H.B. No. 3390
AN ACT
relating to the Texas Economic Development Act; imposing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 313.002, 313.003, 313.004, and 313.007,
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 temporarily limiting 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;
(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 ad valorem [property] tax system of
this state does not favor capital-intensive businesses such as
manufacturers.
Sec. 313.003. PURPOSES. The purposes of this chapter are
to:
(1) encourage large-scale capital investments in this
state[, especially in school districts that have an ad valorem tax
base that is less than the statewide average ad valorem tax base of
school districts in this state];
(2) create new, high-paying jobs in this state;
(3) attract to this state [new,] large-scale
businesses that are exploring opportunities to locate in other
states or other countries;
(4) enable state and local government officials and
economic development professionals to compete with other states by
authorizing economic development incentives that are comparable to
[meet or exceed] incentives being offered to prospective employers
by other states and to provide state and local officials with an
effective means to attract large-scale investment;
(5) strengthen and improve the overall performance of
the economy of this state;
(6) expand and enlarge the ad valorem [property] tax
base of this state; and
(7) enhance this state's economic development efforts
by providing state and local officials [school districts] with an
effective [local] economic development tool [option].
Sec. 313.004. LEGISLATIVE INTENT. It is the intent of the
legislature in enacting this chapter that:
(1) economic development decisions involving school
district taxes should occur at the local level with oversight by the
state and should 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 tax imposed by
Chapter 171 [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; and
(4) in implementing this chapter, the comptroller
should:
(A) strictly interpret the criteria and
selection guidelines provided by this chapter; and
(B) issue certificates for limitations on
appraised value only for those applications for an ad valorem tax
benefit provided by this chapter that:
(i) create high-paying jobs;
(ii) provide a net benefit to the state over
the long term; and
(iii) advance the economic development
goals of this state [as identified by the Texas Strategic Economic
Development Planning Commission].
Sec. 313.007. EXPIRATION. Subchapters B and [,] C [, and D]
expire December 31, 2022 [2014].
SECTION 2. Subchapter A, Chapter 313, Tax Code, is amended
by adding Section 313.010 to read as follows:
Sec. 313.010. AUDIT OF AGREEMENTS BY STATE AUDITOR. (a)
Each year, the state auditor shall review at least three major
agreements, as determined by the state auditor, under this chapter
to determine whether:
(1) each agreement accomplishes the purposes of this
chapter as expressed in Section 313.003;
(2) each agreement complies with the intent of the
legislature in enacting this chapter as expressed in Section
313.004; and
(3) the terms of each agreement were executed in
compliance with the terms of this chapter.
(b) As part of the review, the state auditor shall make
recommendations relating to increasing the efficiency and
effectiveness of the administration of this chapter.
SECTION 3. Sections 313.021(2) and (3), Tax Code, are
amended to read as follows:
(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 submits a complete
application [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 qualifying
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, in the newly expanded 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 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[:
[(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].
(F) In determining whether a property owner has created the
number of qualifying jobs required under this chapter, operations,
services and other related jobs created in connection with the
project, including those employed by third parties under contract,
may satisfy the minimum qualifying jobs requirement for the project
if the Texas Workforce Commission determines that the cumulative
economic benefits to the state of these jobs is the same or greater
than that associated with the minimum number of qualified jobs
required to be created under this chapter. The Texas Workforce
Commission may adopt rules to implement this subsection.
SECTION 4. Section 313.024, Tax Code, is amended by
amending Subsections (a), (b), and (d) and adding Subsection (d-2)
to read as follows:
(a) This subchapter and Subchapter [Subchapters] C [and D]
apply only to property owned by an entity subject to the tax imposed
by [which] Chapter 171 [applies].
(b) To be eligible for a limitation on appraised value under
this subchapter, the entity must use the property for [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.
(d) To be eligible for a limitation on appraised value under
this subchapter, the property owner must create the required number
of new [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) and the average weekly wage for all jobs created by the
owner that are not qualifying jobs must exceed the county average
weekly wage for all jobs in the county where the jobs are located.
(d-2) For purposes of determining whether a property owner
has created the number of new qualifying jobs required for
eligibility for a limitation on appraised value under this
subchapter, the new qualifying jobs created under an agreement
between the property owner and another school district may be
included in the total number of new qualifying jobs created in
connection with the project if the Texas Economic Development and
Tourism Office determines that the projects covered by the
agreements constitute a single unified project. The Texas Economic
Development and Tourism Office may adopt rules to implement this
subsection.
SECTION 5. Section 313.024(e), Tax Code, is amended by
adding Subdivision (7) to read as follows:
(7) "Texas priority project" means a project on which
the applicant has committed to expend or allocate a qualified
investment of more than $1 billion.
SECTION 6. Sections 313.025(a), (a-1), (b), (b-1), (c),
(d), (d-1), (e), (g), and (i), Tax Code, are amended to read as
follows:
(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
313.021(2); and
(3) any information required by the comptroller for
the purposes of [relating to each applicable criterion listed in]
Section 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 proposed agreement between the applicant and
the school district. If the applicant submits 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
313.028.
(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 elects [does elect] to
consider an application, the governing body shall deliver a copy
[three copies] of the application to the comptroller and request
that the comptroller conduct [provide] an economic impact
evaluation of the investment proposed by the application. The [to
the school district. Except as provided by Subsection (b-1), the]
comptroller shall conduct or contract with a third person to
conduct the economic impact evaluation, which shall be completed
and provided to the governing body of the school district, along
with the comptroller's certificate or written explanation under
Subsection (d), as soon as practicable but not later than the 90th
day after the date the comptroller receives the application. The
governing body shall provide to the comptroller or to a third person
contracted by the comptroller to conduct the economic impact
evaluation 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 economic impact evaluation to the
applicant on request. The comptroller may charge the applicant
[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 not later than
the 150th [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 promptly deliver a [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 313.026(a)(9),] and
submit a written report containing the agency's determination to
the school district [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 Texas Education Agency receives [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 governing body of the school district
[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 approve [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) Not later than the 90th [Before the 91st] day after the
date the comptroller receives the copy of the application, the
comptroller shall issue a certificate for a limitation on appraised
value of the property and provide the certificate to the governing
body of the school district or provide the governing body a written
explanation of the comptroller's decision not to issue a
certificate [submit a recommendation to the governing body of the
school district as to whether the application should be approved or
disapproved].
(d-1) The governing body of a school district may not
approve an application unless [that] the comptroller submits to the
governing body a certificate for a limitation on appraised value of
the property [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 subchapter that the governing body of the school district
elects to consider, the governing body [of the school district]
must make a written finding as to any criteria considered by the
comptroller in conducting the economic impact evaluation under
[each criterion listed in] Section 313.026. The governing body
shall deliver a copy of those findings to the applicant.
(g) The Texas [Department of] Economic Development and
Tourism Office or its successor may recommend that a school
district approve an application [grant a person a limitation on
appraised value] under this chapter. In determining whether to
approve [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.
(i) If the comptroller's determination under Subsection (h)
that the property does not meet the requirements of Section 313.024
for eligibility for a limitation on appraised value under this
subchapter becomes final, the comptroller is not required to
provide an economic impact evaluation of the application or to
submit a certificate for a limitation on appraised value of the
property or a written explanation of the decision not to issue a
certificate [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.
SECTION 7. Section 313.026, Tax Code, is amended to read as
follows:
Sec. 313.026. ECONOMIC IMPACT EVALUATION. (a) The
economic impact evaluation of the application must include any
information the comptroller determines is necessary or helpful to:
(1) the governing body of the school district in
determining whether to approve the application under Section
313.025; or
(2) the comptroller in determining whether to issue a
certificate for a limitation on appraised value of the property
under Section 313.025 [the following:
[(1) the recommendations of the comptroller;
[(2) the name of the school district;
[(3) the name of the applicant;
[(4) 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 relative level of the applicant's investment
per qualifying job to be created by the applicant;
[(7) the number of qualifying jobs to be created by the
applicant;
[(8) the wages, salaries, and benefits to be offered
by the applicant to qualifying job holders;
[(9) the ability of the applicant to locate or
relocate in another state or another region of this state;
[(10) the impact the project will have on this state
and individual local units of government, including:
[(A) tax and other revenue gains, direct or
indirect, that would be realized during the 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, during the qualifying time period,
the limitation period, and a period of time after the limitation
period considered appropriate by the comptroller;
[(11) the economic condition of the region of the
state at the time the person's application is being considered;
[(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;
[(14) the projected market value of the qualified
property of the applicant as determined by the comptroller;
[(15) the proposed limitation on appraised value for
the qualified property of the applicant;
[(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;
[(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;
[(18) the projected effect on the Foundation School
Program of payments to the district for each year of the agreement;
[(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 (17) from the
projected taxes stated in Subdivision (16)].
(b) Except as provided by Subsections (c) and (d), the [The]
comptroller's determination whether to issue a certificate for a
limitation on appraised value under this chapter for property
described in the application [recommendations] shall be based on
the economic impact evaluation described by Subsection (a)
[criteria listed in 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 313.025(b)].
(c) The comptroller may not issue a certificate for a
limitation on appraised value under this chapter for property
described in an application unless the comptroller determines that:
(1) the project proposed by the applicant is
reasonably likely to generate, before the 25th anniversary of the
beginning of the limitation period, tax revenue, including state
tax revenue, school district maintenance and operations ad valorem
tax revenue attributable to the project, and any other tax revenue
attributable to the effect of the project on the economy of the
state, in an amount sufficient to offset the school district
maintenance and operations ad valorem tax revenue lost as a result
of the agreement; and
(2) the limitation on appraised value is a determining
factor in the applicant's decision to invest capital and construct
the project in this state.
(d) The comptroller shall state in writing the basis for the
determinations made under Subsections (c)(1) and (2).
(e) The applicant may submit information to the comptroller
that would provide a basis for an affirmative determination under
Subsection (c)(2).
(f) Notwithstanding Subsections (c) and (d), if the
comptroller makes a qualitative determination that other
considerations associated with the project result in a net positive
benefit to the state, the comptroller may issue the certificate.
SECTION 8. Section 313.0265(b), Tax Code, is amended to
read as follows:
(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].
SECTION 9. Section 313.027, Tax Code, is amended by
amending Subsections (a), (f), (h), and (i) and adding Subsections
(a-1) and (j) to read as follows:
(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.
(a-1) 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.
(f) In addition, the agreement:
(1) must incorporate each relevant provision of this
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; and
(7) must be in a form approved by the comptroller.
(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 313.021(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 the
greater of $100 per student per year in average daily attendance, as
defined by Section 42.005, Education Code, or $50,000 per year, or
for a period that exceeds the period beginning with the period
described by Section 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.
SECTION 10. Section 313.0275, Tax Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) Notwithstanding any other provision of this chapter to
the contrary, a person with whom a school district enters into an
agreement under this 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].
(d) In the event of a casualty loss that prevents a person
from complying with Subsection (a), the person may request and the
comptroller may grant a waiver of the penalty imposed under
Subsection (b).
SECTION 11. Subchapter B, Chapter 313, Tax Code, is amended
by adding Section 313.0276 to read as follows:
Sec. 313.0276. PENALTY FOR FAILURE TO COMPLY WITH
JOB-CREATION REQUIREMENTS. (a) The comptroller shall conduct an
annual review and issue a determination as to whether a person with
whom a school district has entered into an agreement under this
chapter satisfied in the preceding year the requirements of this
chapter regarding the creation of the required number of qualifying
jobs. If the comptroller makes an adverse determination in the
review, the comptroller shall notify the person of the cause of the
adverse determination and the corrective measures necessary to
remedy the determination.
(b) If a person who receives an adverse determination fails
to remedy the determination following notification of the
determination and the comptroller makes an adverse determination
with respect to the person's compliance in the following year, the
person must submit to the comptroller a plan for remedying the
determination and certify the person's intent to fully implement
the plan not later than December 31 of the year in which the
determination is made.
(c) If a person who receives an adverse determination under
Subsection (b) fails to comply with that subsection following
notification of the determination and receives an adverse
determination in the following year, the comptroller shall impose a
penalty on the person. The penalty is in an amount equal to the
amount computed by:
(1) subtracting from the number of qualifying jobs
required to be created the number of qualifying jobs actually
created; and
(2) multiplying the amount computed under Subdivision
(1) by the average annual wage for all jobs in the county during the
most recent four quarters for which data is available.
(d) Notwithstanding Subsection (c), if a person receives an
adverse determination and the comptroller has previously imposed a
penalty on the person under this section one or more times, the
comptroller shall impose a penalty on the person in an amount equal
to the amount computed by multiplying the amount computed under
Subsection (c)(1) by an amount equal to twice the amount computed
under Subsection (c)(2).
(e) Notwithstanding Subsections (c) and (d), a penalty
imposed under this section may not exceed an amount equal to the
difference between the amount of the ad valorem tax benefit
received by the person under the agreement in the preceding year and
the amount of any supplemental payments made to the school district
in that year.
(f) A job created by a person that is not a qualifying job
because the job does not meet a numerical requirement of Section
313.021(3)(A), (D), or (E) is considered for purposes of this
section to be a nonqualifying job only if the job fails to meet the
numerical requirement by at least 10 percent.
(g) An adverse determination under this section is a
deficiency determination under Section 111.008. A penalty imposed
under this section is an amount the comptroller is required to
collect, receive, administer, or enforce, and the determination is
subject to the payment and redetermination requirements of Sections
111.0081 and 111.009.
(h) A redetermination under Section 111.009 of an adverse
determination under this section is a contested case as defined by
Section 2001.003, Government Code.
(i) If a person on whom a penalty is imposed under this
section contends that the amount of the penalty is unlawful or that
the comptroller may not legally demand or collect the penalty, the
person may challenge the determination of the comptroller under
Subchapters A and B, Chapter 112.
(j) If the comptroller imposes a penalty on a person under
this section three times, the comptroller may rescind the agreement
between the person and the school district under this chapter.
(k) A person may contest a determination by the comptroller
to rescind an agreement between the person and a school district
under this chapter pursuant to Subsection (j) by filing suit
against the comptroller and the attorney general. The district
courts of Travis County have exclusive, original jurisdiction of a
suit brought under this subsection. This subsection prevails over
a provision of Chapter 25, Government Code, to the extent of any
conflict.
(l) If a person files suit under Subsection (k) and the
comptroller's determination to rescind the agreement is upheld on
appeal, the person shall pay to the comptroller any tax that would
have been due and payable to the school district during the pendency
of the appeal, including statutory interest and penalties imposed
on delinquent taxes under Sections 111.060 and 111.061.
(m) The comptroller shall deposit a penalty collected under
this section, including any interest and penalty applicable to the
penalty, to the credit of the foundation school fund.
SECTION 12. Section 313.031, Tax Code, is amended to read as
follows:
Sec. 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 313.021(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 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 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 any cost to the
school district associated with [the cost of] the economic impact
evaluation required by Section [Sections] 313.025 [and 313.026].
SECTION 13. Section 313.032, Tax Code, is amended by
amending Subsections (a) and (c) and adding Subsections (b-1) and
(d) to read as follows:
(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 total amount of investment in this state;
(D) 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 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 qualifying jobs each
recipient of a limitation on appraised value committed to create;
(B) [(2)] the number of qualifying jobs each
recipient created;
(C) [(3)] the total amount of wages and the
median wage of the new qualifying 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 that is no longer eligible for a
limitation on appraised value under the agreement;
(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-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
or former recipient of a limitation on appraised value under this
chapter.
(d) The comptroller may require a recipient or former
recipient of a limitation on appraised value under this chapter to
submit, on a form the comptroller provides, information required to
complete the report.
SECTION 14. Subchapter B, Chapter 313, Tax Code, is amended
by adding Section 313.033 to read as follows:
Sec. 313.033. REPORT ON COMPLIANCE WITH JOB-CREATION
REQUIREMENTS. Each recipient of a limitation on appraised value
under this chapter shall submit to the comptroller an annual report
on a form provided by the comptroller that provides information
sufficient to document the number of qualifying jobs created.
SECTION 15. The heading to Subchapter C, Chapter 313, Tax
Code, is amended to read as follows:
SUBCHAPTER C. LIMITATION ON APPRAISED VALUE OF PROPERTY IN
STRATEGIC INVESTMENT AREA OR CERTAIN RURAL SCHOOL DISTRICTS
SECTION 16. Section 313.051, Tax Code, is amended to read as
follows:
Sec. 313.051. APPLICABILITY. (a) In this section,
"strategic investment area" means an area the comptroller
determines under Subsection (a-3) is:
(1) a county within this state with unemployment above
the state average and per capita income below the state average;
(2) an area within this state that is a federally
designated urban enterprise community or an urban enhanced
enterprise community; or
(3) a defense economic readjustment zone designated
under Chapter 2310, Government Code.
(a-1) This subchapter applies only to a school district that
has territory in:
(1) an area that qualifies [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, from 2000 [1990] to 2010 [2000],
according to the federal decennial census, the population:
(i) remained the same;
(ii) decreased; or
(iii) increased, but at a rate of not more
than the average rate of increase in the state during that period
[three percent per annum].
(a-2) [(a-1)] Notwithstanding Subsection (a-1) [(a)], if on
January 1, 2002, this subchapter applied to a school district in
whose territory is located a federal nuclear facility, this
subchapter continues to apply to the school district regardless of
whether the school district ceased or ceases to be described by
Subsection (a-1) [(a)] after that date.
(a-3) Not later than September 1 of each year, the
comptroller shall determine areas that qualify as a strategic
investment area using the most recently completed full calendar
year data available on that date and, not later than October 1,
shall publish a list and map of the designated areas. A
determination under this subsection is effective for the following
tax year for purposes of this subchapter.
(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
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 qualifying jobs as defined by Section
313.021(3) 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 17. 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 $25 [$20] million II $25 [$20] million
II $25 [$20] million
III $20 [$10] million III $20 [$10] million
III $20 [$10] million
IV $15 [$5] million IV $15 [$5] million
IV $15 [$5] million
V $10 [$1] million V $10 [$1] million
V $10 [$1] million
SECTION 18. The heading to Subchapter E, Chapter 313, Tax
Code, is amended to read as follows:
SUBCHAPTER E. AVAILABILITY OF TAX CREDIT AFTER PROGRAM
EXPIRES OR IS REPEALED
SECTION 19. Section 313.171(b), Tax Code, is amended to
read as follows:
(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 20. 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 21. 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 22. The following provisions of the Tax Code are
repealed:
(1) Sections 313.008 and 313.009; and
(2) Subchapter D, Chapter 313.
SECTION 23. (a) Except as provided by Subsection (b) of
this section, 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.
(b) An agreement entered into on or after January 1, 2013,
pursuant to an application filed under Chapter 313, Tax Code,
before the effective date of this Act may condition eligibility for
a limitation on appraised value under Subchapter B or C of that
chapter, as applicable, on compliance with the provisions of that
chapter, as amended by this Act, relating to the creation of new
jobs, including Section 313.021(3), Tax Code, and Section
313.024(d) or 313.051(b), Tax Code, as applicable.
SECTION 24. The comptroller shall make the initial
determination under Section 313.051(a-3), Tax Code, as added by
this Act, not later than September 1, 2014, and shall publish the
initial list and map required by that subsection not later than
October 1, 2014.
SECTION 25. This Act takes effect January 1, 2014.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3390 was passed by the House on May 4,
2013, by the following vote: Yeas 129, Nays 7, 2 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 3390 on May 24, 2013, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 3390 on May 26, 2013, by the following vote: Yeas 138,
Nays 6, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3390 was passed by the Senate, with
amendments, on May 21, 2013, by the following vote: Yeas 29, Nays
2; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
3390 on May 26, 2013, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor
CATEGORY MINIMUM AMOUNT OF LIMITATION
I $30 million
II $25 [$20] million
III $20 [$10] million
IV $15 [$5] million
V $10 [$1] million