By: Hilderbran, et al. (Senate Sponsor - Deuell) H.B. No. 3390
(In the Senate - Received from the House May 6, 2013;
May 7, 2013, read first time and referred to Committee on Economic
Development; May 14, 2013, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 5, Nays 0;
May 14, 2013, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 3390 By: Deuell
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Economic Development Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 313.002 and 313.004, Tax Code, are
amended to read as follows:
Sec. 313.002. FINDINGS. The legislature finds that:
(1) many states have enacted aggressive economic
development laws designed to attract large employers, create jobs,
and strengthen their economies;
(2) given Texas' relatively high ad valorem taxes, it
is difficult for the state to compete for new capital projects
without some kind of temporary limit on ad valorem taxes imposed on
new capital investments [the State of Texas has slipped in its
national ranking each year between 1993 and 2000 in terms of
attracting major new manufacturing facilities to this state];
(3) a significant portion of the Texas economy
continues to be based in [the] manufacturing and other
capital-intensive industries [industry], and their [the] continued
growth and overall health serve [of the manufacturing sector
serves] the Texas economy well; and
(4) without a vibrant, strong manufacturing sector,
other sectors of the economy, especially the state's service
sector, will also suffer adverse consequences[; and
[(5) the current property tax system of this state
does not favor capital-intensive businesses such as
manufacturers].
Sec. 313.004. LEGISLATIVE INTENT. It is the intent of the
legislature in enacting this chapter that:
(1) economic development decisions should occur at the
local level and be consistent with identifiable statewide 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;
(B) an applicant for an ad valorem tax benefit or
financial benefit provided by this chapter to assert that jobs will
be eliminated if certain investments are not made if the assertion
is not true; or
(C) an entity not subject to the franchise tax
imposed by Chapter 171 because of its form of business [a sole
proprietorship, partnership, or limited liability partnership] to
receive an ad valorem tax benefit or financial benefit provided by
this chapter; 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 high-paying jobs; and
(iv) advance the economic development goals
of this state as identified by the Texas Strategic Economic
Development Planning Commission or its successor.
SECTION 2. Section 313.021, Tax Code, is transferred to
Subchapter A, Chapter 313, Tax Code, redesignated as Section
313.0045, Tax Code, and amended to read as follows:
Sec. 313.0045 [313.021]. DEFINITIONS. (a) In this chapter
[subchapter]:
(1) "Qualified investment" means:
(A) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is described as Section 1245 property by Section
1245(a), Internal Revenue Code of 1986;
(B) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with the manufacturing,
processing, or fabrication in a cleanroom environment of a
semiconductor product, without regard to whether the property is
actually located in the cleanroom environment, including:
(i) integrated systems, fixtures, and
piping;
(ii) all property necessary or adapted to
reduce contamination or to control airflow, temperature, humidity,
chemical purity, or other environmental conditions or
manufacturing tolerances; and
(iii) production equipment and machinery,
moveable cleanroom partitions, and cleanroom lighting;
(C) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with the operation of a
nuclear electric power generation facility, including:
(i) property, including pressure vessels,
pumps, turbines, generators, and condensers, used to produce
nuclear electric power; and
(ii) property and systems necessary to
control radioactive contamination;
(D) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with operating an
integrated gasification combined cycle electric generation
facility, including:
(i) property used to produce electric power
by means of a combined combustion turbine and steam turbine
application using synthetic gas or another product produced by the
gasification of coal or another carbon-based feedstock; or
(ii) property used in handling materials to
be used as feedstock for gasification or used in the gasification
process to produce synthetic gas or another carbon-based feedstock
for use in the production of electric power in the manner described
by Subparagraph (i);
(E) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period [that begins on or after January 1, 2010], without
regard to whether the property is affixed to or incorporated into
real property, and that is used in connection with operating an
advanced clean energy project, as defined by Section 382.003,
Health and Safety Code; [or]
(F) a building or a permanent, nonremovable
component of a building that is built or constructed during the
applicable qualifying time period that begins on or after January
1, 2002, and that houses tangible personal property described by
Paragraph (A), (B), (C), (D), or (E); or
(G) an existing building that, as part of a
discrete project that increases the value of an existing property,
is renovated, expanded, or otherwise improved.
(2) "Qualified property" means:
(A) land:
(i) that is located in an area designated as
a reinvestment zone under Chapter 311 or 312 or as an enterprise
zone under Chapter 2303, Government Code;
(ii) on which a person proposes to
construct a new building or erect or affix a new improvement that
does not exist before the date the person applies for a limitation
on appraised value under this subchapter;
(iii) that is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(iv) on which, in connection with the new
building or new improvement described by Subparagraph (ii), the
owner or lessee of, or the holder of another possessory interest in,
the land proposes to:
(a) make a qualified investment in an
amount equal to at least the minimum amount required by Section
313.023; and
(b) create at least 25 new jobs;
(B) the new building or other new improvement
described by Paragraph (A)(ii); and
(C) tangible personal property that:
(i) is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(ii) except for new equipment described in
Section 151.318(q) or (q-1), is first placed in service in the new
building or in or on the new improvement described by Paragraph
(A)(ii), or on the land on which that new building or new
improvement is located, if the personal property is ancillary and
necessary to the business conducted in that new building or in or on
that new improvement.
(3) "Qualifying job" means a permanent full-time job
that:
(A) requires at least 1,600 hours of work a year;
(B) is not transferred from one area in this
state to another area in this state;
(C) is not created to replace a previous
employee;
(D) is covered by a group health benefit plan
that complies with the Patient Protection and Affordable Care Act
(Pub. L. No. 111-148) as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. No. 111-152), or a successor law
[for which the business offers to pay at least 80 percent of the
premiums or other charges assessed for employee-only coverage under
the plan, regardless of whether an employee may voluntarily waive
the coverage]; and
(E) pays at least 110 percent of the lesser of:
(i) the county average weekly wage for
manufacturing jobs in the county where the job is located; or
(ii) the county average weekly wage for all
jobs in the county where the job is located, if the property owner
creates more than 1,000 jobs in that county.
(4) "Qualifying time period" means:
(A) the period that begins on the date that a
person's application for a limitation on appraised value under this
chapter [subchapter] is approved by the governing body of the
school district and ends on December 31 of the second tax year that
begins after that date, except as provided by Paragraph (B) or (C)
of this subdivision or Section 313.014(h) [313.027(h)];
(B) in connection with a nuclear electric power
generation facility, the first seven tax years that begin on or
after the third anniversary of the date the school district
approves the property owner's application for a limitation on
appraised value under this chapter [subchapter], unless a shorter
time period is agreed to by the governing body of the school
district and the property owner; or
(C) in connection with an advanced clean energy
project, as defined by Section 382.003, Health and Safety Code, the
first five tax years that begin on or after the third anniversary of
the date the school district approves the property owner's
application for a limitation on appraised value under this chapter
[subchapter], unless a shorter time period is agreed to by the
governing body of the school district and the property owner.
(5) "County average weekly wage for manufacturing
jobs" means:
(A) the average weekly wage in a county for
manufacturing jobs during the most recent four quarterly periods
for which data is available at the time a person submits an
application for a limitation on appraised value under this chapter
[subchapter], as computed by the Texas Workforce Commission; or
(B) the average weekly wage for manufacturing
jobs in the region designated for the regional planning commission,
council of governments, or similar regional planning agency created
under Chapter 391, Local Government Code, in which the county is
located during the most recent four quarterly periods for which
data is available at the time a person submits an application for a
limitation on appraised value under this chapter [subchapter], as
computed by the Texas Workforce Commission.
(6) "Texas priority project" means a project
designated by the governor:
(A) on which the applicant has committed to
expend or allocate a qualified investment of more than $1 billion;
and
(B) that the governor has certified in a letter
provided to the applicant is in the best interest of the state
economy.
(b) 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.
SECTION 3. Section 313.006(a), Tax Code, is amended to read
as follows:
(a) In this section, "impact fee" means a charge or
assessment imposed against a qualified property [, as defined by
Section 313.021,] 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 a
limitation on appraised value under this chapter.
SECTION 4. Section 313.007, Tax Code, is amended to read as
follows:
Sec. 313.007. EXPIRATION. Subchapters A-1, B, and C [, and
D] expire December 31, 2020 [2014].
SECTION 5. Chapter 313, Tax Code, is amended by adding
Subchapter A-1, and a heading is added to that subchapter to read as
follows:
SUBCHAPTER A-1. ELIGIBILITY, APPLICATION, AND REPORTING
SECTION 6. Sections 313.024, 313.025, 313.026, 313.0265,
313.027, 313.0275, 313.028, 313.030, 313.031, and 313.032, Tax
Code, are transferred to Subchapter A-1, Chapter 313, Tax Code, as
added by this Act, redesignated as Sections 313.011, 313.012,
313.013, 313.0135, 313.014, 313.0145, 313.015, 313.016, 313.017,
and 313.018, Tax Code, and amended to read as follows:
Sec. 313.011 [313.024]. ELIGIBLE PROPERTY. (a) This
chapter applies [subchapter and Subchapters C and D apply] only to
property owned by an entity to which Chapter 171 applies.
(b) To be eligible for a limitation on appraised value under
this chapter [subchapter], the entity must use the property in
connection with:
(1) manufacturing;
(2) research and development;
(3) a clean coal project, as defined by Section 5.001,
Water Code;
(4) an advanced clean energy project, as defined by
Section 382.003, Health and Safety Code;
(5) renewable energy electric generation;
(6) electric power generation using integrated
gasification combined cycle technology;
(7) nuclear electric power generation; [or]
(8) a computer center primarily used in connection
with one or more activities described by Subdivisions (1) through
(7) conducted by the entity; or
(9) a Texas priority project.
(c) For purposes of determining an applicant's eligibility
for a limitation under this chapter [subchapter]:
(1) the land on which a building or component of a
building described by Section 313.0045(a)(1)(E) [313.021(1)(E)] is
located is not considered a qualified investment;
(2) property that is leased under a capitalized lease
may be considered a qualified investment;
(3) property that is leased under an operating lease
may not be considered a qualified investment; and
(4) property that is owned by a person other than the
applicant and that is pooled or proposed to be pooled with property
owned by the applicant may not be included in determining the amount
of the applicant's qualifying investment.
(d) To be eligible for a limitation on appraised value under
this chapter [subchapter], at least 80 percent of all the new jobs
created by the property owner must be qualifying jobs [as defined by
Section 313.021(3)].
(e) In this section:
(1) "Manufacturing" means an establishment primarily
engaged in activities described in sectors 31-33 of the 2007 North
American Industry Classification System.
(2) "Renewable energy electric generation" means an
establishment primarily engaged in activities described in
category 221119 of the 1997 North American Industry Classification
System.
(3) "Integrated gasification combined cycle
technology" means technology used to produce electricity in a
combined combustion turbine and steam turbine application using
synthetic gas or another product produced from the gasification of
coal or another carbon-based feedstock, including related
activities such as materials-handling and gasification of coal or
another carbon-based feedstock.
(4) "Nuclear electric power generation" means
activities described in category 221113 of the 2002 North American
Industry Classification System.
(5) "Research and development" means an establishment
primarily engaged in activities described in category 541710 of the
2002 North American Industry Classification System.
(6) "Computer center" means an establishment
primarily engaged in providing electronic data processing and
information storage.
Sec. 313.012 [313.025]. APPLICATION; ACTION ON
APPLICATION. (a) The owner or lessee of, or the holder of another
possessory interest in, any qualified property [described by
Section 313.021(2)(A), (B), or (C)] may apply to the governing body
of the school district in which the property is located for a
limitation on the appraised value for school district maintenance
and operations ad valorem tax purposes of the person's qualified
property. 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 real and
personal property identified in the application as qualified
property meets the applicable criteria established by Section
313.0045(a)(2) [313.021(2)]; and
(3) information relating to each applicable criterion
listed in Section 313.013 [313.026].
(a-1) Within seven days of the receipt of each document, the
school district shall submit to the comptroller a copy of the
application and the agreement between the applicant and the school
district. If an economic analysis of the proposed project is
submitted to the school district, the district shall submit a copy
of the analysis to the comptroller. In addition, the school
district shall submit to the comptroller any subsequent revision of
or amendment to any of those documents within seven days of its
receipt. The comptroller shall publish each document received from
the school district under this subsection on the comptroller's
Internet website. If the school district maintains a generally
accessible Internet website, the district shall provide on its
website a link to the location of those documents posted on the
comptroller's website in compliance with this subsection. This
subsection does not require the comptroller to post information
that is confidential under Section 313.015 [313.028].
(b) The governing body of a school district is not required
to consider an application for a limitation on appraised value 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 deliver three copies of the
application to the comptroller and request that the comptroller
provide an economic impact evaluation of the application to the
school district. Except as provided by Subsection (b-1), the
comptroller shall conduct or contract with a third person to
conduct the evaluation, which shall be completed and provided to
the governing body of the school district as soon as practicable.
The governing body shall provide to the comptroller or third person
any requested information. A methodology to allow comparisons of
economic impact for different schedules of the addition of
qualified investment or qualified property may be developed as part
of the economic impact evaluation. The governing body shall
provide a copy of the evaluation to the applicant on request. The
comptroller may charge and collect a fee sufficient to cover the
costs of providing the economic impact evaluation. The governing
body of a school district shall approve or disapprove an
application before the 151st day after the date the application is
filed, unless the economic impact evaluation has not been received
or an extension is agreed to by the governing body and the
applicant.
(b-1) The comptroller shall indicate on one copy of the
application the date the comptroller received the application and
deliver that copy to the Texas Education Agency. The Texas
Education Agency shall determine the effect that the applicant's
proposal will have on the number or size of the school district's
instructional facilities, as required to be included in the
economic impact evaluation by Section 313.013(a)(11)
[313.026(a)(9)], and submit a written report containing the
agency's determination to the comptroller. The governing body of
the school district shall provide any requested information to the
Texas Education Agency. Not later than the 45th day after the date
the application indicates that the comptroller received the
application, the Texas Education Agency shall make the required
determination and submit the agency's written report to the
comptroller. A third person contracted by the comptroller to
conduct an economic impact evaluation of an application is not
required to make a determination that the Texas Education Agency is
required to make and report to the comptroller under this
subsection.
(c) In determining whether to grant an application, the
governing body of the school district is entitled to request and
receive assistance from:
(1) the comptroller;
(2) the Texas [Department of] Economic Development and
Tourism Office;
(3) the Texas Workforce Investment Council; and
(4) the Texas Workforce Commission.
(d) Before the 91st day after the date the comptroller
receives the copy of the application, the comptroller shall submit
a recommendation to the governing body of the school district as to
whether the application should be approved or disapproved. The
comptroller may recommend to the governing body of the school
district that the application be approved only if the comptroller
determines that the limitation on appraised value is a significant
consideration by the applicant in determining whether to invest
capital and construct the project in this state.
(d-1) The governing body of a school district may approve an
application that the comptroller has recommended should be
disapproved only if:
(1) the governing body holds a public hearing the sole
purpose of which is to consider the application and the
comptroller's recommendation; and
(2) at a subsequent meeting of the governing body held
after the date of the public hearing, at least two-thirds of the
members of the governing body vote to approve the application.
(e) Before approving or disapproving an application under
this chapter [subchapter] that the governing body elects to
consider, the governing body of the school district must make a
written finding as to each criterion listed in Section 313.013
[313.026]. The governing body shall deliver a copy of those
findings to the applicant.
(f) The governing body may approve an application only if
the governing body finds that the information in the application is
true and correct, finds that the applicant is eligible for the
limitation on the appraised value of the person's qualified
property, and determines that granting the application is in the
best interest of the school district and this state.
(f-1) Notwithstanding any other provision of this chapter
to the contrary, including Section 313.003(2) or 313.004(3)(A) or
(B)(iii), the governing body of a school district may waive the new
jobs creation requirement in Section 313.0045(a)(2)(A)(iv)(b)
[313.021(2)(A)(iv)(b)] or 313.051(b) and approve an application if
the governing body makes a finding that the jobs creation
requirement exceeds the industry standard for the number of
employees reasonably necessary for the operation of the facility of
the property owner that is described in the application.
(g) The Texas [Department of] Economic Development and
Tourism Office or its successor may recommend that a school
district grant a person a limitation on appraised value under this
chapter. In determining whether to grant an application, the
governing body of the school district shall consider any
recommendation made by the Texas [Department of] Economic
Development and Tourism Office or its successor.
(h) After receiving a copy of the application, the
comptroller shall determine whether the property meets the
requirements of Section 313.011 [313.024] for eligibility for a
limitation on appraised value under this chapter [subchapter]. The
comptroller shall notify the governing body of the school district
of the comptroller's determination and provide the applicant an
opportunity for a hearing before the determination becomes final.
A hearing under this subsection is a contested case hearing and
shall be conducted by the State Office of Administrative Hearings
in the manner provided by Section 2003.101, Government Code. The
applicant has the burden of proof on each issue in the hearing. The
applicant may seek judicial review of the comptroller's
determination in a Travis County district court under the
substantial evidence rule as provided by Subchapter G, Chapter
2001, Government Code.
(i) If the comptroller's determination under Subsection (h)
that the property does not meet the requirements of Section 313.011
[313.024] for eligibility for a limitation on appraised value under
this chapter [subchapter] becomes final, the comptroller is not
required to provide an economic impact evaluation of the
application or to submit a recommendation to the school district as
to whether the application should be approved or disapproved, and
the governing body of the school district may not grant the
application.
Sec. 313.013 [313.026]. ECONOMIC IMPACT EVALUATION. (a)
The economic impact evaluation of the application must include the
following:
(1) the recommendations of the comptroller;
(2) the name of the school district;
(3) the name of the applicant;
(4) a description of the general nature of the
applicant's investment;
(5) [the relationship between the applicant's industry
and the types of qualifying jobs to be created by the applicant to
the long-term economic growth plans of this state as described in
the strategic plan for economic development submitted by the Texas
Strategic Economic Development Planning Commission under Section
481.033, Government Code, as that section existed before February
1, 1999;
[(6)] the amount [relative level] of the applicant's
intended investment [per qualifying job to be created by the
applicant];
(6) [(7)] the number of qualifying, construction, and
operations jobs to be created by the applicant;
(7) [(8)] the wages, salaries, and benefits to be
offered by the applicant to qualifying, construction, and
operations job holders;
(8) [(9)] the ability of the applicant to locate or
relocate in another state or another region of this state;
(9) [(10)] the fiscal impact the project will have on
this state and individual local units of government, including:
(A) tax and other revenue gains, direct and
otherwise [or indirect], that would be realized during the
construction and operation of the facility, including [qualifying
time period,] the limitation period [,] and a period of time after
the limitation period considered appropriate by the comptroller;
and
(B) economic effects of the project, including
the impact on jobs and income, direct and otherwise, during the
construction and operation of the facility, including [qualifying
time period,] the limitation period [,] and a period of time after
the limitation period considered appropriate by the comptroller;
(10) [(11)] the economic condition of the region of
the state at the time the person's application is being considered;
(11) [(12) the number of new facilities built or
expanded in the region during the two years preceding the date of
the application that were eligible to apply for a limitation on
appraised value under this subchapter;
[(13)] the effect of the applicant's proposal, if
approved, on the number or size of the school district's
instructional facilities, as defined by Section 46.001, Education
Code;
(12) [(14)] the projected market value of the
qualified property of the applicant as determined by the
comptroller;
(13) [(15)] the proposed limitation on appraised
value for the qualified property of the applicant;
(14) [(16)] the projected dollar amount of the taxes
that would be imposed on the qualified property, for each year of
the agreement, if the property does not receive a limitation on
appraised value with assumptions of the projected appreciation or
depreciation of the investment and projected tax rates clearly
stated;
(15) [(17)] the projected dollar amount of the taxes
that would be imposed on the qualified property, for each tax year
of the agreement, if the property receives a limitation on
appraised value with assumptions of the projected appreciation or
depreciation of the investment clearly stated;
(16) [(18)] the projected effect on the Foundation
School Program of payments to the district for each year of the
agreement; and
(17) [(19) the projected future tax credits if the
applicant also applies for school tax credits under Section
313.103; and
[(20)] the total amount of taxes projected to be lost
or gained by the district over the life of the agreement computed by
subtracting the projected taxes stated in Subdivision (15) [(17)]
from the projected taxes stated in Subdivision (14) [(16)].
(b) The comptroller's recommendations shall be based on the
criteria listed in Subsection (a) [Subsections (a)(5)-(20)] and on
any other information available to the comptroller, including
information provided by the governing body of the school district
under Section 313.012(b) [313.025(b)].
Sec. 313.0135 [313.0265]. DISCLOSURE OF APPRAISED VALUE
LIMITATION INFORMATION. (a) The comptroller shall post on the
comptroller's Internet website each document or item of information
the comptroller designates as substantive before the 15th day after
the date the document or item of information was received or
created. Each document or item of information must continue to be
posted until the appraised value limitation expires.
(b) The comptroller shall designate the following as
substantive:
(1) each application requesting a limitation on
appraised value; and
(2) the economic impact evaluation made in connection
with the application [; and
[(3) each application requesting school tax credits
under Section 313.103].
(c) If a school district maintains a generally accessible
Internet website, the district shall maintain a link on its
Internet website to the area of the comptroller's Internet website
where information on each of the district's agreements to limit
appraised value is maintained.
Sec. 313.014 [313.027]. LIMITATION ON APPRAISED VALUE;
AGREEMENT. (a) If the person's application is approved by the
governing body of the school district, [for each of the first eight
tax years that begin after the applicable qualifying time period,]
the appraised value for school district maintenance and operations
ad valorem tax purposes of the person's qualified property as
described in the agreement between the person and the district
entered into under this section in the school district may not
exceed the lesser of:
(1) the market value of the property; or
(2) [subject to Subsection (b),] the amount agreed to
by the governing body of the school district under Subchapter B or
C, as applicable.
(b) The agreement must:
(1) provide that the limitation under Subsection (a)
applies for a period of 10 years; and
(2) specify the beginning date of the limitation,
which must be January 1 of the first tax year that begins after:
(A) the application date;
(B) the qualifying time period; or
(C) the date commercial operations begin at the
site of the project. [amount agreed to by the governing body of a
school district under Subsection (a)(2) must be an amount in
accordance with the following, according to the category
established by Section 313.022 to which the school district
belongs:
CATEGORY MINIMUM AMOUNT OF LIMITATION CATEGORY MINIMUM AMOUNT OF LIMITATION
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $100 million I $100 million
I $100 million
II $80 million II $80 million
II $80 million
III $60 million III $60 million
III $60 million
IV $40 million IV $40 million
IV $40 million
V $20 million] V $20 million]
V $20 million]
(c) The limitation amounts prescribed under Subchapter B or
C, as applicable, [listed in Subsection (b)] are minimum amounts. A
school district, regardless of category, may agree to a greater
amount than those amounts.
(d) The governing body of the school district and the
property owner shall enter into a written agreement for the
implementation of the limitation on appraised value under this
chapter [subchapter] on the owner's qualified property.
(e) The agreement must describe with specificity the
qualified investment that the person will make on or in connection
with the person's qualified property that is subject to the
limitation on appraised value under this chapter [subchapter].
Other property of the person that is not specifically described in
the agreement is not subject to the limitation unless the governing
body of the school district, by official action, provides that the
other property is subject to the limitation.
(f) In addition, the agreement:
(1) must incorporate each relevant provision of this
chapter [subchapter] and, to the extent necessary, include
provisions for the protection of future school district revenues
through the adjustment of the minimum valuations, the payment of
revenue offsets, and other mechanisms agreed to by the property
owner and the school district;
(2) may provide that the property owner will protect
the school district in the event the district incurs extraordinary
education-related expenses related to the project that are not
directly funded in state aid formulas, including expenses for the
purchase of portable classrooms and the hiring of additional
personnel to accommodate a temporary increase in student enrollment
attributable to the project;
(3) must require the property owner to maintain a
viable presence in the school district for at least five [three]
years after the date the limitation on appraised value of the
owner's property expires;
(4) must provide for the termination of the agreement,
the recapture of ad valorem tax revenue lost as a result of the
agreement if the owner of the property fails to comply with the
terms of the agreement, and payment of a penalty or interest, or
both, on that recaptured ad valorem tax revenue;
(5) may specify any conditions the occurrence of which
will require the district and the property owner to renegotiate all
or any part of the agreement; and
(6) must specify the ad valorem tax years covered by
the agreement.
(g) When appraising a person's qualified property subject
to a limitation on appraised value under this section, the chief
appraiser shall determine the market value of the property and
include both the market value and the appropriate value under
Subsection (a) in the appraisal records.
(h) The agreement between the governing body of the school
district and the applicant may provide for a deferral of the date on
which the qualifying time period for the project is to commence or,
subsequent to the date the agreement is entered into, be amended to
provide for such a deferral. The agreement may not provide for the
deferral of the date on which the qualifying time period is to
commence to a date later than January 1 of the fourth tax year that
begins after the date the application is approved except that if the
agreement is one of a series of agreements related to the same
project, the agreement may provide for the deferral of the date on
which the qualifying time period is to commence to a date not later
than January 1 of the sixth tax year that begins after the date the
application is approved. This subsection may not be construed to
permit a qualifying time period that has commenced to continue for
more than the number of years applicable to the project under
Section 313.0045(a)(4) [313.021(4)].
(i) A person and the school district may not enter into an
agreement under which the person agrees to provide supplemental
payments to a school district or any other entity on behalf of a
school district in an amount that exceeds an amount equal to $100
per student per year in average daily attendance, as defined by
Section 42.005, Education Code, or for a period that exceeds the
period beginning with the period described by Section
313.0045(a)(4) [313.021(4)] and ending December 31 of the third tax
year after the date the person's eligibility for a limitation under
this chapter expires [with the period described by Section
313.104(2)(B) of this code]. This limit does not apply to amounts
described by Subsection (f)(1) or (2) [of this section].
(j) An agreement under this chapter must disclose any
consideration promised in conjunction with the application and the
limitation.
Sec. 313.0145 [313.0275]. RECAPTURE OF AD VALOREM TAX
REVENUE LOST. (a) Notwithstanding any other provision of this
chapter to the contrary, a person with whom a school district enters
into an agreement under this chapter [subchapter] must make the
minimum amount of qualified investment [during the qualifying time
period] and create the required number of qualifying jobs during
each year of the agreement.
(b) If in any tax year a property owner fails to comply with
Subsection (a), the property owner is liable to this state for a
penalty equal to the amount computed by subtracting from the market
value of the property for that tax year the value of the property as
limited by the agreement and multiplying the difference by the
maintenance and operations tax rate of the school district for that
tax year.
(c) A penalty imposed under Subsection (b) becomes
delinquent if not paid on or before February 1 of the following tax
year. Section 33.01 applies to the delinquent penalty in the manner
that section applies to delinquent taxes.
(d) In the event of a casualty loss, a person with whom a
school district enters into an agreement under this chapter may
request and the school district may grant a waiver of the
requirements of this section.
Sec. 313.015 [313.028]. CERTAIN BUSINESS INFORMATION
CONFIDENTIAL. Information provided to a school district in
connection with an application for a limitation on appraised value
under this chapter [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 shall be segregated in the application from
other information in the application and is confidential and not
subject to public disclosure unless the governing body of the
school district approves the application. Other information in the
custody of a school district or the comptroller in connection with
the application, including information related to the economic
impact of a project or the essential elements of eligibility under
this chapter, such as the nature and amount of the projected
investment, employment, wages, and benefits, may not be considered
confidential business information if the governing body of the
school district agrees to consider the application. Information in
the custody of a school district or the comptroller if the governing
body approves the application is not confidential under this
section.
Sec. 313.016 [313.030]. PROPERTY NOT ELIGIBLE FOR TAX
ABATEMENT. Property subject to a limitation on appraised value in a
tax year under this chapter [subchapter] is not eligible for tax
abatement by a school district under Chapter 312 in that tax year.
Sec. 313.017 [313.031]. 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 313.0045(a)(1) [313.021(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 a limitation on appraised value under
this chapter [subchapter or a tax credit under Subchapter D].
(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 a
limitation on the appraised value of the person's property under
this chapter [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, including the cost of the
economic impact evaluation required by Sections 313.012 [313.025]
and 313.013 [313.026].
Sec. 313.018 [313.032]. REPORT ON COMPLIANCE WITH
AGREEMENTS. (a) Before the beginning of each regular session of
the legislature, the comptroller shall submit to the lieutenant
governor, the speaker of the house of representatives, and each
other member of the legislature a report on the agreements entered
into under this chapter that includes:
(1) an assessment of the following with regard to the
agreements entered into under this chapter, considered in the
aggregate:
(A) the total number of jobs created, direct and
otherwise, in this state;
(B) the total effect on personal income, direct
and otherwise, in this state;
(C) the effect, direct and otherwise, on the
total amount of investment in this state;
(D) the effect, direct and otherwise, on the
total taxable value of property on the tax rolls in this state,
including property for which the limitation period has expired;
(E) the total value of property not on the tax
rolls in this state as a result of agreements entered into under
this chapter; and
(F) the total fiscal effect, direct and
otherwise, on the state and local governments; and
(2) an assessment of [assessing] the progress of each
agreement made under this chapter that states[. The report must be
based on data certified to the comptroller by each recipient of a
limitation on appraised value under this subchapter and state] for
each agreement:
(A) [(1)] the number of new qualifying jobs each
recipient of a limitation on appraised value committed to create;
(B) [(2)] the number of new qualifying jobs each
recipient created;
(C) [(3)] the total amount of wages [median wage]
of the new jobs each recipient created;
(D) [(4)] the amount of the qualified investment
each recipient committed to spend or allocate for each project;
(E) [(5)] the amount of the [qualified]
investment each recipient spent or allocated for each project;
(F) [(6)] the market value of the qualified
property of each recipient as determined by the applicable chief
appraiser, including property for which the limitation period has
expired;
(G) [(7)] the limitation on appraised value for
the qualified property of each recipient;
(H) [(8)] the dollar amount of the taxes that
would have been imposed on the qualified property if the property
had not received a limitation on appraised value; and
(I) [(9)] the dollar amount of the taxes imposed
on the qualified property[;
[(10) the number of new jobs created by each recipient
in each sector of the North American Industry Classification
System; and
[(11) of the number of new jobs each recipient
created, the number of jobs created that provide health benefits
for employees].
(b) The report may not include information that is
confidential by law.
(b-1) In preparing the portion of the report described by
Subsection (a)(1), the comptroller may use standard economic
estimation techniques, including economic multipliers.
(c) The portion of the report described by Subsection (a)(2)
must be based on data certified to the comptroller by each recipient
of a limitation on appraised value under this chapter. The
comptroller may require a recipient to submit, on a form the
comptroller provides, information required to prepare [complete]
the portion of the report described by that subdivision.
SECTION 7. The heading to Subchapter B, Chapter 313, Tax
Code, is amended to read as follows:
SUBCHAPTER B. GENERAL LIMITATION ON APPRAISED VALUE OF CERTAIN
PROPERTY USED TO CREATE JOBS
SECTION 8. Section 313.022(b), Tax Code, is amended to read
as follows:
(b) For purposes of determining the required minimum amount
of a qualified investment under Section 313.0045(a)(2)(A)(iv)(a)
[313.021(2)(A)(iv)(a)], and the minimum amount of a limitation on
appraised value under this subchapter [Section 313.027(b)], school
districts to which this subchapter applies are categorized
according to the taxable value of property in the district for the
preceding tax year determined under Subchapter M, Chapter 403,
Government Code, as follows:
CATEGORY TAXABLE VALUE OF PROPERTY CATEGORY TAXABLE VALUE OF PROPERTY
CATEGORY TAXABLE VALUE OF PROPERTY
I $10 billion or more I $10 billion or more
I $10 billion or more
II $1 billion or more but less than $10 billion II $1 billion or more but less than $10 billion
II $1 billion or more but less than $10 billion
III $500 million or more but less than $1 billion III $500 million or more but less than $1 billion
III $500 million or more but less than $1 billion
IV $100 million or more but less than $500 million IV $100 million or more but less than $500 million
IV $100 million or more but less than $500 million
V less than $100 million V less than $100 million
V less than $100 million
SECTION 9. Section 313.023, Tax Code, is amended to read as
follows:
Sec. 313.023. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
each category of school district established by Section 313.022,
the minimum amount of a qualified investment under Section
313.0045(a)(2)(A)(iv)(a) [313.021(2)(A)(iv)(a)] is as follows:
CATEGORY MINIMUM QUALIFIED INVESTMENT CATEGORY MINIMUM QUALIFIED INVESTMENT
CATEGORY MINIMUM QUALIFIED INVESTMENT
I $100 million I $100 million
I $100 million
II $80 million II $80 million
II $80 million
III $60 million III $60 million
III $60 million
IV $40 million IV $40 million
IV $40 million
V $20 million V $20 million
V $20 million
SECTION 10. Subchapter B, Chapter 313, Tax Code, is amended
by adding Section 313.0235 to read as follows:
Sec. 313.0235. LIMITATION ON APPRAISED VALUE. For a school
district to which this subchapter applies, the amount agreed to by
the governing body of the school district must be an amount in
accordance with the following, according to the category
established by Section 313.022 to which the school district
belongs:
CATEGORY MINIMUM AMOUNT OF LIMITATION CATEGORY MINIMUM AMOUNT OF LIMITATION
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $100 million I $100 million
I $100 million
II $80 million II $80 million
II $80 million
III $60 million III $60 million
III $60 million
IV $40 million IV $40 million
IV $40 million
V $20 million V $20 million
V $20 million
SECTION 11. The heading to Subchapter C, Chapter 313, Tax
Code, is amended to read as follows:
SUBCHAPTER C. LIMITATION ON APPRAISED VALUE OF PROPERTY IN CERTAIN
[RURAL] SCHOOL DISTRICTS
SECTION 12. Sections 313.051(a) and (b), Tax Code, are
amended to read as follows:
(a) This subchapter applies only to a school district that
has territory in:
(1) an area located in:
(A) a county with unemployment above the state
average and per capita income below the state average;
(B) a federally designated urban enterprise
community or an urban enhanced enterprise community; or
(C) a defense economic readjustment zone
designated under Chapter 2310, Government Code [that qualified as a
strategic investment area under Subchapter O, Chapter 171,
immediately before that subchapter expired]; or
(2) a county:
(A) that has a population of less than 50,000;
and
(B) in which, during the decade preceding [from
1990 to 2000, according to] the most recent federal decennial
census, the population:
(i) remained the same;
(ii) decreased; or
(iii) increased, but at a rate of not more
than three percent per annum.
(b) [The governing body of a school district to which this
subchapter applies may enter into an agreement in the same manner as
a school district to which Subchapter B applies may do so under
Subchapter B, subject to Sections 313.052-313.054.] Except as
otherwise provided by this subchapter, the provisions of Subchapter
A-1 [B] apply to a school district to which this subchapter
applies. For purposes of this subchapter, a property owner is
required to create only at least 10 new jobs on the owner's
qualified property. At least 80 percent of all the new jobs created
must be qualifying jobs [as defined by Section 313.021(3)], except
that, for a school district described by Subsection (a)(2), each
qualifying job must pay at least 110 percent of the average weekly
wage for manufacturing jobs in the region designated for the
regional planning commission, council of governments, or similar
regional planning agency created under Chapter 391, Local
Government Code, in which the district is located.
SECTION 13. Sections 313.052 and 313.053, Tax Code, are
amended to read as follows:
Sec. 313.052. CATEGORIZATION OF SCHOOL DISTRICTS. For
purposes of determining the required minimum amount of a qualified
investment under Section 313.0045(a)(2)(A)(iv)(a)
[313.021(2)(A)(iv)(a)] and the minimum amount of a limitation on
appraised value under this subchapter, school districts to which
this subchapter applies are categorized according to the taxable
value of industrial property in the district for the preceding tax
year determined under Subchapter M, Chapter 403, Government Code,
as follows:
CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
I $200 million or more I $200 million or more
I $200 million or more
II $90 million or more but less than $200 million II $90 million or more but less than $200 million
II $90 million or more but less than $200 million
III $1 million or more but less than $90 million III $1 million or more but less than $90 million
III $1 million or more but less than $90 million
IV $100,000 or more but less than $1 million IV $100,000 or more but less than $1 million
IV $100,000 or more but less than $1 million
V less than $100,000 V less than $100,000
V less than $100,000
Sec. 313.053. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
each category of school district established by Section 313.052,
the minimum amount of a qualified investment under Section
313.0045(a)(2)(A)(iv)(a) [313.021(2)(A)(iv)(a)] is as follows:
CATEGORY MINIMUM QUALIFIED INVESTMENT CATEGORY MINIMUM QUALIFIED INVESTMENT
CATEGORY MINIMUM QUALIFIED INVESTMENT
I $30 million I $30 million
I $30 million
II $20 million II $20 million
II $20 million
III $10 million III $10 million
III $10 million
IV $5 million IV $5 million
IV $5 million
V $1 million V $1 million
V $1 million
SECTION 14. Section 313.054(a), Tax Code, is amended to
read as follows:
(a) For a school district to which this subchapter applies,
the amount agreed to by the governing body of the district [under
Section 313.027(a)(2)] must be an amount in accordance with the
following, according to the category established by Section 313.052
to which the school district belongs:
CATEGORY MINIMUM AMOUNT OF LIMITATION CATEGORY MINIMUM AMOUNT OF LIMITATION
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $30 million I $30 million
I $30 million
II $20 million II $20 million
II $20 million
III $10 million III $10 million
III $10 million
IV $5 million IV $5 million
IV $5 million
V $1 million V $1 million
V $1 million
SECTION 15. The heading to Subchapter E, Chapter 313, Tax
Code, is amended to read as follows:
SUBCHAPTER E. EFFECT [AVAILABILITY] OF [TAX CREDIT AFTER] PROGRAM
EXPIRATION OR REPEAL [EXPIRES]
SECTION 16. Section 313.171, Tax Code, is amended to read as
follows:
Sec. 313.171. SAVING PROVISIONS. (a) A limitation on
appraised value approved under Subchapter A-1, B, or C before the
expiration of that subchapter continues in effect according to that
subchapter as that subchapter existed immediately before its
expiration, and that law is continued in effect for purposes of the
limitation on appraised value.
(b) The repeal [expiration] of Subchapter D does not affect
a property owner's entitlement to a tax credit granted under
Subchapter D if the property owner qualified for the tax credit
before the repeal [expiration] of Subchapter D.
SECTION 17. Section 42.2515(a), Education Code, is amended
to read as follows:
(a) For each school year, a school district, including a
school district that is otherwise ineligible for state aid under
this chapter, is entitled to state aid in an amount equal to the
amount of all tax credits credited against ad valorem taxes of the
district in that year under former Subchapter D, Chapter 313, Tax
Code.
SECTION 18. Section 42.302(e), Education Code, is amended
to read as follows:
(e) For purposes of this section, school district taxes for
which credit is granted under former Subchapter D, Chapter 313, Tax
Code, are considered taxes collected by the school district as if
the taxes were paid when the credit for the taxes was granted.
SECTION 19. The following provisions of the Tax Code are
repealed:
(1) Sections 313.005, 313.008, and 313.009; and
(2) Subchapter D, Chapter 313.
SECTION 20. Chapter 313, Tax Code, as amended by this Act,
applies only to an application filed under that chapter on or after
the effective date of this Act. An application filed under that
chapter before the effective date of this Act is governed by the law
in effect on the date the application was filed, and the former law
is continued in effect for that purpose.
SECTION 21. This Act takes effect January 1, 2014.
* * * * *
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $100 million
II $80 million
III $60 million
IV $40 million
V $20 million]
CATEGORY TAXABLE VALUE OF PROPERTY
I $10 billion or more
II $1 billion or more but less than $10 billion
III $500 million or more but less than $1 billion
IV $100 million or more but less than $500 million
V less than $100 million
CATEGORY MINIMUM QUALIFIED INVESTMENT
I $100 million
II $80 million
III $60 million
IV $40 million
V $20 million
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $100 million
II $80 million
III $60 million
IV $40 million
V $20 million
CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
I $200 million or more
II $90 million or more but less than $200 million
III $1 million or more but less than $90 million
IV $100,000 or more but less than $1 million
V less than $100,000
CATEGORY MINIMUM QUALIFIED INVESTMENT
I $30 million
II $20 million
III $10 million
IV $5 million
V $1 million
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $30 million
II $20 million
III $10 million
IV $5 million
V $1 million