1-1 By: Gallegos S.B. No. 1658
1-2 (In the Senate - Filed April 19, 1995; April 19, 1995, read
1-3 first time and referred to Committee on Finance; May 9, 1995,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 8, Nays 1; May 9, 1995, sent to printer.)
1-6 COMMITTEE SUBSTITUTE FOR S.B. No. 1658 By: Ellis
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to tax credits for real property contributed to
1-10 institutions of higher education.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subchapter C, Chapter 111, Tax Code, is amended
1-13 by adding Section 111.110 to read as follows:
1-14 Sec. 111.110. TAX CREDIT FOR REAL PROPERTY CONTRIBUTED TO AN
1-15 INSTITUTION OF HIGHER EDUCATION. (a) Subject to the provisions of
1-16 Subchapter D, Chapter 55, Education Code, the comptroller shall
1-17 issue a credit to be used by a taxpayer who qualifies for the
1-18 credit under that subchapter against the payment of a tax imposed
1-19 on the taxpayer:
1-20 (1) for the franchise tax under Chapter 171; or
1-21 (2) if the taxpayer holds a direct payment permit for
1-22 the sales and use tax under Chapter 151, for that tax.
1-23 (b) The credit applies to a tax originally due on or after
1-24 the date the credit is issued but not later than the end of the
1-25 20th calendar year following the calendar year in which the credit
1-26 was issued.
1-27 (c) A taxpayer may not claim a credit issued under this
1-28 section in a calendar year in an amount greater than five percent
1-29 of the total credit issued to that taxpayer.
1-30 (d) A taxpayer shall include with a return or report showing
1-31 an amount of tax due against which a taxpayer claims a credit under
1-32 this section, a statement containing the following information:
1-33 (1) the original amount of the credit and its date of
1-34 issue;
1-35 (2) the total amount of the credit previously claimed
1-36 by the taxpayer;
1-37 (3) the amount of credit claimed on the attached
1-38 return;
1-39 (4) the remaining unused credit amount; and
1-40 (5) the calendar year in which the credit expires.
1-41 (e) The comptroller may recover an amount erroneously
1-42 claimed as a credit in a jeopardy or deficiency determination
1-43 issued before the fourth anniversary of the date on which the
1-44 erroneous claim is filed.
1-45 SECTION 2. Chapter 55, Education Code, is amended by adding
1-46 Subchapter D to read as follows:
1-47 SUBCHAPTER D. TAX CREDIT FOR CONTRIBUTED REAL PROPERTY
1-48 Sec. 55.51. PETITION FOR TAX CREDIT; QUALIFICATIONS.
1-49 (a) If the governing board of an institution determines that the
1-50 funds to acquire a parcel of real estate may not be provided
1-51 through the issuance of revenue bonds under this chapter, the
1-52 governing board may petition the Texas Higher Education
1-53 Coordinating Board, in accordance with the rules and regulations
1-54 adopted under Section 61.027, for the issuance of a tax credit to
1-55 the owner of the real estate in the amount provided by this
1-56 subchapter in exchange for the owner's transfer of the parcel of
1-57 real estate to the institution.
1-58 (b) A taxpayer may qualify for a tax credit under this
1-59 subchapter only if:
1-60 (1) the parcel of real estate that is the subject of
1-61 the petition is located in a county with a population of more than
1-62 2,500,000;
1-63 (2) the institution seeking ownership of the parcel
1-64 has more than 29,000 students enrolled or registered during its
1-65 regular term at a facility of the institution located in a county
1-66 with a population of more than 2,500,000; and
1-67 (3) the parcel of real estate owned by the taxpayer is
1-68 transferred to the institution on or before August 31, 1996.
2-1 Sec. 55.52. TAX CREDIT PETITION. (a) In the petition
2-2 before the Texas Higher Education Coordinating Board authorized by
2-3 Section 55.51, the governing board shall:
2-4 (1) show that the desired parcel has been included in
2-5 the most recent campus facilities plan or similar master plan
2-6 adopted by the governing board as a property proposed or targeted
2-7 for acquisition;
2-8 (2) show that the desired parcel is being offered or
2-9 proposed for sale on the open market;
2-10 (3) provide an estimate of the current fair market
2-11 value of the desired parcel; and
2-12 (4) show the basis for the governing board's
2-13 determination that revenue bond funding may not be available.
2-14 (b) The petition must include a fair market valuation study
2-15 of the desired parcel completed and signed by an independent,
2-16 certified real estate appraiser with not less than five years
2-17 experience.
2-18 Sec. 55.53. RULING BY COORDINATING BOARD. (a) Not later
2-19 than the 90th day after the date the Texas Higher Education
2-20 Coordinating Board receives a petition authorized by Section 55.51,
2-21 the board shall, in accordance with the rules and regulations
2-22 adopted under Section 61.027, grant or deny the petition.
2-23 (b) Before deciding whether to grant or deny the petition,
2-24 the Texas Higher Education Coordinating Board shall request,
2-25 receive, and consider a report from the comptroller indicating:
2-26 (1) whether the estimate of fair market value
2-27 presented in the petition is derived in a reasonable and
2-28 professional manner;
2-29 (2) whether the owner of the real estate currently
2-30 owes any outstanding taxes collected or administered by the
2-31 comptroller; and
2-32 (3) whether the owner of the real estate qualifies for
2-33 the tax credit under Sections 55.51(b)(1) and (2).
2-34 (c) The Texas Higher Education Coordinating Board shall
2-35 issue a written notice of its ruling on a petition authorized by
2-36 Section 55.51 not later than the fifth day after the date of the
2-37 ruling and deliver its decision to the petitioning institution and
2-38 to the comptroller.
2-39 Sec. 55.54. ISSUANCE OF TAX CREDIT. (a) Not later than the
2-40 10th day after the date the Texas Higher Education Coordinating
2-41 Board grants a petition authorized by Section 55.51, the
2-42 comptroller shall issue a written notice to the owner of the parcel
2-43 of real estate that a tax credit in an amount equal to 50 percent
2-44 of the fair market value reported on the petition has been granted
2-45 conditioned on the completion of the transfer of the parcel to the
2-46 petitioning institution on or before August 31, 1996.
2-47 (b) The owner may not claim a tax credit before the owner
2-48 files with the comptroller a statement signed by the property owner
2-49 and the petitioning institution that the property transfer has been
2-50 completed on or before August 31, 1996.
2-51 Sec. 55.55. EXPIRATION DATE. This subchapter expires
2-52 January 1, 1997.
2-53 SECTION 3. This Act takes effect September 1, 1995.
2-54 SECTION 4. The importance of this legislation and the
2-55 crowded condition of the calendars in both houses create an
2-56 emergency and an imperative public necessity that the
2-57 constitutional rule requiring bills to be read on three several
2-58 days in each house be suspended, and this rule is hereby suspended.
2-59 * * * * *