87R7828 SMH/KJE-D
	By: Murphy	H.B. No. 1556

	A BILL TO BE ENTITLED
	AN ACT
	relating to the Texas Economic Development Act.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 23.03, Tax Code, is amended to read as
	follows:
	Sec. 23.03.  COMPILATION OF LARGE PROPERTIES AND PROPERTIES
	SUBJECT TO EXEMPTION FROM AD VALOREM TAXATION [LIMITATION ON
	APPRAISED VALUE]. Each year the chief appraiser shall compile and
	send to the Texas [Department of] Economic Development and Tourism
	Office a list of properties in the appraisal district that in that
	tax year:
	(1)  have a market value of $100 million or more; or
	(2)  are subject to an exemption from ad valorem
	taxation [a limitation on appraised value] under Chapter 313.
	SECTION 2.  Section 151.359(k), Tax Code, is amended to read
	as follows:
	(k)  A data center is not eligible to receive an exemption
	under this section if the data center is subject to an agreement
	limiting the appraised value of the data center's property under
	Subchapter B [or C], Chapter 313, as that subchapter existed before
	September 1, 2021, or former Subchapter C, Chapter 313.
	SECTION 3.  Section 151.3595(j), Tax Code, is amended to
	read as follows:
	(j)  A data center is not eligible to receive an exemption
	under this section if the data center is subject to an agreement
	limiting the appraised value of the data center's property under
	Subchapter B [or C], Chapter 313, as that subchapter existed before
	September 1, 2021, or former Subchapter C, Chapter 313.
	SECTION 4.  Section 171.602(f), Tax Code, is amended to read
	as follows:
	(f)  The comptroller may not issue a credit under this
	section before the later of:
	(1)  September 1, 2018; or
	(2)  the expiration of an agreement under Chapter 313
	as that chapter existed before September 1, 2021, regarding the
	clean energy project for which the credit is issued.
	SECTION 5.  Section 312.0025(a), Tax Code, is amended to
	read as follows:
	(a)  Notwithstanding any other provision of this chapter to
	the contrary, the governing body of a school district, in the manner
	required for official action and for purposes of Subchapter B [or
	C], Chapter 313, may designate an area entirely within the
	territory of the school district as a reinvestment zone if the
	governing body finds that, as a result of the designation and the
	granting of an exemption from ad valorem taxation [a limitation on
	appraised value] under Subchapter B [or C], Chapter 313, for
	property located in the reinvestment zone, the designation is
	reasonably likely to:
	(1)  contribute to the expansion of primary employment
	in the reinvestment zone; or
	(2)  attract major investment in the reinvestment zone
	that would:
	(A)  be a benefit to property in the reinvestment
	zone and to the school district; and
	(B)  contribute to the economic development of the
	region of this state in which the school district is located.
	SECTION 6.  Section 312.403(a), Tax Code, is amended to read
	as follows:
	(a)  In this section, "nuclear electric power generation"
	means activities described in category 221113 of the 2002 North
	American Industry Classification System [has the meaning assigned
	by Section 313.024(e)].
	SECTION 7.  Section 313.004, Tax Code, is amended to read as
	follows:
	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 provided by this chapter;
	(B)  an applicant for an ad valorem tax 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 to receive an ad valorem tax benefit provided by this
	chapter;
	(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 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 exemptions from ad
	valorem taxation [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.
	SECTION 8.  Section 313.007, Tax Code, is amended to read as
	follows:
	Sec. 313.007.  EXPIRATION. Subchapter [Subchapters] B
	expires [and C expire] December 31, 2032 [2022].
	SECTION 9.  The heading to Subchapter B, Chapter 313, Tax
	Code, is amended to read as follows:
	SUBCHAPTER B. EXEMPTION FROM AD VALOREM TAXATION [LIMITATION ON
	APPRAISED VALUE] OF CERTAIN PROPERTY [USED TO CREATE JOBS]
	SECTION 10.  Section 313.021, Tax Code, is amended by
	amending Subdivisions (1), (2), and (4) and adding Subdivision (6)
	to read as follows:
	(1)  "Qualified investment" means:
	(A)  tangible personal property that is first
	placed in service in this state during the applicable qualifying
	time period that begins on or after January 1, 2002, without regard
	to whether the property is affixed to or incorporated into real
	property, and that is described as Section 1245 property by Section
	1245(a), Internal Revenue Code of 1986;
	(B)  tangible personal property that is first
	placed in service in this state during the applicable qualifying
	time period that begins on or after January 1, 2002, without regard
	to whether the property is affixed to or incorporated into real
	property, and that is used in connection with the manufacturing,
	processing, or fabrication in a cleanroom environment of a
	semiconductor product, without regard to whether the property is
	actually located in the cleanroom environment, including:
	(i)  integrated systems, fixtures, and
	piping;
	(ii)  all property necessary or adapted to
	reduce contamination or to control airflow, temperature, humidity,
	chemical purity, or other environmental conditions or
	manufacturing tolerances; and
	(iii)  production equipment and machinery,
	moveable cleanroom partitions, and cleanroom lighting;
	(C)  [tangible personal property that is first
	placed in service in this state during the applicable qualifying
	time period that begins on or after January 1, 2002, without regard
	to whether the property is affixed to or incorporated into real
	property, and that is used in connection with the operation of a
	nuclear electric power generation facility, including:
	[(i)  property, including pressure vessels,
	pumps, turbines, generators, and condensers, used to produce
	nuclear electric power; and
	[(ii)  property and systems necessary to
	control radioactive contamination;
	[(D)  tangible personal property that is first
	placed in service in this state during the applicable qualifying
	time period that begins on or after January 1, 2002, without regard
	to whether the property is affixed to or incorporated into real
	property, and that is used in connection with operating an
	integrated gasification combined cycle electric generation
	facility, including:
	[(i)  property used to produce electric
	power by means of a combined combustion turbine and steam turbine
	application using synthetic gas or another product produced by the
	gasification of coal or another carbon-based feedstock; or
	[(ii)  property used in handling materials
	to be used as feedstock for gasification or used in the gasification
	process to produce synthetic gas or another carbon-based feedstock
	for use in the production of electric power in the manner described
	by Subparagraph (i);
	[(E)  tangible personal property that is first
	placed in service in this state during the applicable qualifying
	time period that begins on or after January 1, 2010, without regard
	to whether the property is affixed to or incorporated into real
	property, and that is used in connection with operating an advanced
	clean energy project, as defined by Section 382.003, Health and
	Safety Code; or
	[(F)]  a building or a permanent, nonremovable
	component of a building that is built or constructed during the
	applicable qualifying time period that begins on or after January
	1, 2002, and that houses tangible personal property described by
	Paragraph (A) or[,] (B); or
	(D)  a building or a permanent, nonremovable
	component of a building that, as part of a discrete project that
	increases the value of the building or component, is renovated,
	expanded, or otherwise improved during the applicable qualifying
	time period that begins on or after January 1, 2022, and that houses
	tangible personal property described by Paragraph (A) or (B)[, (C),
	(D), or (E)].
	(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:
	(a)  construct a new building or erect
	or affix a new improvement that does not exist before the date the
	person submits a complete application for an exemption from ad
	valorem taxation [a limitation on appraised value] under this
	subchapter; or
	(b)  renovate, expand, or otherwise
	improve an existing building or improvement;
	(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:
	(i)  that is not subject to a tax abatement
	agreement entered into by a school district under Chapter 312;
	(ii)  for which a sales and use tax refund is
	not claimed under Section 151.3186; and
	(iii)  except for new equipment described in
	Section 151.318(q) or (q-1), that is first placed in service in the
	new building, in the newly renovated, expanded, or improved
	building, or in or on the new or newly renovated, expanded, or
	improved 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.
	(4)  "Qualifying time period" means[:
	[(A)]  the period that begins on the date that a
	person's application for an exemption from ad valorem taxation [a
	limitation on appraised value] under this subchapter is approved by
	the governing body of the school district and ends on December 31 of
	the second tax year that begins after that date, except as provided
	by [Paragraph (B) or (C) of this subdivision or] Section
	313.027(h)[;
	[(B)  in connection with a nuclear electric power
	generation facility, the first seven tax years that begin on or
	after the third anniversary of the date the school district
	approves the property owner's application for a limitation on
	appraised value under this subchapter, unless a shorter time period
	is agreed to by the governing body of the school district and the
	property owner; or
	[(C)  in connection with an advanced clean energy
	project, as defined by Section 382.003, Health and Safety Code, the
	first five tax years that begin on or after the third anniversary of
	the date the school district approves the property owner's
	application for a limitation on appraised value under this
	subchapter, unless a shorter time period is agreed to by the
	governing body of the school district and the property owner].
	(6)  "Wealth per student" has the meaning assigned by
	Section 48.273, Education Code.
	SECTION 11.  Section 313.022, Tax Code, is amended to read as
	follows:
	Sec. 313.022.  [APPLICABILITY;] CATEGORIZATION OF SCHOOL
	DISTRICTS. [(a) This subchapter applies to each school district in
	this state other than a school district to which Subchapter C
	applies.
	[(b)]  For purposes of determining the required minimum
	amount of a qualified investment under Section 313.021(2)(A)(iv)
	[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 as follows:
	(1)  Category I consists of school districts having a
	wealth per student of not more than the statewide average wealth per
	student; and
	(2)  Category II consists of school districts having a
	wealth per student of more than the statewide average wealth per
	student. [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 12.  Section 313.023, Tax Code, is amended to read as
	follows:
	Sec. 313.023.  MINIMUM AMOUNTS OF QUALIFIED INVESTMENT. For
	each category of school district established by Section 313.022,
	the minimum amount of a qualified investment under Section
	313.021(2)(A)(iv) [313.021(2)(A)(iv)(a)] is as follows:
	CATEGORY MINIMUM QUALIFIED INVESTMENT
	I $10 [$100] million
	II $50 [$80] million
	[III $60 million
	[IV $40 million
	[V $20 million]
	SECTION 13.  Sections 313.024(a), (b), (b-1), and (c), Tax
	Code, are amended to read as follows:
	(a)  This subchapter applies [and Subchapter C apply] only to
	property owned by an entity subject to the tax imposed by Chapter
	171.
	(b)  To be eligible for an exemption from ad valorem taxation
	[a limitation on appraised value] under this subchapter, the entity
	must use the property for:
	(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;
	(4) [(6)  electric power generation using integrated
	gasification combined cycle technology;
	[(7)  nuclear electric power generation;
	[(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; or
	(5)  a battery energy storage facility within the scope
	of Subchapter E, Chapter 35, Utilities Code.
	(b-1)  Notwithstanding any other provision of this
	subchapter, an owner of a parcel of land that is located wholly or
	partly in a reinvestment zone, a new building constructed on the
	parcel of land, a new improvement erected or affixed on the parcel
	of land, or tangible personal property placed in service in the
	building or improvement or on the parcel of land may not receive an
	exemption from ad valorem taxation [a limitation on appraised
	value] under this subchapter for the parcel of land, building,
	improvement, or tangible personal property under an agreement under
	this subchapter that is entered into on or after September 1, 2021
	[2017], if, on or after that date, a wind-powered energy device is
	installed or constructed on the same parcel of land at a location
	that is within 25 nautical miles of the boundaries of a military
	aviation facility located in this state.  The prohibition provided
	by this subsection applies regardless of whether the wind-powered
	energy device is installed or constructed at a location that is in
	the reinvestment zone.
	(c)  For purposes of determining an applicant's eligibility
	for an exemption from ad valorem taxation [a limitation] under this
	subchapter:
	(1)  the land on which a building or component of a
	building described by Section 313.021(1)(C) or (D) [313.021(1)(E)]
	is located is not considered a qualified investment;
	(2)  property that is leased under a capitalized lease
	may be considered a qualified investment;
	(3)  property that is leased under an operating lease
	may not be considered a qualified investment; and
	(4)  property that is owned by a person other than the
	applicant and that is pooled or proposed to be pooled with property
	owned by the applicant may not be included in determining the amount
	of the applicant's qualifying investment.
	SECTION 14.  Section 313.025, Tax Code, is amended by
	amending Subsections (a), (a-1), (b), (d), (d-1), (f), (h), and (i)
	and adding Subsection (a-2) 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 comptroller [governing
	body of the school district in which the property is located] for an
	exemption from ad valorem taxation of the person's qualified
	property by the school district in which the property is located as
	provided by Section 313.027 [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 Subsection (a-1) [the comptroller], and [it
	must] be accompanied by an[:
	[(1)  the] application fee of $50,000 [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 Section 313.026].
	(a-1)  The application form may require the applicant to
	provide only the following information:
	(1)  the name and taxpayer identification number of the
	applicant and each parent, subsidiary, or affiliate of the
	applicant;
	(2)  contact information for the applicant;
	(3)  the name of the school district in which the
	qualified property is located;
	(4)  a description of the project, including the
	category of the applicable North American Industry Classification
	System that describes the activities in which the applicant will
	engage in connection with the project;
	(5)  the location of the project; and
	(6)  for each ad valorem tax year covered by the
	proposed agreement between the applicant and the school district,
	an estimate of:
	(A)  the amount of the qualified investment to be
	spent or allocated for the project;
	(B)  the number of construction jobs to be created
	at the project site and the total amount of wages that will be paid
	to the persons holding those jobs;
	(C)  the number of operations jobs to be held by
	employees of the applicant that will be created at the project site
	and the total amount of wages that will be paid to the persons
	holding those jobs; and
	(D)  the number of operations jobs to be held by
	independent contractors that will be created at the project site
	and the total amount of wages that will be paid to the persons
	holding those jobs.
	(a-2)  Within seven days of the receipt of each document, the
	comptroller [school district] shall submit to the governing body of
	the school district in which the property is located [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 to the comptroller
	[school district], the comptroller [district] shall submit a copy
	of the analysis to the school district [comptroller].  In addition,
	the comptroller [school district] shall submit to the school
	district [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 an exemption from ad valorem
	taxation [a limitation on appraised value].  If the governing body
	of the school district elects to consider an application, the
	governing body shall [deliver a copy of the application to the
	comptroller and] request that the comptroller conduct an economic
	impact evaluation of the investment proposed by the application.
	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 request from the
	school district [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 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 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.
	(d)  Not later than the 90th day after the date the
	comptroller receives the request from the school district [copy of
	the application], the comptroller shall issue a certificate for an
	exemption from ad valorem taxation [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.
	(d-1)  The governing body of a school district may not
	approve an application unless the comptroller submits to the
	governing body a certificate for an exemption from ad valorem
	taxation [a limitation on appraised value] of the property.
	(f)  The governing body may approve an application only if
	the governing body finds that the information in the application is
	true and correct, finds that the applicant is eligible for the
	exemption from ad valorem taxation [limitation on the appraised
	value] of the person's qualified property, and determines that
	granting the application is in the best interest of the school
	district and this state.
	(h)  After receiving a request from the school district [copy
	of the application], the comptroller shall determine whether the
	property meets the requirements of Section 313.024 for eligibility
	for an exemption from ad valorem taxation [a limitation on
	appraised value] under this subchapter.  The comptroller shall
	notify the governing body of the school district of the
	comptroller's determination and provide the applicant an
	opportunity for a hearing before the determination becomes final.
	A hearing under this subsection is a contested case hearing and
	shall be conducted by the State Office of Administrative Hearings
	in the manner provided by Section 2003.101, Government Code.  The
	applicant has the burden of proof on each issue in the hearing.  The
	applicant may seek judicial review of the comptroller's
	determination in a Travis County district court under the
	substantial evidence rule as provided by Subchapter G, Chapter
	2001, Government Code.
	(i)  If the comptroller's determination under Subsection (h)
	that the property does not meet the requirements of Section 313.024
	for an exemption from ad valorem taxation [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 an
	exemption from ad valorem taxation [a limitation on appraised
	value] of the property or a written explanation of the decision not
	to issue a certificate, and the governing body of the school
	district may not grant the application.
	SECTION 15.  Sections 313.026(a), (b), (c), and (d), Tax
	Code, are amended to read as follows:
	(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 an exemption from ad valorem taxation [a limitation
	on appraised value] of the property under Section 313.025.
	(b)  Except as provided by Subsections (c) and (d), the
	comptroller's determination whether to issue a certificate for an
	exemption from ad valorem taxation [a limitation on appraised
	value] under this chapter for property described in the application
	shall be based on the economic impact evaluation described by
	Subsection (a) and on any other information available to the
	comptroller, including information provided by the governing body
	of the school district.
	(c)  The comptroller may not issue a certificate for an
	exemption from ad valorem taxation [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 exemption [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 exemption [limitation on appraised value] is a
	determining factor in the applicant's decision to invest capital
	and construct the project in this state; and
	(3)  the exemption will not financially harm the school
	district in which the property is located.
	(d)  The comptroller shall state in writing the basis for the
	determinations made under Subsections (c)(1), [and] (2), and (3).
	SECTION 16.  Section 313.0265, Tax Code, is amended to read
	as follows:
	Sec. 313.0265.  DISCLOSURE OF EXEMPTION [APPRAISED VALUE
	LIMITATION] INFORMATION. (a) The comptroller shall post on the
	comptroller's Internet website each document or item of information
	the comptroller designates as substantive before the 15th day after
	the date the document or item of information was received or
	created. Each document or item of information must continue to be
	posted until the exemption from ad valorem taxation [appraised
	value limitation] expires.
	(b)  The comptroller shall designate the following as
	substantive:
	(1)  each application requesting an exemption from ad
	valorem taxation [a limitation on appraised value]; and
	(2)  the economic impact evaluation made in connection
	with the application.
	(c)  If a school district maintains a generally accessible
	Internet website, the district shall maintain a link on its
	Internet website to the area of the comptroller's Internet website
	where information on each of the district's agreements to exempt
	property from ad valorem taxation under this chapter [limit
	appraised value] is maintained.
	SECTION 17.  The heading to Section 313.027, Tax Code, is
	amended to read as follows:
	Sec. 313.027.  EXEMPTION OF PROPERTY FROM AD VALOREM
	TAXATION [LIMITATION ON APPRAISED VALUE]; AGREEMENT.
	SECTION 18.  Sections 313.027(a), (a-1), (d), (e), (f), (i),
	and (j), Tax Code, are amended to read as follows:
	(a)  If the person's application is approved by the governing
	body of the school district, the portion of 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 that arises from the project is exempt from
	[may not exceed the lesser of]:
	(1)  the district's tier one maintenance and operations
	tax rate described by Section 45.0032(a), Education Code [market
	value of the property]; and [or]
	(2)  the portion of the district's enrichment tax rate
	described by Section 45.0032(b)(2), Education Code [subject to
	Subsection (b), the amount agreed to by the governing body of the
	school district].
	(a-1)  The agreement must:
	(1)  specify the period for which [provide that] the
	exemption from ad valorem taxation [limitation] under Subsection
	(a) applies, which may not exceed [for a period of] 10 years; and
	(2)  specify the beginning date of the exemption
	[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 following applicable date:
	(i)  in the case of a project involving the
	construction of a new building or the erection or affixing of a new
	improvement, the date commercial operations begin at the site of
	the project; or
	(ii)  in the case of a project involving the
	renovation, expansion, or other improvement of an existing building
	or improvement, the date the renovation, expansion, or other
	improvement is completed.
	(d)  The governing body of the school district and the
	property owner shall enter into a written agreement for the
	implementation of the exemption from ad valorem taxation
	[limitation on appraised value] under this subchapter of [on] the
	owner's qualified property.
	(e)  The agreement must describe with specificity the
	qualified investment that the person will make on or in connection
	with the person's qualified property that is subject to the
	exemption from ad valorem taxation [limitation on appraised value]
	under this subchapter. Other property of the person that is not
	specifically described in the agreement is not subject to the
	exemption [limitation] unless the governing body of the school
	district, by official action, provides that the other property is
	subject to the exemption [limitation].
	(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 years after
	the date the exemption from ad valorem taxation [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; and
	(7)  must be in a form approved by the comptroller.
	(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 48.005, 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]. This subsection [limit] does not:
	(1)  apply to payments provided under [amounts
	described by] Subsection (f)(2); or
	(2)  prohibit a person from voluntarily providing
	supplemental payments to the school district or another entity on
	behalf of the district [(f)(1) or (2)].
	(j)  An agreement under this chapter must disclose any
	consideration promised in conjunction with the application and the
	exemption from ad valorem taxation and stipulate that all
	obligations of the parties to the agreement are stated in the
	agreement. Any separate agreement between the parties that imposes
	any additional obligation on either party is void [limitation].
	SECTION 19.  Section 313.0275(b), Tax Code, is amended to
	read as follows:
	(b)  If in any tax year a property owner fails to comply with
	Subsection (a), the property owner is liable to this state for a
	penalty equal to the amount computed by multiplying the amount of
	the exemption from ad valorem taxation under this subchapter
	[subtracting from the market value] of the property for that tax
	year by the sum of the school district's tier one maintenance and
	operations tax rate described by Section 45.0032(a), Education
	Code, and the portion of the district's enrichment tax rate
	described by Section 45.0032(b)(2) of that code [the value of the
	property as limited by the agreement and multiplying the difference
	by the maintenance and operations tax rate of the school district]
	for that tax year.
	SECTION 20.  Subchapter B, Chapter 313, Tax Code, is amended
	by adding Section 313.0277 to read as follows:
	Sec. 313.0277.  PAYMENT TO STATE BASED ON DIFFERENCE BETWEEN
	AD VALOREM TAX BENEFIT RECEIVED AND WAGES AND OTHER COMPENSATION
	PAID. (a) A person with whom a school district enters into an
	agreement under this subchapter is liable to this state for an
	amount equal to the difference between:
	(1)  the product of:
	(A)  10 percent of the amount of the exemption
	from ad valorem taxation under this subchapter of the property
	subject to the agreement for the current tax year; and
	(B)  the sum of the school district's tier one
	maintenance and operations tax rate described by Section
	45.0032(a), Education Code, and the portion of the district's
	enrichment tax rate described by Section 45.0032(b)(2) of that code
	for the current tax year; and
	(2)  the sum of:
	(A)  the total amount of wages paid during the
	current tax year to employees of the person holding jobs created at
	the site of the project covered by the agreement; and
	(B)  50 percent of the total amount of nonemployee
	compensation paid during the current tax year to independent
	contractors for construction or other work performed at the site of
	the project covered by the agreement as reported on Internal
	Revenue Service Form 1099-MISC or any subsequent form with a
	different number or designation that substantially provides the
	same information.
	(b)  An amount imposed under Subsection (a) becomes
	delinquent if not paid on or before February 1 of the following tax
	year. Section 33.01 applies to the delinquent amount in the manner
	that section applies to delinquent taxes.
	(c)  The comptroller shall deposit an amount collected under
	this section, including any interest and penalty applicable to the
	amount, to the credit of the foundation school fund. Money
	deposited under this subsection may be used only to supplement the
	funds allocated to school districts under Section 48.106, Education
	Code.
	SECTION 21.  Section 313.028, Tax Code, is amended to read as
	follows:
	Sec. 313.028.  CERTAIN BUSINESS INFORMATION CONFIDENTIAL.
	Information provided to a school district or the comptroller in
	connection with an application for an exemption from ad valorem
	taxation [a limitation on appraised value] under this subchapter
	that describes the specific processes or business activities to be
	conducted or the specific tangible personal property to be located
	on real property covered by the application shall be segregated in
	the application from other information in the application and is
	confidential and not subject to public disclosure unless the
	governing body of the school district approves the application.
	Other information in the custody of a school district or the
	comptroller in connection with the application, including
	information related to the economic impact of a project or the
	essential elements of eligibility under this chapter, such as the
	nature and amount of the projected investment, employment, wages,
	and benefits, may not be considered confidential business
	information if the governing body of the school district agrees to
	consider the application. Information in the custody of a school
	district or the comptroller if the governing body approves the
	application is not confidential under this section.
	SECTION 22.  Section 313.030, Tax Code, is amended to read as
	follows:
	Sec. 313.030.  PROPERTY NOT ELIGIBLE FOR TAX ABATEMENT.
	Property subject to an exemption from ad valorem taxation [a
	limitation on appraised value] in a tax year under this subchapter
	is not eligible for tax abatement by a school district under Chapter
	312 in that tax year.
	SECTION 23.  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 an exemption from ad valorem taxation [a
	limitation on appraised value] under this subchapter.
	[(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 economic impact evaluation
	required by Section 313.025.]
	SECTION 24.  Sections 313.032(a), (c), and (d), Tax Code,
	are amended 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 information described by
	Subdivision (2) [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 the progress of each agreement
	made under this chapter that states for each agreement:
	(A)  the number of [qualifying] jobs each
	recipient of an exemption from ad valorem taxation created at the
	project site by the following categories:
	(i)  construction jobs;
	(ii)  operations jobs held by employees of
	the recipient; and
	(iii)  operations jobs held by independent
	contractors [a limitation on appraised value committed to create];
	(B)  the total amount of wages paid by [number of
	qualifying jobs] each recipient to persons holding jobs described
	by Paragraph (A), by category listed in that paragraph [created];
	(C)  [the total amount of wages and the median
	wage of the new qualifying jobs each recipient created;
	[(D)]  the amount of the qualified investment each
	recipient committed to spend or allocate for each project;
	(D) [(E)]  the amount of the qualified investment
	each recipient spent or allocated for each project;
	(E)  the total market value of all of the property
	related to the project covered by the agreement as determined by the
	applicable chief appraiser, regardless of whether the property is
	qualified property;
	(F)  the market value of the portion of the
	qualified property of each recipient as determined by the
	applicable chief appraiser that is currently eligible for an
	exemption from ad valorem taxation[, including property that is no
	longer eligible for a limitation on appraised value] under the
	agreement;
	(G)  [the limitation on appraised value for the
	qualified property of each recipient;
	[(H)]  the dollar amount of the taxes that would
	have been imposed on the [qualified] property related to the
	project, regardless of whether the property is qualified property,
	if the qualified property had not received an exemption from ad
	valorem taxation [a limitation on appraised value]; [and]
	(H) [(I)]  the dollar amount of the taxes imposed
	on the [qualified] property related to the project, regardless of
	whether the property is qualified property; and
	(I)  the difference between the amount described
	by Paragraph (G) and the amount described by Paragraph (H).
	(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 an exemption from ad valorem taxation [a
	limitation on appraised value] under this chapter. The comptroller
	shall verify a random sample of the data submitted under this
	section using information from the Texas Workforce Commission, the
	chief appraiser of the applicable appraisal district, or other
	sources the comptroller considers reliable. The random sample used
	to verify data under this section must constitute not less than 33
	percent of the data used by the comptroller to prepare the report.
	Information provided under this section that contains personal
	identifying information of an individual is confidential and not
	subject to disclosure under Chapter 552, Government Code, or
	Chapter 111, Tax Code.
	(d)  The comptroller may require a recipient or former
	recipient of an exemption from ad valorem taxation [a limitation on
	appraised value] under this chapter to submit, on a form the
	comptroller provides, information required to complete the report.
	SECTION 25.  Section 313.033, Tax Code, is amended to read as
	follows:
	Sec. 313.033.  ANNUAL REPORT BY RECIPIENT OF EXEMPTION [ON
	COMPLIANCE WITH JOB-CREATION REQUIREMENTS]. Each recipient of an
	exemption from ad valorem taxation [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 the
	following information with regard to each agreement entered into by
	the recipient under this chapter:
	(1)  the number of jobs the recipient created at the
	project site by the following categories:
	(A)  construction jobs;
	(B)  operations jobs held by employees of the
	recipient; and
	(C)  operations jobs held by independent
	contractors;
	(2)  the total amount of wages paid by the recipient to
	persons holding jobs described by Subdivision (1), by category
	listed in that subdivision;
	(3)  the amount of the qualified investment the
	recipient committed to spend or allocate for the project;
	(4)  the amount of the qualified investment the
	recipient spent or allocated for the project;
	(5)  the total market value of all of the property
	related to the project covered by the agreement as determined by the
	applicable chief appraiser, regardless of whether the property is
	qualified property;
	(6)  the market value of the portion of the qualified
	property of the recipient as determined by the applicable chief
	appraiser that is currently eligible for an exemption from ad
	valorem taxation under the agreement;
	(7)  the dollar amount of the taxes that would have been
	imposed on the property related to the project, regardless of
	whether the property is qualified property, if the qualified
	property had not received an exemption from ad valorem taxation;
	(8)  the dollar amount of the taxes imposed on the
	property related to the project, regardless of whether the property
	is qualified property; and
	(9)  the difference between the amount described by
	Subdivision (7) and the amount described by Subdivision (8)
	[sufficient to document the number of qualifying jobs created].
	SECTION 26.  Section 313.171, Tax Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  An exemption from ad valorem taxation [A limitation on
	appraised value] approved under Subchapter B [or C] before the
	expiration of that subchapter continues in effect according to that
	subchapter as that subchapter existed immediately before its
	expiration, and that law is continued in effect for purposes of the
	exemption [limitation on appraised value].
	(a-1)  A limitation on appraised value approved under
	Subchapter C before the repeal of that subchapter continues in
	effect according to that subchapter as that subchapter existed
	immediately before its repeal, and that law is continued in effect
	for purposes of the limitation on appraised value.
	SECTION 27.  Section 48.202(b), Education Code, is amended
	to read as follows:
	(b)  In computing the district enrichment tax rate of a
	school district, the total amount of maintenance and operations
	taxes collected by the school district does not include the amount
	of:
	(1)  the district's local fund assignment under Section
	48.256; [or]
	(2)  taxes paid into a tax increment fund under Chapter
	311, Tax Code; or
	(3)  taxes attributable to the application of the
	portion of the district's enrichment tax rate described by Section
	45.0032(b)(1) of this code to the portion of the appraised value of
	property that is otherwise exempt from ad valorem taxation under
	Subchapter B, Chapter 313, Tax Code.
	SECTION 28.  Section 48.2551(a), Education Code, is amended
	to read as follows:
	(a)  In this section:
	(1)  "DPV" has the meaning assigned by Section 48.256;
	(2)  "E" is the expiration of the exclusion of
	appraised property value for the preceding tax year that is
	recognized as taxable property value for the current tax year,
	which is the sum of the following:
	(A)  property value that is no longer subject to
	an exemption from ad valorem taxation [a limitation on appraised
	value] under Chapter 313, Tax Code; and
	(B)  property value under Section 311.013(n), Tax
	Code, that is no longer excluded from the calculation of "DPV" from
	the preceding year because of refinancing or renewal after
	September 1, 2019;
	(3)  "MCR" is the district's maximum compressed rate,
	which is the tax rate for the current tax year per $100 of valuation
	of taxable property at which the district must levy a maintenance
	and operations tax to receive the full amount of the tier one
	allotment to which the district is entitled under this chapter;
	(4)  "PYDPV" is the district's value of "DPV" for the
	preceding tax year; and
	(5)  "PYMCR" is the district's value of "MCR" for the
	preceding tax year.
	SECTION 29.  Sections 48.256(d) and (e), Education Code, are
	amended to read as follows:
	(d)  This subsection applies to a school district in which
	the board of trustees entered into a written agreement with a
	property owner under Section 313.027, Tax Code, for the
	implementation of an exemption from ad valorem taxation [a
	limitation on appraised value] under Subchapter B [or C], Chapter
	313, Tax Code, a limitation on appraised value under Subchapter B,
	Chapter 313, Tax Code, as that subchapter existed before September
	1, 2021, or a limitation on appraised value under former Subchapter
	C, Chapter 313, Tax Code. For purposes of determining "DPV" under
	Subsection (a) for a school district to which this subsection
	applies, the commissioner shall exclude a portion of the market
	value of property not otherwise fully taxable by the district under
	Subchapter B [or C], Chapter 313, Tax Code, before the expiration of
	the subchapter or former Subchapter C, Chapter 313, Tax Code,
	before the repeal of that subchapter. The comptroller shall
	provide information to the agency necessary for this subsection.
	[A revenue protection payment required as part of an agreement for a
	limitation on appraised value shall be based on the district's
	taxable value of property for the preceding tax year.]
	(e)  Subsection (d) does not apply to property that was the
	subject of an application under Subchapter B or former Subchapter
	C, Chapter 313, Tax Code, made after May 1, 2009, that the
	comptroller recommended should be disapproved.
	SECTION 30.  Section 2303.507, Government Code, is amended
	to read as follows:
	Sec. 2303.507.  TAX INCREMENT FINANCING AND ABATEMENT;
	EXEMPTIONS FROM AD VALOREM TAXATION [LIMITATIONS ON APPRAISED
	VALUE]. Designation of an area as an enterprise zone is also
	designation of the area as a reinvestment zone for:
	(1)  tax increment financing under Chapter 311, Tax
	Code;
	(2)  tax abatement under Chapter 312, Tax Code; and
	(3)  exemptions from ad valorem taxation [limitations
	on appraised value] under Chapter 313, Tax Code.
	SECTION 31.  The following provisions of the Tax Code are
	repealed:
	(1)  Section 313.006;
	(2)  Section 313.009;
	(3)  Sections 313.021(3) and (5);
	(4)  Sections 313.024(d) and (d-2);
	(5)  Sections 313.024(e)(3), (4), and (6);
	(6)  Section 313.025(f-1);
	(7)  Sections 313.027(b), (c), and (g);
	(8)  Section 313.0276;
	(9)  Section 313.032(b-1); and
	(10)  Subchapter C, Chapter 313.
	SECTION 32.  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.
	SECTION 33.  This Act takes effect September 1, 2021.