88R12797 RDS-D
By: Lozano H.B. No. 2421
A BILL TO BE ENTITLED
AN ACT
relating to the reenactment of expired provisions of the Texas
Economic Development Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 313.007, Tax Code, is amended to read as
follows:
Sec. 313.007. EXPIRATION. Subchapters B and C expire
December 31, 2033 [2022].
SECTION 2. Chapter 313, Tax Code, is amended by adding
Subchapters B and C to read as follows:
SUBCHAPTER B. LIMITATION ON APPRAISED VALUE OF CERTAIN PROPERTY
USED TO CREATE JOBS
Sec. 313.021. DEFINITIONS. In this subchapter:
(1) "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
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 subchapter, as computed by
the Texas Workforce Commission.
(2) "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, 2024, 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, 2024, 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, 2024, 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, 2024, 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, 2024, 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, 2024, and that houses tangible personal property described by
Paragraph (A), (B), (C), (D), or (E).
(3) "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 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:
(i) that is not subject to a tax abatement
agreement entered into by a school district under Chapter 312;
(ii) for which a sales and use tax refund is
not claimed under Section 151.3186; and
(iii) except for new equipment described in
Section 151.318(q) or (q-1), that 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.
(4) "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 the county
average weekly wage for manufacturing jobs in the county where the
job is located.
(5) "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
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 313.028(i);
(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 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
subchapter, unless a shorter time period is agreed to by the
governing body of the school district and the property owner.
Sec. 313.022. APPLICABILITY; CATEGORIZATION OF SCHOOL
DISTRICTS. (a) This subchapter applies to each school district in
this state other than a school district to which Subchapter C
applies.
(b) For purposes of determining the required minimum amount
of a qualified investment under Section 313.021(3)(A)(iv)(a), and
the minimum amount of a limitation on appraised value under Section
313.028(c), 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:
(1) Category I consists of school districts having a
taxable property value of at least $10 billion;
(2) Category II consists of school districts having a
taxable property value of at least $1 billion but less than $10
billion;
(3) Category III consists of school districts having a
taxable property value of at least $500 million but less than $1
billion;
(4) Category IV consists of school districts having a
taxable property value of at least $100 million but less than $500
million; and
(5) Category V consists of school districts having a
taxable property value of less than $100 million.
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
313.021(3)(A)(iv)(a) is as follows:
(1) $100 million for a Category I school district;
(2) $80 million for a Category II school district;
(3) $60 million for a Category III school district;
(4) $40 million for a Category IV school district; and
(5) $20 million for a Category V school district.
Sec. 313.024. ELIGIBLE PROPERTY. (a) In this section:
(1) "Computer center" means an establishment
primarily engaged in providing electronic data processing and
information storage.
(2) "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.
(3) "Manufacturing" means an establishment primarily
engaged in activities described in sectors 31-33 of the 2007 North
American Industry Classification System.
(4) "Military aviation facility" has the meaning
assigned by Section 312.0021.
(5) "Nuclear electric power generation" means
activities described in category 221113 of the 2002 North American
Industry Classification System.
(6) "Renewable energy electric generation" means an
establishment primarily engaged in activities described in
category 221119 of the 1997 North American Industry Classification
System.
(7) "Research and development" means an establishment
primarily engaged in activities described in category 541710 of the
2002 North American Industry Classification System.
(8) "Texas priority project" means a project on which
the applicant has committed to expend or allocate a qualified
investment of more than $1 billion.
(9) "Wind-powered energy device" has the meaning
assigned by Section 11.27.
(b) This subchapter and Subchapter C apply only to property
owned by an entity subject to the tax imposed by Chapter 171.
(c) To be eligible for a limitation on appraised value under
this subchapter, the entity must use the property for:
(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;
(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) Notwithstanding any other provision of this subchapter,
an owner of a parcel of land that is located wholly or partly in a
reinvestment zone, a new building constructed on the parcel of
land, a new improvement erected or affixed on the parcel of land, or
tangible personal property placed in service in the building or
improvement or on the parcel of land may not receive a limitation on
appraised value under this subchapter for the parcel of land,
building, improvement, or tangible personal property under an
agreement under this subchapter that is entered into on or after
September 1, 2023, if, on or after that date, a wind-powered energy
device is installed or constructed on the same parcel of land at a
location that is within 25 nautical miles of the boundaries of a
military aviation facility located in this state. The prohibition
provided by this subsection applies regardless of whether the
wind-powered energy device is installed or constructed at a
location that is in the reinvestment zone.
(e) For purposes of determining an applicant's eligibility
for a limitation under this subchapter:
(1) the land on which a building or component of a
building described by Section 313.021(2)(F) 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.
(f) To be eligible for a limitation on appraised value under
this subchapter, the property owner must create the required number
of new qualifying jobs 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.
(g) For purposes of determining whether a property owner has
created the number of qualifying jobs required for eligibility for
a limitation on appraised value under this subchapter, operations,
services, and other related jobs created in connection with the
project, including jobs of persons employed by third parties under
a contract with the property owner, shall be considered to be
qualifying jobs if the Texas Workforce Commission determines that
the cumulative economic benefit to this state of those jobs is equal
to or greater than the cumulative economic benefit that would
accrue to this state if the property owner were to create the
minimum number of qualifying jobs required by this subchapter. The
Texas Workforce Commission may adopt rules to implement this
subsection.
(h) 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.
Sec. 313.025. APPLICATION; ACTION ON APPLICATION. (a) The
owner or lessee of, or the holder of another possessory interest in,
any qualified property 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(3); and
(3) any information required by the comptroller for
the purposes of Section 313.026.
(b) 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 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 313.031.
(c) The governing body of a school district is not required
to consider an application for a limitation on appraised value. If
the governing body of the school district elects to consider an
application, the governing body shall deliver a copy of the
application to the comptroller and request that the comptroller
conduct an economic impact evaluation of the investment proposed by
the application. 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 (f), 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 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 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.
(d) The comptroller shall promptly deliver a copy of the
application 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 and submit a written report containing the
agency's determination to the school district. 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 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.
(e) In determining whether to approve an application, the
governing body of the school district is entitled to request and
receive assistance from:
(1) the comptroller;
(2) the Texas Economic Development and Tourism Office;
(3) the Texas Workforce Investment Council; and
(4) the Texas Workforce Commission.
(f) Not later than the 90th 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.
(g) The governing body of a school district may not approve
an application unless the comptroller submits to the governing body
a certificate for a limitation on appraised value of the property.
(h) Before approving or disapproving an application under
this subchapter that the governing body of the school district
elects to consider, the governing body must make a written finding
as to any criteria considered by the comptroller in conducting the
economic impact evaluation under Section 313.026. The governing
body shall deliver a copy of those findings to the applicant.
(i) The governing body of a school district 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.
(j) 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 313.021(3)(A)(iv)(b) or
313.051(e) 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.
(k) The Texas Economic Development and Tourism Office or its
successor may recommend that a school district approve an
application under this chapter. In determining whether to approve
an application, the governing body of the school district shall
consider any recommendation made by the Texas Economic Development
and Tourism Office or its successor.
(l) After receiving a copy of the application, the
comptroller shall determine whether the property meets the
requirements of Section 313.024 for eligibility for a limitation on
appraised value under this 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.
(m) If the comptroller's determination under Subsection (l)
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, and the governing body of the school district may not
grant the application.
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.
(b) Except as provided by Subsections (c) and (d), the
comptroller's determination whether to issue a certificate for a
limitation on appraised value under this chapter for property
described in the application shall be based on the economic impact
evaluation described by Subsection (a) and on any other information
available to the comptroller, including information provided by the
governing body of the school district.
(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.
Sec. 313.027. 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.
(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. 313.028. LIMITATION ON APPRAISED VALUE; AGREEMENT.
(a) If the person's application is approved by the governing body
of the school district, 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 school 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 (c), the amount agreed to by
the governing body of the school district.
(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.
(c) The 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:
(1) $100 million for a Category I school district;
(2) $80 million for a Category II school district;
(3) $60 million for a Category III school district;
(4) $40 million for a Category IV school district; and
(5) $20 million for a Category V school district.
(d) The limitation amounts listed in Subsection (c) are
minimum amounts. A school district, regardless of category, may
agree to a greater amount than those amounts.
(e) 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
subchapter on the owner's qualified property.
(f) 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 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.
(g) 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 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 school 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; and
(7) must be in a form approved by the comptroller.
(h) 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.
(i) 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(5).
(j) 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 48.005, Education Code, or $50,000 per year, or
for a period that exceeds the period beginning with the period
described by Section 313.021(5) and ending December 31 of the third
tax year after the date the person's eligibility for a limitation
under this chapter expires. This limit does not apply to amounts
described by Subsection (g)(1) or (2).
(k) An agreement under this chapter must disclose any
consideration promised in conjunction with the application and the
limitation.
Sec. 313.029. 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 subchapter must make the minimum amount of
qualified investment during the qualifying time period.
(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 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).
Sec. 313.030. 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(4)(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.
Sec. 313.031. CERTAIN BUSINESS INFORMATION CONFIDENTIAL.
Information provided to a school district in connection with an
application for a limitation on appraised value under this
subchapter that describes the specific processes or business
activities to be conducted or the specific tangible personal
property to be located on real property covered by the application
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. 313.032. PROPERTY NOT ELIGIBLE FOR TAX ABATEMENT.
Property subject to a limitation on appraised value in a tax year
under this subchapter is not eligible for tax abatement by a school
district under Chapter 312 in that tax year.
Sec. 313.033. 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(2); 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.
(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 economic impact evaluation
required by Section 313.025.
Sec. 313.034. 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 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 the progress of each agreement
made under this chapter that states for each agreement:
(A) the number of qualifying jobs each recipient
of a limitation on appraised value committed to create;
(B) the number of qualifying jobs each recipient
created;
(C) the total amount of wages and the median wage
of the new qualifying jobs each recipient created;
(D) the amount of the qualified investment each
recipient committed to spend or allocate for each project;
(E) the amount of the qualified investment each
recipient spent or allocated for each project;
(F) 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) the limitation on appraised value for the
qualified property of each recipient;
(H) 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) the dollar amount of the taxes imposed on the
qualified property.
(b) The report may not include information that is
confidential by law.
(c) In preparing the portion of the report described by
Subsection (a)(1), the comptroller may use standard economic
estimation techniques, including economic multipliers.
(d) 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.
(e) 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.
Sec. 313.035. 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.
SUBCHAPTER C. LIMITATION ON APPRAISED VALUE OF PROPERTY IN
STRATEGIC INVESTMENT AREA OR CERTAIN RURAL SCHOOL DISTRICTS
Sec. 313.051. APPLICABILITY. (a) In this section,
"strategic investment area" means an area the comptroller
determines under Subsection (d) 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.
(b) This subchapter applies only to a school district that
has territory in:
(1) an area that qualifies as a strategic investment
area; or
(2) a county:
(A) that has a population of less than 50,000;
and
(B) in which, from 2010 to 2020, 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.
(c) Notwithstanding Subsection (b), if on January 1, 2024,
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 (b) after
that date.
(d) 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.
(e) 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
at least 10 new qualifying jobs as defined by Section 313.021(4) on
the owner's qualified property.
Sec. 313.052. CATEGORIZATION OF SCHOOL DISTRICTS. For
purposes of determining the required minimum amount of a qualified
investment under Section 313.021(3)(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:
(1) Category I consists of school districts having a
taxable industrial property value of at least $200 million;
(2) Category II consists of school districts having a
taxable industrial property value of at least $90 million but less
than $200 million;
(3) Category III consists of school districts having a
taxable industrial property value of at least $1 million but less
than $90 million;
(4) Category IV consists of school districts having a
taxable industrial property value of at least $100,000 but less
than $1 million; and
(5) Category V consists of school districts having a
taxable industrial property value of 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
313.021(3)(A)(iv)(a) is as follows:
(1) $30 million for a Category I school district;
(2) $20 million for a Category II school district;
(3) $10 million for a Category III school district;
(4) $5 million for a Category IV school district; and
(5) $1 million for a Category V school district.
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
313.028(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:
(1) $30 million for a Category I school district;
(2) $25 million for a Category II school district;
(3) $20 million for a Category III school district;
(4) $15 million for a Category IV school district; and
(5) $10 million for a Category V school district.
(b) The limitation amounts listed in Subsection (a) are
minimum amounts. A school district, regardless of category, may
agree to a greater amount than those amounts.
SECTION 3. Section 48.256(d), Education Code, is amended to
read as follows:
(d) This subsection applies to a school district in which
the board of trustees entered into a written agreement with a
property owner under Subchapter B, Chapter 313 [Section 313.027],
Tax Code, for the implementation of a limitation on appraised value
under Subchapter B or C, Chapter 313, Tax Code. For purposes of
determining "DPV" under Subsection (a) for a school district to
which this subsection applies, the commissioner shall exclude a
portion of the market value of property not otherwise fully taxable
by the district under Subchapter B or C, Chapter 313, Tax Code,
before the expiration of the subchapter. The comptroller shall
provide information to the agency necessary for this subsection. A
revenue protection payment required as part of an agreement for a
limitation on appraised value shall be based on the district's
taxable value of property for the preceding tax year.
SECTION 4. 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, 2023.