Sec. 374.036. DISBURSEMENTS FROM TAX INCREMENT FUND. (a) Money may be disbursed from a tax increment fund only to satisfy the claims of holders of tax increment bonds issued in aid of the urban renewal project with respect to which the fund was established or to pay project costs. In this section, "project costs" means any expenditure made or estimated to be made, or monetary obligations incurred or estimated to be incurred, by the municipality that are listed in an urban renewal project, plus any incidental costs, less any income or revenues other than tax increments, received or reasonably expected to be received by the municipality in connection with the implementation of the urban renewal plan. Those project costs include:

(1) capital costs, including:

(A) the actual costs of the construction of public works or improvements, new buildings, structures, and fixtures;

(B) the costs of demolition, alteration, remodeling, repair, or reconstruction of existing buildings, structures, and fixtures;

(C) the costs of acquisition of equipment; and

(D) the costs of clearing and grading of land;

(2) financing costs, including interest paid to holders of tax increment bonds issued to pay for project costs and any premium paid over the principal amount because of the redemption of the obligation before maturity;

(3) professional service costs, including costs incurred for architectural, planning, engineering, or legal services;

(4) imputed administrative costs, including reasonable charges for the time spent by municipal employees in connection with the implementation of an urban renewal plan; and

(5) organizational costs, including the cost of conducting studies and the cost of informing the public with respect to the creation of urban renewal projects and the implementation of project plans.

(b) Subject to any agreement with holders of tax increment bonds, money in a tax increment fund may be temporarily invested in the same manner as other municipal funds.

(c) After project costs and tax increment bonds issued with respect to an urban renewal project have been paid or payment has been arranged, and subject to any agreement with bondholders, any money remaining in a tax increment fund shall be paid over to the municipality and to other taxing entities levying taxes on property within the project in amounts belonging to each entity.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.