H.B. No. 3390

	AN ACT
	relating to the Texas Economic Development Act; imposing a penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 313.002, 313.003, 313.004, and 313.007,
	Tax Code, are amended to read as follows:
	Sec. 313.002.  FINDINGS. The legislature finds that:
	(1)  many states have enacted aggressive economic
	development laws designed to attract large employers, create jobs,
	and strengthen their economies;
	(2)  given Texas' relatively high ad valorem taxes, it
	is difficult for the state to compete for new capital projects
	without temporarily limiting ad valorem taxes imposed on new
	capital investments [the State of Texas has slipped in its national
	ranking each year between 1993 and 2000 in terms of attracting major
	new manufacturing facilities to this state];
	(3)  a significant portion of the Texas economy
	continues to be based in [the] manufacturing and other
	capital-intensive industries [industry], and their [the] continued
	growth and overall health serve [of the manufacturing sector
	serves] the Texas economy well;
	(4)  without a vibrant, strong manufacturing sector,
	other sectors of the economy, especially the state's service
	sector, will also suffer adverse consequences; and
	(5)  the current ad valorem [property] tax system of
	this state does not favor capital-intensive businesses such as
	manufacturers.
	Sec. 313.003.  PURPOSES. The purposes of this chapter are
	to:
	(1)  encourage large-scale capital investments in this
	state[, especially in school districts that have an ad valorem tax
	base that is less than the statewide average ad valorem tax base of
	school districts in this state];
	(2)  create new, high-paying jobs in this state;
	(3)  attract to this state [new,] large-scale
	businesses that are exploring opportunities to locate in other
	states or other countries;
	(4)  enable state and local government officials and
	economic development professionals to compete with other states by
	authorizing economic development incentives that are comparable to
	[meet or exceed] incentives being offered to prospective employers
	by other states and to provide state and local officials with an
	effective means to attract large-scale investment;
	(5)  strengthen and improve the overall performance of
	the economy of this state;
	(6)  expand and enlarge the ad valorem [property] tax
	base of this state; and
	(7)  enhance this state's economic development efforts
	by providing state and local officials [school districts] with an
	effective [local] economic development tool [option].
	Sec. 313.004.  LEGISLATIVE INTENT. It is the intent of the
	legislature in enacting this chapter that:
	(1)  economic development decisions involving school
	district taxes should occur at the local level with oversight by the
	state and should be consistent with identifiable statewide economic
	development goals;
	(2)  this chapter should not be construed or
	interpreted to allow:
	(A)  property owners to pool investments to create
	sufficiently large investments to qualify for an ad valorem tax
	benefit [or financial benefit] provided by this chapter;
	(B)  an applicant for an ad valorem tax benefit
	[or financial benefit] provided by this chapter to assert that jobs
	will be eliminated if certain investments are not made if the
	assertion is not true; or
	(C)  an entity not subject to the tax imposed by
	Chapter 171 [a sole proprietorship, partnership, or limited
	liability partnership] to receive an ad valorem tax benefit [or
	financial benefit] provided by this chapter; [and]
	(3)  in implementing this chapter, school districts
	should:
	(A)  strictly interpret the criteria and
	selection guidelines provided by this chapter; and
	(B)  approve only those applications for an ad
	valorem tax benefit [or financial benefit] provided by this chapter
	that:
	(i)  enhance the local community;
	(ii)  improve the local public education
	system;
	(iii)  create high-paying jobs; and
	(iv)  advance the economic development goals
	of this state; and
	(4)  in implementing this chapter, the comptroller
	should:
	(A)  strictly interpret the criteria and
	selection guidelines provided by this chapter; and
	(B)  issue certificates for limitations on
	appraised value only for those applications for an ad valorem tax
	benefit provided by this chapter that:
	(i)  create high-paying jobs;
	(ii)  provide a net benefit to the state over
	the long term; and
	(iii)  advance the economic development
	goals of this state [as identified by the Texas Strategic Economic
	Development Planning Commission].
	Sec. 313.007.  EXPIRATION. Subchapters B and [,] C [, and D]
	expire December 31, 2022 [2014].
	SECTION 2.  Subchapter A, Chapter 313, Tax Code, is amended
	by adding Section 313.010 to read as follows:
	Sec. 313.010.  AUDIT OF AGREEMENTS BY STATE AUDITOR. (a)
	Each year, the state auditor shall review at least three major
	agreements, as determined by the state auditor, under this chapter
	to determine whether:
	(1)  each agreement accomplishes the purposes of this
	chapter as expressed in Section 313.003;
	(2)  each agreement complies with the intent of the
	legislature in enacting this chapter as expressed in Section
	313.004; and
	(3)  the terms of each agreement were executed in
	compliance with the terms of this chapter.
	(b)  As part of the review, the state auditor shall make
	recommendations relating to increasing the efficiency and
	effectiveness of the administration of this chapter.
	SECTION 3.  Sections 313.021(2) and (3), Tax Code, are
	amended to read as follows:
	(2)  "Qualified property" means:
	(A)  land:
	(i)  that is located in an area designated as
	a reinvestment zone under Chapter 311 or 312 or as an enterprise
	zone under Chapter 2303, Government Code;
	(ii)  on which a person proposes to
	construct a new building or erect or affix a new improvement that
	does not exist before the date the person submits a complete
	application [applies] for a limitation on appraised value under
	this subchapter;
	(iii)  that is not subject to a tax abatement
	agreement entered into by a school district under Chapter 312; and
	(iv)  on which, in connection with the new
	building or new improvement described by Subparagraph (ii), the
	owner or lessee of, or the holder of another possessory interest in,
	the land proposes to:
	(a)  make a qualified investment in an
	amount equal to at least the minimum amount required by Section
	313.023; and
	(b)  create at least 25 new qualifying
	jobs;
	(B)  the new building or other new improvement
	described by Paragraph (A)(ii); and
	(C)  tangible personal property that:
	(i)  is not subject to a tax abatement
	agreement entered into by a school district under Chapter 312; and
	(ii)  except for new equipment described in
	Section 151.318(q) or (q-1), is first placed in service in the new
	building, in the newly expanded building, or in or on the new
	improvement described by Paragraph (A)(ii), or on the land on which
	that new building or new improvement is located, if the personal
	property is ancillary and necessary to the business conducted in
	that new building or in or on that new improvement.
	(3)  "Qualifying job" means a permanent full-time job
	that:
	(A)  requires at least 1,600 hours of work a year;
	(B)  is not transferred from one area in this
	state to another area in this state;
	(C)  is not created to replace a previous
	employee;
	(D)  is covered by a group health benefit plan for
	which the business offers to pay at least 80 percent of the premiums
	or other charges assessed for employee-only coverage under the
	plan, regardless of whether an employee may voluntarily waive the
	coverage; and
	(E)  pays at least 110 percent of[:
	[(i)]  the county average weekly wage for
	manufacturing jobs in the county where the job is located[; or
	[(ii)     the county average weekly wage for
	all jobs in the county where the job is located, if the property
	owner creates more than 1,000 jobs in that county].
	(F)  In determining whether a property owner has created the
	number of qualifying jobs required under this chapter, operations,
	services and other related jobs created in connection with the
	project, including those employed by third parties under contract,
	may satisfy the minimum qualifying jobs requirement for the project
	if the Texas Workforce Commission determines that the cumulative
	economic benefits to the state of these jobs is the same or greater
	than that associated with the minimum number of qualified jobs
	required to be created under this chapter.  The Texas Workforce
	Commission may adopt rules to implement this subsection.
	SECTION 4.  Section 313.024, Tax Code, is amended by
	amending Subsections (a), (b), and (d) and adding Subsection (d-2)
	to read as follows:
	(a)  This subchapter and Subchapter [Subchapters] C [and D]
	apply only to property owned by an entity subject to the tax imposed
	by [which] Chapter 171 [applies].
	(b)  To be eligible for a limitation on appraised value under
	this subchapter, the entity must use the property for [in
	connection with]:
	(1)  manufacturing;
	(2)  research and development;
	(3)  a clean coal project, as defined by Section 5.001,
	Water Code;
	(4)  an advanced clean energy project, as defined by
	Section 382.003, Health and Safety Code;
	(5)  renewable energy electric generation;
	(6)  electric power generation using integrated
	gasification combined cycle technology;
	(7)  nuclear electric power generation; [or]
	(8)  a computer center primarily used in connection
	with one or more activities described by Subdivisions (1) through
	(7) conducted by the entity; or
	(9)  a Texas priority project.
	(d)  To be eligible for a limitation on appraised value under
	this subchapter, the property owner must create the required number
	of new [at least 80 percent of all the new jobs created by the
	property owner must be] qualifying jobs as defined by Section
	313.021(3) and the average weekly wage for all jobs created by the
	owner that are not qualifying jobs must exceed the county average
	weekly wage for all jobs in the county where the jobs are located.
	(d-2)  For purposes of determining whether a property owner
	has created the number of new qualifying jobs required for
	eligibility for a limitation on appraised value under this
	subchapter, the new qualifying jobs created under an agreement
	between the property owner and another school district may be
	included in the total number of new qualifying jobs created in
	connection with the project if the Texas Economic Development and
	Tourism Office determines that the projects covered by the
	agreements constitute a single unified project. The Texas Economic
	Development and Tourism Office may adopt rules to implement this
	subsection.
	SECTION 5.  Section 313.024(e), Tax Code, is amended by
	adding Subdivision (7) to read as follows:
	(7)  "Texas priority project" means a project on which
	the applicant has committed to expend or allocate a qualified
	investment of more than $1 billion.
	SECTION 6.  Sections 313.025(a), (a-1), (b), (b-1), (c),
	(d), (d-1), (e), (g), and (i), Tax Code, are amended to read as
	follows:
	(a)  The owner or lessee of, or the holder of another
	possessory interest in, any qualified property described by Section
	313.021(2)(A), (B), or (C) may apply to the governing body of the
	school district in which the property is located for a limitation on
	the appraised value for school district maintenance and operations
	ad valorem tax purposes of the person's qualified property.  An
	application must be made on the form prescribed by the comptroller
	and include the information required by the comptroller, and it
	must be accompanied by:
	(1)  the application fee established by the governing
	body of the school district;
	(2)  information sufficient to show that the real and
	personal property identified in the application as qualified
	property meets the applicable criteria established by Section
	313.021(2); and
	(3)  any information required by the comptroller for
	the purposes of [relating to each applicable criterion listed in]
	Section 313.026.
	(a-1)  Within seven days of the receipt of each document, the
	school district shall submit to the comptroller a copy of the
	application and the proposed agreement between the applicant and
	the school district.  If the applicant submits an economic analysis
	of the proposed project [is submitted] to the school district, the
	district shall submit a copy of the analysis to the comptroller.  In
	addition, the school district shall submit to the comptroller any
	subsequent revision of or amendment to any of those documents
	within seven days of its receipt.  The comptroller shall publish
	each document received from the school district under this
	subsection on the comptroller's Internet website.  If the school
	district maintains a generally accessible Internet website, the
	district shall provide on its website a link to the location of
	those documents posted on the comptroller's website in compliance
	with this subsection.  This subsection does not require the
	comptroller to post information that is confidential under Section
	313.028.
	(b)  The governing body of a school district is not required
	to consider an application for a limitation on appraised value
	[that is filed with the governing body under Subsection (a)].  If
	the governing body of the school district elects [does elect] to
	consider an application, the governing body shall deliver a copy
	[three copies] of the application to the comptroller and request
	that the comptroller conduct [provide] an economic impact
	evaluation of the investment proposed by the application. The [to
	the school district.   Except as provided by Subsection (b-1), the]
	comptroller shall conduct or contract with a third person to
	conduct the economic impact evaluation, which shall be completed
	and provided to the governing body of the school district, along
	with the comptroller's certificate or written explanation under
	Subsection (d), as soon as practicable but not later than the 90th
	day after the date the comptroller receives the application.  The
	governing body shall provide to the comptroller or to a third person
	contracted by the comptroller to conduct the economic impact
	evaluation any requested information.  A methodology to allow
	comparisons of economic impact for different schedules of the
	addition of qualified investment or qualified property may be
	developed as part of the economic impact evaluation.  The governing
	body shall provide a copy of the economic impact evaluation to the
	applicant on request.  The comptroller may charge the applicant
	[and collect] a fee sufficient to cover the costs of providing the
	economic impact evaluation.  The governing body of a school
	district shall approve or disapprove an application not later than
	the 150th [before the 151st] day after the date the application is
	filed, unless the economic impact evaluation has not been received
	or an extension is agreed to by the governing body and the
	applicant.
	(b-1)  The comptroller shall promptly deliver a [indicate on
	one] copy of the application [the date the comptroller received the
	application and deliver that copy] to the Texas Education Agency.
	The Texas Education Agency shall determine the effect that the
	applicant's proposal will have on the number or size of the school
	district's instructional facilities [, as required to be included
	in the economic impact evaluation by Section 313.026(a)(9),] and
	submit a written report containing the agency's determination to
	the school district [comptroller].  The governing body of the
	school district shall provide any requested information to the
	Texas Education Agency.  Not later than the 45th day after the date
	the Texas Education Agency receives [application indicates that the
	comptroller received] the application, the Texas Education Agency
	shall make the required determination and submit the agency's
	written report to the governing body of the school district
	[comptroller.   A third person contracted by the comptroller to
	conduct an economic impact evaluation of an application is not
	required to make a determination that the Texas Education Agency is
	required to make and report to the comptroller under this
	subsection].
	(c)  In determining whether to approve [grant] an
	application, the governing body of the school district is entitled
	to request and receive assistance from:
	(1)  the comptroller;
	(2)  the Texas [Department of] Economic Development and
	Tourism Office;
	(3)  the Texas Workforce Investment Council; and
	(4)  the Texas Workforce Commission.
	(d)  Not later than the 90th [Before the 91st] day after the
	date the comptroller receives the copy of the application, the
	comptroller shall issue a certificate for a limitation on appraised
	value of the property and provide the certificate to the governing
	body of the school district or provide the governing body a written
	explanation of the comptroller's decision not to issue a
	certificate [submit a recommendation to the governing body of the
	school district as to whether the application should be approved or
	disapproved].
	(d-1)  The governing body of a school district may not
	approve an application unless [that] the comptroller submits to the
	governing body a certificate for a limitation on appraised value of
	the property [has recommended should be disapproved only if:
	[(1)     the governing body holds a public hearing the
	sole purpose of which is to consider the application and the
	comptroller's recommendation; and
	[(2)     at a subsequent meeting of the governing body
	held after the date of the public hearing, at least two-thirds of
	the members of the governing body vote to approve the application].
	(e)  Before approving or disapproving an application under
	this subchapter that the governing body of the school district
	elects to consider, the governing body [of the school district]
	must make a written finding as to any criteria considered by the
	comptroller in conducting the economic impact evaluation under
	[each criterion listed in] Section 313.026. The governing body
	shall deliver a copy of those findings to the applicant.
	(g)  The Texas [Department of] Economic Development and
	Tourism Office or its successor may recommend that a school
	district approve an application [grant a person a limitation on
	appraised value] under this chapter. In determining whether to
	approve [grant] an application, the governing body of the school
	district shall consider any recommendation made by the Texas
	[Department of] Economic Development and Tourism Office or its
	successor.
	(i)  If the comptroller's determination under Subsection (h)
	that the property does not meet the requirements of Section 313.024
	for eligibility for a limitation on appraised value under this
	subchapter becomes final, the comptroller is not required to
	provide an economic impact evaluation of the application or to
	submit a certificate for a limitation on appraised value of the
	property or a written explanation of the decision not to issue a
	certificate [recommendation to the school district as to whether
	the application should be approved or disapproved], and the
	governing body of the school district may not grant the
	application.
	SECTION 7.  Section 313.026, Tax Code, is amended to read as
	follows:
	Sec. 313.026.  ECONOMIC IMPACT EVALUATION. (a) The
	economic impact evaluation of the application must include any
	information the comptroller determines is necessary or helpful to:
	(1)  the governing body of the school district in
	determining whether to approve the application under Section
	313.025; or
	(2)  the comptroller in determining whether to issue a
	certificate for a limitation on appraised value of the property
	under Section 313.025 [the following:
	[(1)  the recommendations of the comptroller;
	[(2)  the name of the school district;
	[(3)  the name of the applicant;
	[(4)  the general nature of the applicant's investment;
	[(5)     the relationship between the applicant's industry
	and the types of qualifying jobs to be created by the applicant to
	the long-term economic growth plans of this state as described in
	the strategic plan for economic development submitted by the Texas
	Strategic Economic Development Planning Commission under Section
	481.033, Government Code, as that section existed before February
	1, 1999;
	[(6)     the relative level of the applicant's investment
	per qualifying job to be created by the applicant;
	[(7)     the number of qualifying jobs to be created by the
	applicant;
	[(8)     the wages, salaries, and benefits to be offered
	by the applicant to qualifying job holders;
	[(9)     the ability of the applicant to locate or
	relocate in another state or another region of this state;
	[(10)     the impact the project will have on this state
	and individual local units of government, including:
	[(A)     tax and other revenue gains, direct or
	indirect, that would be realized during the qualifying time period,
	the limitation period, and a period of time after the limitation
	period considered appropriate by the comptroller; and
	[(B)     economic effects of the project, including
	the impact on jobs and income, during the qualifying time period,
	the limitation period, and a period of time after the limitation
	period considered appropriate by the comptroller;
	[(11)     the economic condition of the region of the
	state at the time the person's application is being considered;
	[(12)     the number of new facilities built or expanded
	in the region during the two years preceding the date of the
	application that were eligible to apply for a limitation on
	appraised value under this subchapter;
	[(13)     the effect of the applicant's proposal, if
	approved, on the number or size of the school district's
	instructional facilities, as defined by Section 46.001, Education
	Code;
	[(14)     the projected market value of the qualified
	property of the applicant as determined by the comptroller;
	[(15)     the proposed limitation on appraised value for
	the qualified property of the applicant;
	[(16)     the projected dollar amount of the taxes that
	would be imposed on the qualified property, for each year of the
	agreement, if the property does not receive a limitation on
	appraised value with assumptions of the projected appreciation or
	depreciation of the investment and projected tax rates clearly
	stated;
	[(17)     the projected dollar amount of the taxes that
	would be imposed on the qualified property, for each tax year of the
	agreement, if the property receives a limitation on appraised value
	with assumptions of the projected appreciation or depreciation of
	the investment clearly stated;
	[(18)     the projected effect on the Foundation School
	Program of payments to the district for each year of the agreement;
	[(19)     the projected future tax credits if the
	applicant also applies for school tax credits under Section
	313.103; and
	[(20)     the total amount of taxes projected to be lost or
	gained by the district over the life of the agreement computed by
	subtracting the projected taxes stated in Subdivision (17) from the
	projected taxes stated in Subdivision (16)].
	(b)  Except as provided by Subsections (c) and (d), the [The]
	comptroller's determination whether to issue a certificate for a
	limitation on appraised value under this chapter for property
	described in the application [recommendations] shall be based on
	the economic impact evaluation described by Subsection (a)
	[criteria listed in Subsections (a)(5)-(20)] and on any other
	information available to the comptroller, including information
	provided by the governing body of the school district [under
	Section 313.025(b)].
	(c)  The comptroller may not issue a certificate for a
	limitation on appraised value under this chapter for property
	described in an application unless the comptroller determines that:
	(1)  the project proposed by the applicant is
	reasonably likely to generate, before the 25th anniversary of the
	beginning of the limitation period, tax revenue, including state
	tax revenue, school district maintenance and operations ad valorem
	tax revenue attributable to the project, and any other tax revenue
	attributable to the effect of the project on the economy of the
	state, in an amount sufficient to offset the school district
	maintenance and operations ad valorem tax revenue lost as a result
	of the agreement; and
	(2)  the limitation on appraised value is a determining
	factor in the applicant's decision to invest capital and construct
	the project in this state.
	(d)  The comptroller shall state in writing the basis for the
	determinations made under Subsections (c)(1) and (2).
	(e)  The applicant may submit information to the comptroller
	that would provide a basis for an affirmative determination under
	Subsection (c)(2).
	(f)  Notwithstanding Subsections (c) and (d), if the
	comptroller makes a qualitative determination that other
	considerations associated with the project result in a net positive
	benefit to the state, the comptroller may issue the certificate.
	SECTION 8.  Section 313.0265(b), Tax Code, is amended to
	read as follows:
	(b)  The comptroller shall designate the following as
	substantive:
	(1)  each application requesting a limitation on
	appraised value; and
	(2)  the economic impact evaluation made in connection
	with the application [; and
	[(3)     each application requesting school tax credits
	under Section 313.103].
	SECTION 9.  Section 313.027, Tax Code, is amended by
	amending Subsections (a), (f), (h), and (i) and adding Subsections
	(a-1) and (j) to read as follows:
	(a)  If the person's application is approved by the governing
	body of the school district, [for each of the first eight tax years
	that begin after the applicable qualifying time period,] the
	appraised value for school district maintenance and operations ad
	valorem tax purposes of the person's qualified property as
	described in the agreement between the person and the district
	entered into under this section in the school district may not
	exceed the lesser of:
	(1)  the market value of the property; or
	(2)  subject to Subsection (b), the amount agreed to by
	the governing body of the school district.
	(a-1)  The agreement must:
	(1)  provide that the limitation under Subsection (a)
	applies for a period of 10 years; and
	(2)  specify the beginning date of the limitation,
	which must be January 1 of the first tax year that begins after:
	(A)  the application date;
	(B)  the qualifying time period; or
	(C)  the date commercial operations begin at the
	site of the project.
	(f)  In addition, the agreement:
	(1)  must incorporate each relevant provision of this
	subchapter and, to the extent necessary, include provisions for the
	protection of future school district revenues through the
	adjustment of the minimum valuations, the payment of revenue
	offsets, and other mechanisms agreed to by the property owner and
	the school district;
	(2)  may provide that the property owner will protect
	the school district in the event the district incurs extraordinary
	education-related expenses related to the project that are not
	directly funded in state aid formulas, including expenses for the
	purchase of portable classrooms and the hiring of additional
	personnel to accommodate a temporary increase in student enrollment
	attributable to the project;
	(3)  must require the property owner to maintain a
	viable presence in the school district for at least five [three]
	years after the date the limitation on appraised value of the
	owner's property expires;
	(4)  must provide for the termination of the agreement,
	the recapture of ad valorem tax revenue lost as a result of the
	agreement if the owner of the property fails to comply with the
	terms of the agreement, and payment of a penalty or interest, or
	both, on that recaptured ad valorem tax revenue;
	(5)  may specify any conditions the occurrence of which
	will require the district and the property owner to renegotiate all
	or any part of the agreement; [and]
	(6)  must specify the ad valorem tax years covered by
	the agreement; and
	(7)  must be in a form approved by the comptroller.
	(h)  The agreement between the governing body of the school
	district and the applicant may provide for a deferral of the date on
	which the qualifying time period for the project is to commence or,
	subsequent to the date the agreement is entered into, be amended to
	provide for such a deferral.  The agreement may not provide for the
	deferral of the date on which the qualifying time period is to
	commence to a date later than January 1 of the fourth tax year that
	begins after the date the application is approved except that if the
	agreement is one of a series of agreements related to the same
	project, the agreement may provide for the deferral of the date on
	which the qualifying time period is to commence to a date not later
	than January 1 of the sixth tax year that begins after the date the
	application is approved. This subsection may not be construed to
	permit a qualifying time period that has commenced to continue for
	more than the number of years applicable to the project under
	Section 313.021(4).
	(i)  A person and the school district may not enter into an
	agreement under which the person agrees to provide supplemental
	payments to a school district or any other entity on behalf of a
	school district in an amount that exceeds an amount equal to the
	greater of $100 per student per year in average daily attendance, as
	defined by Section 42.005, Education Code, or $50,000 per year, or
	for a period that exceeds the period beginning with the period
	described by Section 313.021(4) and ending December 31 of the third
	tax year after the date the person's eligibility for a limitation
	under this chapter expires [with the period described by Section
	313.104(2)(B) of this code].  This limit does not apply to amounts
	described by Subsection (f)(1) or (2) [of this section].
	(j)  An agreement under this chapter must disclose any
	consideration promised in conjunction with the application and the
	limitation.
	SECTION 10.  Section 313.0275, Tax Code, is amended by
	amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(a)  Notwithstanding any other provision of this chapter to
	the contrary, a person with whom a school district enters into an
	agreement under this subchapter must make the minimum amount of
	qualified investment during the qualifying time period [and create
	the required number of qualifying jobs during each year of the
	agreement].
	(d)  In the event of a casualty loss that prevents a person
	from complying with Subsection (a), the person may request and the
	comptroller may grant a waiver of the penalty imposed under
	Subsection (b).
	SECTION 11.  Subchapter B, Chapter 313, Tax Code, is amended
	by adding Section 313.0276 to read as follows:
	Sec. 313.0276.  PENALTY FOR FAILURE TO COMPLY WITH
	JOB-CREATION REQUIREMENTS. (a) The comptroller shall conduct an
	annual review and issue a determination as to whether a person with
	whom a school district has entered into an agreement under this
	chapter satisfied in the preceding year the requirements of this
	chapter regarding the creation of the required number of qualifying
	jobs. If the comptroller makes an adverse determination in the
	review, the comptroller shall notify the person of the cause of the
	adverse determination and the corrective measures necessary to
	remedy the determination.
	(b)  If a person who receives an adverse determination fails
	to remedy the determination following notification of the
	determination and the comptroller makes an adverse determination
	with respect to the person's compliance in the following year, the
	person must submit to the comptroller a plan for remedying the
	determination and certify the person's intent to fully implement
	the plan not later than December 31 of the year in which the
	determination is made.
	(c)  If a person who receives an adverse determination under
	Subsection (b) fails to comply with that subsection following
	notification of the determination and receives an adverse
	determination in the following year, the comptroller shall impose a
	penalty on the person. The penalty is in an amount equal to the
	amount computed by:
	(1)  subtracting from the number of qualifying jobs
	required to be created the number of qualifying jobs actually
	created; and
	(2)  multiplying the amount computed under Subdivision
	(1) by the average annual wage for all jobs in the county during the
	most recent four quarters for which data is available.
	(d)  Notwithstanding Subsection (c), if a person receives an
	adverse determination and the comptroller has previously imposed a
	penalty on the person under this section one or more times, the
	comptroller shall impose a penalty on the person in an amount equal
	to the amount computed by multiplying the amount computed under
	Subsection (c)(1) by an amount equal to twice the amount computed
	under Subsection (c)(2).
	(e)  Notwithstanding Subsections (c) and (d), a penalty
	imposed under this section may not exceed an amount equal to the
	difference between the amount of the ad valorem tax benefit
	received by the person under the agreement in the preceding year and
	the amount of any supplemental payments made to the school district
	in that year.
	(f)  A job created by a person that is not a qualifying job
	because the job does not meet a numerical requirement of Section
	313.021(3)(A), (D), or (E) is considered for purposes of this
	section to be a nonqualifying job only if the job fails to meet the
	numerical requirement by at least 10 percent.
	(g)  An adverse determination under this section is a
	deficiency determination under Section 111.008. A penalty imposed
	under this section is an amount the comptroller is required to
	collect, receive, administer, or enforce, and the determination is
	subject to the payment and redetermination requirements of Sections
	111.0081 and 111.009.
	(h)  A redetermination under Section 111.009 of an adverse
	determination under this section is a contested case as defined by
	Section 2001.003, Government Code.
	(i)  If a person on whom a penalty is imposed under this
	section contends that the amount of the penalty is unlawful or that
	the comptroller may not legally demand or collect the penalty, the
	person may challenge the determination of the comptroller under
	Subchapters A and B, Chapter 112.
	(j)  If the comptroller imposes a penalty on a person under
	this section three times, the comptroller may rescind the agreement
	between the person and the school district under this chapter.
	(k)  A person may contest a determination by the comptroller
	to rescind an agreement between the person and a school district
	under this chapter pursuant to Subsection (j) by filing suit
	against the comptroller and the attorney general. The district
	courts of Travis County have exclusive, original jurisdiction of a
	suit brought under this subsection. This subsection prevails over
	a provision of Chapter 25, Government Code, to the extent of any
	conflict.
	(l)  If a person files suit under Subsection (k) and the
	comptroller's determination to rescind the agreement is upheld on
	appeal, the person shall pay to the comptroller any tax that would
	have been due and payable to the school district during the pendency
	of the appeal, including statutory interest and penalties imposed
	on delinquent taxes under Sections 111.060 and 111.061.
	(m)  The comptroller shall deposit a penalty collected under
	this section, including any interest and penalty applicable to the
	penalty, to the credit of the foundation school fund.
	SECTION 12.  Section 313.031, Tax Code, is amended to read as
	follows:
	Sec. 313.031.  RULES AND FORMS; FEES.  (a)  The comptroller
	shall:
	(1)  adopt rules and forms necessary for the
	implementation and administration of this chapter, including rules
	for determining whether a property owner's property qualifies as a
	qualified investment under Section 313.021(1); and
	(2)  provide without charge one copy of the rules and
	forms to any school district and to any person who states that the
	person intends to apply for a limitation on appraised value under
	this subchapter [or a tax credit under Subchapter D].
	(b)  The governing body of a school district by official
	action shall establish reasonable nonrefundable application fees
	to be paid by property owners who apply to the district for a
	limitation on the appraised value of the person's property under
	this subchapter. The amount of an application fee must be
	reasonable and may not exceed the estimated cost to the district of
	processing and acting on an application, including any cost to the
	school district associated with [the cost of] the economic impact
	evaluation required by Section [Sections] 313.025 [and 313.026].
	SECTION 13.  Section 313.032, Tax Code, is amended by
	amending Subsections (a) and (c) and adding Subsections (b-1) and
	(d) to read as follows:
	(a)  Before the beginning of each regular session of the
	legislature, the comptroller shall submit to the lieutenant
	governor, the speaker of the house of representatives, and each
	other member of the legislature a report on the agreements entered
	into under this chapter that includes:
	(1)  an assessment of the following with regard to the
	agreements entered into under this chapter, considered in the
	aggregate:
	(A)  the total number of jobs created, direct and
	otherwise, in this state;
	(B)  the total effect on personal income, direct
	and otherwise, in this state;
	(C)  the total amount of investment in this state;
	(D)  the total taxable value of property on the
	tax rolls in this state, including property for which the
	limitation period has expired;
	(E)  the total value of property not on the tax
	rolls in this state as a result of agreements entered into under
	this chapter; and
	(F)  the total fiscal effect on the state and
	local governments; and
	(2)  an assessment of [assessing] the progress of each
	agreement made under this chapter that states[.     The report must be
	based on data certified to the comptroller by each recipient of a
	limitation on appraised value under this subchapter and state] for
	each agreement:
	(A) [(1)]  the number of qualifying jobs each
	recipient of a limitation on appraised value committed to create;
	(B) [(2)]  the number of qualifying jobs each
	recipient created;
	(C) [(3)]  the total amount of wages and the
	median wage of the new qualifying jobs each recipient created;
	(D) [(4)]  the amount of the qualified investment
	each recipient committed to spend or allocate for each project;
	(E) [(5)]  the amount of the qualified investment
	each recipient spent or allocated for each project;
	(F) [(6)]  the market value of the qualified
	property of each recipient as determined by the applicable chief
	appraiser, including property that is no longer eligible for a
	limitation on appraised value under the agreement;
	(G) [(7)]  the limitation on appraised value for
	the qualified property of each recipient;
	(H)  [(8)]  the dollar amount of the taxes that
	would have been imposed on the qualified property if the property
	had not received a limitation on appraised value; and
	(I)  [(9)]  the dollar amount of the taxes imposed
	on the qualified property[;
	[(10)     the number of new jobs created by each recipient
	in each sector of the North American Industry Classification
	System; and
	[(11)     of the number of new jobs each recipient
	created, the number of jobs created that provide health benefits
	for employees].
	(b-1)  In preparing the portion of the report described by
	Subsection (a)(1), the comptroller may use standard economic
	estimation techniques, including economic multipliers.
	(c)  The portion of the report described by Subsection (a)(2)
	must be based on data certified to the comptroller by each recipient
	or former recipient of a limitation on appraised value under this
	chapter.
	(d)  The comptroller may require a recipient or former
	recipient of a limitation on appraised value under this chapter to
	submit, on a form the comptroller provides, information required to
	complete the report.
	SECTION 14.  Subchapter B, Chapter 313, Tax Code, is amended
	by adding Section 313.033 to read as follows:
	Sec. 313.033.  REPORT ON COMPLIANCE WITH JOB-CREATION
	REQUIREMENTS. Each recipient of a limitation on appraised value
	under this chapter shall submit to the comptroller an annual report
	on a form provided by the comptroller that provides information
	sufficient to document the number of qualifying jobs created.
	SECTION 15.  The heading to Subchapter C, Chapter 313, Tax
	Code, is amended to read as follows:
	SUBCHAPTER C.  LIMITATION ON APPRAISED VALUE OF PROPERTY IN
	STRATEGIC INVESTMENT AREA OR CERTAIN RURAL SCHOOL DISTRICTS
	SECTION 16.  Section 313.051, Tax Code, is amended to read as
	follows:
	Sec. 313.051.  APPLICABILITY. (a) In this section,
	"strategic investment area" means an area the comptroller
	determines under Subsection (a-3) is:
	(1)  a county within this state with unemployment above
	the state average and per capita income below the state average;
	(2)  an area within this state that is a federally
	designated urban enterprise community or an urban enhanced
	enterprise community; or
	(3)  a defense economic readjustment zone designated
	under Chapter 2310, Government Code.
	(a-1)  This subchapter applies only to a school district that
	has territory in:
	(1)  an area that qualifies [qualified] as a strategic
	investment area [under Subchapter O, Chapter 171, immediately
	before that subchapter expired]; or
	(2)  a county:
	(A)  that has a population of less than 50,000;
	and
	(B)  in which, from 2000 [1990] to 2010 [2000],
	according to the federal decennial census, the population:
	(i)  remained the same;
	(ii)  decreased; or
	(iii)  increased, but at a rate of not more
	than the average rate of increase in the state during that period
	[three percent per annum].
	(a-2) [(a-1)]  Notwithstanding Subsection (a-1) [(a)], if on
	January 1, 2002, this subchapter applied to a school district in
	whose territory is located a federal nuclear facility, this
	subchapter continues to apply to the school district regardless of
	whether the school district ceased or ceases to be described by
	Subsection (a-1) [(a)] after that date.
	(a-3)  Not later than September 1 of each year, the
	comptroller shall determine areas that qualify as a strategic
	investment area using the most recently completed full calendar
	year data available on that date and, not later than October 1,
	shall publish a list and map of the designated areas. A
	determination under this subsection is effective for the following
	tax year for purposes of this subchapter.
	(b)  The governing body of a school district to which this
	subchapter applies may enter into an agreement in the same manner as
	a school district to which Subchapter B applies may do so under
	Subchapter B, subject to Sections 313.052-313.054.  Except as
	otherwise provided by this subchapter, the provisions of Subchapter
	B apply to a school district to which this subchapter applies.  For
	purposes of this subchapter, a property owner is required to create
	[only] at least 10 new qualifying jobs as defined by Section
	313.021(3) on the owner's qualified property.  [At least 80 percent
	of all the new jobs created must be qualifying jobs as defined by
	Section 313.021(3), except that, for a school district described by
	Subsection (a)(2), each qualifying job must pay at least 110
	percent of the average weekly wage for manufacturing jobs in the
	region designated for the regional planning commission, council of
	governments, or similar regional planning agency created under
	Chapter 391, Local Government Code, in which the district is
	located.]
	SECTION 17.  Section 313.054(a), Tax Code, is amended to
	read as follows:
	(a)  For a school district to which this subchapter applies,
	the amount agreed to by the governing body of the district under
	Section 313.027(a)(2) must be an amount in accordance with the
	following, according to the category established by Section 313.052
	to which the school district belongs:
	CATEGORY MINIMUM AMOUNT OF LIMITATION
	I $30 million
	II $25 [$20] million
	III $20 [$10] million
	IV $15 [$5] million
	V $10 [$1] million
	SECTION 18.  The heading to Subchapter E, Chapter 313, Tax
	Code, is amended to read as follows:
	SUBCHAPTER E.  AVAILABILITY OF TAX CREDIT AFTER PROGRAM
	EXPIRES OR IS REPEALED
	SECTION 19.  Section 313.171(b), Tax Code, is amended to
	read as follows:
	(b)  The repeal [expiration] of Subchapter D does not affect
	a property owner's entitlement to a tax credit granted under
	Subchapter D if the property owner qualified for the tax credit
	before the repeal [expiration] of Subchapter D.
	SECTION 20.  Section 42.2515(a), Education Code, is amended
	to read as follows:
	(a)  For each school year, a school district, including a
	school district that is otherwise ineligible for state aid under
	this chapter, is entitled to state aid in an amount equal to the
	amount of all tax credits credited against ad valorem taxes of the
	district in that year under former Subchapter D, Chapter 313, Tax
	Code.
	SECTION 21.  Section 42.302(e), Education Code, is amended
	to read as follows:
	(e)  For purposes of this section, school district taxes for
	which credit is granted under former Subchapter D, Chapter 313, Tax
	Code, are considered taxes collected by the school district as if
	the taxes were paid when the credit for the taxes was granted.
	SECTION 22.  The following provisions of the Tax Code are
	repealed:
	(1)  Sections 313.008 and 313.009; and
	(2)  Subchapter D, Chapter 313.
	SECTION 23.  (a)  Except as provided by Subsection (b) of
	this section, Chapter 313, Tax Code, as amended by this Act, applies
	only to an application filed under that chapter on or after the
	effective date of this Act. An application filed under that chapter
	before the effective date of this Act is governed by the law in
	effect on the date the application was filed, and the former law is
	continued in effect for that purpose.
	(b)  An agreement entered into on or after January 1, 2013,
	pursuant to an application filed under Chapter 313, Tax Code,
	before the effective date of this Act may condition eligibility for
	a limitation on appraised value under Subchapter B or C of that
	chapter, as applicable, on compliance with the provisions of that
	chapter, as amended by this Act, relating to the creation of new
	jobs, including Section 313.021(3), Tax Code, and Section
	313.024(d) or 313.051(b), Tax Code, as applicable.
	SECTION 24.  The comptroller shall make the initial
	determination under Section 313.051(a-3), Tax Code, as added by
	this Act, not later than September 1, 2014, and shall publish the
	initial list and map required by that subsection not later than
	October 1, 2014.
	SECTION 25.  This Act takes effect January 1, 2014.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3390 was passed by the House on May 4,
	2013, by the following vote:  Yeas 129, Nays 7, 2 present, not
	voting; that the House refused to concur in Senate amendments to
	H.B. No. 3390 on May 24, 2013, and requested the appointment of a
	conference committee to consider the differences between the two
	houses; and that the House adopted the conference committee report
	on H.B. No. 3390 on May 26, 2013, by the following vote:  Yeas 138,
	Nays 6, 2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3390 was passed by the Senate, with
	amendments, on May 21, 2013, by the following vote:  Yeas 29, Nays
	2; at the request of the House, the Senate appointed a conference
	committee to consider the differences between the two houses; and
	that the Senate adopted the conference committee report on H.B. No.
	3390 on May 26, 2013, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor