88R23990 TJB-F

By: Landgraf, Morales of Maverick H.B. No. 4429

A BILL TO BE ENTITLED

AN ACT

relating to the duty of a school district to enter into an ad valorem tax abatement agreement under the Property Redevelopment and Tax Abatement Act for certain property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 312.002(f) and (g), Tax Code, are amended to read as follows:

(f) Except as provided by Subchapter D, on [On] or after September 1, 2001, a school district may not enter into a tax abatement agreement under this chapter.

(g) "Taxing unit" has the meaning assigned by Section 1.04, except that for a tax abatement agreement executed on or after September 1, 2001, other than an agreement under Subchapter D, the term does not include a school district that is subject to Chapter 48, Education Code, and that is organized primarily to provide general elementary and secondary public education.

SECTION 2. 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 D of this chapter or 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 taxation under Subchapter D of this chapter or a limitation on appraised value under Subchapter B or C, Chapter 313, as applicable, 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 3. Chapter 312, Tax Code, is amended by adding Subchapter D to read as follows:

SUBCHAPTER D. TAX ABATEMENT IN SCHOOL DISTRICT REINVESTMENT ZONE

Sec. 312.501. DEFINITIONS. In this subchapter:

(1) "Appraised value" has the meaning assigned by Section 1.04.

(2) "Electric generating facility" means a facility that:

(A) is a natural gas-fired electric generating facility that provides dispatchable electric power for the ERCOT power grid and for which a permit is required by the Texas Commission on Environmental Quality under the prevention of significant deterioration air permit program adopted under Chapter 382, Health and Safety Code, including a facility that captures, uses, reuses, or stores carbon dioxide emissions for enhanced oil recovery, sequestration, or other commercial uses; and

(B) is located in a reinvestment zone designated under this chapter.

(3) "Qualified property" means the following property that is part of an electric generating facility and has an aggregated appraised value of $1 billion on January 1 of the first year following the year in which the facility first furnishes electricity for the power grid:

(A) a building or other improvement constructed on or after January 1, 2024; and

(B) tangible personal property first placed in service in the new building or other improvement described by Paragraph (A) or on the land on which the new building or other improvement is located.

Sec. 312.502. APPLICATION. The owner of a proposed electric generating facility may apply to the governing body of the school district in which the facility is proposed to be located to exempt from taxation for school district maintenance and operations tax purposes the portion of the appraised value of qualified property proposed to be located at the facility in excess of $30 million.

Sec. 312.503. ACTION ON APPLICATION. (a) The governing body of a school district shall approve an application submitted under Section 312.502 unless the governing body determines that the proposed electric generating facility subject to the application is not an electric generating facility as defined by Section 312.501.

(b) The governing body of a school district must approve or deny an application not later than the 60th day after the date the applicant submits the application.

Sec. 312.504. AGREEMENT. (a) A school district that approves an application submitted under Section 312.502 shall enter into a written agreement with the owner of the proposed electric generating facility subject to the application not later than the 90th day after the date the applicant submits the application.

(b) An agreement entered into under this section must provide that the owner of the electric generating facility is entitled to an exemption from taxation for school district maintenance and operations tax purposes of the portion of the appraised value of qualified property located at the facility in excess of $30 million for a period of 10 years beginning on the first January 1 after 2027 that the facility furnishes electricity for the power grid.

SECTION 4. Section 403.302(d), Government Code, is amended to read as follows:

(d) For the purposes of this section, "taxable value" means the market value of all taxable property less:

(1) the total dollar amount of any residence homestead exemptions lawfully granted under Section 11.13(b) or (c), Tax Code, in the year that is the subject of the study for each school district;

(2) one-half of the total dollar amount of any residence homestead exemptions granted under Section 11.13(n), Tax Code, in the year that is the subject of the study for each school district;

(3) the total dollar amount of any exemptions granted before May 31, 1993, or after June 1, 2023, within a reinvestment zone under agreements authorized by Chapter 312, Tax Code;

(4) subject to Subsection (e), the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone created on or before May 31, 1999, or is proposed to be included within the boundaries of a reinvestment zone as the boundaries of the zone and the proposed portion of tax increment paid into the tax increment fund by a school district are described in a written notification provided by the municipality or the board of directors of the zone to the governing bodies of the other taxing units in the manner provided by former Section 311.003(e), Tax Code, before May 31, 1999, and within the boundaries of the zone as those boundaries existed on September 1, 1999, including subsequent improvements to the property regardless of when made;

(B) generates taxes paid into a tax increment fund created under Chapter 311, Tax Code, under a reinvestment zone financing plan approved under Section 311.011(d), Tax Code, on or before September 1, 1999; and

(C) is eligible for tax increment financing under Chapter 311, Tax Code;

(5) the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone:

(i) created on or before December 31, 2008, by a municipality with a population of less than 18,000; and

(ii) the project plan for which includes the alteration, remodeling, repair, or reconstruction of a structure that is included on the National Register of Historic Places and requires that a portion of the tax increment of the zone be used for the improvement or construction of related facilities or for affordable housing;

(B) generates school district taxes that are paid into a tax increment fund created under Chapter 311, Tax Code; and

(C) is eligible for tax increment financing under Chapter 311, Tax Code;

(6) the total dollar amount of any exemptions granted under Section 11.251 or 11.253, Tax Code;

(7) the difference between the comptroller's estimate of the market value and the productivity value of land that qualifies for appraisal on the basis of its productive capacity, except that the productivity value estimated by the comptroller may not exceed the fair market value of the land;

(8) the portion of the appraised value of residence homesteads of individuals who receive a tax limitation under Section 11.26, Tax Code, on which school district taxes are not imposed in the year that is the subject of the study, calculated as if the residence homesteads were appraised at the full value required by law;

(9) a portion of the market value of property not otherwise fully taxable by the district at market value because of action required by statute or the constitution of this state, other than Section 11.311, Tax Code, that, if the tax rate adopted by the district is applied to it, produces an amount equal to the difference between the tax that the district would have imposed on the property if the property were fully taxable at market value and the tax that the district is actually authorized to impose on the property, if this subsection does not otherwise require that portion to be deducted;

(10) the market value of all tangible personal property, other than manufactured homes, owned by a family or individual and not held or used for the production of income;

(11) the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.06, Tax Code;

(12) the portion of the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.065, Tax Code;

(13) the amount by which the market value of a residence homestead to which Section 23.23, Tax Code, applies exceeds the appraised value of that property as calculated under that section; and

(14) the total dollar amount of any exemptions granted under Section 11.35, Tax Code.

SECTION 5. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2023.