HB5451 - Relating to the treatment of certain residence homesteads for purposes of the Tax Increment Financing Act.

      By: Anchía H.B. No. 5451       A BILL TO BE ENTITLED   AN ACT   relating to the treatment of certain residence homesteads for   purposes of the Tax Increment Financing Act.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 311.002(1), Tax Code, is amended to read   as follows:                (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 designating a   reinvestment zone that are listed in the project plan as costs of   public works, public improvements, programs, or other projects   benefiting 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; the actual costs of the remediation of conditions that   contaminate public or private land or buildings; the actual costs   of the preservation of the facade of a public or private building;   the actual costs of the demolition of public or private buildings;   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;                      (K)  the costs of school buildings, other   educational buildings, other educational facilities, or other   buildings owned by or on behalf of a school district, community   college district, or other political subdivision of this state;   [ and ]                      (L)  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 ; and                       (M)     payments made as part of a reinvestment zone   stability program established under Section 311.0111 .          SECTION 2.  Section 311.006(a), Tax Code, is amended to read   as follows:          (a)  A municipality may not designate a reinvestment zone if:                (1)  more than 40 [ 30 ] percent of the property in the   proposed zone[ , excluding property that is publicly owned, ] is used   for residential purposes , excluding property that is:                       (A)  publicly owned; or                       (B)     a residence homestead owned by a legacy   homeowner, as those terms are defined by Section 311.0111 ; or                (2)  the total appraised value of taxable real property   in the proposed zone and in existing reinvestment zones exceeds:                      (A)  25 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 has a   population of 100,000 or more; or                      (B)  50 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 has a   population of less than 100,000.          SECTION 3.  Chapter 311, Tax Code, is amended by adding   Section 311.0111 to read as follows:           Sec.   311.0111.     REINVESTMENT ZONE STABILITY PROGRAM. (a)     In this section:                 (1)     "Legacy homeowner" means the owner of a residence   homestead located in a reinvestment zone who has continuously   resided in and received an exemption under Section 11.13 for the   homestead for at least seven years preceding the date the governing   body of the county or municipality designated the zone in which the   homestead is located and meets certain conditions imposed under the   project plan under Section 311.011.                 (2)     "Program" means a reinvestment zone stability   program established under this section.                 (3)     "Residence homestead" has the meaning assigned by   Section 11.13.           (b)     The project plan prepared and adopted by the board of   directors of a reinvestment zone under Section 311.011 may   authorize the board of directors to establish a reinvestment zone   stability program, the purpose of which is to ensure that all   residents of the zone benefit from its designation.   The governing   body of the county or municipality that designated the zone and any   affiliated community organizations may participate in the   development of the program.   As part of a program established under   this section, the board may dedicate, pledge, or otherwise provide   for the use of money in the tax increment fund established for the   zone to prevent homeowner displacement by providing conditional   annual payments on behalf of legacy homeowners to offset the   increase in ad valorem taxes imposed on the residence homesteads of   those homeowners that is attributable to the increase in property   values associated with the development or redevelopment of property   in the zone.           (c)     If the project plan for a reinvestment zone authorizes   annual payments on behalf of legacy homeowners, the plan must   provide that:                 (1)     the legacy homeowner must meet and maintain   certain conditions, including meeting an income eligibility   requirement;                 (2)     the amount of an annual payment made under the   program on behalf of a legacy homeowner may not exceed the amount   determined for that homeowner under Subsection (d); and                 (3)     the period of time for which annual payments may be   made on behalf of a legacy homeowner may not exceed 10 years.           (d)     The maximum amount of an annual payment that may be made   on behalf of a legacy homeowner for a tax year is equal to the   positive difference, if any, between the following amounts:                 (1)     the ad valorem taxes due on the homeowner's   homestead for that tax year; and                 (2)     the ad valorem taxes due on the homeowner's   homestead for the tax year in which the reinvestment zone in which   the homestead is located was designated.          SECTION 4.  This Act takes effect September 1, 2025.