or 222.107 for the same transportation
  project or projects may enter into an agreement to provide for the
  joint administration of the transportation reinvestment zones. The
  agreement may provide for:
               (1)  the creation of a board of directors to oversee the
  transportation reinvestment zones, including the implementation of
  a transportation project in the zones;
               (2)  the establishment of a joint tax increment account
  for the transportation reinvestment zones;
               (3)  separate accounts for the maintenance of funds
  from a zone created under Section 222.106 and funds from a zone
  created under Section 222.107;
               (4)  the commitment of each participating entity to
  transfer the tax increment or assessment, or the portion thereof
  dedicated to a transportation project, to an account subject to the
  joint administration; and
               (5)  to the extent legally permitted, the pledge or
  assignment of the tax increment or assessment to an entity
  developing a transportation project or providing funding for a
  transportation project.
         (b)  A board of directors is composed of one person appointed
  by each local government that is a party to the agreement providing
  for joint administration of the transportation reinvestment zones
  and one person appointed by agreement of those local governments.
         (c)  Notwithstanding any other law, a local government may
  designate a transportation reinvestment zone for a transportation
  project located outside the local government's boundaries if:
               (1)  the local government finds that:
                     (A)  the project will benefit the property and
  residents located in the zone; and
                     (B)  the creation of the zone will serve a public
  purpose of the local government;
               (2)  a zone has been designated for the same project by
  one or more local governments in whose boundaries the project is
  located; and
               (3)  an agreement for joint administration of the
  designated zones is entered into under this section by:
                     (A)  the local government whose boundaries do not
  contain the project; and
                     (B)  one or more of the local governments that
  have designated a zone for the project and in whose boundaries the
  project is located.
         SECTION 11.  Subsection (i-1), Section 222.107, and
  Subsection (d), Section 222.108, Transportation Code, are
  repealed.
         SECTION 12.  This Act takes effect September 1, 2013.