By: Estes	S.B. No. 1627

	A BILL TO BE ENTITLED
	AN ACT
	relating to consulting agreements, limitation on appraised value,
	and supplemental payments under the Texas Economic Development Act.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter A, Chapter 313, Tax Code, is amended
	by adding Section 313.008 to read as follows:
	Sec. 313.008.  CERTAIN CONSULTING AGREEMENTS PROHIBITED.
	(a) In this section, "compensation" has the meaning assigned by
	Section 305.002, Government Code.
	(b)  A person may not for compensation act as a consultant on
	behalf of a school district in relation to an application or
	agreement for a limitation on appraised value authorized by this
	chapter if the person is:
	(1)  an employee of the school district, including the
	superintendent of the district;
	(2)  a member of the board of trustees of the school
	district; or
	(3)  related to a person described by Subdivision (1)
	or (2) in the first degree by consanguinity or affinity, as
	determined under Chapter 573, Government Code.
	SECTION 2.  Section 313.022(b), Tax Code, is amended to read
	as follows:
	(b)  For purposes of determining the required minimum amount
	of a qualified investment under Section 313.021(2)(A)(iv)(a), [and
	the minimum amount of a limitation on appraised value under Section
	313.027(b),] school districts to which this subchapter applies are
	categorized according to the taxable value of property in the
	district for the preceding tax year determined under Subchapter M,
	Chapter 403, Government Code, as follows:
	CATEGORY  TAXABLE VALUE OF PROPERTY
	I        $10 billion or more
	II       $1 billion or more but less than $10 billion
	III      $500 million or more but less than $1 billion
	IV       $100 million or more but less than $500 million
	V        less than $100 million
	SECTION 3.  Section 313.025(a), Tax Code, is 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
	(2) [(3)]  any information required by the comptroller
	for the purposes of Section 313.026.
	SECTION 4.  Sections 313.027(b), (c), and (f), Tax Code, are
	amended to read as follows:
	(b)  The amount agreed to by the governing body of a school
	district under Subsection (a)(2) must be an amount that is:
	(1)  determined for each tax year in which the
	limitation under Subsection (a) applies; and
	(2)  equal to at least 33.3 percent of the market value
	of the person's qualified property for that tax year. [in
	accordance with the following, according to the category
	established by Section 313.022 to which the school district
	belongs:
	[CATEGORY   MINIMUM AMOUNT OF LIMITATION
	[I          $100 million
	[II         $80 million
	[III        $60 million
	[IV         $40 million
	[V          $20 million]
	(c)  The limitation amounts determined under [listed in]
	Subsection (b) are minimum amounts. A school district, regardless
	of category, may agree to a greater amount than those amounts.
	(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, in accommodating a
	temporary increase in student enrollment attributable to the
	project, incurs the following extraordinary education-related
	expenses:
	(A)  expenses related to [the project that are not
	directly funded in state aid formulas, including expenses for] the
	purchase of portable classrooms; or [and]
	(B)  expenses related to 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 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;
	(6)  must specify the ad valorem tax years covered by
	the agreement;
	(7)  must require the property owner to provide a
	supplemental payment to the district or another entity on behalf of
	the district in an amount equal to $25 per student per year in
	average daily attendance, as defined by Section 42.005, Education
	Code, for each ad valorem tax year covered by the agreement, except
	that in a tax year, no district may collect in supplemental payments
	from all property owners in the district an amount equal to more
	than two percent of the district's budget; and
	(8) [(7)]  must be in a form approved by the
	comptroller.
	SECTION 5.  The heading to Section 313.031, Tax Code, is
	amended to read as follows:
	Sec. 313.031.  RULES AND FORMS[; FEES].
	SECTION 6.  Section 313.052, Tax Code, is amended to read as
	follows:
	Sec. 313.052.  CATEGORIZATION OF SCHOOL DISTRICTS. For
	purposes of determining the required minimum amount of a qualified
	investment under Section 313.021(2)(A)(iv)(a) [and the minimum
	amount of a limitation on appraised value under this subchapter],
	school districts to which this subchapter applies are categorized
	according to the taxable value of industrial property in the
	district for the preceding tax year determined under Subchapter M,
	Chapter 403, Government Code, as follows:
	CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
	I        $200 million or more
	II       $90 million or more but less than $200 million
	III      $1 million or more but less than $90 million
	IV       $100,000 or more but less than $1 million
	V        less than $100,000
	SECTION 7.  Section 313.054, Tax Code, is amended to read as
	follows:
	Sec. 313.054.  LIMITATION ON APPRAISED VALUE. (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 that is:
	(1)  determined for each tax year in which the
	limitation under this subsection applies; and
	(2)  equal to at least 33.3 percent of the market value
	of the person's qualified property for that tax year. [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 million
	[III      $20 million
	[IV       $15 million
	[V        $10 million]
	(b)  The limitation amounts determined under [listed in]
	Subsection (a) are minimum amounts. A school district, regardless
	of category, may agree to a greater amount than those amounts.
	SECTION 8.  Sections 313.027(i) and 313.031(b), Tax Code,
	are repealed.
	SECTION 9.  The change in law made by this Act applies only
	to an agreement entered into pursuant to an application filed under
	Chapter 313, Tax Code, on or after the effective date of this Act.
	An agreement entered into pursuant to 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.
	SECTION 10.  This Act takes effect September 1, 2017.