Texas 2023 - 88th Regular

Texas Senate Bill SB1926 Compare Versions

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1	1	By: Springer S.B. No. 1926
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the establishment of the Texas Mircale Act (TMA),
7	7	allowing for certain fees, authorizing certain ad valorem tax
8	8	incentives for economic development, specifically certain tax
9	9	relief from school district taxes for certain corporations and
10	10	limited liability companies that make large investments that create
11	11	jobs in this state, to authorizing the imposition of certain fees,
12	12	and the repeal of Chapter 313 of Texas Tax Code and the Economic
13	13	Development Act of the 77th Legislature.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Subtitle A, Title 2, Tax Code, is amended by
16	16	adding Chapter 310 to read as follows:
17	17	CHAPTER 310. TEXAS ECONOMIC VITALITY ACT
18	18	SUBCHAPTER A. GENERAL PROVISIONS
19	19	Sec. 310.001. SHORT TITLE. This chapter may be cited as the
20	20	Texas Mircale Act(TMA).
21	21	Sec. 310.002. FINDINGS. The legislature finds that:
22	22	1) many states have enacted aggressive economic development
23	23	laws designed to attract large employers, create jobs, and
24	24	strengthen their economies;
25	25	2) a significant portion of the Texas economy continues to
26	26	be based in the manufacturing industry, and the continued
27	27	growth and overall health of the manufacturing sector serves
28	28	the Texas economy well;
29	29	3) foreign competitors, who recognize the benefits of the
30	30	science and technology that originates from Texas, are
31	31	organizing massive human and capital resources on a national
32	32	level to take the lead in science and technology with
33	33	long-term consequences.
34	34	4) without vibrant, strong manufacturing, science and
35	35	technology sectors, other sectors of the economy, especially
36	36	the state's service sector, will also suffer adverse
37	37	consequences;
38	38	5) the current property tax system of this state does not
39	39	favor capital intensive manufacturing, critical
40	40	infrastructure, State and national security projects; and
41	41	6) for Texas to unilaterally disarm itself of incentives for
42	42	large capital investments, places the state at a disadvantage
43	43	in the national and world marketplace, and risks the
44	44	long-term economic security of the state.
45	45	Sec. 310.003. PURPOSES. The purposes of this chapter are
46	46	to:
47	47	1) enable state and local government officials, especially
48	48	those in rural and economic distressed areas of the state, to
49	49	compete with other states by authorizing economic
50	50	development incentives that are comparable to incentives
51	51	being offered to prospective employers by other states and to
52	52	provide state and local officials with an effective means to
53	53	attract or keep large-scale business investment to area
54	54	2) create new, high paying jobs in these areas and across
55	55	the state;
56	56	3) attract to this state new, large-scale businesses that
57	57	are exploring opportunities to locate in other states or
58	58	other countries;
59	59	4) keep in the state, existing large-scale businesses that
60	60	are exploring opportunities to expand to other states or
61	61	other countries;
62	62	5) ensuring the effective protection of science and
63	63	technologies critical to Texas and U.S. national security
64	64	interests;
65	65	6) strengthen and maintain the great gains and overall
66	66	performance of the economy of this state;
67	67	7) expand and enlarge the ad valorem property tax base of
68	68	this state by attracting or keeping large-scale businesses
69	69	that otherwise would not exist; and
70	70	8) enhance this state's economic development efforts by
71	71	providing state officials, local officials, and economic
72	72	development professionals with an effective economic
73	73	development tool.
74	74	Sec. 310.004. LEGISLATIVE INTENT. It is the intent of the
75	75	legislature in enacting this chapter that:
76	76	1) economic development decisions should benefit the level
77	77	but be consistent with identifiable statewide and regional
78	78	economic development goals;
79	79	2) this chapter should not be construed or interpreted to
80	80	allow:
81	81	a. property owners to pool investments to create
82	82	sufficiently large investments to qualify for an ad
83	83	valorem tax benefit or financial benefit provided by
84	84	this chapter;
85	85	b. an applicant for an ad valorem tax benefit or
86	86	financial benefit provided by this chapter to assert
87	87	that jobs will be eliminated if certain investments are
88	88	not made if the assertion is not true; or
89	89	c. a sole proprietorship, partnership, or limited
90	90	liability partnership to receive an ad valorem tax
91	91	benefit or financial benefit provided by this chapter.
92	92	3) in implementing this chapter, the Governor, Lieutenant
93	93	Governor, Comptroller, and Speaker should:
94	94	a. strictly interpret the criteria and selection
95	95	guidelines provided by this chapter; and
96	96	b. issue the privileges of ad valorem tax benefits
97	97	under this chapter only for those applications that:
98	98	i. create high-paying jobs;
99	99	ii. provide a net benefit to the state over the
100	100	long term; and
101	101	iii. advance the economic development goals of
102	102	this state.
103	103	Sec. 313.005. AUDIT OF AGREEMENTS BY STATE AUDITOR. Each
104	104	year, the state auditor shall review at least three major
105	105	agreements, as determined by the state auditor, under this chapter
106	106	to determine whether:
107	107	1) each agreement accomplishes the purposes of this chapter
108	108	as expressed in Section 310.003;
109	109	2) each agreement complies with the intent of the
110	110	legislature in enacting this chapter as expressed in Section
111	111	310.004; and
112	112	3) the terms of each agreement were executed in compliance
113	113	with the terms of this chapter.
114	114	4) As part of the review, the state auditor shall make
115	115	recommendations relating to increasing the efficiency and
116	116	effectiveness of the administration of this chapter.
117	117	Sec. 310.006 IMPOSITION OF IMPACT FEE. In this section,
118	118	"impact fee" means:
119	119	1) a charge or assessment imposed against a qualified
120	120	property, as defined by Section 310.010, in order to generate
121	121	revenue for funding or recouping the costs of capital
122	122	improvements or facility expansions for water, wastewater,
123	123	or storm water services or for roads necessitated by or
124	124	attributable to property that receives an ad valorem tax
125	125	benefit under this chapter.
126	126	2) Notwithstanding any other law, including Chapter 395,
127	127	Local Government Code, a municipality, or county may impose
128	128	and collect from the owner of a qualified property a
129	129	reasonable impact fee under this section to pay for the cost
130	130	of providing improvements associated with or attributable to
131	131	property that receives an ad valorem tax benefit under this
132	132	chapter.
133	133	Sec.310.07: RULES AND FORMS; FEES. The Comptroller and Texas
134	134	Workforce Commission shall:
135	135	1) adopt rules and forms necessary for the implementation
136	136	and administration of this chapter, including rules for
137	137	determining whether a property owner's land qualifies as a
138	138	qualified investment under this Chapter and
139	139	2) to post online, without charge, a copy of the rules and
140	140	forms for an ad valorem tax benefit under this chapter on the
141	141	Comptroller's website.
142	142	3) The Comptroller and Texas Workforce Commission may
143	143	impose application fees that must be reasonable and may not
144	144	exceed the estimated cost to the agencies for processing and
145	145	acting on an application, including any cost associated with
146	146	the economic impact evaluation required by the Chapter.
147	147	SUBCHAPTER B. LIMITATION ON APPRAISED VALUE OF CERTAIN
148	148	PROPERTY USED TO CREATE JOBS
149	149	Sec. 310.100 DEFINITIONS. In this subchapter:
150	150	(1) "Agreement" means a written agreement between the
151	151	owner of a new investment project and a school district in this
152	152	state.
153	153	(2) "New investment project" means the construction
154	154	and operation of new improvements to realty or placement into
155	155	service in this state new tangible personal property that did not
156	156	exist on the date of the agreement.
157	157	(3) "Qualified industry" means:
158	158	(A) manufacturing;
159	159	(B) critical infrastructure; or
160	160	(C) national and state security and critical
161	161	domestic supply chain support.
162	162	Sec. 310.200 APPLICATION. (a) A person may apply to the
163	163	school district for approval of an agreement under this subchapter.
164	164	An application must be made on a form prescribed by the comptroller
165	165	and contain the following information: (1) the applicant's name,
166	166	address, Texas taxpayer identification number, and contact
167	167	information of an authorized representative;
168	168	(2) the applicant's form of business and, if
169	169	applicable, the name, address, and Texas taxpayer identification
170	170	number of the applicant's parent entity;
171	171	(3) the school district's name and address, the county
172	172	in which the district is located or the county in which the project
173	173	is located if the district is in more than one county, and the
174	174	contact information of the district's authorized representative;
175	175	(4) the address of the project or proposed facility,
176	176	if different from the applicant's address;
177	177	(5) a brief description of the project, including the
178	178	classification of the project as designated by the North American
179	179	Industry Classification System as of the date of the application;
180	180	(6) a brief description of the eligible property for
181	181	which the applicant is seeking an agreement;
182	182	(7) the estimated dates of commencement of
183	183	construction, completion of construction, and commencement of
184	184	commercial operations of the project;
185	185	(8) the name and location of the reinvestment zone or
186	186	enterprise zone in which the project is located;
187	187	(9) a brief summary of the economic benefits of the
188	188	project; and
189	189	(10) the applicant's signature and certification.
190	190	(b) The application must be accompanied by an application
191	191	fee payable to the school district.
192	192	(c) The school district shall forward the application to the
193	193	comptroller within 7 days of receipt from the applicant.
194	194	(d) Subject to the confidentiality requirements of Section
195	195	310.616, the comptroller shall publish the application and the
196	196	information described by Subsections (b)(2)-(5), and any
197	197	subsequent revisions of the application or the information on the
198	198	comptroller's Internet website.
199	199	Sec. 310.603. ECONOMIC BENEFIT STATEMENT. (a) The
200	200	applicant shall submit with the application an economic benefit
201	201	statement containing estimates of the economic and fiscal impacts
202	202	on the school district and the state for the 25-year period
203	203	commencing on the date on which the applicant estimates
204	204	construction of the project will commence.
205	205	(b) The comptroller shall establish criteria for the
206	206	methodology of the economic benefit statement submitted by the
207	207	applicant and may require the applicant to supplement or modify the
208	208	statement to ensure the accuracy of the estimates listed in
209	209	Subsection (a).
210	210	Sec. 310.604. COMPTROLLER RECOMMENDATION OF APPLICATION.
211	211	(a) The comptroller shall recommend an application for approval by
212	212	the school district if the comptroller finds that the project
213	213	provides:
214	214	(1) no financial harm to the school district; and
215	215	(2) a net economic or financial benefit to the state.
216	216	(b) If the comptroller finds that the project does not meet
217	217	one or more of the criteria established by Subsection (a), the
218	218	comptroller shall not recommend the application for approval.
219	219	Sec. 310.605. SCHOOL DISTRICT APPROVAL. (a) Within 21 days
220	220	of receiving a recommendation to approve an application from the
221	221	comptroller under Section 403.604, the school district shall either
222	222	approve or disapprove of the agreement.
223	223	Sec. 310.606. REPORTS BY APPLICANT. The comptroller shall
224	224	promulgate an online reporting form for applicants to submit to the
225	225	agency by April 1 of each even-numbered year that reports the
226	226	following information for each year since the application was
227	227	approved and for three years after the limitation has expired:
228	228	(1) the application number, name of the applicant,
229	229	name of the school district which levies ad valorem taxes on the
230	230	project, and name and contact information for the applicant's
231	231	representative;
232	232	(2) the parcel number of the property subject to the
233	233	agreement;
234	234	(3) the total number of jobs created by the project;
235	235	(4) the total wages paid;
236	236	(5) the total amount of the investment;
237	237	(6) the appraised value of all property associated
238	238	with the project, including property subject to the agreement and
239	239	any other real or tangible personal property owned by the applicant
240	240	as part of the project;
241	241	(7) the taxable value of all property associated with
242	242	the project, including property subject to the agreement and any
243	243	other real or tangible personal property owned by the applicant as
244	244	part of the project, for school district maintenance and operations
245	245	ad valorem tax purposes;
246	246	(8) the total amount of school district maintenance
247	247	and operations ad valorem taxes paid by the applicant;
248	248	(9) the total amount of school district interest and
249	249	sinking fund ad valorem taxes paid by the applicant;
250	250	(10) the total amount for school district ad valorem
251	251	taxes the applicant would have paid in the absence of an agreement;
252	252	(11) the total amount of payments other than ad
253	253	valorem taxes made by the applicant to the school district.
254	254	Sec. 310.607. REPORTS BY SCHOOL DISTRICT. (a) A school
255	255	district that levies ad valorem taxes on the project shall submit at
256	256	its own expense to the comptroller a report not later than April 1
257	257	of each even-numbered year since the application was approved and
258	258	for three years after the limitation has expired.
259	259	(b) The report shall include:
260	260	(1) the total amount of payments other than ad valorem
261	261	taxes received from the applicant;
262	262	(2) the total amount of any other direct or indirect
263	263	benefits received from the applicant such as in-kind contributions
264	264	or other financial benefits; and
265	265	(3) the purposes for which the payments and benefits
266	266	were used by the school district.
267	267	(c) The comptroller shall promulgate a form to be used by
268	268	the school district for purposes of this section.
269	269	Sec. 310.608. RULES AND FORMS. The comptroller shall adopt
270	270	rules and forms necessary for the implementation and administration
271	271	of this subchapter.
272	272	Sec. 310.608. RULES AND FORMS. The comptroller shall adopt
273	273	rules and forms necessary for the implementation and administration
274	274	of this subchapter.
275	275	SECTION 4. Chapter 313 of the Texas Tax Code is repealed.
276	276	SECTION 3. The change in law made by this Act applies only
277	277	to a person receiving an ad valorem tax benefit under this chapter
278	278	issued on or after January 1, 2024. Any a person receiving an ad
279	279	valorem tax benefit under state law before January 1, 202, is
280	280	governed by the law as it existed immediately before the effective
281	281	date of this Act, and that law is continued in effect for that
282	282	purpose.
283	283	SECTION 4. This Act takes effect September 1, 2023.