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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Introduced.html

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By: Hunter H.B. No. 5

A BILL TO BE ENTITLED
AN ACT
relating to agreements to create jobs and to generate state and
local tax revenue for this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 403, Government Code, is amended by
adding Subchapter S to read as follows:
Subchapter S. AGREEMENTS TO CREATE JOBS AND TO GENERATE STATE AND
LOCAL REVENUE
Sec. 403.6005. PURPOSES. The purposes of this subchapter
are to:
(1) create new, high-paying permanent jobs and
construction jobs in this state;
(2) encourage financially beneficial economic
development in this state;
(3) provide a temporary and limited competitive
economic incentive for attracting to this state large-scale
manufacturing projects that, in the absence of this subchapter,
would likely locate in another state or nation;
(4) strengthen the security and resource independence
of this state and nation by encouraging infrastructure development;
(5) promote the relocation of offshore manufacturing
facilities to this state;
(6) make this state a national and international
leader in new and innovative technologies;
(7) encourage the establishment of advanced
manufacturing industry sectors critical to national defense and
security;
(8) create new wealth, raise personal income, and
foster long-term expansion of state and local tax bases; and
(9) provide growing and sustainable economic
opportunity for the citizens of this state.
Sec. 403.601. DEFINITIONS. In this subchapter:
(1) "Agreement" means a written agreement between the
owner of a new investment project and a school district in this
state.
(2) "New investment project" means the construction
and operation of new improvements to realty or placement into
service in this state new tangible personal property that did not
exist on the date of the agreement.
(3) "Qualified industry" means:
(A) manufacturing;
(B) critical infrastructure; or
(C) national and state security and critical
domestic supply chain support.
Sec. 403.602. APPLICATION. (a) A person may apply to the
school district for approval of an agreement under this subchapter.
An application must be made on a form prescribed by the comptroller
and contain the following information:
(1) the applicant's name, address, Texas taxpayer
identification number, and contact information of an 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 school district's name and address, the county
in which the district is located or the county in which the project
is located if the district is in more than one county, and the
contact information of the district's authorized representative;
(4) the address of the project or proposed facility,
if different from the applicant's address;
(5) a brief description of the project, including the
classification of the project as designated by the North American
Industry Classification System as of the date of the application;
(6) a brief description of the eligible property for
which the applicant is seeking an agreement;
(7) the estimated dates of commencement of
construction, completion of construction, and commencement of
commercial operations of the project;
(8) the name and location of the reinvestment zone or
enterprise zone in which the project is located;
(9) a brief summary of the economic benefits of the
project; and
(10) the applicant's signature and certification.
(b) The application must be accompanied by an application
fee payable to the school district.
(c) The school district shall forward the application to the
comptroller within 30 days of receipt from the applicant.
(d) Subject to the confidentiality requirements of Section
403.616, the comptroller shall publish the application and the
information described by Subsections (b)(2)-(5), and any
subsequent revisions of the application or the information on the
comptroller's Internet website.
Sec. 403.603. ECONOMIC BENEFIT STATEMENT. (a) The
applicant shall submit with the application an economic benefit
statement containing estimates of the economic and fiscal impacts
on the school district and the state for the 25-year period
commencing on the date on which the applicant estimates
construction of the project will commence.
(b) The comptroller shall establish criteria for the
methodology of the economic benefit statement submitted by the
applicant and may require the applicant to supplement or modify the
statement to ensure the accuracy of the estimates listed in
Subsection (a).
Sec. 403.604. COMPTROLLER RECOMMENDATION OF APPLICATION.
(a) The comptroller shall recommend an application for approval by
the school district if the comptroller finds that the project
provides a net economic or financial benefit to the state.
(b) If the comptroller finds that the project does not meet
the criteria established by Subsection (a), the comptroller shall
not recommend the application for approval.
Sec. 403.605. SCHOOL DISTRICT APPROVAL. (a) Within days of
receiving a recommendation to approve an application from the
comptroller under Section 403.604, the school district shall either
approve or disapprove of the agreement.
Sec. 403.606. REPORTS BY APPLICANT. The comptroller shall
promulgate an online reporting form for applicants to submit to the
agency by April 1 of each even-numbered year that reports the
following information for each year since the application was
approved and for three years after the limitation has expired:
(1) the application number, name of the applicant,
name of the school district which levies ad valorem taxes on the
project, and name and contact information for the applicant's
representative;
(2) the parcel number of the property subject to the
agreement;
(3) the total number of jobs created by the project;
(4) the total wages paid;
(5) the total amount of the investment;
(6) the appraised value of all property associated
with the project, including property subject to the agreement and
any other real or tangible personal property owned by the applicant
as part of the project;
(7) the taxable value of all property associated with
the project, including property subject to the agreement and any
other real or tangible personal property owned by the applicant as
part of the project, for school district maintenance and operations
ad valorem tax purposes;
(8) the total amount of school district maintenance
and operations ad valorem taxes paid by the applicant;
(9) the total amount of school district interest and
sinking fund ad valorem taxes paid by the applicant;
(10) the total amount for school district ad valorem
taxes the applicant would have paid in the absence of an agreement;
(11) the total amount of payments other than ad
valorem taxes made by the applicant to the school district.
Sec. 403.607. REPORTS BY SCHOOL DISTRICT. (a) A school
district that levies ad valorem taxes on the project shall submit at
its own expense to the comptroller a report not later than April 1
of each even-numbered year since the application was approved and
for three years after the limitation has expired.
(b) The report shall include:
(1) the total amount of payments other than ad valorem
taxes received from the applicant;
(2) the total amount of any other direct or indirect
benefits received from the applicant such as in-kind contributions
or other financial benefits; and
(3) the purposes for which the payments and benefits
were used by the school district.
(c) The comptroller shall promulgate a form to be used by
the school district for purposes of this section.
Sec. 403.608. DISTRIBUTION OF SAVINGS FROM THE AGREEMENT.
(a) If an application is approved under this subchapter, the
applicant shall not later than January 31 of each year of the term
of the agreement and as provided by rule:
(1) retain the greater percentage of any tax savings
resulting from the agreement; and
(2) remit the lesser percentage of any tax savings
resulting from the agreement to the comptroller.
(b) The comptroller shall distribute the funds received
under Subsection (a) as provided by rule as follows:
(1) the greater percentage of the funds received are
payable to the school district that levies ad valorem taxes on the
project, to be used solely for direct instructional purposes; and
(2) the lesser percentage of the funds received shall
be deposited to the credit of the general revenue fund for
distribution as specified by a general appropriations act.
(c) The applicant shall annually calculate the tax savings
from the agreement by multiplying the school district maintenance
and operations ad valorem tax rate by the difference between the
taxable value in the absence of the agreement and the taxable value
as specified by the agreement, as shown on the tax bill received by
the applicant from the school district.
Sec. 403.609. RULES AND FORMS. The comptroller shall adopt
rules and forms necessary for the implementation and administration
of this subchapter.
SECTION 2. This Act takes effect September 1, 2023.