Bill Text: TX HB1556 | 2021-2022 | 87th Legislature | Comm Sub


Bill Title: Relating to the Texas Economic Development Act; requiring the imposition of an authorized fee and changing the amounts of certain fees.

Spectrum: Slight Partisan Bill (Republican 5-2)

Status: (Introduced - Dead) 2021-05-10 - Postponed 6/1/21 10:00 AM [HB1556 Detail]

Download: Texas-2021-HB1556-Comm_Sub.html
  87R24087 SMH-D
 
  By: Murphy, Burrows, Moody, Shine H.B. No. 1556
 
  Substitute the following for H.B. No. 1556:
 
  By:  Shine C.S.H.B. No. 1556
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the Texas Economic Development Act; requiring the
  imposition of an authorized fee and changing the amounts of certain
  fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 313.007, Tax Code, is amended to read as
  follows:
         Sec. 313.007.  EXPIRATION.  Subchapters B and C expire
  December 31, 2032 [2022].
         SECTION 2.  Sections 313.021(1) and (2), Tax Code, are
  amended to read as follows:
               (1)  "Qualified investment" means:
                     (A)  tangible personal property that is first
  placed in service in this state during the applicable qualifying
  time period that begins on or after January 1, 2002, without regard
  to whether the property is affixed to or incorporated into real
  property, and that is described as Section 1245 property by Section
  1245(a), Internal Revenue Code of 1986;
                     (B)  tangible personal property that is first
  placed in service in this state during the applicable qualifying
  time period that begins on or after January 1, 2002, without regard
  to whether the property is affixed to or incorporated into real
  property, and that is used in connection with the manufacturing,
  processing, or fabrication in a cleanroom environment of a
  semiconductor product, without regard to whether the property is
  actually located in the cleanroom environment, including:
                           (i)  integrated systems, fixtures, and
  piping;
                           (ii)  all property necessary or adapted to
  reduce contamination or to control airflow, temperature, humidity,
  chemical purity, or other environmental conditions or
  manufacturing tolerances; and
                           (iii)  production equipment and machinery,
  moveable cleanroom partitions, and cleanroom lighting;
                     (C)  tangible personal property that is first
  placed in service in this state during the applicable qualifying
  time period that begins on or after January 1, 2002, without regard
  to whether the property is affixed to or incorporated into real
  property, and that is used in connection with the operation of a
  nuclear electric power generation facility, including:
                           (i)  property, including pressure vessels,
  pumps, turbines, generators, and condensers, used to produce
  nuclear electric power; and
                           (ii)  property and systems necessary to
  control radioactive contamination;
                     (D)  tangible personal property that is first
  placed in service in this state during the applicable qualifying
  time period that begins on or after January 1, 2002, without regard
  to whether the property is affixed to or incorporated into real
  property, and that is used in connection with operating an
  integrated gasification combined cycle electric generation
  facility, including:
                           (i)  property used to produce electric power
  by means of a combined combustion turbine and steam turbine
  application using synthetic gas or another product produced by the
  gasification of coal or another carbon-based feedstock; or
                           (ii)  property used in handling materials to
  be used as feedstock for gasification or used in the gasification
  process to produce synthetic gas or another carbon-based feedstock
  for use in the production of electric power in the manner described
  by Subparagraph (i);
                     (E)  tangible personal property that is first
  placed in service in this state during the applicable qualifying
  time period that begins on or after January 1, 2010, without regard
  to whether the property is affixed to or incorporated into real
  property, and that is used in connection with operating an advanced
  clean energy project, as defined by Section 382.003, Health and
  Safety Code; [or]
                     (F)  a building or a permanent, nonremovable
  component of a building that is built or constructed during the
  applicable qualifying time period that begins on or after January
  1, 2002, and that houses tangible personal property described by
  Paragraph (A), (B), (C), (D), or (E); or
                     (G)  a building or a permanent, nonremovable
  component of a building that, as part of a discrete project that
  increases the value of the building or component, is renovated,
  expanded, modernized, or otherwise improved during the applicable
  qualifying time period that begins on or after January 1, 2023, and
  that houses tangible personal property described by Paragraph (A),
  (B), (C), (D), or (E).
               (2)  "Qualified property" means:
                     (A)  land:
                           (i)  that is located in an area designated as
  a reinvestment zone under Chapter 311 or 312 or as an enterprise
  zone under Chapter 2303, Government Code;
                           (ii)  on which a person proposes to:
                                 (a)  construct a new building or erect
  or affix a new improvement that does not exist before the date the
  person submits a complete application for a limitation on appraised
  value under this subchapter; or
                                 (b)  renovate, expand, modernize, or
  otherwise improve an existing building or improvement;
                           (iii)  that is not subject to a tax abatement
  agreement entered into by a school district under Chapter 312; and
                           (iv)  on which, in connection with the [new]
  building or [new] improvement described by Subparagraph (ii), the
  owner or lessee of, or the holder of another possessory interest in,
  the land proposes to:
                                 (a)  make a qualified investment in an
  amount equal to at least the minimum amount required by Section
  313.023; and
                                 (b)  create at least 25 new qualifying
  jobs;
                     (B)  the [new] building or other [new] improvement
  described by Paragraph (A)(ii); and
                     (C)  tangible personal property:
                           (i)  that is not subject to a tax abatement
  agreement entered into by a school district under Chapter 312;
                           (ii)  for which a sales and use tax refund is
  not claimed under Section 151.3186; and
                           (iii)  except for new equipment described in
  Section 151.318(q) or (q-1), that is first placed in service in the
  new building, in the newly renovated, expanded, modernized, or
  improved building, or in or on the new or newly renovated, expanded,
  modernized, or improved improvement described by Paragraph
  (A)(ii), or on the land on which that [new] building or [new]
  improvement is located, if the personal property is ancillary and
  necessary to the business conducted in that [new] building or in or
  on that [new] improvement.
         SECTION 3.  Section 313.024(c), Tax Code, is amended to read
  as follows:
         (c)  For purposes of determining an applicant's eligibility
  for a limitation under this subchapter:
               (1)  the land on which a building or component of a
  building described by Section 313.021(1)(F) or (G) [313.021(1)(E)]
  is located is not considered a qualified investment;
               (2)  property that is leased under a capitalized lease
  may be considered a qualified investment;
               (3)  property that is leased under an operating lease
  may not be considered a qualified investment; [and]
               (4)  property that is owned by a person other than the
  applicant and that is pooled or proposed to be pooled with property
  owned by the applicant may not be included in determining the amount
  of the applicant's qualifying investment; and
               (5)  a building or component of a building that is
  renovated, expanded, modernized, or otherwise improved as
  described by Section 313.021(1)(G) is not considered a qualified
  investment unless:
                     (A)  the building or component would qualify as a
  qualified investment if the building or component were to be built
  or constructed during the applicable qualifying time period; and
                     (B)  the agreement between the property owner and
  the school district describes with specificity as required by
  Section 313.027(e) the manner in which the building or component
  will be renovated, expanded, modernized, or otherwise improved.
         SECTION 4.  Section 313.025, Tax Code, is amended by
  amending Subsections (a), (a-1), and (b) and adding Subsection
  (a-2) to read as follows:
         (a)  The owner or lessee of, or the holder of another
  possessory interest in, any qualified property described by Section
  313.021(2)(A), (B), or (C) may apply to the governing body of the
  school district in which the property is located for a limitation on
  the appraised value for school district maintenance and operations
  ad valorem tax purposes of the person's qualified property.  An
  application must be made on the form prescribed by the comptroller
  and [include the information required by the comptroller, and it
  must] be accompanied by a [:
               [(1)  the application] fee in the amount of $60,000
  payable to [established by the governing body of] the school
  district[;
               [(2)  information sufficient to show that the real and
  personal property identified in the application as qualified
  property meets the applicable criteria established by Section
  313.021(2); and
               [(3)  any information required by the comptroller for
  the purposes of Section 313.026].
         (a-1)  The application form may require the applicant to
  provide only the following information:
               (1)  the name and taxpayer identification number of the
  applicant and each parent, subsidiary, or affiliate of the
  applicant;
               (2)  contact information for the applicant;
               (3)  the name of the school district in which the
  qualified property is located;
               (4)  a description of the project, including the
  category of the applicable North American Industry Classification
  System that describes the activities in which the applicant will
  engage in connection with the project;
               (5)  the location of the project;
               (6)  for each ad valorem tax year covered by the
  proposed agreement between the applicant and the school district:
                     (A)  an estimate of the amount of the qualified
  investment to be spent or allocated for the project;
                     (B)  the number of qualifying jobs the applicant
  commits to create and the total amount of wages that will be paid to
  the persons holding those jobs;
                     (C)  an estimate of the appraised value of the
  project if the project were not subject to the proposed agreement;
                     (D)  an estimate of the amount of ad valorem taxes
  for maintenance and operations and for debt that would be imposed by
  the school district on the project if the project were not subject
  to the proposed agreement;
                     (E)  an estimate of the appraised value of the
  project for school district maintenance and operations ad valorem
  tax purposes as determined in accordance with the proposed
  agreement; and
                     (F)  an estimate of the amount of ad valorem taxes
  for maintenance and operations that will be imposed by the school
  district on the project as determined in accordance with the
  proposed agreement; and
               (7)  any information that the comptroller:
                     (A)  requires for the purposes of Section 313.026;
  or
                     (B)  otherwise determines to be necessary to
  determine the applicant's eligibility for a limitation on appraised
  value.
         (a-2)  Within seven days of the receipt of each document, the
  school district shall submit to the comptroller a copy of the
  application and the proposed agreement between the applicant and
  the school district.  If the applicant submits an economic analysis
  of the proposed project to the school district, the district shall
  submit a copy of the analysis to the comptroller.  In addition, the
  school district shall submit to the comptroller any subsequent
  revision of or amendment to any of those documents within seven days
  of its receipt.  The comptroller shall publish each document
  received from the school district under this subsection on the
  comptroller's Internet website.  If the school district maintains a
  generally accessible Internet website, the district shall provide
  on its website a link to the location of those documents posted on
  the comptroller's website in compliance with this subsection.  This
  subsection does not require the comptroller to post information
  that is confidential under Section 313.028.
         (b)  The governing body of a school district is not required
  to consider an application for a limitation on appraised value.  If
  the governing body of the school district elects not to consider the
  application, the governing body shall refund $10,000 of the payment
  described by Subsection (a) to the applicant. If the governing body
  of the school district elects to consider an application, the
  governing body shall deliver a copy of the application and $10,000
  of the payment described by Subsection (a) to the comptroller and
  request that the comptroller conduct an economic impact evaluation
  of the investment proposed by the application.  The comptroller
  shall conduct or contract with a third person to conduct the
  economic impact evaluation, which shall be completed and provided
  to the governing body of the school district, along with the
  comptroller's certificate or written explanation under Subsection
  (d), as soon as practicable but not later than the 90th day after
  the date the comptroller receives the application.  The governing
  body shall provide to the comptroller or to a third person
  contracted by the comptroller to conduct the economic impact
  evaluation any requested information.  A methodology to allow
  comparisons of economic impact for different schedules of the
  addition of qualified investment or qualified property may be
  developed as part of the economic impact evaluation.  The governing
  body shall provide a copy of the economic impact evaluation to the
  applicant on request.  [The comptroller may charge the applicant a
  fee sufficient to cover the costs of providing the economic impact
  evaluation.]  The governing body of a school district shall approve
  or disapprove an application not later than the 150th day after the
  date the application is filed, unless the economic impact
  evaluation has not been received or an extension is agreed to by the
  governing body and the applicant.
         SECTION 5.  Sections 313.027(a-1), (f), and (i), Tax Code,
  are amended to read as follows:
         (a-1)  The agreement must:
               (1)  provide that the limitation under Subsection (a)
  applies for a period of 10 years; and
               (2)  specify the beginning date of the limitation,
  which must be January 1 of the first tax year that begins after:
                     (A)  the application date;
                     (B)  the qualifying time period; or
                     (C)  the following applicable date:
                           (i)  in the case of a project involving the
  construction of a new building or the erection or affixing of a new
  improvement, the date commercial operations begin at the site of
  the project; or
                           (ii)  in the case of a project involving the
  renovation, expansion, modernization, or other improvement of an
  existing building or improvement, the date the renovation,
  expansion, modernization, or other improvement is completed.
         (f)  In addition, the agreement:
               (1)  must incorporate each relevant provision of this
  subchapter [and, to the extent necessary, include provisions for
  the protection of future school district revenues through the
  adjustment of the minimum valuations, the payment of revenue
  offsets, and other mechanisms agreed to by the property owner and
  the school district];
               (2)  must require the property owner to provide a
  stabilization payment to the school district in each tax year
  during the period for which the limitation under Subsection (a)
  applies in an amount equal to a portion, not to exceed 38 percent,
  as specified by the agreement of the amount computed by subtracting
  from the market value of the person's qualified property as
  described in the agreement for that tax year the value of the
  property as limited by the agreement and multiplying the difference
  by the maintenance and operations tax rate of the school district
  for that tax year [may provide that the property owner will protect
  the school district in the event the district incurs extraordinary
  education-related expenses related to the project that are not
  directly funded in state aid formulas, including expenses for the
  purchase of portable classrooms and the hiring of additional
  personnel to accommodate a temporary increase in student enrollment
  attributable to the project];
               (3)  must require the property owner to maintain a
  viable presence in the school district for at least five years after
  the date the limitation on appraised value of the owner's property
  expires;
               (4)  must provide for the termination of the agreement,
  the recapture of ad valorem tax revenue lost as a result of the
  agreement if the owner of the property fails to comply with the
  terms of the agreement, and payment of a penalty or interest, or
  both, on that recaptured ad valorem tax revenue;
               (5)  may specify any conditions the occurrence of which
  will require the district and the property owner to renegotiate all
  or any part of the agreement;
               (6)  must specify the ad valorem tax years covered by
  the agreement; and
               (7)  must be in a form approved by the comptroller.
         (i)  A person and the school district may not enter into an
  agreement pursuant to an application filed on or after January 1,
  2023, under which the person agrees to provide supplemental
  payments to a school district or any other entity on behalf of a
  school district. A stabilization payment as described by
  Subsection (f)(2) is not considered to be a supplemental payment
  for purposes of an agreement entered into by a person and a school
  district pursuant to an application filed before January 1, 2023,
  under which the person agrees to provide supplemental payments to
  the school district or another entity on behalf of the school
  district [in an amount that exceeds an amount equal to the greater
  of $100 per student per year in average daily attendance, as defined
  by Section 48.005, Education Code, or $50,000 per year, or for a
  period that exceeds the period beginning with the period described
  by Section 313.021(4) and ending December 31 of the third tax year
  after the date the person's eligibility for a limitation under this
  chapter expires.  This limit does not apply to amounts described by
  Subsection (f)(1) or (2)].
         SECTION 6.  Section 313.0276(e), Tax Code, is amended to
  read as follows:
         (e)  Notwithstanding Subsections (c) and (d), a penalty
  imposed under this section may not exceed an amount equal to the
  difference between the amount of the ad valorem tax benefit
  received by the person under the agreement in the preceding year and
  the amount of any stabilization [supplemental] payments as
  described by Section 313.027(f)(2) made to the school district in
  that year.
         SECTION 7.  The heading to Section 313.031, Tax Code, is
  amended to read as follows:
         Sec. 313.031.  RULES AND FORMS[; FEES].
         SECTION 8.  Section 313.031, Tax Code, is amended by adding
  Subsection (a-1) to read as follows:
         (a-1)  The comptroller shall adopt a single annual reporting
  form to be used by a recipient or former recipient of a limitation
  on appraised value under this chapter for the purpose of submitting
  information necessary for the comptroller to complete the reports
  required by this chapter. A recipient or former recipient shall
  submit the form to the applicable school district at the same time
  the recipient or former recipient submits the form to the
  comptroller. This subsection does not apply to the form described
  by Section 313.033.
         SECTION 9.  Section 313.032(a), Tax Code, is amended to read
  as follows:
         (a)  Before the beginning of each regular session of the
  legislature, the comptroller shall submit to the lieutenant
  governor, the speaker of the house of representatives, and each
  other member of the legislature a report on the agreements entered
  into under this chapter that includes:
               (1)  an assessment of the following with regard to the
  agreements entered into under this chapter, considered in the
  aggregate, from the year in which each agreement was entered into to
  the most recent year for which actual data is available:
                     (A)  the total number of qualifying jobs created[,
  direct and otherwise,] in this state;
                     (B)  [the total effect on personal income, direct
  and otherwise, in this state;
                     [(C)]  the total amount of qualified investment in
  this state;
                     (C) [(D)]  the total taxable value for purposes of
  school district ad valorem taxes for maintenance and operations and
  for debt of property on the tax rolls in this state, including
  property for which the limitation period has expired, and the total
  amount of school district ad valorem taxes for maintenance and
  operations and for debt imposed on that property;
                     (D) [(E)]  the total value of property not on the
  tax rolls in this state as a result of agreements entered into under
  this chapter and the total amount of school district maintenance
  and operations ad valorem taxes that would have been imposed on that
  value if that value were on the tax rolls; and
                     (E)  the total amount of stabilization payments as
  described by Section 313.027(f)(2) made to school districts
  [(F)  the total fiscal effect on the state and local governments];
  and
               (2)  an assessment of the progress of each agreement
  made under this chapter that states for each agreement from the year
  in which the agreement was entered into to the most recent year for
  which actual data has been certified:
                     (A)  the number of qualifying jobs each recipient
  of a limitation on appraised value committed to create;
                     (B)  the number of qualifying jobs each recipient
  created;
                     (C)  the total amount of wages [and the median
  wage] of the new qualifying jobs each recipient created;
                     (D)  the amount of the qualified investment each
  recipient committed to spend or allocate for each project;
                     (E)  the amount of the qualified investment each
  recipient spent or allocated for each project;
                     (F)  the market value of the qualified property of
  each recipient as determined by the applicable chief appraiser,
  including property that is no longer eligible for a limitation on
  appraised value under the agreement;
                     (G)  the limitation on appraised value for the
  qualified property of each recipient;
                     (H)  the dollar amount of the school district ad
  valorem taxes for maintenance and operations and for debt that
  would have been imposed on the qualified property if the property
  had not received a limitation on appraised value; [and]
                     (I)  the dollar amount of the school district ad
  valorem taxes for maintenance and operations and for debt imposed
  on the qualified property; and
                     (J)  the amount of stabilization payments as
  described by Section 313.027(f)(2) each recipient made to the
  applicable school district.
         SECTION 10.  Section 48.256(d), Education Code, is amended
  to read as follows:
         (d)  This subsection applies to a school district in which
  the board of trustees entered into a written agreement with a
  property owner under Section 313.027, Tax Code, for the
  implementation of a limitation on appraised value under Subchapter
  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 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. A revenue protection payment
  described by Section 313.027(f)(1), Tax Code, as that subdivision
  existed before January 1, 2023, 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.
         SECTION 11.  The following provisions of the Tax Code are
  repealed:
               (1)  Section 313.031(b); and
               (2)  Section 313.032(b-1).
         SECTION 12.  (a) The changes in law made by this Act apply
  only to an agreement entered into under Chapter 313, Tax Code,
  pursuant to an application filed under that chapter on or after the
  effective date of this Act. An agreement entered into under that
  chapter pursuant to an application filed before the effective date
  of this Act is governed by the law in effect on the date the
  application was filed, and the former law is continued in effect for
  that purpose.
         (b)  The change in law made by this Act to Section 48.256(d),
  Education Code, applies beginning with the 2023-2024 school year.
         SECTION 13.  This Act takes effect January 1, 2023.
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