81R5301 SMH-D
By: Darby H.B. No. 1853
A BILL TO BE ENTITLED
AN ACT
relating to the authorization of school district ad valorem tax
incentives for historic redevelopment and economic development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 3, Tax Code, is amended by
adding Chapter 314 to read as follows:
CHAPTER 314. HISTORIC REDEVELOPMENT AND ECONOMIC DEVELOPMENT ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 314.001. SHORT TITLE. This chapter may be cited as the
Historic Redevelopment and Economic Development Act.
Sec. 314.002. FINDINGS. The legislature finds that:
(1) the various economic development programs allowed
by the State of Texas stimulate community growth and
revitalization;
(2) the State of Texas supports sustainable
development practices that encourage reinvestment in historic or
blighted downtowns, commercial corridors, and neighborhoods that
are identified in a municipality's comprehensive plan;
(3) historic rehabilitation and other revitalization
projects often require overinvestment as compared to the
development of raw land, and it is in the interest of all taxing
units to facilitate redevelopment rather than sprawl;
(4) municipalities and counties are willing to forgo
marginal gains to their ad valorem tax collections, but it is
imperative that school districts have the opportunity to
participate in the revitalization of their communities because
school district ad valorem taxes sometimes constitute the majority
of the ad valorem taxes imposed on property;
(5) a school district's participation in the
revitalization of the district's community must not adversely
affect the district's annual funding from the State of Texas; and
(6) the short-term exemption of property from ad
valorem taxation under this chapter is more than offset by the
long-term increase in ad valorem taxes generated from the
redevelopment and economic development activities encouraged by
this chapter.
Sec. 314.003. PURPOSES. The purposes of this chapter are
to:
(1) encourage capital investment in historic and
blighted areas of a community that are traditionally neglected due
to the overinvestment that is required to use existing structures;
(2) assist local governments in diversifying the
economic opportunities in their communities;
(3) prevent the continued deterioration of blighted
areas of a community that will ultimately reduce the valuation of
property in the community for ad valorem tax purposes;
(4) enable local government officials and economic
development professionals to reduce the increased costs associated
with urban sprawl by authorizing redevelopment and economic
development incentives that will encourage reinvestment in the
traditional core of a municipality so as to allow all government
entities to use existing infrastructure;
(5) strengthen and improve the overall performance of
municipalities, counties, and school districts by allowing them to
promote capital investments in all sectors of their community;
(6) expand and enlarge the ad valorem property tax
base of this state; and
(7) enhance the redevelopment and economic
development efforts of this state and local governments by
providing school districts with an effective local redevelopment
and economic development option.
Sec. 314.004. LEGISLATIVE INTENT. It is the intent of the
legislature in enacting this chapter that:
(1) redevelopment and economic development decisions
should occur at the local level and be consistent with identifiable
community and statewide redevelopment and economic development
goals;
(2) this chapter should not be construed or
interpreted to allow:
(A) property owners to pool investments to create
sufficiently large investments to qualify for an ad valorem tax
benefit or financial benefit provided by this chapter; or
(B) an applicant for an ad valorem tax benefit or
financial benefit provided by this chapter to assert that jobs will
be eliminated or historic properties will be destroyed if certain
investments are not made if the assertion is not true; and
(3) in implementing this chapter, school districts
should:
(A) strictly interpret the criteria and
selection guidelines provided by this chapter; and
(B) approve only those applications for an ad
valorem tax benefit or financial benefit provided by this chapter
that:
(i) enhance the local community;
(ii) improve the local public education
system;
(iii) create reinvestment in areas that
have traditionally been neglected;
(iv) encourage the use of existing
infrastructure and reduce the need for the creation of new
infrastructure;
(v) assist in creating opportunities in
areas of a community that are identified as historic or blighted and
that traditionally are populated by the less advantaged population
of the community; and
(vi) advance the redevelopment and economic
development goals of the State of Texas or a municipality's
comprehensive plan.
Sec. 314.005. DEFINITIONS. Unless this chapter defines a
word or phrase used in this chapter, Section 1.04 or any other
section of Title 1 or this title that defines the word or phrase or
ascribes a meaning to the word or phrase applies to the word or
phrase used in this chapter.
Sec. 314.006. IMPOSITION OF IMPACT FEE. (a) In this
section, "impact fee" means a charge or assessment imposed against
a qualified property, as defined by Section 314.051, in order to
generate revenue for funding or recouping the costs of capital
improvements or facility expansions for water, wastewater, or storm
water services or for roads necessitated by or attributable to
property that receives an exemption from taxation under this
chapter.
(b) Notwithstanding any other law, including Chapter 395,
Local Government Code, a municipality or county may impose and
collect from the owner of a qualified property a reasonable impact
fee under this section to pay for the cost of providing improvements
associated with or attributable to property that receives an
exemption from taxation under this chapter.
[Sections 314.007-314.050 reserved for expansion]
SUBCHAPTER B. EXEMPTION FROM TAXATION OF CERTAIN PROPERTY USED FOR
HISTORIC REVITALIZATION OR ECONOMIC DEVELOPMENT
Sec. 314.051. DEFINITIONS. In this subchapter:
(1) "Qualified investment" means tangible personal
property that is located in an area in a municipality that is
defined as a historic or blighted downtown, commercial corridor, or
neighborhood by a municipality's comprehensive plan.
(2) "Qualified property" means:
(A) land that is located in an area designated by
the governing body of the municipality as a reinvestment zone under
Chapter 311 or 312 or as an enterprise zone under Chapter 2303,
Government Code, and:
(i) that is identified by a municipality's
comprehensive plan as a historic or blighted downtown, commercial
area, or corridor; or
(ii) on which a person proposes to
construct a new building or erect or affix a new improvement that
does not exist and is consistent with the historic character of the
area; and
(B) a building or other improvement located on
land described by Paragraph (A).
Sec. 314.052. APPLICABILITY. This subchapter applies to
each school district in this state.
Sec. 314.053. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT FOR
CERTAIN EXEMPTION PERCENTAGES. (a) An agreement under this
subchapter to exempt a portion of the value of qualified property
from taxation may exempt the following percentages of the
difference between the appraised value of the property for a tax
year and the appraised value of the property for the tax year in
which the agreement is entered into if the owner of the property
makes a qualified investment in at least the following amount:
EXEMPTION PERCENTAGE MINIMUM QUALIFIED INVESTMENT
100 percent $1 million
85 percent $500,000
75 percent $250,000
50 percent $100,000
25 percent $25,000
(b) An owner of qualified property may not receive an
exemption under this subchapter for the property for a period of
more than 10 years.
Sec. 314.054. APPLICATION; ACTION ON APPLICATION. (a) The
owner of qualified property may apply to the governing body of the
school district in which the property is located for an exemption
from taxation of a portion of the value of the person's qualified
property for school district maintenance and operations ad valorem
tax purposes. An application must be made on the form prescribed by
the comptroller and include the information required by the
comptroller, and it must be accompanied by:
(1) the application fee established by the governing
body of the school district;
(2) information sufficient to show that the property
identified in the application as qualified property meets the
applicable criteria listed in Sections 314.004(3), 314.051, and
314.053 and this section; and
(3) information relating to each applicable criterion
listed in Sections 314.004(3), 314.051, and 314.053 and this
section.
(b) The governing body of a school district is not required
to consider an application that is filed with the governing body
under Subsection (a). If the governing body of the school district
does elect to consider an application, the governing body shall
work with the municipality in which the qualified property is
located to evaluate the application and approve or disapprove the
application before the 121st day after the date the application is
filed, unless an extension is agreed to by the governing body and
the applicant.
(c) In determining whether to grant an application, the
governing body of a school district is entitled to request and
receive assistance from:
(1) the comptroller;
(2) the Texas Economic Development and Tourism Office;
(3) the Texas Workforce Investment Council;
(4) the Texas Workforce Commission;
(5) the Texas Historical Commission; and
(6) any local board or commission that regulates or
advises the regulating governing body of a specific area.
(d) Before approving or disapproving an application that
the governing body of a school district elects to consider, the
governing body must make a written finding as to each criterion
listed in Sections 314.004(3), 314.051, and 314.053 and this
section. The governing body shall deliver a copy of those findings
to the applicant.
(e) The governing body of a school district may approve an
application only if the governing body:
(1) finds that the information in the application is
true and correct;
(2) finds that the applicant is eligible for an
exemption from taxation under this subchapter; and
(3) determines that granting the application is in the
best interest of the school district and this state.
Sec. 314.055. EXEMPTION FROM AD VALOREM TAXATION;
AGREEMENT. If the governing body of a school district approves a
person's application for an exemption from taxation under this
subchapter, the governing body and the property owner shall enter
into a written agreement for the implementation of the exemption.
Sec. 314.056. CERTAIN BUSINESS INFORMATION CONFIDENTIAL.
Information provided to a school district in connection with an
application for an exemption from taxation under this subchapter
that describes the specific processes or business activities to be
conducted or the specific tangible personal property to be located
on real property covered by the application is confidential and not
subject to public disclosure unless the governing body of the
school district approves the application. Information in the
custody of a school district if the governing body approves the
application is not confidential under this section.
Sec. 314.057. RULES AND FORMS; FEES. (a) The comptroller
shall:
(1) adopt rules and forms necessary for the
implementation and administration of this chapter, including rules
for determining whether a property owner's property qualifies as a
qualified investment under Section 314.051(1); and
(2) provide without charge one copy of the rules and
forms to any school district and to any person who states that the
person intends to apply for an exemption from taxation under this
subchapter.
(b) The governing body of a school district by official
action shall establish reasonable nonrefundable application fees
to be paid by property owners who apply to the district for an
exemption from taxation under this subchapter. The amount of an
application fee must be reasonable and may not exceed the estimated
cost to the district of processing and acting on an application.
SECTION 2. Section 312.0025(a), Tax Code, is amended to
read as follows:
(a) Notwithstanding any other provision of this chapter to
the contrary:
(1)[,] the governing body of a school district, in the
manner required for official action and for purposes of Subchapter
B or C, Chapter 313, may designate an area entirely within the
territory of the school district as a reinvestment zone if the
governing body finds that, as a result of the designation and the
granting of a limitation on appraised value under Subchapter B or C,
Chapter 313, for property located in the reinvestment zone, the
designation is reasonably likely to:
(A) [(1)] contribute to the expansion of primary
employment in the reinvestment zone; or
(B) [(2)] attract major investment in the
reinvestment zone that would:
(i) [(A)] be a benefit to property in the
reinvestment zone and to the school district; and
(ii) [(B)] contribute to the economic
development of the region of this state in which the school district
is located; and
(2) the governing body of a school district, in the
manner required by law for official action and for purposes of
Chapter 314, may designate an area entirely within the territory of
the school district as a reinvestment zone if the governing body
finds that, as a result of the designation and the granting of an
exemption from taxation under Chapter 314 for property located in
the reinvestment zone, the designation is reasonably like to serve
the purposes provided by Section 314.003 in connection with the
reinvestment zone.
SECTION 3. Section 403.302(d), Government Code, is amended
to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) for a school district for which a deduction from
taxable value is made under Subdivision (4), an amount equal to the
taxable value required to generate revenue when taxed at the school
district's current tax rate in an amount that, when added to the
taxes of the district paid into a tax increment fund as described by
Subdivision (4)(B), is equal to the total amount of taxes the
district would have paid into the tax increment fund if the district
levied taxes at the rate the district levied in 2005;
(6) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(7) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(8) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(9) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(10) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, or Chapter 314, Tax Code;
(11) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(12) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(13) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(14) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 4. Section 2303.507, Government Code, is amended to
read as follows:
Sec. 2303.507. TAX INCREMENT FINANCING AND ABATEMENT;
LIMITATIONS ON APPRAISED VALUE. Designation of an area as an
enterprise zone is also designation of the area as a reinvestment
zone for:
(1) tax increment financing under Chapter 311, Tax
Code;
(2) tax abatement under Chapter 312, Tax Code; [and]
(3) limitations on appraised value under Chapter 313,
Tax Code; and
(4) exemptions under Chapter 314, Tax Code.
SECTION 5. This Act takes effect January 1, 2010.