BILL ANALYSIS |
C.S.H.B. 1987 |
By: Springer |
Ways & Means |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Interested parties are concerned about changes to the Texas Economic Development Act that allow school districts to waive the job creation requirement as it relates to the eligibility of a business for a limitation on the appraised value of property for purposes of the maintenance and operations portion of school district property taxes. These parties contend that the job creation requirement has been disproportionately waived for wind-based electricity generation projects as compared to manufacturing projects. The parties claim that, as a result of these waivers, wind-based electricity generation accounts for the highest estimated gross tax benefit per committed job over the life of a project agreement, which has created a cost borne by the state and not the school district that waived the requirement. Interested parties further contend that the potential for wind farms to rapidly depreciate in value can ultimately turn these project agreements into a bad deal because there may not be enough of a taxable asset after depreciation to allow the recapture of the maintenance and operations tax when the tax relief ends. C.S.H.B. 1987 seeks to remedy these issues.
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CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 1987 amends the Tax Code to remove the authority of the governing body of a school district to waive certain new jobs creation requirements and approve an application for a limitation on the appraised value of property for school district maintenance and operations property tax purposes under the Texas Economic Development Act if the governing body makes a finding that the jobs creation requirement exceeds the industry standard for the number of employees reasonably necessary for the operation of the facility of the property owner that is described in the application. The bill instead authorizes the governing body of a school district to request that the Texas Economic Development and Tourism Office (TEDTO) or its successor submit a recommendation as to whether the new jobs creation requirement should be reduced or waived and, if reduced, the number of new jobs that should be required to be created.
C.S.H.B. 1987 requires a school district's governing body that elects to request that TEDTO or its successor submit such a recommendation to deliver a copy of the application for a limitation on appraised value to TEDTO or its successor and to notify the comptroller of public accounts of the governing body's election. The bill requires the comptroller to provide a copy of the economic impact evaluation of the application to TEDTO or its successor. The bill requires the recommendation of TEDTO or its successor to be based on the economic impact evaluation and on any other information available to TEDTO or its successor. The bill requires TEDTO or its successor to submit its recommendation to the governing body of the school district as soon as practicable after receipt of the copy of the economic impact evaluation but not later than the 30th day after the date TEDTO or its successor receives the copy of the economic impact evaluation.
C.S.H.B. 1987 authorizes TEDTO or its successor to recommend waiving or reducing the new jobs requirement on the condition that TEDTO or its successor determines that the jobs creation requirement exceeds the industry standard for the number of employees reasonably necessary for the operation of the facility of the property owner that is described in the application. The bill authorizes the governing body of the school district to waive or reduce the new jobs creation requirement on the condition that TEDTO or its successor recommends waiving or reducing the new jobs creation requirement and only to the extent recommended by TEDTO or its successor. The bill makes failure of a school district's governing body to receive the recommendation of TEDTO or its successor an exception to the requirement that the governing body approve or disapprove an application not later than the 150th day after the date the application is filed.
C.S.H.B. 1987 shortens the deadline for the completion of an economic impact evaluation of an application for a limitation on the appraised value of property for school district maintenance and operations property tax purposes, and for the comptroller's action on such an application, from the 90th day after the date the comptroller receives the application to the 60th day after such date.
C.S.H.B. 1987 requires the economic impact evaluation of an application for a limitation on the appraised value of property for school district maintenance and operations property tax purposes to include any information that the comptroller determines is necessary or helpful to TEDTO or its successor in determining whether to recommend the waiver or reduction of the new jobs creation requirement if such a recommendation is requested.
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EFFECTIVE DATE
January 1, 2016.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 1987 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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