By: Estes S.B. No. 1627
A BILL TO BE ENTITLED
AN ACT
relating to consulting agreements, limitation on appraised value,
and supplemental payments under the Texas Economic Development Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 313, Tax Code, is amended
by adding Section 313.008 to read as follows:
Sec. 313.008. CERTAIN CONSULTING AGREEMENTS PROHIBITED.
(a) In this section, "compensation" has the meaning assigned by
Section 305.002, Government Code.
(b) A person may not for compensation act as a consultant on
behalf of a school district in relation to an application or
agreement for a limitation on appraised value authorized by this
chapter if the person is:
(1) an employee of the school district, including the
superintendent of the district;
(2) a member of the board of trustees of the school
district; or
(3) related to a person described by Subdivision (1)
or (2) in the first degree by consanguinity or affinity, as
determined under Chapter 573, Government Code.
SECTION 2. 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 313.021(2)(A)(iv)(a), [and
the minimum amount of a limitation on appraised value under 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 3. Section 313.025(a), Tax Code, is 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
(2) [(3)] any information required by the comptroller
for the purposes of Section 313.026.
SECTION 4. Sections 313.027(b), (c), and (f), Tax Code, are
amended to read as follows:
(b) The amount agreed to by the governing body of a school
district under Subsection (a)(2) must be an amount that is:
(1) determined for each tax year in which the
limitation under Subsection (a) applies; and
(2) equal to at least 33.3 percent of the market value
of the person's qualified property for that tax year. [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 determined under [listed in]
Subsection (b) are minimum amounts. A school district, regardless
of category, may agree to a greater amount than those amounts.
(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, in accommodating a
temporary increase in student enrollment attributable to the
project, incurs the following extraordinary education-related
expenses:
(A) expenses related to [the project that are not
directly funded in state aid formulas, including expenses for] the
purchase of portable classrooms; or [and]
(B) expenses related to 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 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;
(6) must specify the ad valorem tax years covered by
the agreement;
(7) must require the property owner to provide a
supplemental payment to the district or another entity on behalf of
the district in an amount equal to $25 per student per year in
average daily attendance, as defined by Section 42.005, Education
Code, for each ad valorem tax year covered by the agreement, except
that in a tax year, no district may collect in supplemental payments
from all property owners in the district an amount equal to more
than two percent of the district's budget; and
(8) [(7)] must be in a form approved by the
comptroller.
SECTION 5. The heading to Section 313.031, Tax Code, is
amended to read as follows:
Sec. 313.031. RULES AND FORMS[; FEES].
SECTION 6. Section 313.052, Tax Code, is 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 313.021(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
SECTION 7. Section 313.054, Tax Code, is amended to read as
follows:
Sec. 313.054. LIMITATION ON APPRAISED VALUE. (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 that is:
(1) determined for each tax year in which the
limitation under this subsection applies; and
(2) equal to at least 33.3 percent of the market value
of the person's qualified property for that tax year. [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 million [II $25 million
[II $25 million
[III $20 million [III $20 million
[III $20 million
[IV $15 million [IV $15 million
[IV $15 million
[V $10 million] [V $10 million]
[V $10 million]
(b) The limitation amounts determined under [listed in]
Subsection (a) are minimum amounts. A school district, regardless
of category, may agree to a greater amount than those amounts.
SECTION 8. Sections 313.027(i) and 313.031(b), Tax Code,
are repealed.
SECTION 9. The change in law made by this Act applies only
to an agreement entered into pursuant to an application filed under
Chapter 313, Tax Code, on or after the effective date of this Act.
An agreement entered into pursuant to 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 10. This Act takes effect September 1, 2017.
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 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 AMOUNT OF LIMITATION
[I $30 million
[II $25 million
[III $20 million
[IV $15 million
[V $10 million]