1-1 By: Brimer, et al. (Senate Sponsor - Harris) H.B. No. 1200
1-2 (In the Senate - Received from the House May 4, 2001;
1-3 May 7, 2001, read first time and referred to Committee on Finance;
1-4 May 9, 2001, reported favorably, as amended, by the following vote:
1-5 Yeas 11, Nays 1; May 9, 2001, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Harris
1-7 Amend HB 1200 as follows:
1-8 (1) Page 12, between lines 12 and 13, insert a new SECTION 8 to
1-9 read as follows and renumber the subsequent SECTIONS accordingly:
1-10 SECTION 8. Section 42.302, Education Code, is amended by
1-11 adding subsection (d)to read as follows:
1-12 (d) For purposes of this section, school district taxes for
1-13 which credit is granted under Subchapter D, Chapter 313, Tax Code,
1-14 are considered taxes collected by the school district as if the
1-15 taxes were paid when the credit for the taxes was granted.
1-16 (2) Page 9, Line 36, strike "each of the first eight" and
1-17 substitute "the second and subsequent six".
1-18 (3) Page 9, Line 39, after the words "equal to" strike
1-19 "one-eight" and insert "one-seventh".
1-20 (4) Page 3, line 68 between "except for" and "equipment", insert
1-21 "new".
1-22 (5) Page 3, lines 61 and 62, strike ",and at least 80 percent of
1-23 all the new jobs must be qualifying jobs".
1-24 (6) Page 5, between lines 8 and 9 add a new subsection (c) to
1-25 read as follows and re-letter subsequent subsections accordingly:
1-26 (c) To be eligible for a limitation on appraised value under
1-27 this subchapter, at least 80% of all the new jobs created by the
1-28 property owner must be qualified jobs as defined by Section 313.021
1-29 (3).
1-30 (7) On Page 8, lines 21 thru 23, strike "In this subchapter,
1-31 "qualified property" means land on which the owner of the land
1-32 proposes to create at least 10 qualifying jobs." and substitute
1-33 "For purposes of this subchapter, a property owner is required to
1-34 create only at least 10 new jobs on the owner's qualified property.
1-35 At least 80 percent of all the new jobs created must be qualifying
1-36 jobs as defined by Section 313.021 (3)."
1-37 A BILL TO BE ENTITLED
1-38 AN ACT
1-39 relating to the enactment of the Texas Economic Development Act,
1-40 authorizing certain ad valorem tax incentives for economic
1-41 development, including authorizing school districts to provide tax
1-42 relief for certain corporations and limited liability companies
1-43 that make large investments that create jobs in this state, to
1-44 authorizing the imposition of certain impact fees, and to
1-45 continuing the Property Redevelopment and Tax Abatement Act.
1-46 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-47 SECTION 1. Subtitle B, Title 3, Tax Code, is amended by
1-48 adding Chapter 313 to read as follows:
1-49 CHAPTER 313. TEXAS ECONOMIC DEVELOPMENT ACT
1-50 SUBCHAPTER A. GENERAL PROVISIONS
1-51 Sec. 313.001. SHORT TITLE. This chapter may be cited as the
1-52 Texas Economic Development Act.
1-53 Sec. 313.002. FINDINGS. The legislature finds that:
1-54 (1) many states have enacted aggressive economic
1-55 development laws designed to attract large employers, create jobs,
1-56 and strengthen their economies;
1-57 (2) the State of Texas has slipped in its national
1-58 ranking each year between 1993 and 2000 in terms of attracting
1-59 major new manufacturing facilities to this state;
1-60 (3) a significant portion of the Texas economy
1-61 continues to be based in the manufacturing industry, and the
1-62 continued growth and overall health of the manufacturing sector
1-63 serves the Texas economy well;
2-1 (4) without a vibrant, strong manufacturing sector,
2-2 other sectors of the economy, especially the state's service
2-3 sector, will also suffer adverse consequences; and
2-4 (5) the current property tax system of this state does
2-5 not favor capital-intensive businesses such as manufacturers.
2-6 Sec. 313.003. PURPOSES. The purposes of this chapter are
2-7 to:
2-8 (1) encourage large-scale capital investments in this
2-9 state, especially in school districts that have an ad valorem tax
2-10 base that is less than the statewide average ad valorem tax base of
2-11 school districts in this state;
2-12 (2) create new, high-paying jobs in this state;
2-13 (3) attract to this state new, large-scale businesses
2-14 that are exploring opportunities to locate in other states or other
2-15 countries;
2-16 (4) enable local government officials and economic
2-17 development professionals to compete with other states by
2-18 authorizing economic development incentives that meet or exceed
2-19 incentives being offered to prospective employers by other states
2-20 and to provide local officials with an effective means to attract
2-21 large-scale investment;
2-22 (5) strengthen and improve the overall performance of
2-23 the economy of this state;
2-24 (6) expand and enlarge the ad valorem property tax
2-25 base of this state; and
2-26 (7) enhance this state's economic development efforts
2-27 by providing school districts with an effective local economic
2-28 development option.
2-29 Sec. 313.004. LEGISLATIVE INTENT. It is the intent of the
2-30 legislature in enacting this chapter that:
2-31 (1) economic development decisions should occur at the
2-32 local level and be consistent with identifiable statewide economic
2-33 development goals;
2-34 (2) this chapter should not be construed or
2-35 interpreted to allow:
2-36 (A) property owners to pool investments to
2-37 create sufficiently large investments to qualify for an ad valorem
2-38 tax benefit or financial benefit provided by this chapter;
2-39 (B) an applicant for an ad valorem tax benefit
2-40 or financial benefit provided by this chapter to assert that jobs
2-41 will be eliminated if certain investments are not made if the
2-42 assertion is not true; or
2-43 (C) a sole proprietorship, partnership, or
2-44 limited liability partnership to receive an ad valorem tax benefit
2-45 or financial benefit provided by this chapter; and
2-46 (3) in implementing this chapter, school districts
2-47 should:
2-48 (A) strictly interpret the criteria and
2-49 selection guidelines provided by this chapter; and
2-50 (B) approve only those applications for an ad
2-51 valorem tax benefit or financial benefit provided by this chapter
2-52 that:
2-53 (i) enhance the local community;
2-54 (ii) improve the local public education
2-55 system;
2-56 (iii) create high-paying jobs; and
2-57 (iv) advance the economic development
2-58 goals of this state as identified by the Texas Strategic Economic
2-59 Development Planning Commission.
2-60 Sec. 313.005. DEFINITIONS. Unless this chapter defines a
2-61 word or phrase used in this chapter, Section 1.04 or any other
2-62 section of Title 1 or this title that defines the word or phrase or
2-63 ascribes a meaning to the word or phrase applies to the word or
2-64 phrase used in this chapter.
2-65 Sec. 313.006. IMPOSITION OF IMPACT FEE. (a) In this
2-66 section, "impact fee" means a charge or assessment imposed against
2-67 a qualified property, as defined by Section 313.021, in order to
2-68 generate revenue for funding or recouping the costs of capital
2-69 improvements or facility expansions for water, wastewater, or storm
3-1 water services or for roads necessitated by or attributable to
3-2 property that receives a limitation on appraised value under this
3-3 chapter.
3-4 (b) Notwithstanding any other law, including Chapter 395,
3-5 Local Government Code, a municipality or county may impose and
3-6 collect from the owner of a qualified property a reasonable impact
3-7 fee under this section to pay for the cost of providing
3-8 improvements associated with or attributable to property that
3-9 receives a limitation on appraised value under this chapter.
3-10 Sec. 313.007. EXPIRATION. Subchapters B, C, and D expire
3-11 December 31, 2007.
3-12 (Sections 313.008-313.020 reserved for expansion)
3-13 SUBCHAPTER B. LIMITATION ON APPRAISED VALUE OF CERTAIN
3-14 PROPERTY USED TO CREATE JOBS
3-15 Sec. 313.021. DEFINITIONS. In this subchapter:
3-16 (1) "Qualified investment" means:
3-17 (A) tangible personal property that is first
3-18 placed in service in this state during the applicable qualifying
3-19 time period that begins on or after January 1, 2002, and is
3-20 described as Section 1245 property by Section 1245(a), Internal
3-21 Revenue Code of 1986;
3-22 (B) tangible personal property that is first
3-23 placed in service in this state during the applicable qualifying
3-24 time period that begins on or after January 1, 2002, without regard
3-25 to whether the property is affixed to or incorporated into real
3-26 property, and that is used in connection with the manufacturing,
3-27 processing, or fabrication in a cleanroom environment of a
3-28 semiconductor product, without regard to whether the property is
3-29 actually located in the cleanroom environment, including:
3-30 (i) integrated systems, fixtures, and
3-31 piping;
3-32 (ii) all property necessary or adapted to
3-33 reduce contamination or to control airflow, temperature, humidity,
3-34 chemical purity, or other environmental conditions or manufacturing
3-35 tolerances; and
3-36 (iii) production equipment and machinery,
3-37 moveable cleanroom partitions, and cleanroom lighting; or
3-38 (C) a building or a permanent, nonremovable
3-39 component of a building that is built or constructed during the
3-40 applicable qualifying time period that begins on or after January
3-41 1, 2002, and that houses tangible personal property described by
3-42 Paragraph (A) or (B).
3-43 (2) "Qualified property" means:
3-44 (A) land:
3-45 (i) that is located in an area designated
3-46 as a reinvestment zone under Chapter 311 or 312 or as an enterprise
3-47 zone under Chapter 2303, Government Code;
3-48 (ii) on which a person proposes to
3-49 construct a new building or erect or affix a new improvement that
3-50 does not exist before the date the owner applies for a limitation
3-51 on appraised value under this subchapter;
3-52 (iii) that is not subject to a tax
3-53 abatement agreement entered into by a school district under Chapter
3-54 312; and
3-55 (iv) on which, in connection with the new
3-56 building or new improvement described by Subparagraph (ii), the
3-57 owner of the land proposes to:
3-58 (a) make a qualified investment in
3-59 an amount equal to at least the minimum amount required by Section
3-60 313.023; and
3-61 (b) create at least 25 new jobs, and
3-62 at least 80 percent of all the new jobs must be qualifying jobs;
3-63 (B) the new building or other new improvement
3-64 described by Paragraph (A)(ii); and
3-65 (C) tangible personal property that:
3-66 (i) is not subject to a tax abatement
3-67 agreement entered into by a school district under Chapter 312; and
3-68 (ii) except for equipment described in
3-69 Section 151.318(q), is first placed in service in the new building
4-1 or in or on the new improvement described by Paragraph (A)(ii), or
4-2 on the land on which that new building or new improvement is
4-3 located, if the personal property is ancillary and necessary to the
4-4 business conducted in that new building or in or on that new
4-5 improvement.
4-6 (3) "Qualifying job" means a permanent full-time job
4-7 that:
4-8 (A) requires at least 1,600 hours of work a
4-9 year;
4-10 (B) is not transferred from one area in this
4-11 state to another area in this state;
4-12 (C) is not created to replace a previous
4-13 employee;
4-14 (D) is covered by a group health benefit plan,
4-15 as defined by Section 481.151, Government Code, for which the
4-16 business offers to pay at least 80 percent of the premiums or other
4-17 charges assessed for employee-only coverage under the plan,
4-18 regardless of whether an employee may voluntarily waive the
4-19 coverage; and
4-20 (E) pays at least 110 percent of the county
4-21 average weekly wage for manufacturing jobs in the county where the
4-22 job is located.
4-23 (4) "Qualifying time period" means the first two tax
4-24 years that begin on or after the date a person's application for a
4-25 limitation on appraised value under this subchapter is approved.
4-26 (5) "County average weekly wage for manufacturing
4-27 jobs" means the average weekly wage in a county for manufacturing
4-28 jobs as computed by the Texas Workforce Commission.
4-29 Sec. 313.022. APPLICABILITY; CATEGORIZATION OF SCHOOL
4-30 DISTRICTS. (a) This subchapter applies to each school district in
4-31 this state other than a school district to which Subchapter C
4-32 applies.
4-33 (b) For purposes of determining the required minimum amount
4-34 of a qualified investment under Section 313.021(2)(A)(iv)(a), and
4-35 the minimum amount of a limitation on appraised value under Section
4-36 313.027(b), school districts to which this subchapter applies are
4-37 categorized according to the taxable value of property in the
4-38 district for the preceding tax year determined under Subchapter M,
4-39 Chapter 403, Government Code, as follows:
4-40 CATEGORY TAXABLE VALUE OF PROPERTY
4-41 I $10 billion or more
4-42 II $1 billion or more but less than $10 billion
4-43 III $500 million or more but less than $1 billion
4-44 IV $100 million or more but less than $500 million
4-45 V less than $100 million
4-46 Sec. 313.023. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
4-47 each category of school district established by Section 313.022,
4-48 the minimum amount of a qualified investment under Section
4-49 313.021(2)(A)(iv)(a) is as follows:
4-50 CATEGORY MINIMUM QUALIFIED INVESTMENT
4-51 I $100 million
4-52 II $80 million
4-53 III $60 million
4-54 IV $40 million
4-55 V $20 million
4-56 Sec. 313.024. ELIGIBLE PROPERTY. (a) This subchapter and
4-57 Subchapters C and D apply only to property owned by a corporation
4-58 or limited liability company to which Section 171.001 applies.
4-59 (b) To be eligible for a limitation on appraised value under
4-60 this subchapter, the corporation or limited liability company must
4-61 use the property in connection with:
4-62 (1) manufacturing;
4-63 (2) research and development; or
4-64 (3) renewable energy electric generation.
4-65 (c) For purposes of determining an applicant's eligibility
4-66 for a limitation under this subchapter:
4-67 (1) the land on which a building or component of a
4-68 building described by Section 313.021(1)(C) is located is not
4-69 considered a qualified investment;
5-1 (2) property that is leased under a capitalized lease
5-2 may be considered a qualified investment;
5-3 (3) property that is leased under an operating lease
5-4 may not be considered a qualified investment; and
5-5 (4) property that is owned by a person other than the
5-6 applicant and that is pooled or proposed to be pooled with property
5-7 owned by the applicant may not be included in determining the
5-8 amount of the applicant's qualifying investment.
5-9 (d) In this section:
5-10 (1) "Manufacturing" and "research and development"
5-11 have the meanings assigned by Section 171.751.
5-12 (2) "Renewable energy electric generation" means an
5-13 establishment primarily engaged in activities described in category
5-14 221119 of the 1997 North American Industry Classification System.
5-15 Sec. 313.025. APPLICATION; ACTION ON APPLICATION. (a) The
5-16 owner of qualified property may apply to the governing body of the
5-17 school district in which the property is located for a limitation
5-18 on the appraised value for school district maintenance and
5-19 operations ad valorem tax purposes of the person's qualified
5-20 property. An application must be made on the form prescribed by
5-21 the comptroller and include the information required by the
5-22 comptroller, and it must be accompanied by:
5-23 (1) the application fee established by the governing
5-24 body of the school district;
5-25 (2) information sufficient to show that the real and
5-26 personal property identified in the application as qualified
5-27 property meets the applicable criteria established by Section
5-28 313.021(2); and
5-29 (3) information relating to each applicable criterion
5-30 listed in Section 313.026.
5-31 (b) The governing body of a school district is not required
5-32 to consider an application for a limitation on appraised value that
5-33 is filed with the governing body under Subsection (a). If the
5-34 governing body of the school district does elect to consider an
5-35 application, the governing body shall engage a third person to
5-36 conduct an economic impact evaluation of the application on behalf
5-37 of the school district and approve or disapprove an application
5-38 before the 121st day after the date the application is filed,
5-39 unless an extension is agreed to by the governing body and the
5-40 applicant.
5-41 (c) In determining whether to grant an application, the
5-42 governing body of the school district is entitled to request and
5-43 receive assistance from:
5-44 (1) the comptroller;
5-45 (2) the Texas Department of Economic Development;
5-46 (3) the Council on Workforce and Economic
5-47 Competitiveness; and
5-48 (4) the Texas Workforce Commission.
5-49 (d) On receipt of an application under this section that the
5-50 governing body elects to consider, the school district shall
5-51 deliver one copy of the application to the comptroller. Before the
5-52 61st day after the date the copy of the application is received,
5-53 the comptroller, using the criteria listed in Section 313.026,
5-54 shall submit a recommendation to the governing body of the school
5-55 district as to whether the application should be approved or
5-56 disapproved.
5-57 (e) Before approving or disapproving an application under
5-58 this subchapter that the governing body elects to consider, the
5-59 governing body of the school district must make a written finding
5-60 as to each criterion listed in Section 313.026. The governing body
5-61 shall deliver a copy of those findings to the applicant.
5-62 (f) The governing body may approve an application only if
5-63 the governing body finds that the information in the application is
5-64 true and correct, finds that the applicant is eligible for the
5-65 limitation on the appraised value of the person's qualified
5-66 property, and determines that granting the application is in the
5-67 best interest of the school district and this state.
5-68 Sec. 313.026. ECONOMIC IMPACT EVALUATION. The economic
5-69 impact evaluation of the application must include the following:
6-1 (1) the recommendations of the comptroller;
6-2 (2) the relationship between the applicant's industry
6-3 and the types of qualifying jobs to be created by the applicant to
6-4 the long-term economic growth plans of this state as described in
6-5 the strategic plan for economic development submitted by the Texas
6-6 Strategic Economic Development Planning Commission under Section
6-7 481.033, Government Code, as that section existed before February
6-8 1, 1999;
6-9 (3) the relative level of the applicant's investment
6-10 per qualifying job to be created by the applicant;
6-11 (4) the wages, salaries, and benefits to be offered by
6-12 the applicant to qualifying job holders;
6-13 (5) the ability of the applicant to locate or relocate
6-14 in another state or another region of this state;
6-15 (6) the impact the added infrastructure will have on
6-16 the region, including:
6-17 (A) revenue gains that would be realized by the
6-18 school district; and
6-19 (B) subsequent economic effects on the local and
6-20 regional tax bases;
6-21 (7) the economic condition of the region of the state
6-22 at the time the person's application is being considered;
6-23 (8) the number of new facilities built or expanded in
6-24 the region during the two years preceding the date of the
6-25 application that were eligible to apply for a limitation on
6-26 appraised value under this subchapter; and
6-27 (9) the effect of the applicant's proposal, if
6-28 approved, on the number or size of the school district's
6-29 instructional facilities, as defined by Section 46.001, Education
6-30 Code.
6-31 Sec. 313.027. LIMITATION ON APPRAISED VALUE; AGREEMENT. (a)
6-32 If the person's application is approved by the governing body of
6-33 the school district, for each of the first eight tax years that
6-34 begin after the applicable qualifying time period, the appraised
6-35 value for school district maintenance and operations ad valorem tax
6-36 purposes of the person's qualified property as described in the
6-37 agreement between the person and the district entered into under
6-38 this section in the school district may not exceed the lesser of:
6-39 (1) the market value of the property; or
6-40 (2) subject to Subsection (b), the amount agreed to by
6-41 the governing body of the school district.
6-42 (b) The amount agreed to by the governing body of a school
6-43 district under Subsection (a)(2) must be an amount in accordance
6-44 with the following, according to the category established by
6-45 Section 313.022 to which the school district belongs:
6-46 CATEGORY MINIMUM AMOUNT OF LIMITATION
6-47 I $100 million
6-48 II $80 million
6-49 III $60 million
6-50 IV $40 million
6-51 V $20 million
6-52 (c) The limitation amounts listed in Subsection (b) are
6-53 minimum amounts. A school district, regardless of category, may
6-54 agree to a greater amount than those amounts.
6-55 (d) The governing body of the school district and the
6-56 property owner shall enter into a written agreement for the
6-57 implementation of the limitation on appraised value under this
6-58 subchapter on the owner's qualified property.
6-59 (e) The agreement must describe with specificity the
6-60 qualified investment that the person will make on or in connection
6-61 with the person's qualified property that is subject to the
6-62 limitation on appraised value under this subchapter. Other
6-63 property of the person that is not specifically described in the
6-64 agreement is not subject to the limitation unless the governing
6-65 body of the school district, by official action, provides that the
6-66 other property is subject to the limitation.
6-67 (f) In addition, the agreement:
6-68 (1) must incorporate each relevant provision of this
6-69 subchapter and, to the extent necessary, include provisions for the
7-1 protection of future school district revenues through the
7-2 adjustment of the minimum valuations, the payment of revenue
7-3 offsets, and other mechanisms agreed to by the property owner and
7-4 the school district;
7-5 (2) must require the property owner to maintain a
7-6 viable presence in the school district for at least three years
7-7 after the date the limitation on appraised value of the owner's
7-8 property expires;
7-9 (3) must provide for the termination of the agreement,
7-10 the recapture of ad valorem tax revenue lost as a result of the
7-11 agreement if the owner of the property fails to comply with the
7-12 terms of the agreement, and payment of a penalty or interest, or
7-13 both, on that recaptured ad valorem tax revenue;
7-14 (4) may specify any conditions the occurrence of which
7-15 will require the district and the property owner to renegotiate all
7-16 or any part of the agreement; and
7-17 (5) must specify the ad valorem tax years covered by
7-18 the agreement.
7-19 (g) When appraising a person's qualified property subject to
7-20 a limitation on appraised value under this section, the chief
7-21 appraiser shall determine the market value of the property and
7-22 include both the market value and the appropriate value under
7-23 Subsection (a) in the appraisal records.
7-24 Sec. 313.028. CERTAIN BUSINESS INFORMATION CONFIDENTIAL.
7-25 Information provided to a school district in connection with an
7-26 application for a limitation on appraised value under this
7-27 subchapter that describes the specific processes or business
7-28 activities to be conducted or the specific tangible personal
7-29 property to be located on real property covered by the application
7-30 is confidential and not subject to public disclosure unless the
7-31 governing body of the school district approves the application.
7-32 Information in the custody of a school district if the governing
7-33 body approves the application is not confidential under this
7-34 section.
7-35 Sec. 313.029. TAX RATE LIMITATION. If the governing body of
7-36 a school district grants an application for a limitation on
7-37 appraised value under this subchapter, for each of the first two
7-38 tax years that begins after the date the application is approved,
7-39 the governing body of the school district may not adopt a tax rate
7-40 that exceeds the school district's rollback tax rate under Section
7-41 26.08 for that year. If, in any tax year in which a restriction on
7-42 the school district's tax rate under this section is in effect, the
7-43 governing body approves a subsequent application for a limitation
7-44 on appraised value under this section, the restriction on the
7-45 school district's tax rate is extended until the first tax year
7-46 that begins after the second anniversary of the date the subsequent
7-47 application is approved.
7-48 Sec. 313.030. PROPERTY NOT ELIGIBLE FOR TAX ABATEMENT.
7-49 Property subject to a limitation on appraised value in a tax year
7-50 under this subchapter is not eligible for tax abatement by a school
7-51 district under Chapter 312 in that tax year.
7-52 Sec. 313.031. RULES AND FORMS; FEES. (a) The comptroller
7-53 shall:
7-54 (1) adopt rules and forms necessary for the
7-55 implementation and administration of this chapter, including rules
7-56 for determining whether a property owner's property qualifies as a
7-57 qualified investment under Section 313.021(1); and
7-58 (2) provide without charge one copy of the rules and
7-59 forms to any school district and to any person who states that the
7-60 person intends to apply for a limitation on appraised value under
7-61 this subchapter or a tax credit under Subchapter D.
7-62 (b) The governing body of a school district by official
7-63 action shall establish reasonable nonrefundable application fees to
7-64 be paid by property owners who apply to the district for a
7-65 limitation on the appraised value of the person's property under
7-66 this subchapter. The amount of an application fee must be
7-67 reasonable and may not exceed the estimated cost to the district of
7-68 processing and acting on an application, including the cost of the
7-69 economic impact evaluation required by Sections 313.025 and
8-1 313.026.
8-2 (Sections 313.032-313.050 reserved for expansion
8-3 SUBCHAPTER C. LIMITATION ON APPRAISED VALUE OF PROPERTY
8-4 IN CERTAIN RURAL SCHOOL DISTRICTS
8-5 Sec. 313.051. APPLICABILITY. (a) This subchapter applies
8-6 only to a school district that has territory in a county:
8-7 (1) that has a population of less than 50,000;
8-8 (2) that is not partially or wholly located in a
8-9 metropolitan statistical area; and
8-10 (3) in which, from 1990 to 2000, according to the
8-11 federal decennial census, the population:
8-12 (A) remained the same;
8-13 (B) decreased; or
8-14 (C) increased, but at a rate of less than 15
8-15 percent.
8-16 (b) The governing body of a school district to which this
8-17 subchapter applies may enter into an agreement in the same manner
8-18 as a school district to which Subchapter B applies may do so under
8-19 Subchapter B, subject to Sections 313.052-313.054. Except as
8-20 otherwise provided by this subchapter, the provisions of Subchapter
8-21 B apply to a school district to which this subchapter applies. In
8-22 this subchapter, "qualified property" means land on which the owner
8-23 of the land proposes to create at least 10 qualifying jobs.
8-24 Sec. 313.052. CATEGORIZATION OF SCHOOL DISTRICTS. For
8-25 purposes of determining the required minimum amount of a qualified
8-26 investment under Section 313.021(2)(A)(iv)(a) and the minimum
8-27 amount of a limitation on appraised value under this subchapter,
8-28 school districts to which this subchapter applies are categorized
8-29 according to the taxable value of industrial property in the
8-30 district for the preceding tax year determined under Subchapter M,
8-31 Chapter 403, Government Code, as follows:
8-32 CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
8-33 I $200 million or more
8-34 II $90 million or more but less than $200 million
8-35 III $1 million or more but less than $90 million
8-36 IV $100,000 or more but less than $1 million
8-37 V less than $100,000
8-38 Sec. 313.053. MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
8-39 each category of school district established by Section 313.052,
8-40 the minimum amount of a qualified investment under Section
8-41 313.021(2)(A)(iv)(a) is as follows:
8-42 CATEGORY MINIMUM QUALIFIED INVESTMENT
8-43 I $30 million
8-44 II $20 million
8-45 III $10 million
8-46 IV $5 million
8-47 V $1 million
8-48 Sec. 313.054. LIMITATION ON APPRAISED VALUE. (a) For a
8-49 school district to which this subchapter applies, the amount agreed
8-50 to by the governing body of the district under Section
8-51 313.027(a)(2) must be an amount in accordance with the following,
8-52 according to the category established by Section 313.052 to which
8-53 the school district belongs:
8-54 CATEGORY MINIMUM AMOUNT OF LIMITATION
8-55 I $30 million
8-56 II $20 million
8-57 III $10 million
8-58 IV $5 million
8-59 V $1 million
8-60 (b) The limitation amounts listed in Subsection (a) are
8-61 minimum amounts. A school district, regardless of category, may
8-62 agree to a greater amount than those amounts.
8-63 (Sections 313.055-313.100 reserved for expansion
8-64 SUBCHAPTER D. SCHOOL TAX CREDITS
8-65 Sec. 313.101. DEFINITION. In this subchapter, "qualifying
8-66 time period" has the meaning assigned by Section 313.021.
8-67 Sec. 313.102. ELIGIBILITY FOR TAX CREDIT; AMOUNT OF CREDIT.
8-68 (a) In addition to the limitation on the appraised value of the
8-69 person's qualified property under Subchapter B or C, a person is
9-1 entitled to a tax credit from the school district that approved the
9-2 limitation in an amount equal to the amount of ad valorem taxes
9-3 paid to that school district that were imposed on the portion of
9-4 the appraised value of the qualified property that exceeds the
9-5 amount of the limitation agreed to by the governing body of the
9-6 school district under Section 313.027(a)(2) in each year in the
9-7 applicable qualifying time period.
9-8 (b) If the person relocates the person's business outside
9-9 the school district, the person is not entitled to the credit in or
9-10 after the year in which the relocation occurs.
9-11 Sec. 313.103. APPLICATION. An application for a tax credit
9-12 under this subchapter must be made to the governing body of the
9-13 school district to which the ad valorem taxes were paid. The
9-14 application must be:
9-15 (1) made on the form prescribed for that purpose by
9-16 the comptroller and verified by the applicant;
9-17 (2) accompanied by:
9-18 (A) a tax receipt from the collector of taxes
9-19 for the school district showing full payment of school district ad
9-20 valorem taxes on the qualified property for the applicable
9-21 qualifying time period; and
9-22 (B) any other document or information that the
9-23 comptroller or the governing body considers necessary for a
9-24 determination of the applicant's eligibility for the credit or the
9-25 amount of the credit; and
9-26 (3) filed before September 1 of the year immediately
9-27 following the applicable qualifying time period.
9-28 Sec. 313.104. ACTION ON APPLICATION; GRANT OF CREDIT.
9-29 Before the 90th day after the date the application for a tax credit
9-30 is filed, the governing body of the school district shall:
9-31 (1) determine the person's eligibility for a tax
9-32 credit under this subchapter; and
9-33 (2) if the person's application is approved, by order
9-34 or resolution direct the collector of taxes for the school
9-35 district:
9-36 (A) in each of the first eight tax years that
9-37 begin after the date the application is approved, to credit against
9-38 the taxes imposed on the qualified property by the district in that
9-39 year an amount equal to one-eighth of the total amount of tax
9-40 credit to which the person is entitled under Section 313.102,
9-41 except that the amount of a credit granted in any of those tax
9-42 years may not exceed 50 percent of the total amount of ad valorem
9-43 school taxes imposed on the qualified property by the school
9-44 district in that tax year; and
9-45 (B) in the first tax year that begins on or
9-46 after the date the person's eligibility for the limitation under
9-47 Subchapter B or C expires, to credit against the taxes imposed on
9-48 the qualified property by the district an amount equal to the
9-49 portion of the total amount of tax credit to which the person is
9-50 entitled under Section 313.102 that was not credited against the
9-51 person's taxes under Paragraph (A) in a tax year covered by
9-52 Paragraph (A), except that the amount of a tax credit granted under
9-53 this paragraph in any tax year may not exceed the total amount of
9-54 ad valorem school taxes imposed on the qualified property by the
9-55 school district in that tax year.
9-56 Sec. 313.105. REMEDY FOR ERRONEOUS CREDIT. (a) If the
9-57 comptroller and the governing body of a school district determine
9-58 that a person who received a tax credit under this subchapter for
9-59 any reason was not entitled to the credit received or was entitled
9-60 to a lesser amount of credit than the amount of the credit
9-61 received, an additional tax is imposed on the qualified property
9-62 equal to the full credit or the amount of the credit to which the
9-63 person was not entitled, as applicable, plus interest at an annual
9-64 rate of seven percent calculated from the date the credit was
9-65 issued.
9-66 (b) A tax lien attaches to the qualified property in favor
9-67 of the school district to secure payment by the person of the
9-68 additional tax and interest imposed by this section and any
9-69 penalties incurred. A person delinquent in the payment of an
10-1 additional tax under this section may not submit a subsequent
10-2 application or receive a tax credit under this subchapter in a
10-3 subsequent year.
10-4 (Sections 313.106-313.170 reserved for expansion
10-5 SUBCHAPTER E. AVAILABILITY OF TAX CREDIT AFTER PROGRAM
10-6 EXPIRES
10-7 Sec. 313.171. SAVING PROVISIONS. (a) A limitation on
10-8 appraised value approved under Subchapter B or C before the
10-9 expiration of that subchapter continues in effect according to that
10-10 subchapter as that subchapter existed immediately before its
10-11 expiration, and that law is continued in effect for purposes of the
10-12 limitation on appraised value.
10-13 (b) The expiration of Subchapter D does not affect a
10-14 property owner's entitlement to a tax credit granted under
10-15 Subchapter D if the property owner qualified for the tax credit
10-16 before the expiration of Subchapter D.
10-17 SECTION 2. Subchapter A, Chapter 23, Tax Code, is amended by
10-18 adding Section 23.03 to read as follows:
10-19 Sec. 23.03. COMPILATION OF LARGE PROPERTIES AND PROPERTIES
10-20 SUBJECT TO LIMITATION ON APPRAISED VALUE. Each year the chief
10-21 appraiser shall compile and send to the Texas Department of
10-22 Economic Development a list of properties in the appraisal district
10-23 that in that tax year:
10-24 (1) have a market value of $100 million or more; or
10-25 (2) are subject to a limitation on appraised value
10-26 under Chapter 313.
10-27 SECTION 3. Section 26.012(6), Tax Code, is amended to read as
10-28 follows:
10-29 (6) "Current total value" means the total taxable
10-30 value of property listed on the appraisal roll for the current
10-31 year, including all appraisal roll supplements and corrections as
10-32 of the date of the calculation, less the taxable value of property
10-33 exempted for the current tax year for the first time under Section
10-34 11.31, except that the current total value for a school district
10-35 excludes:
10-36 (A) the total value of homesteads that qualify
10-37 for a tax limitation as provided by Section 11.26; and
10-38 (B) new property value of property that is
10-39 subject to an agreement entered into under Chapter 313.
10-40 SECTION 4. Subchapter A, Chapter 312, Tax Code, is amended by
10-41 adding Section 312.0025 to read as follows:
10-42 Sec. 312.0025. DESIGNATION OF REINVESTMENT ZONE BY SCHOOL
10-43 DISTRICT. (a) Notwithstanding any other provision of this chapter
10-44 to the contrary, the governing body of a school district, in the
10-45 manner required for official action and for purposes of Subchapter
10-46 B or C, Chapter 313, may designate an area entirely within the
10-47 territory of the school district as a reinvestment zone if the
10-48 governing body finds that, as a result of the designation and the
10-49 granting of a limitation on appraised value under Subchapter B or
10-50 C, Chapter 313, for property located in the reinvestment zone, the
10-51 designation is reasonably likely to:
10-52 (1) contribute to the expansion of primary employment
10-53 in the reinvestment zone; or
10-54 (2) attract major investment in the reinvestment zone
10-55 that would:
10-56 (A) be a benefit to property in the reinvestment
10-57 zone and to the school district; and
10-58 (B) contribute to the economic development of
10-59 the region of this state in which the school district is located.
10-60 (b) The governing body of the school district may seek the
10-61 recommendation of the commissioners court of each county and the
10-62 governing body of each municipality that has territory in the
10-63 school district before designating an area as a reinvestment zone
10-64 under Subsection (a).
10-65 SECTION 5. Section 312.006, Tax Code, is amended to read as
10-66 follows:
10-67 Sec. 312.006. EXPIRATION DATE. If not continued in effect,
10-68 this chapter expires September 1, 2007 [2001].
10-69 SECTION 6. Subchapter E, Chapter 42, Education Code, is
11-1 amended by adding Section 42.2515 to read as follows:
11-2 Sec. 42.2515. ADDITIONAL STATE AID FOR AD VALOREM TAX
11-3 CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. (a) For each school
11-4 year, a school district, including a school district that is
11-5 otherwise ineligible for state aid under this chapter, is entitled
11-6 to state aid in an amount equal to the amount of all tax credits
11-7 credited against ad valorem taxes of the district in that year
11-8 under Subchapter D, Chapter 313, Tax Code.
11-9 (b) The commissioner may adopt rules to implement and
11-10 administer this section.
11-11 SECTION 7. Section 403.302(d), Government Code, is amended to
11-12 read as follows:
11-13 (d) For the purposes of this section, "taxable value" means
11-14 the market value of all taxable property less:
11-15 (1) the total dollar amount of any residence homestead
11-16 exemptions lawfully granted under Section 11.13(b) or (c), Tax
11-17 Code, in the year that is the subject of the study for each school
11-18 district;
11-19 (2) one-half of the total dollar amount of any
11-20 residence homestead exemptions granted under Section 11.13(n), Tax
11-21 Code, in the year that is the subject of the study for each school
11-22 district;
11-23 (3) the total dollar amount of any exemptions granted
11-24 before May 31, 1993, within a reinvestment zone under agreements
11-25 authorized by Chapter 312, Tax Code;
11-26 (4) subject to Subsection (e), the total dollar amount
11-27 of any captured appraised value of property that:
11-28 (A) is within a reinvestment zone created on or
11-29 before May 31, 1999, or is proposed to be included within the
11-30 boundaries of a reinvestment zone as the boundaries of the zone and
11-31 the proposed portion of tax increment paid into the tax increment
11-32 fund by a school district are described in a written notification
11-33 provided by the municipality or the board of directors of the zone
11-34 to the governing bodies of the other taxing units in the manner
11-35 provided by Section 311.003(e), Tax Code, before May 31, 1999, and
11-36 within the boundaries of the zone as those boundaries existed on
11-37 September 1, 1999, including subsequent improvements to the
11-38 property regardless of when made;
11-39 (B) generates taxes paid into a tax increment
11-40 fund created under Chapter 311, Tax Code, under a reinvestment zone
11-41 financing plan approved under Section 311.011(d), Tax Code, on or
11-42 before September 1, 1999; and
11-43 (C) is eligible for tax increment financing
11-44 under Chapter 311, Tax Code;
11-45 (5) the total dollar amount of any exemptions granted
11-46 under Section 11.251, Tax Code;
11-47 (6) the difference between the comptroller's estimate
11-48 of the market value and the productivity value of land that
11-49 qualifies for appraisal on the basis of its productive capacity,
11-50 except that the productivity value estimated by the comptroller may
11-51 not exceed the fair market value of the land;
11-52 (7) the portion of the appraised value of residence
11-53 homesteads of the elderly on which school district taxes are not
11-54 imposed in the year that is the subject of the study, calculated as
11-55 if the residence homesteads were appraised at the full value
11-56 required by law;
11-57 (8) a portion of the market value of property not
11-58 otherwise fully taxable by the district at market value because of:
11-59 (A) action required by statute or the
11-60 constitution of this state that, if the tax rate adopted by the
11-61 district is applied to it, produces an amount equal to the
11-62 difference between the tax that the district would have imposed on
11-63 the property if the property were fully taxable at market value and
11-64 the tax that the district is actually authorized to impose on the
11-65 property, if this subsection does not otherwise require that
11-66 portion to be deducted; or
11-67 (B) action taken by the district under
11-68 Subchapter B or C, Chapter 313, Tax Code;
11-69 (9) the market value of all tangible personal
12-1 property, other than manufactured homes, owned by a family or
12-2 individual and not held or used for the production of income;
12-3 (10) the appraised value of property the collection of
12-4 delinquent taxes on which is deferred under Section 33.06, Tax
12-5 Code;
12-6 (11) the portion of the appraised value of property
12-7 the collection of delinquent taxes on which is deferred under
12-8 Section 33.065, Tax Code; and
12-9 (12) the amount by which the market value of a
12-10 residence homestead to which Section 23.23, Tax Code, applies
12-11 exceeds the appraised value of that property as calculated under
12-12 that section.
12-13 SECTION 8. Section 481.0044, Government Code, is amended by
12-14 adding Subsections (e) and (f) to read as follows:
12-15 (e) In addition to the information required by Subsection
12-16 (d), the governing board shall include in the report under that
12-17 subsection:
12-18 (1) a listing of the properties in this state that are
12-19 compiled and reported to the department under Section 23.03, Tax
12-20 Code;
12-21 (2) a listing of the school districts in this state,
12-22 classified according to the categories established by Sections
12-23 313.022 and 313.052, Tax Code;
12-24 (3) a listing of prospective projects identified by
12-25 the business development division of the department that proposed
12-26 to invest at least $100 million in this state, including
12-27 prospective projects that worked with the department or of which
12-28 the department was aware but that located in another state or
12-29 country;
12-30 (4) information identifying the other state or country
12-31 in which a prospective project located and stating the primary
12-32 reason identified by the department that the prospective project
12-33 did not locate in this state; and
12-34 (5) an assessment as to the effectiveness of the
12-35 incentives provided by Chapter 313, Tax Code, accompanied by
12-36 information on the number of agreements entered into by school
12-37 districts under that chapter during the preceding biennium, a
12-38 description of each project covered by an agreement, and the
12-39 details of the agreement.
12-40 (f) The comptroller shall assist the governing board and the
12-41 department in complying with Subsection (e).
12-42 SECTION 9. Subchapter K, Chapter 481, Government Code, is
12-43 amended by adding Section 481.168 to read as follows:
12-44 Sec. 481.168. ANNUAL REPORT OF TAX INCENTIVE LAWS AND
12-45 ECONOMIC DEVELOPMENT LAWS OF OTHER STATES. (a) The attorney
12-46 general, the comptroller, the Texas Department of Economic
12-47 Development, and the Council on Workforce and Economic
12-48 Competitiveness shall:
12-49 (1) conduct a survey of tax incentive laws and
12-50 economic development laws enacted in other states since 1990; and
12-51 (2) deliver to the governor, the lieutenant governor,
12-52 and the speaker of the house of representatives a joint report of
12-53 the results of the survey.
12-54 (b) The initial joint report required by this section shall
12-55 be delivered before December 31, 2002. An update of the joint
12-56 report shall be delivered before December 31 of each subsequent
12-57 year.
12-58 (c) Any interested person, including a trade association,
12-59 may provide information the person considers useful or relevant to
12-60 the survey or the joint report.
12-61 (d) Any agency of this state, on request, shall assist in
12-62 conducting the survey or in preparing the initial joint report or
12-63 an update of the joint report.
12-64 (e) The initial and each update of the joint report shall
12-65 include recommendations for legislative action.
12-66 SECTION 10. Section 2303.507, Government Code, is amended to
12-67 read as follows:
12-68 Sec. 2303.507. TAX INCREMENT FINANCING AND ABATEMENT;
12-69 LIMITATIONS ON APPRAISED VALUE. Designation of an area as an
13-1 enterprise zone is also designation of the area as a reinvestment
13-2 zone for:
13-3 (1) tax increment financing under Chapter 311, Tax
13-4 Code; [and]
13-5 (2) tax abatement under Chapter 312, Tax Code; and
13-6 (3) limitations on appraised value under Chapter 313,
13-7 Tax Code.
13-8 SECTION 11. (a) Except as provided by Subsection (b) of this
13-9 section, this Act takes effect January 1, 2002.
13-10 (b) Section 312.006, Tax Code, as amended by this Act, takes
13-11 effect September 1, 2001.
13-12 * * * * *