This website will be unavailable from Thursday, May 30, 2024 at 6:00 p.m. through Monday, June 3, 2024 at 7:00 a.m. due to data center maintenance.

 
 
  H.B. No. 5
 
 
 
 
AN ACT
  relating to agreements authorizing a limitation on taxable value of
  certain property to provide for the creation of jobs and the
  generation of state and local tax revenue; authorizing fees;
  authorizing penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 403, Government Code, is amended by
  adding Subchapter T to read as follows:
  SUBCHAPTER T. TEXAS JOBS, ENERGY, TECHNOLOGY, AND INNOVATION ACT
         Sec. 403.601.  PURPOSES. The purposes of this subchapter
  are to:
               (1)  create new, high-paying permanent jobs and
  construction jobs in this state;
               (2)  encourage financially positive economic
  development in this state;
               (3)  provide a temporary competitive economic
  incentive for attracting certain large-scale economic development
  projects to this state that, in the absence of this subchapter,
  would likely locate in another state or nation;
               (4)  encourage energy and water infrastructure
  development, including new and expanded dispatchable electric
  generation facilities;
               (5)  make this state a national and international
  leader in new and innovative technologies;
               (6)  encourage the establishment of certain advanced
  manufacturing industry sectors critical to national defense and
  health care;
               (7)  create new wealth, raise personal income, and
  foster long-term expansion of state and local tax bases;
               (8)  provide growing and sustainable economic
  opportunity for the residents of this state; and
               (9)  incentivize the preceding objectives in a
  balanced, transparent, and accountable manner.
         Sec. 403.602.  DEFINITIONS. In this subchapter:
               (1)  "Additional job" means a full-time job in
  connection with an eligible project that is not a required job for
  the same project.
               (2)  "Agreement" means an agreement entered into under
  Section 403.612.
               (3)  "Applicant" means a person that applies for, or
  enters into an agreement providing for, a limitation on the taxable
  value of eligible property used as part of an eligible project,
  including the person's assignees or successors-in-interest.
               (4)  "Appraised value," "tax year," and "taxing unit"
  have the meanings assigned by Section 1.04, Tax Code.
               (5)  "Construction completion date" means the date on
  which an eligible project is first capable of being used for the
  purposes for which it is constructed.
               (6)  "Construction job" means an otherwise full-time
  job that is temporary in nature and is performed before the start of
  the incentive period applicable to an eligible project to perform
  construction, maintenance, remodeling, or repair work for an
  applicant in connection with the project.
               (7)  "Construction period" means the period prescribed
  by an agreement as the construction period of the eligible project
  that is the subject of the agreement.
               (8)  "Eligible project":
                     (A)  means a project:
                           (i)  to construct or expand a new or existing
  facility that is:
                                 (a)  a manufacturing facility;
                                 (b)  a facility related to the
  provision of utility services, including an electric generation
  facility that is considered to be dispatchable because the
  facility's output can be controlled primarily by forces under human
  control;
                                 (c)  a facility related to the
  development of natural resources; or
                                 (d)  a facility engaged in the
  research, development, or manufacture of high-tech equipment or
  technology; or
                           (ii)  to construct or expand critical
  infrastructure; and
                     (B)  does not include a project to construct or
  expand a new or existing:
                           (i)  nondispatchable electric generation
  facility; or
                           (ii)  electric energy storage facility.
               (9)  "Eligible property" means property that is used as
  part of an eligible project that is wholly owned by an applicant or
  leased by an applicant under a capitalized lease and consists of:
                     (A)  a new building or expansion of an existing
  building, including a permanent, nonremovable component of a
  building, that is:
                           (i)  constructed after the date the
  agreement pertaining to the project is entered into; and
                           (ii)  located in an area designated as a
  reinvestment zone under Chapter 311 or 312, Tax Code, or as an
  enterprise zone under Chapter 2303 of this code, at the time the
  agreement pertaining to the project is entered into; or
                     (B)  tangible personal property, other than
  inventory, first located in the zone described by Paragraph (A)(ii)
  after the date the agreement pertaining to the project is entered
  into.
               (10)  "Full-time job" means a permanent full-time job
  that requires a total of at least 1,600 hours of work a year in
  connection with an eligible project.  The term does not include a
  construction job.
               (11)  "Incentive period" for an eligible project means
  the period prescribed by the agreement pertaining to the project
  during which the eligible property used as part of the project is
  subject to a limitation on taxable value.
               (12)  "Independent contractor" has the meaning
  assigned by Section 406.121, Labor Code.
               (13)  "Investment" means the costs incurred by an
  applicant to acquire or construct eligible property composing an
  eligible project, other than the cost of land or inventory.
               (14)  "Oversight committee" means the Jobs, Energy,
  Technology, and Innovation Act Oversight Committee established
  under Section 403.618.
               (15)  "Qualified opportunity zone" means an area
  designated as such by the secretary of the United States Treasury.
               (16)  "Required job" means a job that an applicant
  commits to create or demonstrate in connection with an eligible
  project as prescribed by Section 403.604.
               (17)  "Total jobs" means the sum of required jobs and
  additional jobs in connection with an eligible project.
         Sec. 403.603.  EXPIRATION.  This subchapter expires December
  31, 2033.
         Sec. 403.604.  REQUIRED JOBS AND INVESTMENT.  (a)  A jobs
  requirement prescribed by this section does not apply to an
  eligible project that is an electric generation facility described
  by Section 403.602(8)(A)(i)(b).
         (b)  To be eligible to enter into an agreement, an applicant
  for a limitation on taxable value of eligible property to be used
  for a proposed eligible project must agree to:
               (1)  if the project is to be located in a county with a
  population of at least 750,000:
                     (A)  create at least 75 required jobs by the end of
  the first tax year of the incentive period prescribed by the
  agreement and demonstrate an average of at least that number of jobs
  during each following tax year until the date the agreement
  expires; and
                     (B)  make an investment in the project in an
  amount of at least $200 million by the end of the first tax year of
  the incentive period prescribed by the agreement;
               (2)  if the project is to be located in a county with a
  population of at least 250,000 but less than 750,000:
                     (A)  create at least 50 required jobs by the end of
  the first tax year of the incentive period prescribed by the
  agreement and demonstrate an average of at least that number of jobs
  during each following tax year until the date the agreement
  expires; and
                     (B)  make an investment in the project in an
  amount of at least $100 million by the end of the first tax year of
  the incentive period prescribed by the agreement;
               (3)  if the project is to be located in a county with a
  population of at least 100,000 but less than 250,000:
                     (A)  create at least 35 required jobs by the end of
  the first tax year of the incentive period prescribed by the
  agreement and demonstrate an average of at least that number of jobs
  during each following tax year until the date the agreement
  expires; and
                     (B)  make an investment in the project in an
  amount of at least $50 million by the end of the first tax year of
  the incentive period prescribed by the agreement; or
               (4)  if the project is to be located in a county with a
  population of less than 100,000:
                     (A)  create at least 10 required jobs by the end of
  the first tax year of the incentive period prescribed by the
  agreement and demonstrate an average of at least that number of jobs
  during each following tax year until the date the agreement
  expires; and
                     (B)  make an investment in the project in an
  amount of at least $20 million by the end of the first tax year of
  the incentive period prescribed by the agreement.
         (c)  For purposes of Subsection (b), each required job
  created in connection with an eligible project:
               (1)  must be a new full-time job in this state:
                     (A)  maintained in the usual course and scope of
  the applicant's business, which may be performed by an individual
  who is a trainee under the Texans Work program established under
  Chapter 308, Labor Code; or
                     (B)  performed by an independent contractor and
  the independent contractor's employees at the site of the project;
  and
               (2)  may not be transferred by the applicant from an
  existing facility or location in this state or otherwise created to
  replace an existing job, unless the applicant fills the vacancy
  caused by the transfer.
         (d)  For purposes of Subsection (b), an applicant may
  demonstrate that the applicant has met the applicable minimum
  investment requirement by any reasonable means. The applicant is
  considered to have met the applicable minimum investment
  requirement if the most recent appraisal roll for the county used to
  determine the minimum investment requirement under this section
  indicates that the appraised value of the eligible property
  composing the project as of January 1 of the second tax year of the
  incentive period prescribed by the agreement is equal to or greater
  than the minimum investment requirement applicable to the project.
         (e)  If an eligible project is located in more than one
  county, the jobs and investment requirement applicable to the
  project is determined using the jobs and investment requirement
  applicable to the county with the smallest population in which any
  part of the project is located.
         (f)  The comptroller may adopt rules necessary to interpret
  and administer this section, including rules regarding:
               (1)  the manner for determining:
                     (A)  which jobs and investment requirements
  prescribed by Subsection (b) apply to an eligible project; and
                     (B)  the circumstances under which a trainee under
  the Texans Work program established under Chapter 308, Labor Code,
  may be considered a full-time employee for purposes of this
  section; and
               (2)  the method by which an applicant must demonstrate
  an average of at least the number of required jobs for purposes of
  satisfying the jobs requirement prescribed by Subsection (b).
         Sec. 403.605.  TAXABLE VALUE OF ELIGIBLE PROPERTY. (a)  The
  taxable value for school district maintenance and operations ad
  valorem tax purposes of eligible property subject to an agreement
  for each tax year of the incentive period prescribed by the
  agreement is equal to:
               (1)  50 percent of the market value of the property for
  that tax year; or
               (2)  if the property is located in a qualified
  opportunity zone, 25 percent of the market value of the property for
  that tax year.
         (b)  The taxable value of eligible property for school
  district maintenance and operations ad valorem tax purposes is zero
  for each tax year beginning with the tax year following the year in
  which the agreement pertaining to the property is entered into and
  ending December 31 of the tax year that includes the construction
  completion date for the applicable eligible project.
         (c)  The chief appraiser for the appraisal district in which
  eligible property is located shall determine the market value and
  appraised value of the property and include the market value,
  appraised value, and taxable value of the property as determined
  under this section in the appraisal records for the appraisal
  district.
         (d)  The chief appraiser for the appraisal district in which
  eligible property subject to an agreement is located may not use an
  estimated value included in the application to which the agreement
  pertains to determine the market value of the property.
         Sec. 403.606.  CERTAIN PERSONS INELIGIBLE. A person is not
  eligible to submit an application to the comptroller or enter into
  an agreement under this subchapter if the person is a company that
  is listed as ineligible to receive a state contract or investment
  under Chapter 808, 809, 2270, 2271, or 2274, as added by Chapters
  529 (S.B. 13), 530 (S.B. 19), and 975 (S.B. 2116), Acts of the 87th
  Legislature, Regular Session, 2021.
         Sec. 403.607.  APPLICATION. (a) A person who proposes to
  construct an eligible project in a school district for which the
  person seeks a limitation on the taxable value for maintenance and
  operations ad valorem tax purposes of the district of the eligible
  property used as part of the proposed project must submit an
  application to the comptroller.
         (b)  A person submitting an application under Subsection (a)
  must use the form prescribed by the comptroller. The form must
  contain the following information:
               (1)  the applicant's name, address, and Texas taxpayer
  identification number and the contact information for the
  applicant's authorized representative;
               (2)  the applicant's form of business and, if
  applicable, the name, address, and Texas taxpayer identification
  number of the applicant's parent entity;
               (3)  the applicable school district's name and address
  and the contact information for the district's authorized
  representative;
               (4)  the legal description of the property on which the
  project is proposed to be located and, if applicable, the address of
  the proposed project;
               (5)  each county in which the project is proposed to be
  located and the population of each of those counties;
               (6)  the applicable number of required jobs prescribed
  by Section 403.604 for the proposed project;
               (7)  a list of each taxing unit in which the project is
  proposed to be located;
               (8)  a brief description of the proposed project;
               (9)  any grant or loan of public money or other tax
  incentive, if applicable, that the applicant is receiving or
  expects to receive for the project;
               (10)  a brief description of the eligible property to
  be used as part of the proposed project;
               (11)  a projected timeline for construction and
  completion of the proposed project, including the projected dates
  on which construction will begin, construction will be completed,
  and commercial operations will start;
               (12)  the proposed incentive period;
               (13)  the name and location of the existing or proposed
  reinvestment zone or enterprise zone in which the proposed project
  will be located;
               (14)  whether the project is proposed to be located in a
  qualified opportunity zone;
               (15)  a statement indicating whether the applicant
  considered locating the proposed project in a qualified opportunity
  zone;
               (16)  a brief summary of the projected economic
  benefits of the proposed project; and
               (17)  the applicant's signature and certification of
  the accuracy of the information included in the application.
         (c)  The form prescribed by Subsection (b) must allow the
  applicant to segregate confidential information described by
  Section 403.621(a) from other information in the application.
         (d)  An applicant must include with an application the
  following:
               (1)  an application fee payable to the comptroller in
  an amount determined by the comptroller not to exceed an amount
  sufficient to cover the costs associated with the comptroller's
  evaluation of the application;
               (2)  an application fee payable to the school district
  in an amount determined by the comptroller not to exceed $30,000 to
  cover the costs associated with the district's evaluation of the
  application, including the cost of processing the application,
  retaining professional services, and, if applicable, creating a
  reinvestment zone or enterprise zone;
               (3)  a map showing the site of the proposed project;
               (4)  the economic benefit statement prepared under
  Section 403.608 in connection with the proposed project; and
               (5)  a sworn affidavit stating that the applicant is
  not ineligible under Section 403.606 to submit the application.
         (e)  The comptroller may request that an applicant provide
  any additional information the comptroller reasonably determines
  is necessary to complete the comptroller's evaluation of the
  application. The comptroller may require an applicant to submit
  the additional information by a certain date and may extend that
  deadline on a showing of good cause. The comptroller is not
  required to take any further action on an application until it is
  complete.
         (f)  The comptroller shall notify an applicant and the
  applicable school district when the applicant's application is
  administratively complete.
         Sec. 403.608.  ECONOMIC BENEFIT STATEMENT. (a) An
  applicant shall submit an economic benefit statement with the
  applicant's application.
         (b)  An economic benefit statement must include the
  following information for each year of the period that begins on the
  date the applicant projects construction of the proposed project
  that is the subject of the application will begin and ends on the
  25th anniversary of the date the incentive period ends:
               (1)  an estimate of the number of total jobs that will
  be created by the project;
               (2)  an estimate of the total amount of capital
  investment that will be created by the project;
               (3)  an estimate of the increase in appraised value of
  property that will be attributable to the project;
               (4)  an estimate of the amount of ad valorem taxes that
  will be imposed by each taxing unit, including the applicable
  school district, on the property used as part of the project;
               (5)  an estimate of the amount of state taxes that will
  be paid in connection with the project; and
               (6)  an estimate of the associated economic benefits
  that may reasonably be attributed to the project, including: 
                     (A)  the impact on the gross revenues and
  employment levels of local businesses that provide goods or
  services in connection with the project or to the applicant's
  employees;
                     (B)  the amount of state and local taxes that will
  be generated as a result of the indirect economic impact of the
  project, including all ad valorem taxes not otherwise estimated in
  Subdivision (4) that will be imposed on property placed into
  service as a result of the project;
                     (C)  the development of complementary businesses
  or industries that locate in this state as a direct consequence of
  the project;
                     (D)  the total impact of the project on the gross
  domestic product of this state;
                     (E)  the total impact of the project on personal
  income in this state; and
                     (F)  the total impact of the project on state and
  local taxes.
         (c)  An applicant may use standard economic estimation
  techniques, including economic multipliers, to create an economic
  benefit statement.  An applicant must base each estimate required
  by Subsection (b) on reasonable projections of the economic and
  labor conditions of this state for the period for which the estimate
  is made.
         (d)  The comptroller shall establish criteria for the
  methodology to be used by an applicant to create an economic benefit
  statement.
         (e)  The comptroller may require an applicant to supplement
  or modify an economic benefit statement to ensure the accuracy of
  the estimates required to be included in the statement under
  Subsection (b).
         Sec. 403.609.  COMPTROLLER ACTION ON APPLICATION. (a) The
  comptroller shall determine whether to recommend or not recommend
  for approval an application submitted to the comptroller under
  Section 403.607. The comptroller shall recommend an application
  for approval if the comptroller makes the findings prescribed by
  Subsection (b). The comptroller may not recommend an application
  for approval if the comptroller is unable to make the findings
  prescribed by that subsection.
         (b)  The comptroller may not recommend an application for
  approval unless the comptroller finds that:
               (1)  the proposed project that is the subject of the
  application is an eligible project;
               (2)  the proposed project is reasonably likely to
  generate, before the 20th anniversary of the first day of the
  construction period, state or local tax revenue, including ad
  valorem tax revenue attributable to the effect of the project on the
  economy of this state, in an amount sufficient to offset the school
  district maintenance and operations ad valorem tax revenue lost as
  a result of the agreement;
               (3)  the agreement is a compelling factor in a
  competitive site selection determination and that, in the absence
  of the agreement, the applicant would not make the proposed
  investment in this state; and
               (4)  if the application indicates that the eligible
  project is proposed to be located in a qualified opportunity zone,
  the project is located in the zone.
         (c)  In making the finding required by Subsection (b)(3), the
  comptroller shall consider factors related to the selection of the
  proposed site for the project, including the workforce, the
  regulatory environment, infrastructure, transportation, market
  conditions, investment alternatives, and any specific incentive
  information provided by the applicant related to other potential
  sites.
         (d)  Not later than the 60th day after the date the
  comptroller determines that an application is complete, the
  comptroller shall take the action required by Subsection (a)
  regarding the application and provide written notice of the action
  to the governor, the school district in which the project is
  proposed to be located, and the applicant.
         (e)  The comptroller shall send to the governor and the
  applicable school district with the notice required by Subsection
  (d) regarding an application recommended by the comptroller under
  Subsection (a) a copy of the application and each document and item
  of information the comptroller relied on to recommend the
  application.
         Sec. 403.610.  GOVERNOR ACTION ON APPLICATION. (a) The
  governor shall, not later than the 30th day after the date the
  governor receives an application sent to the governor by the
  comptroller under Section 403.609, consider the application and by
  official action determine whether the governor is agreeable to
  entering into the agreement that is the subject of the application.
         (b)  The governor shall provide written notice of the
  governor's determination under Subsection (a) to the comptroller,
  the applicable school district, the oversight committee, and the
  applicant not later than the seventh day after the date the governor
  makes the determination under that subsection.
         Sec. 403.611.  SCHOOL DISTRICT ACTION ON APPLICATION. (a)
  The governing body of a school district shall, not later than the
  30th day after the date the district receives an application sent to
  the district by the comptroller under Section 403.609, consider the
  application and by official action determine whether the district
  is agreeable to entering into the agreement that is the subject of
  the application.
         (b)  The governing body of the school district shall hold a
  public hearing on the application during the period described by
  Subsection (a).
         (c)  The governing body of the school district must provide
  notice of the public hearing in the manner required by Chapter 551,
  except that the district must provide the notice not later than the
  15th day before the date of the hearing.  The notice must contain:
               (1)  the name of the applicant;
               (2)  the name and location of the existing or proposed
  reinvestment zone or enterprise zone in which the eligible project
  that is the subject of the application is proposed to be located;
               (3)  a general description of the proposed eligible
  project; and
               (4)  the projected investment the applicant will make
  in the project.
         (d)  The governing body of the school district shall provide
  written notice of the district's determination under Subsection (a)
  to the comptroller, the governor, and the applicant.
         Sec. 403.612.  AGREEMENT. (a) The governor, the governing
  body of a school district, and an applicant may enter into an
  agreement to limit the taxable value for maintenance and operations
  ad valorem tax purposes of the district of the eligible property
  used as part of an eligible project that is the subject of an
  application for which both the governor and the governing body of
  the district have made a favorable determination under Sections
  403.610(a) and 403.611(a), respectively.
         (b)  An agreement entered into under this section between the
  governor, a school district, and an applicant pertaining to an
  eligible project shall:
               (1)  specify the project to which the agreement
  applies;
               (2)  specify the term of the agreement, which must:
                     (A)  begin on the date the agreement is entered
  into; and
                     (B)  end on December 31 of the third tax year
  following the end of the incentive period;
               (3)  specify the construction and incentive periods for
  the project;
               (4)  specify the manner for determining the taxable
  value for school district maintenance and operations ad valorem tax
  purposes during the incentive period under Section 403.605 for the
  eligible property subject to the agreement;
               (5)  specify the applicable jobs and investment
  requirements prescribed by Section 403.604 and require the
  applicant to comply with those requirements;
               (6)  require that the average annual wage paid to all
  persons employed by the applicant in connection with the project
  used to calculate total jobs exceed 110 percent of the average
  annual wage for all jobs in the applicable industry sector during
  the most recent four quarters for which data is available, as
  computed by the Texas Workforce Commission, with the applicant's
  average annual wage being equal to the quotient of:
                     (A)  the applicant's total wages paid, other than
  wages paid for construction jobs, as reported under Section
  403.616(c)(4); and
                     (B)  the applicant's number of total jobs as
  reported under Section 403.616(c)(3);
               (7)  require the applicant to pay a penalty prescribed
  by Section 403.614 if the applicant fails to comply with an
  applicable jobs or wage requirement;
               (8)  require the applicant to offer and contribute to a
  group health benefit plan for each employee of the applicant who is
  employed in a full-time job;
               (9)  require the applicant, at the time the applicant
  executes the agreement, to execute a performance bond in an amount
  the comptroller determines to be reasonable and necessary to
  protect the interests of the state and the district and conditioned
  on the applicant's compliance with the terms of the agreement;
               (10)  authorize the governor or the district to
  terminate the agreement as provided by Subsection (d); and
               (11)  incorporate each relevant provision of this
  subchapter.
         (c)  An agreement entered into under this section between the
  governor, a school district, and an applicant pertaining to an
  eligible project must include a provision that states that the
  applicant is prohibited from making a payment to the district
  related to the agreement.
         (d)  This subsection applies to a term described by
  Subsection (b)(10). The agreement must provide that:
               (1)  the governor or the school district is authorized
  to terminate the agreement if the applicant fails to comply with an
  applicable jobs or wage requirement of the agreement;
               (2)  the governor or the district may not terminate the
  agreement until the party provides written notice to the applicant
  of the proposed termination;
               (3)  the governor or the district must provide the
  applicant a 180-day period to cure and dispute the alleged failure,
  including through judicial action; and
               (4)  in the event the agreement is terminated, the
  state shall recover from the applicant a penalty in an amount equal
  to all lost ad valorem tax revenue from the project and interest on
  that amount calculated as provided by Section 111.060, Tax Code.
         (e)  An agreement terminated under Subsection (d) is void,
  and all remaining obligations and benefits under the agreement and
  this subchapter terminate on the date the agreement is terminated.
         (f)  The parties to an agreement may modify the terms of the
  agreement that do not materially modify the jobs or investment
  requirements prescribed by the agreement.
         (g)  An agreement must be submitted to the comptroller not
  later than the seventh day after the date the agreement is entered
  into. A copy of the economic benefit statement applicable to the
  project that is the subject of the agreement must be attached to the
  agreement.
         (h)  The comptroller shall deposit a penalty collected under
  Subsection (d)(4) and any interest on the penalty to the credit of
  the foundation school fund.
         Sec. 403.613.  INCENTIVE PERIOD. (a) An incentive period
  pertaining to an eligible project is a period of 10 consecutive tax
  years specified in the agreement pertaining to the project.
         (b)  An incentive period may not begin:
               (1)  earlier than January 1 of the first tax year
  following the construction completion date; or
               (2)  later than January 1 of the first tax year
  following the 10th anniversary of the date the agreement is entered
  into.
         (c)  Subject to Subsection (b), the beginning date of an
  incentive period specified in an agreement pertaining to an
  eligible project may be deferred if the applicant projects that the
  applicant will not satisfy the minimum investment requirement
  applicable to the project by the end of the first tax year of the
  incentive period. The incentive period may be deferred until
  January 1 of the second tax year following the construction
  completion date. The deferral of an incentive period under this
  subsection does not affect the date on which the incentive period
  ends as prescribed by the agreement.  An applicant that is a party
  to an agreement for which the beginning date of the incentive period
  is deferred as authorized by this subsection must provide notice of
  the deferral to the comptroller.  The notice must include the reason
  for the deferral.
         (d)  Subject to Subsection (b), an applicant may propose to
  modify the beginning and ending dates of the incentive period as
  provided by this subsection. The applicant shall provide notice of
  the proposed modification to the comptroller, the governor, and the
  school district not later than the 90th day before the first day of
  the incentive period specified in Section 403.612(b)(3) or as
  proposed to be modified, whichever is earlier. The applicant shall
  revise the most recent economic benefit statement as necessary to
  reflect the proposed change to the incentive period. The applicant
  must include the revised economic benefit statement with the notice
  provided to the comptroller, the governor, and the district under
  this subsection. The comptroller shall make the finding required
  by Section 403.609(b)(2) regarding the project as proposed to be
  modified or determine that the finding cannot be made. The
  comptroller shall notify the governor, the district, and the
  applicant of the comptroller's finding or determination not later
  than the 60th day after the date the comptroller receives notice
  from the applicant of the proposed modification. The incentive
  period for the project may not be modified if the comptroller
  determines that the finding required by Section 403.609(b)(2)
  regarding the project as proposed to be modified cannot be made or
  if the governor or the district objects to the proposed
  modification.
         Sec. 403.614.  PENALTY FOR FAILURE TO COMPLY WITH JOBS OR
  WAGE REQUIREMENT. (a) An applicant is liable to the state for a
  penalty in the amount computed under this subsection if the
  applicant fails to maintain at least the number of required jobs
  prescribed by the agreement to which the applicant is a party during
  the periods covered by two consecutive reports submitted by the
  applicant under Section 403.616. The amount of the penalty is equal
  to two times the product of:
               (1)  the difference between:
                     (A)  the number of required jobs prescribed by the
  agreement; and
                     (B)  the number of required jobs actually created
  as stated in the most recent report submitted by the applicant under
  Section 403.616; and
               (2)  the average annual wage prescribed by the
  agreement during the most recent four quarters for which data is
  available, as computed by the Texas Workforce Commission.
         (b)  An applicant is liable to the state for a penalty in the
  amount computed under this subsection if the applicant fails to
  meet the average annual wage requirement prescribed by the
  agreement to which the applicant is a party, if any, during the
  periods covered by two consecutive reports submitted by the
  applicant under Section 403.616. The amount of the penalty is equal
  to two times the difference between:
               (1)  the product of:
                     (A)  the actual average annual wage paid to all
  persons employed by the applicant in connection with the project
  that is the subject of the agreement as computed under Section
  403.612(b)(6); and
                     (B)  the number of required jobs prescribed by the
  agreement; and
               (2)  the product of:
                     (A)  the average annual wage prescribed by the
  agreement; and
                     (B)  the number of required jobs prescribed by the
  agreement.
         (c)  Notwithstanding Subsections (a) and (b), the amount of a
  penalty imposed on an applicant under this section may not exceed
  the amount of the ad valorem tax benefit received by the applicant
  under the agreement that is the subject of the penalty.
         (d)  An applicant on request of the comptroller shall provide
  to the comptroller a schedule of required jobs created as of the
  date of the request under an agreement to which the applicant is a
  party.
         (e)  A determination by the comptroller that an applicant has
  failed to meet the jobs or wage requirement prescribed by an
  agreement to which the applicant is a party is a deficiency
  determination under Section 111.008, Tax Code. A penalty imposed
  under this section is an amount the comptroller is required to
  collect, receive, administer, or enforce and is subject to the
  payment and redetermination requirements of Sections 111.0081 and
  111.009, Tax Code. A redetermination under Section 111.009, Tax
  Code, of a determination under this section is a contested case as
  defined by Section 2001.003 of this code.
         (f)  The comptroller shall deposit a penalty collected under
  this section and any interest on the penalty to the credit of the
  foundation school fund.
         Sec. 403.615.  AUDIT OF AGREEMENTS BY STATE AUDITOR. (a)
  Each year the state auditor shall select and review at least 10
  percent of the agreements in effect in that year to determine
  whether:
               (1)  each agreement accomplishes the purposes of this
  subchapter as expressed in Section 403.601; and
               (2)  the terms of each agreement were executed in
  compliance with the terms of this subchapter.
         (b)  In determining which agreements to review under
  Subsection (a), the state auditor may consider any risk of
  noncompliance identified in the biennial compliance report
  regarding an agreement submitted to the comptroller under Section
  403.616.
         (c)  As part of the review, the state auditor shall make
  recommendations relating to increasing the efficiency and
  effectiveness of the administration of this subchapter. The state
  auditor shall submit the recommendations to the governor,
  comptroller, lieutenant governor, speaker of the house of
  representatives, and oversight committee not later than December 15
  of each year.
         Sec. 403.616.  BIENNIAL COMPLIANCE REPORT BY APPLICANT. (a)
  An applicant that is a party to an agreement shall submit a report
  to the comptroller as required by this section using the form
  adopted by the comptroller.
         (b)  An applicant must submit a report required by this
  section to the comptroller not later than June 1 of each
  even-numbered year during the term of the agreement that is the
  subject of the report.
         (c)  A report required by this section must include the
  following documents and information applicable to the agreement
  that is the subject of the report:
               (1)  a certification by the applicant that is a party to
  the agreement that the applicant has met the jobs and investment
  requirements prescribed by the agreement, which must include:
                     (A)  a sworn affidavit stating:
                           (i)  the number of required jobs prescribed
  by the agreement; and
                           (ii)  the number of required jobs actually
  created under the agreement as of December 31 of the preceding two
  years; and
                     (B)  if applicable, payroll records maintained
  for purposes of 40 T.A.C. Chapter 815;
               (2)  the number assigned to the application by the
  comptroller for the agreement, name of the applicant, name of the
  school district, and name of and contact information for the
  applicant's representative;
               (3)  the number of total jobs created by the project in
  each of the preceding two years;
               (4)  the total wages paid for total jobs, not including
  wages paid for construction jobs, in each of the preceding two
  years;
               (5)  the number of construction jobs created by the
  project;
               (6)  the total amount of the applicant's investment,
  including any additional amount invested by the applicant after the
  incentive period begins;
               (7)  the appraised value of all property composing the
  project for each previous tax year of the agreement;
               (8)  the taxable value of all property composing the
  project for each previous tax year of the agreement;
               (9)  the amount of school district maintenance and
  operations ad valorem taxes imposed on the property composing the
  project and paid by the applicant for each previous tax year of the
  agreement;
               (10)  the amount of school district interest and
  sinking fund ad valorem taxes imposed on the property composing the
  project and paid by the applicant for each previous tax year of the
  agreement;
               (11)  the amount of school district ad valorem taxes
  that would have been imposed on the property composing the project
  and paid by the applicant in the absence of the agreement for each
  previous tax year of the agreement; and
               (12)  the amount of ad valorem taxes imposed on the
  property composing the project by each taxing unit other than the
  school district and paid by the applicant for each previous tax year
  of the agreement, stated by taxing unit.
         (d)  This subsection applies only to a report required to be
  submitted under this section by an applicant for the period that
  includes the first year of the incentive period as prescribed by the
  agreement that is the subject of the report or as deferred. In
  addition to the documents and information described by Subsection
  (c), the applicant must include with the certification required by
  Subsection (c)(1):
               (1)  a list of the property tax account numbers
  assigned to the property composing the project;
               (2)  the current total appraised value of the property
  composing the project; and
               (3)  if applicable, a statement that the incentive
  period was deferred because the applicant did not meet the minimum
  investment requirement prescribed by the agreement before the date
  specified in the agreement.
         Sec. 403.617.  BIENNIAL REPORT TO LEGISLATURE. (a) 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
  subchapter. The comptroller must submit the report not later than
  December 1 of each even-numbered year.
         (b)  The report must include:
               (1)  an assessment of the following with regard to the
  agreements entered into under this subchapter, considered in the
  aggregate:
                     (A)  the total number of jobs created in this
  state;
                     (B)  the total effect on personal income 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 resulting from the agreements, including
  property subject to an agreement that has expired;
                     (E)  the total value of property subject to
  agreements that have not expired; and
                     (F)  the total fiscal effect resulting from the
  agreements on this state and on local governments in this state; and
               (2)  an assessment of each agreement entered into under
  this subchapter that states for each agreement:
                     (A)  the number of required jobs prescribed by the
  agreement;
                     (B)  the number of jobs actually created under the
  agreement, including:
                           (i)  each job described by Section
  403.604(c)(1)(A);
                           (ii)  each job described by Section
  403.604(c)(1)(B); and
                           (iii)  any additional jobs created or
  maintained in connection with the project that is the subject of the
  agreement, if reported by the applicant;
                     (C)  the number of total jobs created under the
  agreement, if the term of the agreement has expired;
                     (D)  the amount of the investment specified by the
  agreement;
                     (E)  the amount of the actual investment made for
  the applicable project before the expiration of the agreement;
                     (F)  the difference between the amount of ad
  valorem taxes that would have been imposed on the property
  composing the applicable project in the absence of the agreement
  and the amount of ad valorem taxes actually imposed on that property
  during the term of the agreement; and
                     (G)  the total amount of state and local tax
  revenue attributable to the applicable project during the term of
  the agreement.
         (c)  The comptroller may not include in the report
  information that is confidential under law.
         (d)  The comptroller may use standard economic estimation
  techniques, including economic multipliers, to prepare the portion
  of the report described by Subsection (b)(1).
         (e)  The comptroller may require an applicant to submit
  information required to complete the report on a form prescribed by
  the comptroller.
         Sec. 403.618.  JOBS, ENERGY, TECHNOLOGY, AND INNOVATION ACT
  OVERSIGHT COMMITTEE; REPORT. (a) The Jobs, Energy, Technology,
  and Innovation Act Oversight Committee is composed of the following
  seven members:
               (1)  three members of the house of representatives
  appointed by the speaker of the house of representatives;
               (2)  three members of the senate appointed by the
  lieutenant governor; and
               (3)  one member who serves as the chair of the committee
  and who:
                     (A)  is a member of the house of representatives
  appointed by the speaker of the house of representatives who serves
  only in odd-numbered years; and
                     (B)  is a member of the senate appointed by the
  lieutenant governor who serves only in even-numbered years.
         (b)  At least one member appointed by the speaker of the
  house of representatives and at least one member appointed by the
  lieutenant governor under Subsection (a) must represent a district
  that includes a county with a population of 100,000 or less.
         (c)  If a vacancy occurs in the membership of the oversight
  committee, the appropriate appointing authority shall appoint a
  person to fill the vacancy.
         (d)  A member of the oversight committee serves at the
  pleasure of the appropriate appointing authority.
         (e)  The oversight committee may recommend in a written
  report to the legislature those types of projects that the
  committee determines by majority vote should be statutorily added
  to or removed from the definition of "eligible project" provided by
  Section 403.602.
         Sec. 403.619.  CONFLICT OF INTEREST. A person may not,
  directly or indirectly, represent, advise, or provide a service to
  both an applicant and a school district in connection with the same
  application submitted or agreement entered into under this
  subchapter.
         Sec. 403.620.  CERTAIN BENEFITS RELATED TO AGREEMENTS
  PROHIBITED; ATTORNEY GENERAL ENFORCEMENT. (a) An employee or
  representative of a school district, a member of the governing body
  of the district, or any other person may not intentionally or
  knowingly solicit, accept, agree to accept, or require any payment
  of money or transfer of property or other thing of value, directly
  or indirectly, to the district, an employee or representative of
  the district, a member of the governing body of the district, or any
  other person in recognition of, anticipation of, or consideration
  for approval of an agreement unless authorized by this subchapter.
         (b)  An applicant, an employee or representative of the
  applicant, or any other person may not intentionally or knowingly
  offer, confer, agree to confer, or make a payment of money or
  transfer of property or other thing of value, directly or
  indirectly, to the governor or the school district, an employee or
  representative of the governor or the district, a member of the
  governing body of the district, or any other person in recognition
  of, anticipation of, or consideration for approval of an agreement
  unless authorized by this subchapter.
         (c)  If the attorney general receives a written complaint
  from a party to an agreement of a violation of this section, the
  attorney general may bring an action to enforce this section to
  restrain or enjoin a person from continuing or repeating the
  violation. Venue for an action brought under this subsection is in
  a district court in Travis County.
         Sec. 403.621.  CONFIDENTIALITY OF CERTAIN BUSINESS
  INFORMATION. (a) Information provided to the comptroller, the
  governor, or a school district by an applicant under this
  subchapter that is a trade secret, as defined by Section 134A.002,
  Civil Practice and Remedies Code, is confidential and not subject
  to disclosure under Chapter 552.
         (b)  Payroll records reported under Section 403.616(c)(1)(A)
  or (B) by an applicant to the comptroller are confidential and not
  subject to disclosure under Chapter 552.
         Sec. 403.622.  INTERNET POSTING OF INFORMATION. (a)
  Subject to Section 403.621, the comptroller shall post on the
  comptroller's Internet website the following information received
  by the comptroller:
               (1)  each application submitted under this subchapter;
               (2)  each map and economic benefit statement required
  to be submitted with an application under this subchapter;
               (3)  each amendment to an application made under this
  subchapter;
               (4)  each agreement entered into under this subchapter;
  and
               (5)  each biennial compliance report submitted as
  required under this subchapter.
         (b)  Except as provided by Subsection (c), the comptroller
  shall post the information described by Subsection (a) as soon as
  practicable after the date the comptroller receives the
  information.
         (c)  The comptroller shall post the information described by
  Subsections (a)(1), (2), and (3) not later than the 10th business
  day after the date the comptroller receives the information.
         (d)  The comptroller shall continue to post the information
  required by this section until the date the agreement to which the
  information relates expires.
         (e)  The comptroller shall notify the governor and the
  applicable school district of the comptroller's posting of the
  information described by Subsection (a)(5) on the comptroller's
  Internet website.
         Sec. 403.623.  RULES AND FORMS. (a) The comptroller shall
  adopt rules necessary to implement and administer this subchapter,
  including rules for:
               (1)  determining whether an applicant meets the jobs
  and investment requirements prescribed by Section 403.604; and
               (2)  authorizing an applicant or school district to
  submit any form or information required by this subchapter
  electronically.
         (b)  The comptroller shall adopt forms necessary to
  implement and administer this subchapter, including the forms to be
  used by an applicant under Sections 403.607 and 403.616.
         (c)  The comptroller shall provide without charge one copy of
  the rules and forms adopted under this section to any person that
  states that the person intends to submit an application to the
  comptroller under this subchapter to limit the taxable value of
  eligible property used as part of an eligible project.
         SECTION 2.  Section 48.2551(a), Education Code, is amended
  to read as follows:
         (a)  In this section:
               (1)  "DPV" is the taxable value of property in the
  school district, as determined by the agency by rule, using locally
  determined property values adjusted in accordance with Section
  403.302(d), Government Code;
               (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 a
  limitation on appraised value under former Subchapter B or C,
  Chapter 313, Tax Code, or a limitation on taxable value under
  Subchapter T, Chapter 403, Government 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 3.  Section 48.256, Education Code, is amended by
  amending Subsections (d) and (e) and adding Subsection (d-1) 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 a limitation on taxable [appraised] value under
  Subchapter T, Chapter 403, Government [B or 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 T, Chapter
  403, Government [B or C, Chapter 313, Tax] Code[, before the
  expiration of the subchapter]. The comptroller shall provide
  information to the agency necessary for this subsection.
         (d-1)  Subsection (d) applies to an agreement for the
  implementation of a limitation on appraised value under former
  Subchapter B or C, Chapter 313, Tax Code, that was in effect on
  January 1, 2023, in the same manner as that subsection applies to an
  agreement described by that subsection. If the agreement for the
  limitation on appraised value requires a [A] revenue protection
  payment to the school district, the 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-1) [(d)] does not apply to property that
  was the subject of an application under former Subchapter B or C,
  Chapter 313, Tax Code, made after May 1, 2009, that the comptroller
  recommended should be disapproved.
         SECTION 4.  Section 2303.507, Government Code, is amended to
  read as follows:
         Sec. 2303.507.  TAX INCREMENT FINANCING AND
  ABATEMENT;  LIMITATIONS ON APPRAISED AND TAXABLE
  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)  limitations on appraised value under former
  Subchapter B or C, Chapter 313, Tax Code; and
               (4)  limitations on taxable value under Subchapter T,
  Chapter 403, of this code.
         SECTION 5.  Section 23.03, Tax Code, is amended to read as
  follows:
         Sec. 23.03.  COMPILATION OF LARGE PROPERTIES AND PROPERTIES
  SUBJECT TO LIMITATION ON APPRAISED OR TAXABLE 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 a limitation on appraised value
  under former Subchapter B or C, Chapter 313; or
               (3)  are subject to a limitation on taxable value under
  Subchapter T, Chapter 403, Government Code.
         SECTION 6.  Section 26.012(6), Tax Code, is amended to read
  as follows:
               (6)  "Current total value" means the total taxable
  value of property listed on the appraisal roll for the current year,
  including all appraisal roll supplements and corrections as of the
  date of the calculation, less the taxable value of property
  exempted for the current tax year for the first time under Section
  11.31 or 11.315, except that:
                     (A)  the current total value for a school district
  excludes:
                           (i)  the total value of homesteads that
  qualify for a tax limitation as provided by Section 11.26; [and]
                           (ii)  new property value of property that is
  subject to an agreement entered into under former Subchapter B or C,
  Chapter 313; and
                           (iii)  new property value of property that
  is subject to an agreement entered into under Subchapter T, Chapter
  403, Government Code; and
                     (B)  the current total value for a county,
  municipality, or junior college district excludes the total value
  of homesteads that qualify for a tax limitation provided by Section
  11.261.
         SECTION 7.  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 former
  Subchapter B or C, Chapter 313, regarding the clean energy project
  for which the credit is issued; or
               (2)  the expiration of an agreement under Subchapter T,
  Chapter 403, Government Code, regarding the clean energy project
  for which the credit is issued.
         SECTION 8.  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 former Subchapter
  B or C, Chapter 313, of this code or Subchapter T, Chapter 403,
  Government Code, 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 a limitation on appraised value under former Subchapter
  B or C, Chapter 313, of this code or the granting of a limitation on
  taxable value under Subchapter T, Chapter 403, Government Code, 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 9.  The lieutenant governor and the speaker of the
  house of representatives shall appoint the initial members of the
  Jobs, Energy, Technology, and Innovation Act Oversight Committee
  under Sections 403.618(a)(1), (2), and (3)(B), Government Code, as
  added by this Act, as soon as practicable after the effective date
  of this Act.
         SECTION 10.  The comptroller of public accounts shall adopt
  rules and develop and make available the forms and materials as
  required under Section 403.623, Government Code, as added by this
  Act, as soon as practicable after the effective date of this
  section.
         SECTION 11.  (a) Except as provided by Subsection (b) of
  this section, this Act takes effect January 1, 2024.
         (b)  Section 10 of this Act takes effect September 1, 2023.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 5 was passed by the House on May 5,
  2023, by the following vote:  Yeas 120, Nays 24, 1 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 5 on May 26, 2023, 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. 5 on May 28, 2023, by the following vote:  Yeas 100,
  Nays 36, 1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 5 was passed by the Senate, with
  amendments, on May 24, 2023, by the following vote:  Yeas 27, Nays
  4; 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.
  5 on May 28, 2023, by the following vote:  Yeas 26, Nays 5.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor