Bill Text: TX HB5 | 2023-2024 | 88th Legislature | Enrolled

Texas House Bill 5

Bill Title: 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.

Spectrum: Slight Partisan Bill (Republican 54-32)

Status: (Enrolled - Dead) 2023-05-30 - Sent to the Governor [HB5 Detail]

Download: Texas-2023-HB5-Enrolled.html



	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