Untitled Texas Attorney General Opinion, GA-0953

Attorney General assesses whether a county may issue tax increment financing bonds under Chapter 311 of the Tax Code and Article VIII, § I-g(b) of the Texas Constitution.
Chapter 311 authorizes reinvestment zones and bonds/notes to finance zone project costs; counties can designate zones but generally lack bond-issuing authority.
Article VIII, § I-g(b) allows an incorporated city or town to issue bonds to finance development and pledge increases in ad valorem tax revenues from the area and other political subdivisions.
Legislative history: counties designated reinvestment zones in 2005 but were not authorized to issue TIF bonds; voters rejected a 2011 constitutional amendment that would have allowed counties to issue such bonds.
Opinion concludes counties have no statutory authority to issue tax increment financing bonds; counties may contribute funds to a tax increment fund but cannot pledge it or issue bonds.
The opinion also confirms that counties are political subdivisions, but only municipalities may pledge tax increment funds for TIF bonds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Can a county issue tax increment financing bonds under Chapter 311?	Request Letter suggests counties may issue bonds if authorized by statute or constitution.	Legislature has not granted counties TIF bond authority; only municipalities may issue bonds.	No; counties may not issue tax increment financing bonds.
Does 'other political subdivisions' include counties for bond security purposes under art. VIII, § I-g(b)?	Counties are political subdivisions that could pledge tax increment revenues.	Even if counties are political subdivisions, only municipalities may pledge the tax increment fund for bonds.	Counties are political subdivisions, but only municipalities may pledge the tax increment fund for TIF bonds.

City of El Paso v. El Paso Community College Dist., 729 S.W.2d 296 (Tex. 1986) (defines 'political subdivision' and applies test to counties)
Lasater v. Lopez, 217 S.W.2d 373 (Tex. 1919) (county may not issue negotiable securities without special authority)
Lopez v. Ramirez, 558 S.W.2d 954 (Tex. Civ. App.—San Antonio 1977, no writ) (bonds restricted to purposes and manners expressly authorized)
City of El Paso v. El Paso Community College Dist. (related citation), 106 S.W.3d 692 (Tex. 2003) (describes broader context of political subdivision status in related sovereign contexts)