83R4113 SMH-F
 
  By: Strama H.B. No. 546
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of renewable energy reinvestment zones and
  the abatement of ad valorem taxes on property of a renewable energy
  company located in such a zone.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 3, Tax Code, is amended by
  adding Chapter 314 to read as follows:
  CHAPTER 314. RENEWABLE ENERGY REINVESTMENT ZONES
         Sec. 314.001.  SHORT TITLE. This chapter may be cited as the
  Renewable Energy Reinvestment Zone Act.
         Sec. 314.002.  APPLICABILITY. The provisions of this
  chapter applicable to a municipality apply only to a municipality
  that:
               (1)  has a population of at least 45,000 but not more
  than 60,000;
               (2)  is located in a county with a population of at
  least one million; and
               (3)  does not contain within its corporate limits:
                     (A)  more than two school districts that are
  categorized as category II school districts under Section 313.022;
  or
                     (B)  any school districts to which Subchapter C,
  Chapter 313, applies.
         Sec. 314.003.  DEFINITION. In this chapter, "renewable
  energy company" means a business organization that manufactures,
  assembles, sells, maintains, or conducts research on renewable
  energy and renewable energy efficient products, including:
                     (A)  solar energy;
                     (B)  wind energy;
                     (C)  biomass energy;
                     (D)  geothermal energy;
                     (E)  battery technology;
                     (F)  electric vehicles;
                     (G)  lighting using light-emitting diodes;
                     (H)  fuel cells;
                     (I)  energy generated from agricultural sources;
                     (J)  nuclear energy;
                     (K)  clean coal technology; and
                     (L)  water-saving devices.
         Sec. 314.004.  ELIGIBILITY OF MUNICIPALITY TO PARTICIPATE IN
  TAX ABATEMENT. (a) A municipality may not enter into a tax
  abatement agreement under this chapter and the governing body of a
  municipality may not designate an area as a renewable energy
  reinvestment zone unless the governing body adopts a resolution
  stating that the municipality elects to become eligible to
  participate in tax abatement and establishes guidelines and
  criteria governing tax abatement agreements by the municipality.
  The guidelines and criteria applicable to property must provide for
  the availability of tax abatement only for new facilities or
  structures.
         (b)  The governing body of a municipality may not enter into
  a tax abatement agreement under this chapter unless it finds that
  the terms of the agreement and the property subject to the agreement
  meet the applicable guidelines and criteria adopted by the
  governing body under this section.
         (c)  The guidelines and criteria adopted under this section
  are effective for two years from the date adopted. During that
  period, the guidelines and criteria may be amended or repealed only
  by a vote of three-fourths of the members of the governing body.
         (d)  The adoption of the guidelines and criteria by the
  governing body of a municipality does not:
               (1)  limit the discretion of the governing body to
  decide whether to enter into a specific tax abatement agreement;
               (2)  limit the discretion of the governing body to
  delegate to its employees the authority to determine whether or not
  the governing body should consider a particular application or
  request for tax abatement; or
               (3)  create any property, contract, or other legal
  right in any person to have the governing body consider or grant a
  specific application or request for tax abatement.
         Sec. 314.005.  DESIGNATION OF ZONE. (a) The governing body
  of a municipality by ordinance may designate as a renewable energy
  reinvestment zone an area in the taxing jurisdiction or
  extraterritorial jurisdiction of the municipality that the
  governing body finds satisfies the requirements of Section 314.006.
         (b)  The ordinance must describe the boundaries of the zone.
         (c)  The governing body may not adopt an ordinance
  designating an area as a renewable energy reinvestment zone until
  the governing body has held a public hearing on the designation and
  has found that the improvements sought are feasible and practical
  and would be a benefit to the land to be included in the zone and to
  the municipality after the expiration of an agreement entered into
  under Section 314.008. At the hearing, interested persons are
  entitled to speak and present evidence for or against the
  designation. Not later than the seventh day before the date of the
  hearing, notice of the hearing must be:
               (1)  published in a newspaper having general
  circulation in the municipality; and
               (2)  delivered in writing to the presiding officer of
  the governing body of each county and school district that includes
  in its boundaries real property that is to be included in the
  proposed renewable energy reinvestment zone.
         (d)  A notice made under Subsection (c)(2) is presumed
  delivered when placed in the mail postage prepaid and properly
  addressed to the appropriate presiding officer. A notice properly
  addressed and sent by registered or certified mail for which a
  return receipt is received by the sender is considered to have been
  delivered to the addressee.
         Sec. 314.006.  CRITERIA FOR RENEWABLE ENERGY REINVESTMENT
  ZONE. To be designated as a renewable energy reinvestment zone
  under this chapter, an area must meet the following requirements:
               (1)  the area must be at least 100 acres in size;
               (2)  at the time of the designation of the area as a
  zone, at least 75 percent of the land in the area must be owned by
  the municipality designating the area or by a municipal development
  corporation created under Chapter 379A, Local Government Code; and
               (3)  the area must be zoned for commercial purposes.
         Sec. 314.007.  EXPIRATION OF REINVESTMENT ZONE. The
  designation of a renewable energy reinvestment zone for tax
  abatement expires five years after the date of the designation and
  may be renewed for periods not to exceed five years.  The expiration
  of the designation does not affect an existing tax abatement
  agreement made under this chapter.
         Sec. 314.008.  MUNICIPAL TAX ABATEMENT AGREEMENT. (a) The
  governing body of a municipality eligible to enter into tax
  abatement agreements under Section 314.004 may agree in writing
  with a renewable energy company that owns taxable real property
  that is located in a renewable energy reinvestment zone, but that is
  not located in an improvement project financed by tax increment
  bonds, to exempt from taxation 50 percent of the value of the real
  property and of tangible personal property located on the real
  property for a period of 15 years, on the condition that the company
  construct a facility on the property to be used in connection with
  the company's operations as specified by the agreement. The
  governing body of an eligible municipality may agree in writing
  with a renewable energy company that owns a leasehold interest in
  tax-exempt real property that is located in a renewable energy
  reinvestment zone, but that is not located in an improvement
  project financed by tax increment bonds, to exempt 50 percent of the
  value of property subject to ad valorem taxation, including the
  leasehold interest, improvements, and tangible personal property
  located on the real property, for a period of 15 years, on the
  condition that the company construct a facility on the property to
  be used in connection with the company's operations as specified by
  the agreement. A tax abatement agreement under this section is
  subject to the rights of holders of outstanding bonds of the
  municipality. In a municipality that has a comprehensive zoning
  ordinance, an improvement, development, or redevelopment taking
  place under an agreement under this section must conform to the
  comprehensive zoning ordinance.
         (b)  The property subject to an agreement made under this
  section may be located in the extraterritorial jurisdiction of the
  municipality. In that event, the agreement applies to taxes of the
  municipality if the municipality annexes the property during the
  period specified in the agreement.
         (c)  Except as otherwise provided by this subsection,
  property that is in a renewable energy reinvestment zone and that is
  owned or leased by a person who is a member of the governing body of
  the municipality or a member of a zoning or planning board or
  commission of the municipality is excluded from property tax
  abatement. Property owned or leased by a person that is subject to
  a tax abatement agreement in effect when the person becomes a member
  of the governing body or of the zoning or planning board or
  commission does not cease to be eligible for property tax abatement
  under that agreement because of the person's membership on the
  governing body, board, or commission.
         Sec. 314.009.  NOTICE OF TAX ABATEMENT AGREEMENT TO COUNTIES
  AND SCHOOL DISTRICTS. (a) Not later than the seventh day before the
  date on which a municipality enters into an agreement under Section
  314.008, the governing body of the municipality or a designated
  officer or employee of the municipality shall deliver to the
  presiding officer of the governing body of each county and school
  district in which the property to be subject to the agreement is
  located a written notice that the municipality intends to enter
  into the agreement. The notice must include a copy of the proposed
  agreement.
         (b)  A notice is presumed delivered when placed in the mail
  postage paid and properly addressed to the appropriate presiding
  officer. A notice properly addressed and sent by registered or
  certified mail for which a return receipt is received by the sender
  is considered to have been delivered to the addressee.
         (c)  Failure to deliver the notice does not affect the
  validity of the agreement.
         Sec. 314.010.  SPECIFIC TERMS OF TAX ABATEMENT AGREEMENT.
  An agreement made under Section 314.008 must:
               (1)  list the kind, number, and location of all
  proposed improvements of the property;
               (2)  provide access to and authorize inspection of the
  property by municipal employees and by employees of each county and
  school district that approves the agreement to ensure that the
  improvements are made according to the specifications and
  conditions of the agreement;
               (3)  limit the uses of the property consistent with the
  general purpose of encouraging development or redevelopment of the
  renewable energy reinvestment zone during the period that property
  tax exemptions are in effect;
               (4)  provide for recapturing property tax revenue lost
  as a result of the agreement if the owner of the property fails to
  make the improvements as provided by the agreement;
               (5)  contain each term agreed to by the owner of the
  property;
               (6)  require the owner of the property to certify
  annually to the governing body of the municipality and each county
  and school district that approves the agreement that the owner is in
  compliance with each applicable term of the agreement; and
               (7)  provide that the governing body of the
  municipality may cancel or modify the agreement if the property
  owner fails to comply with the agreement.
         Sec. 314.011.  APPROVAL OF AGREEMENT BY GOVERNING BODY OF
  MUNICIPALITY. (a) To be effective, an agreement made under this
  chapter by a municipality must be approved by the affirmative vote
  of a majority of the members of the governing body of the
  municipality at a regularly scheduled meeting of the governing
  body.
         (b)  On approval by the governing body, an agreement may be
  executed in the same manner as other contracts made by the
  municipality.
         Sec. 314.012.  MODIFICATION OR TERMINATION OF AGREEMENT.
  (a) At any time before the expiration of an agreement made under
  this chapter, the agreement may be modified by the parties to the
  agreement to include other provisions that could have been included
  in the original agreement or to delete provisions that were not
  necessary to the original agreement. The modification must be made
  by the same procedure by which the original agreement was approved
  and executed. The original agreement may not be modified to extend
  beyond 15 years from the date of the original agreement.
         (b)  An agreement made under this chapter may be terminated
  by the mutual consent of the parties in the same manner that the
  agreement was approved and executed.
         Sec. 314.013.  TAX ABATEMENT BY COUNTY AND SCHOOL DISTRICT.
  (a)  If municipal property taxes on property located in the taxing
  jurisdiction of a municipality are abated under an agreement under
  Section 314.008, the agreement also applies to the taxation of the
  property by a county or school district in which the property is
  located if the governing body of the county or school district
  approves the agreement by the affirmative vote of a majority of the
  members of the governing body at a regularly scheduled meeting of
  the governing body.
         (b)  A county or school district may not approve a municipal
  tax abatement agreement under this chapter unless the governing
  body of the county or school district adopts a resolution stating
  that the county or school district elects to become eligible to
  participate in tax abatement and establishes guidelines and
  criteria governing the approval by the county or school district of
  municipal tax abatement agreements. The provisions of Section
  314.004 governing guidelines and criteria for the entry by a
  municipality into a tax abatement agreement apply to guidelines and
  criteria established by a county or school district for approval of
  a municipal tax abatement agreement to the extent those provisions
  can be made applicable.
         SECTION 2.  Section 11.28, Tax Code, is amended to read as
  follows:
         Sec. 11.28.  PROPERTY EXEMPTED FROM [CITY] TAXATION BY
  AGREEMENT. (a)  The owner of property to which an agreement made
  under Chapter 312 [the Property Redevelopment and Tax Abatement Act
  (Chapter 312 of this code)] applies is entitled to exemption from
  taxation by an incorporated city or town or other taxing unit of all
  or part of the value of the property as provided by the agreement.
         (b)  The owner of property to which an agreement made by an
  incorporated city or town under Chapter 314 applies is entitled to
  exemption from taxation by the incorporated city or town and from
  taxation by a county or school district that has approved the
  agreement of part of the value of the property as provided by the
  agreement.
         SECTION 3.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2013.