83R4113 SMH-F
By: Strama H.B. No. 546
A BILL TO BE ENTITLED
AN ACT
relating to the creation of renewable energy reinvestment zones and
the abatement of ad valorem taxes on property of a renewable energy
company located in such a zone.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 3, Tax Code, is amended by
adding Chapter 314 to read as follows:
CHAPTER 314. RENEWABLE ENERGY REINVESTMENT ZONES
Sec. 314.001. SHORT TITLE. This chapter may be cited as the
Renewable Energy Reinvestment Zone Act.
Sec. 314.002. APPLICABILITY. The provisions of this
chapter applicable to a municipality apply only to a municipality
that:
(1) has a population of at least 45,000 but not more
than 60,000;
(2) is located in a county with a population of at
least one million; and
(3) does not contain within its corporate limits:
(A) more than two school districts that are
categorized as category II school districts under Section 313.022;
or
(B) any school districts to which Subchapter C,
Chapter 313, applies.
Sec. 314.003. DEFINITION. In this chapter, "renewable
energy company" means a business organization that manufactures,
assembles, sells, maintains, or conducts research on renewable
energy and renewable energy efficient products, including:
(A) solar energy;
(B) wind energy;
(C) biomass energy;
(D) geothermal energy;
(E) battery technology;
(F) electric vehicles;
(G) lighting using light-emitting diodes;
(H) fuel cells;
(I) energy generated from agricultural sources;
(J) nuclear energy;
(K) clean coal technology; and
(L) water-saving devices.
Sec. 314.004. ELIGIBILITY OF MUNICIPALITY TO PARTICIPATE IN
TAX ABATEMENT. (a) A municipality may not enter into a tax
abatement agreement under this chapter and the governing body of a
municipality may not designate an area as a renewable energy
reinvestment zone unless the governing body adopts a resolution
stating that the municipality elects to become eligible to
participate in tax abatement and establishes guidelines and
criteria governing tax abatement agreements by the municipality.
The guidelines and criteria applicable to property must provide for
the availability of tax abatement only for new facilities or
structures.
(b) The governing body of a municipality may not enter into
a tax abatement agreement under this chapter unless it finds that
the terms of the agreement and the property subject to the agreement
meet the applicable guidelines and criteria adopted by the
governing body under this section.
(c) The guidelines and criteria adopted under this section
are effective for two years from the date adopted. During that
period, the guidelines and criteria may be amended or repealed only
by a vote of three-fourths of the members of the governing body.
(d) The adoption of the guidelines and criteria by the
governing body of a municipality does not:
(1) limit the discretion of the governing body to
decide whether to enter into a specific tax abatement agreement;
(2) limit the discretion of the governing body to
delegate to its employees the authority to determine whether or not
the governing body should consider a particular application or
request for tax abatement; or
(3) create any property, contract, or other legal
right in any person to have the governing body consider or grant a
specific application or request for tax abatement.
Sec. 314.005. DESIGNATION OF ZONE. (a) The governing body
of a municipality by ordinance may designate as a renewable energy
reinvestment zone an area in the taxing jurisdiction or
extraterritorial jurisdiction of the municipality that the
governing body finds satisfies the requirements of Section 314.006.
(b) The ordinance must describe the boundaries of the zone.
(c) The governing body may not adopt an ordinance
designating an area as a renewable energy reinvestment zone until
the governing body has held a public hearing on the designation and
has found that the improvements sought are feasible and practical
and would be a benefit to the land to be included in the zone and to
the municipality after the expiration of an agreement entered into
under Section 314.008. At the hearing, interested persons are
entitled to speak and present evidence for or against the
designation. Not later than the seventh day before the date of the
hearing, notice of the hearing must be:
(1) published in a newspaper having general
circulation in the municipality; and
(2) delivered in writing to the presiding officer of
the governing body of each county and school district that includes
in its boundaries real property that is to be included in the
proposed renewable energy reinvestment zone.
(d) A notice made under Subsection (c)(2) is presumed
delivered when placed in the mail postage prepaid and properly
addressed to the appropriate presiding officer. A notice properly
addressed and sent by registered or certified mail for which a
return receipt is received by the sender is considered to have been
delivered to the addressee.
Sec. 314.006. CRITERIA FOR RENEWABLE ENERGY REINVESTMENT
ZONE. To be designated as a renewable energy reinvestment zone
under this chapter, an area must meet the following requirements:
(1) the area must be at least 100 acres in size;
(2) at the time of the designation of the area as a
zone, at least 75 percent of the land in the area must be owned by
the municipality designating the area or by a municipal development
corporation created under Chapter 379A, Local Government Code; and
(3) the area must be zoned for commercial purposes.
Sec. 314.007. EXPIRATION OF REINVESTMENT ZONE. The
designation of a renewable energy reinvestment zone for tax
abatement expires five years after the date of the designation and
may be renewed for periods not to exceed five years. The expiration
of the designation does not affect an existing tax abatement
agreement made under this chapter.
Sec. 314.008. MUNICIPAL TAX ABATEMENT AGREEMENT. (a) The
governing body of a municipality eligible to enter into tax
abatement agreements under Section 314.004 may agree in writing
with a renewable energy company that owns taxable real property
that is located in a renewable energy reinvestment zone, but that is
not located in an improvement project financed by tax increment
bonds, to exempt from taxation 50 percent of the value of the real
property and of tangible personal property located on the real
property for a period of 15 years, on the condition that the company
construct a facility on the property to be used in connection with
the company's operations as specified by the agreement. The
governing body of an eligible municipality may agree in writing
with a renewable energy company that owns a leasehold interest in
tax-exempt real property that is located in a renewable energy
reinvestment zone, but that is not located in an improvement
project financed by tax increment bonds, to exempt 50 percent of the
value of property subject to ad valorem taxation, including the
leasehold interest, improvements, and tangible personal property
located on the real property, for a period of 15 years, on the
condition that the company construct a facility on the property to
be used in connection with the company's operations as specified by
the agreement. A tax abatement agreement under this section is
subject to the rights of holders of outstanding bonds of the
municipality. In a municipality that has a comprehensive zoning
ordinance, an improvement, development, or redevelopment taking
place under an agreement under this section must conform to the
comprehensive zoning ordinance.
(b) The property subject to an agreement made under this
section may be located in the extraterritorial jurisdiction of the
municipality. In that event, the agreement applies to taxes of the
municipality if the municipality annexes the property during the
period specified in the agreement.
(c) Except as otherwise provided by this subsection,
property that is in a renewable energy reinvestment zone and that is
owned or leased by a person who is a member of the governing body of
the municipality or a member of a zoning or planning board or
commission of the municipality is excluded from property tax
abatement. Property owned or leased by a person that is subject to
a tax abatement agreement in effect when the person becomes a member
of the governing body or of the zoning or planning board or
commission does not cease to be eligible for property tax abatement
under that agreement because of the person's membership on the
governing body, board, or commission.
Sec. 314.009. NOTICE OF TAX ABATEMENT AGREEMENT TO COUNTIES
AND SCHOOL DISTRICTS. (a) Not later than the seventh day before the
date on which a municipality enters into an agreement under Section
314.008, the governing body of the municipality or a designated
officer or employee of the municipality shall deliver to the
presiding officer of the governing body of each county and school
district in which the property to be subject to the agreement is
located a written notice that the municipality intends to enter
into the agreement. The notice must include a copy of the proposed
agreement.
(b) A notice is presumed delivered when placed in the mail
postage paid and properly addressed to the appropriate presiding
officer. A notice properly addressed and sent by registered or
certified mail for which a return receipt is received by the sender
is considered to have been delivered to the addressee.
(c) Failure to deliver the notice does not affect the
validity of the agreement.
Sec. 314.010. SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
An agreement made under Section 314.008 must:
(1) list the kind, number, and location of all
proposed improvements of the property;
(2) provide access to and authorize inspection of the
property by municipal employees and by employees of each county and
school district that approves the agreement to ensure that the
improvements are made according to the specifications and
conditions of the agreement;
(3) limit the uses of the property consistent with the
general purpose of encouraging development or redevelopment of the
renewable energy reinvestment zone during the period that property
tax exemptions are in effect;
(4) provide for recapturing property tax revenue lost
as a result of the agreement if the owner of the property fails to
make the improvements as provided by the agreement;
(5) contain each term agreed to by the owner of the
property;
(6) require the owner of the property to certify
annually to the governing body of the municipality and each county
and school district that approves the agreement that the owner is in
compliance with each applicable term of the agreement; and
(7) provide that the governing body of the
municipality may cancel or modify the agreement if the property
owner fails to comply with the agreement.
Sec. 314.011. APPROVAL OF AGREEMENT BY GOVERNING BODY OF
MUNICIPALITY. (a) To be effective, an agreement made under this
chapter by a municipality must be approved by the affirmative vote
of a majority of the members of the governing body of the
municipality at a regularly scheduled meeting of the governing
body.
(b) On approval by the governing body, an agreement may be
executed in the same manner as other contracts made by the
municipality.
Sec. 314.012. MODIFICATION OR TERMINATION OF AGREEMENT.
(a) At any time before the expiration of an agreement made under
this chapter, the agreement may be modified by the parties to the
agreement to include other provisions that could have been included
in the original agreement or to delete provisions that were not
necessary to the original agreement. The modification must be made
by the same procedure by which the original agreement was approved
and executed. The original agreement may not be modified to extend
beyond 15 years from the date of the original agreement.
(b) An agreement made under this chapter may be terminated
by the mutual consent of the parties in the same manner that the
agreement was approved and executed.
Sec. 314.013. TAX ABATEMENT BY COUNTY AND SCHOOL DISTRICT.
(a) If municipal property taxes on property located in the taxing
jurisdiction of a municipality are abated under an agreement under
Section 314.008, the agreement also applies to the taxation of the
property by a county or school district in which the property is
located if the governing body of the county or school district
approves the agreement by the affirmative vote of a majority of the
members of the governing body at a regularly scheduled meeting of
the governing body.
(b) A county or school district may not approve a municipal
tax abatement agreement under this chapter unless the governing
body of the county or school district adopts a resolution stating
that the county or school district elects to become eligible to
participate in tax abatement and establishes guidelines and
criteria governing the approval by the county or school district of
municipal tax abatement agreements. The provisions of Section
314.004 governing guidelines and criteria for the entry by a
municipality into a tax abatement agreement apply to guidelines and
criteria established by a county or school district for approval of
a municipal tax abatement agreement to the extent those provisions
can be made applicable.
SECTION 2. Section 11.28, Tax Code, is amended to read as
follows:
Sec. 11.28. PROPERTY EXEMPTED FROM [CITY] TAXATION BY
AGREEMENT. (a) The owner of property to which an agreement made
under Chapter 312 [the Property Redevelopment and Tax Abatement Act
(Chapter 312 of this code)] applies is entitled to exemption from
taxation by an incorporated city or town or other taxing unit of all
or part of the value of the property as provided by the agreement.
(b) The owner of property to which an agreement made by an
incorporated city or town under Chapter 314 applies is entitled to
exemption from taxation by the incorporated city or town and from
taxation by a county or school district that has approved the
agreement of part of the value of the property as provided by the
agreement.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2013.