By: Springer S.B. No. 1926
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Mircale Act (TMA),
allowing for certain fees, authorizing certain ad valorem tax
incentives for economic development, specifically certain tax
relief from school district taxes for certain corporations and
limited liability companies that make large investments that create
jobs in this state, to authorizing the imposition of certain fees,
and the repeal of Chapter 313 of Texas Tax Code and the Economic
Development Act of the 77th Legislature.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 2, Tax Code, is amended by
adding Chapter 310 to read as follows:
CHAPTER 310. TEXAS ECONOMIC VITALITY ACT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 310.001. SHORT TITLE. This chapter may be cited as the
Texas Mircale Act(TMA).
Sec. 310.002. 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) a significant portion of the Texas economy continues to
be based in the manufacturing industry, and the continued
growth and overall health of the manufacturing sector serves
the Texas economy well;
3) foreign competitors, who recognize the benefits of the
science and technology that originates from Texas, are
organizing massive human and capital resources on a national
level to take the lead in science and technology with
long-term consequences.
4) without vibrant, strong manufacturing, science and
technology sectors, other sectors of the economy, especially
the state's service sector, will also suffer adverse
consequences;
5) the current property tax system of this state does not
favor capital intensive manufacturing, critical
infrastructure, State and national security projects; and
6) for Texas to unilaterally disarm itself of incentives for
large capital investments, places the state at a disadvantage
in the national and world marketplace, and risks the
long-term economic security of the state.
Sec. 310.003. PURPOSES. The purposes of this chapter are
to:
1) enable state and local government officials, especially
those in rural and economic distressed areas of the state, to
compete with other states by authorizing economic
development incentives that are comparable to incentives
being offered to prospective employers by other states and to
provide state and local officials with an effective means to
attract or keep large-scale business investment to area
2) create new, high paying jobs in these areas and across
the state;
3) attract to this state new, large-scale businesses that
are exploring opportunities to locate in other states or
other countries;
4) keep in the state, existing large-scale businesses that
are exploring opportunities to expand to other states or
other countries;
5) ensuring the effective protection of science and
technologies critical to Texas and U.S. national security
interests;
6) strengthen and maintain the great gains and overall
performance of the economy of this state;
7) expand and enlarge the ad valorem property tax base of
this state by attracting or keeping large-scale businesses
that otherwise would not exist; and
8) enhance this state's economic development efforts by
providing state officials, local officials, and economic
development professionals with an effective economic
development tool.
Sec. 310.004. LEGISLATIVE INTENT. It is the intent of the
legislature in enacting this chapter that:
1) economic development decisions should benefit the level
but be consistent with identifiable statewide and regional
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. a sole proprietorship, partnership, or limited
liability partnership to receive an ad valorem tax
benefit or financial benefit provided by this chapter.
3) in implementing this chapter, the Governor, Lieutenant
Governor, Comptroller, and Speaker should:
a. strictly interpret the criteria and selection
guidelines provided by this chapter; and
b. issue the privileges of ad valorem tax benefits
under this chapter only for those applications 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.
Sec. 313.005. AUDIT OF AGREEMENTS BY STATE AUDITOR. 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 310.003;
2) each agreement complies with the intent of the
legislature in enacting this chapter as expressed in Section
310.004; and
3) the terms of each agreement were executed in compliance
with the terms of this chapter.
4) As part of the review, the state auditor shall make
recommendations relating to increasing the efficiency and
effectiveness of the administration of this chapter.
Sec. 310.006 IMPOSITION OF IMPACT FEE. In this section,
"impact fee" means:
1) a charge or assessment imposed against a qualified
property, as defined by Section 310.010, in order to generate
revenue for funding or recouping the costs of capital
improvements or facility expansions for water, wastewater,
or storm water services or for roads necessitated by or
attributable to property that receives an ad valorem tax
benefit under this chapter.
2) Notwithstanding any other law, including Chapter 395,
Local Government Code, a municipality, or county may impose
and collect from the owner of a qualified property a
reasonable impact fee under this section to pay for the cost
of providing improvements associated with or attributable to
property that receives an ad valorem tax benefit under this
chapter.
Sec.310.07: RULES AND FORMS; FEES. The Comptroller and Texas
Workforce Commission shall:
1) adopt rules and forms necessary for the implementation
and administration of this chapter, including rules for
determining whether a property owner's land qualifies as a
qualified investment under this Chapter and
2) to post online, without charge, a copy of the rules and
forms for an ad valorem tax benefit under this chapter on the
Comptroller's website.
3) The Comptroller and Texas Workforce Commission may
impose application fees that must be reasonable and may not
exceed the estimated cost to the agencies for processing and
acting on an application, including any cost associated with
the economic impact evaluation required by the Chapter.
SUBCHAPTER B. LIMITATION ON APPRAISED VALUE OF CERTAIN
PROPERTY USED TO CREATE JOBS
Sec. 310.100 DEFINITIONS. In this subchapter:
(1) "Agreement" means a written agreement between the
owner of a new investment project and a school district in this
state.
(2) "New investment project" means the construction
and operation of new improvements to realty or placement into
service in this state new tangible personal property that did not
exist on the date of the agreement.
(3) "Qualified industry" means:
(A) manufacturing;
(B) critical infrastructure; or
(C) national and state security and critical
domestic supply chain support.
Sec. 310.200 APPLICATION. (a) A person may apply to the
school district for approval of an agreement under this subchapter.
An application must be made on a form prescribed by the comptroller
and contain the following information: (1) the applicant's name,
address, Texas taxpayer identification number, and contact
information of an authorized representative;
(2) the applicant's form of business and, if
applicable, the name, address, and Texas taxpayer identification
number of the applicant's parent entity;
(3) the school district's name and address, the county
in which the district is located or the county in which the project
is located if the district is in more than one county, and the
contact information of the district's authorized representative;
(4) the address of the project or proposed facility,
if different from the applicant's address;
(5) a brief description of the project, including the
classification of the project as designated by the North American
Industry Classification System as of the date of the application;
(6) a brief description of the eligible property for
which the applicant is seeking an agreement;
(7) the estimated dates of commencement of
construction, completion of construction, and commencement of
commercial operations of the project;
(8) the name and location of the reinvestment zone or
enterprise zone in which the project is located;
(9) a brief summary of the economic benefits of the
project; and
(10) the applicant's signature and certification.
(b) The application must be accompanied by an application
fee payable to the school district.
(c) The school district shall forward the application to the
comptroller within 7 days of receipt from the applicant.
(d) Subject to the confidentiality requirements of Section
310.616, the comptroller shall publish the application and the
information described by Subsections (b)(2)-(5), and any
subsequent revisions of the application or the information on the
comptroller's Internet website.
Sec. 310.603. ECONOMIC BENEFIT STATEMENT. (a) The
applicant shall submit with the application an economic benefit
statement containing estimates of the economic and fiscal impacts
on the school district and the state for the 25-year period
commencing on the date on which the applicant estimates
construction of the project will commence.
(b) The comptroller shall establish criteria for the
methodology of the economic benefit statement submitted by the
applicant and may require the applicant to supplement or modify the
statement to ensure the accuracy of the estimates listed in
Subsection (a).
Sec. 310.604. COMPTROLLER RECOMMENDATION OF APPLICATION.
(a) The comptroller shall recommend an application for approval by
the school district if the comptroller finds that the project
provides:
(1) no financial harm to the school district; and
(2) a net economic or financial benefit to the state.
(b) If the comptroller finds that the project does not meet
one or more of the criteria established by Subsection (a), the
comptroller shall not recommend the application for approval.
Sec. 310.605. SCHOOL DISTRICT APPROVAL. (a) Within 21 days
of receiving a recommendation to approve an application from the
comptroller under Section 403.604, the school district shall either
approve or disapprove of the agreement.
Sec. 310.606. REPORTS BY APPLICANT. The comptroller shall
promulgate an online reporting form for applicants to submit to the
agency by April 1 of each even-numbered year that reports the
following information for each year since the application was
approved and for three years after the limitation has expired:
(1) the application number, name of the applicant,
name of the school district which levies ad valorem taxes on the
project, and name and contact information for the applicant's
representative;
(2) the parcel number of the property subject to the
agreement;
(3) the total number of jobs created by the project;
(4) the total wages paid;
(5) the total amount of the investment;
(6) the appraised value of all property associated
with the project, including property subject to the agreement and
any other real or tangible personal property owned by the applicant
as part of the project;
(7) the taxable value of all property associated with
the project, including property subject to the agreement and any
other real or tangible personal property owned by the applicant as
part of the project, for school district maintenance and operations
ad valorem tax purposes;
(8) the total amount of school district maintenance
and operations ad valorem taxes paid by the applicant;
(9) the total amount of school district interest and
sinking fund ad valorem taxes paid by the applicant;
(10) the total amount for school district ad valorem
taxes the applicant would have paid in the absence of an agreement;
(11) the total amount of payments other than ad
valorem taxes made by the applicant to the school district.
Sec. 310.607. REPORTS BY SCHOOL DISTRICT. (a) A school
district that levies ad valorem taxes on the project shall submit at
its own expense to the comptroller a report not later than April 1
of each even-numbered year since the application was approved and
for three years after the limitation has expired.
(b) The report shall include:
(1) the total amount of payments other than ad valorem
taxes received from the applicant;
(2) the total amount of any other direct or indirect
benefits received from the applicant such as in-kind contributions
or other financial benefits; and
(3) the purposes for which the payments and benefits
were used by the school district.
(c) The comptroller shall promulgate a form to be used by
the school district for purposes of this section.
Sec. 310.608. RULES AND FORMS. The comptroller shall adopt
rules and forms necessary for the implementation and administration
of this subchapter.
Sec. 310.608. RULES AND FORMS. The comptroller shall adopt
rules and forms necessary for the implementation and administration
of this subchapter.
SECTION 4. Chapter 313 of the Texas Tax Code is repealed.
SECTION 3. The change in law made by this Act applies only
to a person receiving an ad valorem tax benefit under this chapter
issued on or after January 1, 2024. Any a person receiving an ad
valorem tax benefit under state law before January 1, 202, is
governed by the law as it existed immediately before the effective
date of this Act, and that law is continued in effect for that
purpose.
SECTION 4. This Act takes effect September 1, 2023.