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