Bill Text: TX HB2421 | 2023-2024 | 88th Legislature | Introduced
Bill Title: Relating to the reenactment of expired provisions of the Texas Economic Development Act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-03-13 - Referred to Ways & Means [HB2421 Detail]
Download: Texas-2023-HB2421-Introduced.html
88R12797 RDS-D | ||
By: Lozano | H.B. No. 2421 |
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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 [ |
||
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 [ |
||
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. |