By Brimer, Oliveira, Swinford, McCall, H.B. No. 1200
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the enactment of the Texas Economic Development Act,
1-3 authorizing certain ad valorem tax incentives for economic
1-4 development, including authorizing school districts to provide tax
1-5 relief for certain corporations and limited liability companies
1-6 that make large investments that create jobs in this state, to
1-7 authorizing the imposition of certain impact fees, and to
1-8 continuing the Property Redevelopment and Tax Abatement Act.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Subtitle B, Title 3, Tax Code, is amended by
1-11 adding Chapter 313 to read as follows:
1-12 CHAPTER 313. TEXAS ECONOMIC DEVELOPMENT ACT
1-13 SUBCHAPTER A. GENERAL PROVISIONS
1-14 Sec. 313.001. SHORT TITLE. This chapter may be cited as the
1-15 Texas Economic Development Act.
1-16 Sec. 313.002. FINDINGS. The legislature finds that:
1-17 (1) many states have enacted aggressive economic
1-18 development laws designed to attract large employers, create jobs,
1-19 and strengthen their economies;
1-20 (2) the State of Texas has slipped in its national
1-21 ranking each year between 1993 and 2000 in terms of attracting
1-22 major new manufacturing facilities to this state;
1-23 (3) a significant portion of the Texas economy
1-24 continues to be based in the manufacturing industry, and the
1-25 continued growth and overall health of the manufacturing sector
2-1 serves the Texas economy well;
2-2 (4) without a vibrant, strong manufacturing sector,
2-3 other sectors of the economy, especially the state's service
2-4 sector, will also suffer adverse consequences; and
2-5 (5) the current property tax system of this state does
2-6 not favor capital-intensive businesses such as manufacturers.
2-7 Sec. 313.003. PURPOSES. The purposes of this chapter are
2-8 to:
2-9 (1) encourage large-scale capital investments in this
2-10 state, especially in school districts that have an ad valorem tax
2-11 base that is less than the statewide average ad valorem tax base of
2-12 school districts in this state;
2-13 (2) create new, high-paying jobs in this state;
2-14 (3) attract to this state new, large-scale businesses
2-15 that are exploring opportunities to locate in other states or other
2-16 countries;
2-17 (4) enable local government officials and economic
2-18 development professionals to compete with other states by
2-19 authorizing economic development incentives that meet or exceed
2-20 incentives being offered to prospective employers by other states
2-21 and to provide local officials with an effective means to attract
2-22 large-scale investment;
2-23 (5) strengthen and improve the overall performance of
2-24 the economy of this state;
2-25 (6) expand and enlarge the ad valorem property tax
2-26 base of this state; and
2-27 (7) enhance this state's economic development efforts
3-1 by providing school districts with an effective local economic
3-2 development option.
3-3 Sec. 313.004. LEGISLATIVE INTENT. It is the intent of the
3-4 legislature in enacting this chapter that:
3-5 (1) economic development decisions should occur at the
3-6 local level and be consistent with identifiable statewide economic
3-7 development goals;
3-8 (2) this chapter should not be construed or
3-9 interpreted to allow:
3-10 (A) property owners to pool investments to
3-11 create sufficiently large investments to qualify for an ad valorem
3-12 tax benefit or financial benefit provided by this chapter;
3-13 (B) an applicant for an ad valorem tax benefit
3-14 or financial benefit provided by this chapter to assert that jobs
3-15 will be eliminated if certain investments are not made if the
3-16 assertion is not true; or
3-17 (C) a sole proprietorship, partnership, or
3-18 limited liability partnership to receive an ad valorem tax benefit
3-19 or financial benefit provided by this chapter; and
3-20 (3) in implementing this chapter, school districts
3-21 should:
3-22 (A) strictly interpret the criteria and
3-23 selection guidelines provided by this chapter; and
3-24 (B) approve only those applications for an ad
3-25 valorem tax benefit or financial benefit provided by this chapter
3-26 that:
3-27 (i) enhance the local community;
4-1 (ii) improve the local public education
4-2 system;
4-3 (iii) create high-paying jobs; and
4-4 (iv) advance the economic development
4-5 goals of this state as identified by the Texas Strategic Economic
4-6 Development Planning Commission.
4-7 Sec. 313.005. DEFINITIONS. Unless this chapter defines a
4-8 word or phrase used in this chapter, Section 1.04 or any other
4-9 section of Title 1 or this title that defines the word or phrase or
4-10 ascribes a meaning to the word or phrase applies to the word or
4-11 phrase used in this chapter.
4-12 Sec. 313.006. IMPOSITION OF IMPACT FEE. (a) In this
4-13 section, "impact fee" means a charge or assessment imposed against
4-14 a qualified property, as defined by Section 313.021, in order to
4-15 generate revenue for funding or recouping the costs of capital
4-16 improvements or facility expansions for water, wastewater, or storm
4-17 water services or for roads necessitated by or attributable to
4-18 property that receives a limitation on appraised value under this
4-19 chapter.
4-20 (b) Notwithstanding any other law, including Chapter 395,
4-21 Local Government Code, a municipality or county may impose and
4-22 collect from the owner of a qualified property a reasonable impact
4-23 fee under this section to pay for the cost of providing
4-24 improvements associated with or attributable to property that
4-25 receives a limitation on appraised value under this chapter.
4-26 Sec. 313.007. EXPIRATION. Subchapters B, C, and D expire
4-27 December 31, 2007.
5-1 (Sections 313.008-313.020 reserved for expansion)
5-2 SUBCHAPTER B. LIMITATION ON APPRAISED VALUE OF CERTAIN
5-3 PROPERTY USED TO CREATE JOBS
5-4 Sec. 313.021. DEFINITIONS. In this subchapter:
5-5 (1) "Qualified investment" means:
5-6 (A) tangible personal property that is first
5-7 placed in service in this state during the applicable qualifying
5-8 time period that begins on or after January 1, 2002, and is
5-9 described as Section 1245 property by Section 1245(a), Internal
5-10 Revenue Code of 1986;
5-11 (B) tangible personal property that is first
5-12 placed in service in this state during the applicable qualifying
5-13 time period that begins on or after January 1, 2002, without regard
5-14 to whether the property is affixed to or incorporated into real
5-15 property, and that is used in connection with the manufacturing,
5-16 processing, or fabrication in a cleanroom environment of a
5-17 semiconductor product, without regard to whether the property is
5-18 actually located in the cleanroom environment, including:
5-19 (i) integrated systems, fixtures, and
5-20 piping;
5-21 (ii) all property necessary or adapted to
5-22 reduce contamination or to control airflow, temperature, humidity,
5-23 chemical purity, or other environmental conditions or manufacturing
5-24 tolerances; and
5-25 (iii) production equipment and machinery,
5-26 moveable cleanroom partitions, and cleanroom lighting; or
5-27 (C) a building or a permanent, nonremovable
6-1 component of a building that is built or constructed during the
6-2 applicable qualifying time period that begins on or after January
6-3 1, 2002, and that houses tangible personal property described by
6-4 Paragraph (A) or (B).
6-5 (2) "Qualified property" means:
6-6 (A) land:
6-7 (i) that is located in an area designated
6-8 as a reinvestment zone under Chapter 311 or 312 or as an enterprise
6-9 zone under Chapter 2303, Government Code;
6-10 (ii) on which a person proposes to
6-11 construct a new building or erect or affix a new improvement that
6-12 does not exist before the date the owner applies for a limitation
6-13 on appraised value under this subchapter;
6-14 (iii) that is not subject to a tax
6-15 abatement agreement entered into by a school district under Chapter
6-16 312; and
6-17 (iv) on which, in connection with the new
6-18 building or new improvement described by Subparagraph (ii), the
6-19 owner of the land proposes to:
6-20 (a) make a qualified investment in
6-21 an amount equal to at least the minimum amount required by Section
6-22 313.023; and
6-23 (b) create at least 25 new jobs, and
6-24 at least 80 percent of all the new jobs must be qualifying jobs;
6-25 (B) the new building or other new improvement
6-26 described by Paragraph (A)(ii); and
6-27 (C) tangible personal property that:
7-1 (i) is not subject to a tax abatement
7-2 agreement entered into by a school district under Chapter 312; and
7-3 (ii) except for equipment described in
7-4 Section 151.318(q), is first placed in service in the new building
7-5 or in or on the new improvement described by Paragraph (A)(ii), or
7-6 on the land on which that new building or new improvement is
7-7 located, if the personal property is ancillary and necessary to the
7-8 business conducted in that new building or in or on that new
7-9 improvement.
7-10 (3) "Qualifying job" means a permanent full-time job
7-11 that:
7-12 (A) requires at least 1,600 hours of work a
7-13 year;
7-14 (B) is not transferred from one area in this
7-15 state to another area in this state;
7-16 (C) is not created to replace a previous
7-17 employee;
7-18 (D) is covered by a group health benefit plan,
7-19 as defined by Section 481.151, Government Code, for which the
7-20 business offers to pay at least 80 percent of the premiums or other
7-21 charges assessed for employee-only coverage under the plan,
7-22 regardless of whether an employee may voluntarily waive the
7-23 coverage; and
7-24 (E) pays at least 110 percent of the county
7-25 average weekly wage for manufacturing jobs in the county where the
7-26 job is located.
7-27 (4) "Qualifying time period" means the first two tax
8-1 years that begin on or after the date a person's application for a
8-2 limitation on appraised value under this subchapter is approved.
8-3 (5) "County average weekly wage for manufacturing
8-4 jobs" means the average weekly wage in a county for manufacturing
8-5 jobs as computed by the Texas Workforce Commission.
8-6 Sec. 313.022. APPLICABILITY; CATEGORIZATION OF SCHOOL
8-7 DISTRICTS. (a) This subchapter applies to each school district in
8-8 this state other than a school district to which Subchapter C
8-9 applies.
8-10 (b) For purposes of determining the required minimum amount
8-11 of a qualified investment under Section 313.021(2)(A)(iv)(a), and
8-12 the minimum amount of a limitation on appraised value under Section
8-13 313.027(b), school districts to which this subchapter applies are
8-14 categorized according to the taxable value of property in the
8-15 district for the preceding tax year determined under Subchapter M,
8-16 Chapter 403, Government Code, as follows:
8-17 CATEGORY TAXABLE VALUE OF PROPERTY
8-18 I $10 billion or more
8-19 II $1 billion or more but less than $10 billion
8-20 III $500 million or more but less than $1 billion
8-21 IV $100 million or more but less than $500 million
8-22 V less than $100 million
8-23 Sec. 313.023. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
8-24 each category of school district established by Section 313.022,
8-25 the minimum amount of a qualified investment under Section
8-26 313.021(2)(A)(iv)(a) is as follows:
8-27 CATEGORY MINIMUM QUALIFIED INVESTMENT
9-1 I $100 million
9-2 II $80 million
9-3 III $60 million
9-4 IV $40 million
9-5 V $20 million
9-6 Sec. 313.024. ELIGIBLE PROPERTY. (a) This subchapter and
9-7 Subchapters C and D apply only to property owned by a corporation
9-8 or limited liability company to which Section 171.001 applies.
9-9 (b) To be eligible for a limitation on appraised value under
9-10 this subchapter, the corporation or limited liability company must
9-11 use the property in connection with:
9-12 (1) manufacturing;
9-13 (2) research and development; or
9-14 (3) renewable energy electric generation.
9-15 (c) For purposes of determining an applicant's eligibility
9-16 for a limitation under this subchapter:
9-17 (1) the land on which a building or component of a
9-18 building described by Section 313.021(1)(C) is located is not
9-19 considered a qualified investment;
9-20 (2) property that is leased under a capitalized lease
9-21 may be considered a qualified investment;
9-22 (3) property that is leased under an operating lease
9-23 may not be considered a qualified investment; and
9-24 (4) property that is owned by a person other than the
9-25 applicant and that is pooled or proposed to be pooled with property
9-26 owned by the applicant may not be included in determining the
9-27 amount of the applicant's qualifying investment.
10-1 (d) In this section:
10-2 (1) "Manufacturing" and "research and development"
10-3 have the meanings assigned by Section 171.751.
10-4 (2) "Renewable energy electric generation" means an
10-5 establishment primarily engaged in activities described in category
10-6 221119 of the 1997 North American Industry Classification System.
10-7 Sec. 313.025. APPLICATION; ACTION ON APPLICATION. (a) The
10-8 owner of qualified property may apply to the governing body of the
10-9 school district in which the property is located for a limitation
10-10 on the appraised value for school district maintenance and
10-11 operations ad valorem tax purposes of the person's qualified
10-12 property. An application must be made on the form prescribed by
10-13 the comptroller and include the information required by the
10-14 comptroller, and it must be accompanied by:
10-15 (1) the application fee established by the governing
10-16 body of the school district;
10-17 (2) information sufficient to show that the real and
10-18 personal property identified in the application as qualified
10-19 property meets the applicable criteria established by Section
10-20 313.021(2); and
10-21 (3) information relating to each applicable criterion
10-22 listed in Section 313.026.
10-23 (b) The governing body of a school district is not required
10-24 to consider an application for a limitation on appraised value that
10-25 is filed with the governing body under Subsection (a). If the
10-26 governing body of the school district does elect to consider an
10-27 application, the governing body shall engage a third person to
11-1 conduct an economic impact evaluation of the application on behalf
11-2 of the school district and approve or disapprove an application
11-3 before the 121st day after the date the application is filed,
11-4 unless an extension is agreed to by the governing body and the
11-5 applicant.
11-6 (c) In determining whether to grant an application, the
11-7 governing body of the school district is entitled to request and
11-8 receive assistance from:
11-9 (1) the comptroller;
11-10 (2) the Texas Department of Economic Development;
11-11 (3) the Council on Workforce and Economic
11-12 Competitiveness; and
11-13 (4) the Texas Workforce Commission.
11-14 (d) On receipt of an application under this section that the
11-15 governing body elects to consider, the school district shall
11-16 deliver one copy of the application to the comptroller. Before the
11-17 61st day after the date the copy of the application is received,
11-18 the comptroller, using the criteria listed in Section 313.026,
11-19 shall submit a recommendation to the governing body of the school
11-20 district as to whether the application should be approved or
11-21 disapproved.
11-22 (e) Before approving or disapproving an application under
11-23 this subchapter that the governing body elects to consider, the
11-24 governing body of the school district must make a written finding
11-25 as to each criterion listed in Section 313.026. The governing body
11-26 shall deliver a copy of those findings to the applicant.
11-27 (f) The governing body may approve an application only if
12-1 the governing body finds that the information in the application is
12-2 true and correct, finds that the applicant is eligible for the
12-3 limitation on the appraised value of the person's qualified
12-4 property, and determines that granting the application is in the
12-5 best interest of the school district and this state.
12-6 Sec. 313.026. ECONOMIC IMPACT EVALUATION. The economic
12-7 impact evaluation of the application must include the following:
12-8 (1) the recommendations of the comptroller;
12-9 (2) the relationship between the applicant's industry
12-10 and the types of qualifying jobs to be created by the applicant to
12-11 the long-term economic growth plans of this state as described in
12-12 the strategic plan for economic development submitted by the Texas
12-13 Strategic Economic Development Planning Commission under Section
12-14 481.033, Government Code, as that section existed before February
12-15 1, 1999;
12-16 (3) the relative level of the applicant's investment
12-17 per qualifying job to be created by the applicant;
12-18 (4) the wages, salaries, and benefits to be offered by
12-19 the applicant to qualifying job holders;
12-20 (5) the ability of the applicant to locate or relocate
12-21 in another state or another region of this state;
12-22 (6) the impact the added infrastructure will have on
12-23 the region, including:
12-24 (A) revenue gains that would be realized by the
12-25 school district; and
12-26 (B) subsequent economic effects on the local and
12-27 regional tax bases;
13-1 (7) the economic condition of the region of the state
13-2 at the time the person's application is being considered;
13-3 (8) the number of new facilities built or expanded in
13-4 the region during the two years preceding the date of the
13-5 application that were eligible to apply for a limitation on
13-6 appraised value under this subchapter; and
13-7 (9) the effect of the applicant's proposal, if
13-8 approved, on the number or size of the school district's
13-9 instructional facilities, as defined by Section 46.001, Education
13-10 Code.
13-11 Sec. 313.027. LIMITATION ON APPRAISED VALUE; AGREEMENT. (a)
13-12 If the person's application is approved by the governing body of
13-13 the school district, for each of the first eight tax years that
13-14 begin after the applicable qualifying time period, the appraised
13-15 value for school district maintenance and operations ad valorem tax
13-16 purposes of the person's qualified property as described in the
13-17 agreement between the person and the district entered into under
13-18 this section in the school district may not exceed the lesser of:
13-19 (1) the market value of the property; or
13-20 (2) subject to Subsection (b), the amount agreed to by
13-21 the governing body of the school district.
13-22 (b) The amount agreed to by the governing body of a school
13-23 district under Subsection (a)(2) must be an amount in accordance
13-24 with the following, according to the category established by
13-25 Section 313.022 to which the school district belongs:
13-26 CATEGORY MINIMUM AMOUNT OF LIMITATION
13-27 I $100 million
14-1 II $80 million
14-2 III $60 million
14-3 IV $40 million
14-4 V $20 million
14-5 (c) The limitation amounts listed in Subsection (b) are
14-6 minimum amounts. A school district, regardless of category, may
14-7 agree to a greater amount than those amounts.
14-8 (d) The governing body of the school district and the
14-9 property owner shall enter into a written agreement for the
14-10 implementation of the limitation on appraised value under this
14-11 subchapter on the owner's qualified property.
14-12 (e) The agreement must describe with specificity the
14-13 qualified investment that the person will make on or in connection
14-14 with the person's qualified property that is subject to the
14-15 limitation on appraised value under this subchapter. Other
14-16 property of the person that is not specifically described in the
14-17 agreement is not subject to the limitation unless the governing
14-18 body of the school district, by official action, provides that the
14-19 other property is subject to the limitation.
14-20 (f) In addition, the agreement:
14-21 (1) must incorporate each relevant provision of this
14-22 subchapter and, to the extent necessary, include provisions for the
14-23 protection of future school district revenues through the
14-24 adjustment of the minimum valuations, the payment of revenue
14-25 offsets, and other mechanisms agreed to by the property owner and
14-26 the school district;
14-27 (2) must require the property owner to maintain a
15-1 viable presence in the school district for at least three years
15-2 after the date the limitation on appraised value of the owner's
15-3 property expires;
15-4 (3) must provide for the termination of the agreement,
15-5 the recapture of ad valorem tax revenue lost as a result of the
15-6 agreement if the owner of the property fails to comply with the
15-7 terms of the agreement, and payment of a penalty or interest, or
15-8 both, on that recaptured ad valorem tax revenue;
15-9 (4) may specify any conditions the occurrence of which
15-10 will require the district and the property owner to renegotiate all
15-11 or any part of the agreement; and
15-12 (5) must specify the ad valorem tax years covered by
15-13 the agreement.
15-14 (g) When appraising a person's qualified property subject to
15-15 a limitation on appraised value under this section, the chief
15-16 appraiser shall determine the market value of the property and
15-17 include both the market value and the appropriate value under
15-18 Subsection (a) in the appraisal records.
15-19 Sec. 313.028. CERTAIN BUSINESS INFORMATION CONFIDENTIAL.
15-20 Information provided to a school district in connection with an
15-21 application for a limitation on appraised value under this
15-22 subchapter that describes the specific processes or business
15-23 activities to be conducted or the specific tangible personal
15-24 property to be located on real property covered by the application
15-25 is confidential and not subject to public disclosure unless the
15-26 governing body of the school district approves the application.
15-27 Information in the custody of a school district if the governing
16-1 body approves the application is not confidential under this
16-2 section.
16-3 Sec. 313.029. TAX RATE LIMITATION. If the governing body of
16-4 a school district grants an application for a limitation on
16-5 appraised value under this subchapter, for each of the first two
16-6 tax years that begins after the date the application is approved,
16-7 the governing body of the school district may not adopt a tax rate
16-8 that exceeds the school district's rollback tax rate under Section
16-9 26.08 for that year. If, in any tax year in which a restriction on
16-10 the school district's tax rate under this section is in effect, the
16-11 governing body approves a subsequent application for a limitation
16-12 on appraised value under this section, the restriction on the
16-13 school district's tax rate is extended until the first tax year
16-14 that begins after the second anniversary of the date the subsequent
16-15 application is approved.
16-16 Sec. 313.030. PROPERTY NOT ELIGIBLE FOR TAX ABATEMENT.
16-17 Property subject to a limitation on appraised value in a tax year
16-18 under this subchapter is not eligible for tax abatement by a school
16-19 district under Chapter 312 in that tax year.
16-20 Sec. 313.031. RULES AND FORMS; FEES. (a) The comptroller
16-21 shall:
16-22 (1) adopt rules and forms necessary for the
16-23 implementation and administration of this chapter, including rules
16-24 for determining whether a property owner's property qualifies as a
16-25 qualified investment under Section 313.021(1); and
16-26 (2) provide without charge one copy of the rules and
16-27 forms to any school district and to any person who states that the
17-1 person intends to apply for a limitation on appraised value under
17-2 this subchapter or a tax credit under Subchapter D.
17-3 (b) The governing body of a school district by official
17-4 action shall establish reasonable nonrefundable application fees to
17-5 be paid by property owners who apply to the district for a
17-6 limitation on the appraised value of the person's property under
17-7 this subchapter. The amount of an application fee must be
17-8 reasonable and may not exceed the estimated cost to the district of
17-9 processing and acting on an application, including the cost of the
17-10 economic impact evaluation required by Sections 313.025 and
17-11 313.026.
17-12 (Sections 313.032-313.050 reserved for expansion
17-13 SUBCHAPTER C. LIMITATION ON APPRAISED VALUE OF PROPERTY
17-14 IN CERTAIN RURAL SCHOOL DISTRICTS
17-15 Sec. 313.051. APPLICABILITY. (a) This subchapter applies
17-16 only to a school district that has territory in a county:
17-17 (1) that has a population of less than 50,000;
17-18 (2) that is not partially or wholly located in a
17-19 metropolitan statistical area; and
17-20 (3) in which, from 1990 to 2000, according to the
17-21 federal decennial census, the population:
17-22 (A) remained the same;
17-23 (B) decreased; or
17-24 (C) increased, but at a rate of less than 15
17-25 percent.
17-26 (b) The governing body of a school district to which this
17-27 subchapter applies may enter into an agreement in the same manner
18-1 as a school district to which Subchapter B applies may do so under
18-2 Subchapter B, subject to Sections 313.052-313.054. Except as
18-3 otherwise provided by this subchapter, the provisions of Subchapter
18-4 B apply to a school district to which this subchapter applies. In
18-5 this subchapter, "qualified property" means land on which the owner
18-6 of the land proposes to create at least 10 qualifying jobs.
18-7 Sec. 313.052. CATEGORIZATION OF SCHOOL DISTRICTS. For
18-8 purposes of determining the required minimum amount of a qualified
18-9 investment under Section 313.021(2)(A)(iv)(a) and the minimum
18-10 amount of a limitation on appraised value under this subchapter,
18-11 school districts to which this subchapter applies are categorized
18-12 according to the taxable value of industrial property in the
18-13 district for the preceding tax year determined under Subchapter M,
18-14 Chapter 403, Government Code, as follows:
18-15 CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
18-16 I $200 million or more
18-17 II $90 million or more but less than $200 million
18-18 III $1 million or more but less than $90 million
18-19 IV $100,000 or more but less than $1 million
18-20 V less than $100,000
18-21 Sec. 313.053. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
18-22 each category of school district established by Section 313.052,
18-23 the minimum amount of a qualified investment under Section
18-24 313.021(2)(A)(iv)(a) is as follows:
18-25 CATEGORY MINIMUM QUALIFIED INVESTMENT
18-26 I $30 million
18-27 II $20 million
19-1 III $10 million
19-2 IV $5 million
19-3 V $1 million
19-4 Sec. 313.054. LIMITATION ON APPRAISED VALUE. (a) For a
19-5 school district to which this subchapter applies, the amount agreed
19-6 to by the governing body of the district under Section
19-7 313.027(a)(2) must be an amount in accordance with the following,
19-8 according to the category established by Section 313.052 to which
19-9 the school district belongs:
19-10 CATEGORY MINIMUM AMOUNT OF LIMITATION
19-11 I $30 million
19-12 II $20 million
19-13 III $10 million
19-14 IV $5 million
19-15 V $1 million
19-16 (b) The limitation amounts listed in Subsection (a) are
19-17 minimum amounts. A school district, regardless of category, may
19-18 agree to a greater amount than those amounts.
19-19 (Sections 313.055-313.100 reserved for expansion
19-20 SUBCHAPTER D. SCHOOL TAX CREDITS
19-21 Sec. 313.101. DEFINITION. In this subchapter, "qualifying
19-22 time period" has the meaning assigned by Section 313.021.
19-23 Sec. 313.102. ELIGIBILITY FOR TAX CREDIT; AMOUNT OF CREDIT.
19-24 (a) In addition to the limitation on the appraised value of the
19-25 person's qualified property under Subchapter B or C, a person is
19-26 entitled to a tax credit from the school district that approved the
19-27 limitation in an amount equal to the amount of ad valorem taxes
20-1 paid to that school district that were imposed on the portion of
20-2 the appraised value of the qualified property that exceeds the
20-3 amount of the limitation agreed to by the governing body of the
20-4 school district under Section 313.027(a)(2) in each year in the
20-5 applicable qualifying time period.
20-6 (b) If the person relocates the person's business outside
20-7 the school district, the person is not entitled to the credit in or
20-8 after the year in which the relocation occurs.
20-9 Sec. 313.103. APPLICATION. An application for a tax credit
20-10 under this subchapter must be made to the governing body of the
20-11 school district to which the ad valorem taxes were paid. The
20-12 application must be:
20-13 (1) made on the form prescribed for that purpose by
20-14 the comptroller and verified by the applicant;
20-15 (2) accompanied by:
20-16 (A) a tax receipt from the collector of taxes
20-17 for the school district showing full payment of school district ad
20-18 valorem taxes on the qualified property for the applicable
20-19 qualifying time period; and
20-20 (B) any other document or information that the
20-21 comptroller or the governing body considers necessary for a
20-22 determination of the applicant's eligibility for the credit or the
20-23 amount of the credit; and
20-24 (3) filed before September 1 of the year immediately
20-25 following the applicable qualifying time period.
20-26 Sec. 313.104. ACTION ON APPLICATION; GRANT OF CREDIT.
20-27 Before the 90th day after the date the application for a tax credit
21-1 is filed, the governing body of the school district shall:
21-2 (1) determine the person's eligibility for a tax
21-3 credit under this subchapter; and
21-4 (2) if the person's application is approved, by order
21-5 or resolution direct the collector of taxes for the school
21-6 district:
21-7 (A) in each of the first eight tax years that
21-8 begin after the date the application is approved, to credit against
21-9 the taxes imposed on the qualified property by the district in that
21-10 year an amount equal to one-eighth of the total amount of tax
21-11 credit to which the person is entitled under Section 313.102,
21-12 except that the amount of a credit granted in any of those tax
21-13 years may not exceed 50 percent of the total amount of ad valorem
21-14 school taxes imposed on the qualified property by the school
21-15 district in that tax year; and
21-16 (B) in the first tax year that begins on or
21-17 after the date the person's eligibility for the limitation under
21-18 Subchapter B or C expires, to credit against the taxes imposed on
21-19 the qualified property by the district an amount equal to the
21-20 portion of the total amount of tax credit to which the person is
21-21 entitled under Section 313.102 that was not credited against the
21-22 person's taxes under Paragraph (A) in a tax year covered by
21-23 Paragraph (A), except that the amount of a tax credit granted under
21-24 this paragraph in any tax year may not exceed the total amount of
21-25 ad valorem school taxes imposed on the qualified property by the
21-26 school district in that tax year.
21-27 Sec. 313.105. REMEDY FOR ERRONEOUS CREDIT. (a) If the
22-1 comptroller and the governing body of a school district determine
22-2 that a person who received a tax credit under this subchapter for
22-3 any reason was not entitled to the credit received or was entitled
22-4 to a lesser amount of credit than the amount of the credit
22-5 received, an additional tax is imposed on the qualified property
22-6 equal to the full credit or the amount of the credit to which the
22-7 person was not entitled, as applicable, plus interest at an annual
22-8 rate of seven percent calculated from the date the credit was
22-9 issued.
22-10 (b) A tax lien attaches to the qualified property in favor
22-11 of the school district to secure payment by the person of the
22-12 additional tax and interest imposed by this section and any
22-13 penalties incurred. A person delinquent in the payment of an
22-14 additional tax under this section may not submit a subsequent
22-15 application or receive a tax credit under this subchapter in a
22-16 subsequent year.
22-17 (Sections 313.106-313.170 reserved for expansion
22-18 SUBCHAPTER E. AVAILABILITY OF TAX CREDIT AFTER PROGRAM
22-19 EXPIRES
22-20 Sec. 313.171. SAVING PROVISIONS. (a) A limitation on
22-21 appraised value approved under Subchapter B or C before the
22-22 expiration of that subchapter continues in effect according to that
22-23 subchapter as that subchapter existed immediately before its
22-24 expiration, and that law is continued in effect for purposes of the
22-25 limitation on appraised value.
22-26 (b) The expiration of Subchapter D does not affect a
22-27 property owner's entitlement to a tax credit granted under
23-1 Subchapter D if the property owner qualified for the tax credit
23-2 before the expiration of Subchapter D.
23-3 SECTION 2. Subchapter A, Chapter 23, Tax Code, is amended by
23-4 adding Section 23.03 to read as follows:
23-5 Sec. 23.03. COMPILATION OF LARGE PROPERTIES AND PROPERTIES
23-6 SUBJECT TO LIMITATION ON APPRAISED VALUE. Each year the chief
23-7 appraiser shall compile and send to the Texas Department of
23-8 Economic Development a list of properties in the appraisal district
23-9 that in that tax year:
23-10 (1) have a market value of $100 million or more; or
23-11 (2) are subject to a limitation on appraised value
23-12 under Chapter 313.
23-13 SECTION 3. Section 26.012(6), Tax Code, is amended to read as
23-14 follows:
23-15 (6) "Current total value" means the total taxable
23-16 value of property listed on the appraisal roll for the current
23-17 year, including all appraisal roll supplements and corrections as
23-18 of the date of the calculation, less the taxable value of property
23-19 exempted for the current tax year for the first time under Section
23-20 11.31, except that the current total value for a school district
23-21 excludes:
23-22 (A) the total value of homesteads that qualify
23-23 for a tax limitation as provided by Section 11.26; and
23-24 (B) new property value of property that is
23-25 subject to an agreement entered into under Chapter 313.
23-26 SECTION 4. Subchapter A, Chapter 312, Tax Code, is amended by
23-27 adding Section 312.0025 to read as follows:
24-1 Sec. 312.0025. DESIGNATION OF REINVESTMENT ZONE BY SCHOOL
24-2 DISTRICT. (a) Notwithstanding any other provision of this chapter
24-3 to the contrary, the governing body of a school district, in the
24-4 manner required for official action and for purposes of Subchapter
24-5 B or C, Chapter 313, may designate an area entirely within the
24-6 territory of the school district as a reinvestment zone if the
24-7 governing body finds that, as a result of the designation and the
24-8 granting of a limitation on appraised value under Subchapter B or
24-9 C, Chapter 313, for property located in the reinvestment zone, the
24-10 designation is reasonably likely to:
24-11 (1) contribute to the expansion of primary employment
24-12 in the reinvestment zone; or
24-13 (2) attract major investment in the reinvestment zone
24-14 that would:
24-15 (A) be a benefit to property in the reinvestment
24-16 zone and to the school district; and
24-17 (B) contribute to the economic development of
24-18 the region of this state in which the school district is located.
24-19 (b) The governing body of the school district may seek the
24-20 recommendation of the commissioners court of each county and the
24-21 governing body of each municipality that has territory in the
24-22 school district before designating an area as a reinvestment zone
24-23 under Subsection (a).
24-24 SECTION 5. Section 312.006, Tax Code, is amended to read as
24-25 follows:
24-26 Sec. 312.006. EXPIRATION DATE. If not continued in effect,
24-27 this chapter expires September 1, 2007 [2001].
25-1 SECTION 6. Subchapter E, Chapter 42, Education Code, is
25-2 amended by adding Section 42.2515 to read as follows:
25-3 Sec. 42.2515. ADDITIONAL STATE AID FOR AD VALOREM TAX
25-4 CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. (a) For each school
25-5 year, a school district, including a school district that is
25-6 otherwise ineligible for state aid under this chapter, is entitled
25-7 to state aid in an amount equal to the amount of all tax credits
25-8 credited against ad valorem taxes of the district in that year
25-9 under Subchapter D, Chapter 313, Tax Code.
25-10 (b) The commissioner may adopt rules to implement and
25-11 administer this section.
25-12 SECTION 7. Section 403.302(d), Government Code, is amended to
25-13 read as follows:
25-14 (d) For the purposes of this section, "taxable value" means
25-15 the market value of all taxable property less:
25-16 (1) the total dollar amount of any residence homestead
25-17 exemptions lawfully granted under Section 11.13(b) or (c), Tax
25-18 Code, in the year that is the subject of the study for each school
25-19 district;
25-20 (2) one-half of the total dollar amount of any
25-21 residence homestead exemptions granted under Section 11.13(n), Tax
25-22 Code, in the year that is the subject of the study for each school
25-23 district;
25-24 (3) the total dollar amount of any exemptions granted
25-25 before May 31, 1993, within a reinvestment zone under agreements
25-26 authorized by Chapter 312, Tax Code;
25-27 (4) subject to Subsection (e), the total dollar amount
26-1 of any captured appraised value of property that:
26-2 (A) is within a reinvestment zone created on or
26-3 before May 31, 1999, or is proposed to be included within the
26-4 boundaries of a reinvestment zone as the boundaries of the zone and
26-5 the proposed portion of tax increment paid into the tax increment
26-6 fund by a school district are described in a written notification
26-7 provided by the municipality or the board of directors of the zone
26-8 to the governing bodies of the other taxing units in the manner
26-9 provided by Section 311.003(e), Tax Code, before May 31, 1999, and
26-10 within the boundaries of the zone as those boundaries existed on
26-11 September 1, 1999, including subsequent improvements to the
26-12 property regardless of when made;
26-13 (B) generates taxes paid into a tax increment
26-14 fund created under Chapter 311, Tax Code, under a reinvestment zone
26-15 financing plan approved under Section 311.011(d), Tax Code, on or
26-16 before September 1, 1999; and
26-17 (C) is eligible for tax increment financing
26-18 under Chapter 311, Tax Code;
26-19 (5) the total dollar amount of any exemptions granted
26-20 under Section 11.251, Tax Code;
26-21 (6) the difference between the comptroller's estimate
26-22 of the market value and the productivity value of land that
26-23 qualifies for appraisal on the basis of its productive capacity,
26-24 except that the productivity value estimated by the comptroller may
26-25 not exceed the fair market value of the land;
26-26 (7) the portion of the appraised value of residence
26-27 homesteads of the elderly on which school district taxes are not
27-1 imposed in the year that is the subject of the study, calculated as
27-2 if the residence homesteads were appraised at the full value
27-3 required by law;
27-4 (8) a portion of the market value of property not
27-5 otherwise fully taxable by the district at market value because of:
27-6 (A) action required by statute or the
27-7 constitution of this state that, if the tax rate adopted by the
27-8 district is applied to it, produces an amount equal to the
27-9 difference between the tax that the district would have imposed on
27-10 the property if the property were fully taxable at market value and
27-11 the tax that the district is actually authorized to impose on the
27-12 property, if this subsection does not otherwise require that
27-13 portion to be deducted; or
27-14 (B) action taken by the district under
27-15 Subchapter B or C, Chapter 313, Tax Code;
27-16 (9) the market value of all tangible personal
27-17 property, other than manufactured homes, owned by a family or
27-18 individual and not held or used for the production of income;
27-19 (10) the appraised value of property the collection of
27-20 delinquent taxes on which is deferred under Section 33.06, Tax
27-21 Code;
27-22 (11) the portion of the appraised value of property
27-23 the collection of delinquent taxes on which is deferred under
27-24 Section 33.065, Tax Code; and
27-25 (12) the amount by which the market value of a
27-26 residence homestead to which Section 23.23, Tax Code, applies
27-27 exceeds the appraised value of that property as calculated under
28-1 that section.
28-2 SECTION 8. Section 481.0044, Government Code, is amended by
28-3 adding Subsections (e) and (f) to read as follows:
28-4 (e) In addition to the information required by Subsection
28-5 (d), the governing board shall include in the report under that
28-6 subsection:
28-7 (1) a listing of the properties in this state that are
28-8 compiled and reported to the department under Section 23.03, Tax
28-9 Code;
28-10 (2) a listing of the school districts in this state,
28-11 classified according to the categories established by Sections
28-12 313.022 and 313.052, Tax Code;
28-13 (3) a listing of prospective projects identified by
28-14 the business development division of the department that proposed
28-15 to invest at least $100 million in this state, including
28-16 prospective projects that worked with the department or of which
28-17 the department was aware but that located in another state or
28-18 country;
28-19 (4) information identifying the other state or country
28-20 in which a prospective project located and stating the primary
28-21 reason identified by the department that the prospective project
28-22 did not locate in this state; and
28-23 (5) an assessment as to the effectiveness of the
28-24 incentives provided by Chapter 313, Tax Code, accompanied by
28-25 information on the number of agreements entered into by school
28-26 districts under that chapter during the preceding biennium, a
28-27 description of each project covered by an agreement, and the
29-1 details of the agreement.
29-2 (f) The comptroller shall assist the governing board and the
29-3 department in complying with Subsection (e).
29-4 SECTION 9. Subchapter K, Chapter 481, Government Code, is
29-5 amended by adding Section 481.168 to read as follows:
29-6 Sec. 481.168. ANNUAL REPORT OF TAX INCENTIVE LAWS AND
29-7 ECONOMIC DEVELOPMENT LAWS OF OTHER STATES. (a) The attorney
29-8 general, the comptroller, the Texas Department of Economic
29-9 Development, and the Council on Workforce and Economic
29-10 Competitiveness shall:
29-11 (1) conduct a survey of tax incentive laws and
29-12 economic development laws enacted in other states since 1990; and
29-13 (2) deliver to the governor, the lieutenant governor,
29-14 and the speaker of the house of representatives a joint report of
29-15 the results of the survey.
29-16 (b) The initial joint report required by this section shall
29-17 be delivered before December 31, 2002. An update of the joint
29-18 report shall be delivered before December 31 of each subsequent
29-19 year.
29-20 (c) Any interested person, including a trade association,
29-21 may provide information the person considers useful or relevant to
29-22 the survey or the joint report.
29-23 (d) Any agency of this state, on request, shall assist in
29-24 conducting the survey or in preparing the initial joint report or
29-25 an update of the joint report.
29-26 (e) The initial and each update of the joint report shall
29-27 include recommendations for legislative action.
30-1 SECTION 10. Section 2303.507, Government Code, is amended to
30-2 read as follows:
30-3 Sec. 2303.507. TAX INCREMENT FINANCING AND ABATEMENT;
30-4 LIMITATIONS ON APPRAISED VALUE. Designation of an area as an
30-5 enterprise zone is also designation of the area as a reinvestment
30-6 zone for:
30-7 (1) tax increment financing under Chapter 311, Tax
30-8 Code; [and]
30-9 (2) tax abatement under Chapter 312, Tax Code; and
30-10 (3) limitations on appraised value under Chapter 313,
30-11 Tax Code.
30-12 SECTION 11. (a) Except as provided by Subsection (b) of this
30-13 section, this Act takes effect January 1, 2002.
30-14 (b) Section 312.006, Tax Code, as amended by this Act, takes
30-15 effect September 1, 2001.