By Coleman H.B. No. 3155 Substitute the following for H.B. No. 3155: By Craddick C.S.H.B. No. 3155 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to tax credits for real property contributed to 1-3 institutions of higher education. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter C, Chapter 111, Tax Code, is amended 1-6 by adding Section 111.110 to read as follows: 1-7 Sec. 111.110. TAX CREDIT FOR REAL PROPERTY CONTRIBUTED TO AN 1-8 INSTITUTION OF HIGHER EDUCATION. (a) Subject to the provisions of 1-9 Subchapter D, Chapter 55, Education Code, the comptroller shall 1-10 issue a credit to be used by a taxpayer who qualifies for the 1-11 credit under that subchapter against the payment of a tax imposed 1-12 on the taxpayer: 1-13 (1) for the franchise tax under Chapter 171; or 1-14 (2) if the taxpayer holds a direct payment permit for 1-15 the sales and use tax under Chapter 151, for that tax. 1-16 (b) The credit applies to a tax originally due on or after 1-17 the date the credit is issued but not later than the end of the 1-18 20th calendar year following the calendar year in which the credit 1-19 was issued. 1-20 (c) A taxpayer may not claim a credit issued under this 1-21 section in a calendar year in an amount greater than five percent 1-22 of the total credit issued to that taxpayer. 1-23 (d) A taxpayer shall include with a return or report showing 2-1 an amount of tax due against which a taxpayer claims a credit under 2-2 this section, a statement containing the following information: 2-3 (1) the original amount of the credit and its date of 2-4 issue; 2-5 (2) the total amount of the credit previously claimed 2-6 by the taxpayer; 2-7 (3) the amount of credit claimed on the attached 2-8 return; 2-9 (4) the remaining unused credit amount; and 2-10 (5) the calendar year in which the credit expires. 2-11 (e) The comptroller may recover an amount erroneously 2-12 claimed as a credit in a jeopardy or deficiency determination 2-13 issued before the fourth anniversary of the date on which the 2-14 erroneous claim is filed. 2-15 SECTION 2. Chapter 55, Education Code, is amended by adding 2-16 Subchapter D to read as follows: 2-17 SUBCHAPTER D. TAX CREDIT FOR CONTRIBUTED REAL PROPERTY 2-18 Sec. 55.51. PETITION FOR TAX CREDIT; QUALIFICATIONS. (a) 2-19 If the governing board of an institution determines that the funds 2-20 to acquire a parcel of real estate may not be provided through the 2-21 issuance of revenue bonds under this chapter, the governing board 2-22 may petition the Texas Higher Education Coordinating Board, in 2-23 accordance with the rules and regulations adopted under Section 2-24 61.027, for the issuance of a tax credit to the owner of the real 2-25 estate in the amount provided by this subchapter in exchange for 3-1 the owner's transfer of the parcel of real estate to the 3-2 institution. 3-3 (b) A taxpayer may qualify for a tax credit under this 3-4 subchapter only if: 3-5 (1) the parcel of real estate that is the subject of 3-6 the petition is located in a county with a population of more than 3-7 2,500,000; 3-8 (2) the institution seeking ownership of the parcel 3-9 has more than 29,000 students enrolled or registered during its 3-10 regular term at a facility of the institution located in a county 3-11 with a population of more than 2,500,000; and 3-12 (3) the parcel of real estate owned by the taxpayer is 3-13 transferred to the institution on or before August 31, 1996. 3-14 Sec. 55.52. TAX CREDIT PETITION. (a) In the petition 3-15 before the Texas Higher Education Coordinating Board authorized by 3-16 Section 55.51, the governing board shall: 3-17 (1) show that the desired parcel has been included in 3-18 the most recent campus facilities plan or similar master plan 3-19 adopted by the governing board as a property proposed or targeted 3-20 for acquisition; 3-21 (2) show that the desired parcel is being offered or 3-22 proposed for sale on the open market; 3-23 (3) provide an estimate of the current fair market 3-24 value of the desired parcel; and 3-25 (4) show the basis for the governing board's 4-1 determination that revenue bond funding may not be available. 4-2 (b) The petition must include a fair market valuation study 4-3 of the desired parcel completed and signed by an independent, 4-4 certified real estate appraiser with not less than five years 4-5 experience. 4-6 Sec. 55.53. RULING BY COORDINATING BOARD. (a) Not later 4-7 than the 90th day after the date the Texas Higher Education 4-8 Coordinating Board receives a petition authorized by Section 55.51, 4-9 the board shall, in accordance with the rules and regulations 4-10 adopted under Section 61.027, grant or deny the petition. 4-11 (b) Before deciding whether to grant or deny the petition, 4-12 the Texas Higher Education Coordinating Board shall request, 4-13 receive, and consider a report from the comptroller indicating: 4-14 (1) whether the estimate of fair market value 4-15 presented in the petition is derived in a reasonable and 4-16 professional manner; 4-17 (2) whether the owner of the real estate currently 4-18 owes any outstanding taxes collected or administered by the 4-19 comptroller; and 4-20 (3) whether the owner of the real estate qualifies for 4-21 the tax credit under Sections 55.51(b)(1) and (2). 4-22 (c) The Texas Higher Education Coordinating Board shall 4-23 issue a written notice of its ruling on a petition authorized by 4-24 Section 55.51 not later than the fifth day after the date of the 4-25 ruling and deliver its decision to the petitioning institution and 5-1 to the comptroller. 5-2 Sec. 55.54. ISSUANCE OF TAX CREDIT. (a) Not later than the 5-3 10th day after the date the Texas Higher Education Coordinating 5-4 Board grants a petition authorized by Section 55.51, the 5-5 comptroller shall issue a written notice to the owner of the parcel 5-6 of real estate that a tax credit in an amount equal to 50 percent 5-7 of the fair market value reported on the petition has been granted 5-8 conditioned on the completion of the transfer of the parcel to the 5-9 petitioning institution on or before August 31, 1996. 5-10 (b) The owner may not claim a tax credit before the owner 5-11 files with the comptroller a statement signed by the property owner 5-12 and the petitioning institution that the property transfer has been 5-13 completed on or before August 31, 1996. 5-14 Sec. 55.55. EXPIRATION DATE. This subchapter expires 5-15 January 1, 1997. 5-16 SECTION 3. This Act takes effect September 1, 1995. 5-17 SECTION 4. The importance of this legislation and the 5-18 crowded condition of the calendars in both houses create an 5-19 emergency and an imperative public necessity that the 5-20 constitutional rule requiring bills to be read on three several 5-21 days in each house be suspended, and this rule is hereby suspended.