CCGB(LEGAL) -

Tax Increment Financing Act

Board of Directors

Large Municipality

Tax Increments

Amount

"Captured Appraised Value"
"Tax Increment Base"

Collection and Deposit

  1. Property taxes produced from the tax increments that are, by contract executed before the designation of the area as a reinvestment zone, required to be paid by the district to another political subdivision; and
  2. A portion, not to exceed 15 percent, of the tax increment produced by the district as provided by the reinvestment zone financing plan or a larger portion as provided at Agreement Required below.

Agreement Required

Property Redevelopment and Tax Abatement Act

Reinvestment Zone for Chapter 313

  1. Contribute to the expansion of primary employment in the reinvestment zone; or
  2. Attract major investment in the reinvestment zone that would:
    1. Be a benefit to property in the reinvestment zone and to the district; and
    2. Contribute to the economic development of the region of this state in which the district is located.

Texas Economic Development Act

  1. Enhance the local community;
  2. Improve the local public education system;
  3. Create high-paying jobs; and
  4. Advance the economic development goals of Texas.

Definitions

"Agreement"

"Agreement Holder"

"Applicant"

"Application"

"Application Review Start Date"

"Completed Application"

"Entity"

"Qualified Investment"

  1. 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:
    1. Described as Section 1245 property by Section 1245(a), Internal Revenue Code of 1986;
    2. 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 integrated systems, fixtures, and piping; all property necessary or adapted to reduce contamination or to control airflow, temperature, humidity, chemical purity, or other environmental conditions or manufacturing tolerances; and production equipment and machinery, moveable cleanroom partitions, and cleanroom lighting;
    3. Used in connection with the operation of a nuclear electric power generation facility, including property, including pressure vessels, pumps, turbines, generators, and condensers, used to produce nuclear electric power; and property and systems necessary to control radioactive contamination;
    4. Used in connection with operating an integrated gasification combined cycle electric generation facility, including 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 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 herein;
    5. Used in connection with operating an advanced clean energy project, as defined by Health and Safety Code 382.003; or
  2. 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 items 1a–e above.

"Qualified Property"

  1. Land:
    1. That is located in an area designated as a reinvestment zone under Tax Code Chapter 311 or 312 or as an enterprise zone under Government Code Chapter 2303;
    2. On which a person proposes to 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 Tax Code Chapter 313, Subchapter B;
    3. That is not subject to a tax abatement agreement entered into by a district under Tax Code Chapter 312; and
    4. On which, in connection with the new building or new improvement described by item 1b above, the owner or lessee of, or the holder of another possessory interest in, the land proposes to:
      1. Make a qualified investment in an amount equal to at least the minimum amount required by Tax Code 313.023; and
      2. Create at least 25 new qualifying jobs, except as provided at Exception below;
  2. The new building or other new improvement described by item 1b above; and
  3. Tangible personal property:
    1. That is not subject to a tax abatement agreement entered into by a district under Tax Code Chapter 312;
    2. For which a sales and use tax refund is not claimed under Tax Code 151.3186; and
    3. Except for new equipment described in Tax Code 151.318(q) or (q-1), that is first placed in service in the new building, in the newly expanded building, or in or on the new improvement described by item 1b above, 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.
Exception

"Qualifying Job"

  1. Requires at least 1,600 hours of work a year;
  2. Is not transferred from one area in this state to another area in this state;
  3. Is not created to replace a previous employee;
  4. Is covered by a group health benefit plan for which the business offers to pay at least 80 percent of the premiums or other charges assessed for employee-only coverage under the plan, regardless of whether an employee may voluntarily waive the coverage; and
  5. Pays at least 110 percent of the county average weekly wage for manufacturing jobs in the county where the job is located.
Waiver of New Jobs Creation Requirement

"Qualifying Time Period"

  1. The period that begins on the date that a person's application for a limitation on appraised value under Tax Code Chapter 313 is approved by the board and ends on December 31 of the second tax year that begins after that date, except as provided by items 2 and 3 below or Tax Code 313.027(h);
  2. In connection with a nuclear electric power generation facility, the first seven tax years that begin on or after the third anniversary of the date the district approves the property owner's application for a limitation on appraised value, unless a shorter time period is agreed to by the board and the property owner; or
  3. In connection with an advanced clean energy project, the first five tax years that begin on or after the third anniversary of the date the district approves the property owner's application for a limitation on appraised value, unless a shorter time period is agreed to by the board and the property owner.

"Substantive Document"

School District Categories

Minimum Amounts of Qualified Investment

Eligibility

Exception for Wind-Powered Energy Device

Application for Limitation on Appraised Value

  1. The application fee established by the board;
  2. Information sufficient to show that the real and personal property identified in the application as qualified property meets the applicable criteria established by Tax Code 313.021(2); and
  3. Any information required by the comptroller for the purposes of Tax Code 313.026 (economic impact evaluation).

Required Contents and Format

Optional Requests
  1. A request that the district waive the applicable requirement to create new jobs. In order for a completed application to include a job waiver request, the applicant shall submit the information specified in 34 Administrative Code 9.1053(b)(1); or
  2. A request to begin the qualifying time period on a date that is after the date that the application is approved. In order for a completed application to include a qualifying time period deferral request, the applicant shall submit the information specified in 34 Administrative Code 9.1053(b)(2).

Changes

  1. Be submitted in the same form or schedule and manner as the information was initially submitted or should have been initially submitted;
  2. Include a date for the submission and a sequential number identifying the number of submissions made by the applicant;
  3. Have the signature of the authorized representative(s) by which the applicant confirms and attests to the truth and accuracy of the information submitted in the application amendment or supplement, as applicable, to the best knowledge and belief of the applicant and its representative(s); and
  4. Be submitted before the 120th day after the application was accepted by the district or within another time period as provided in writing by the comptroller.
  1. Reject the amended application, supplemental application, or application, in whole or in part, and discontinue consideration of any submission by the applicant;
  2. With the written concurrence of the comptroller, consider the completed application, as amended or supplemented, before the 151st day from the application review start date; or
  3. Review the documents submitted by the applicant, issue an amended written notice of a completed application, and present the amended application to the board in the manner and time period authorized by 34 Administrative Code 9.1053(c)(5).

Confidential Business Information

  1. Submit a written request that:
    1. Specifically lists each document or portion of document and each entry in any form prescribed by the comptroller that the applicant contends is confidential; and
    2. Identifies specific detailed reasons stating why the applicant believes each item listed should be considered confidential and identifies any relevant legal authority in support of the request;
  2. Segregate the documents which are subject to the request from the other documents submitted with the application, application amendment, or application supplement that are not subject to the request; and
  3. Adequately designate the documents subject to the request as "confidential."

Action on Application

Initial Review

Acting on Completed Application

  1. Provide written notice to the applicant and to the comptroller, with a copy to the appraisal district, that the district has received and will be considering a completed application. The notice shall include:
    1. The date on which the application was received;
    2. The date on which the board elected to consider the application; and
    3. The date on which the district determined that applicant has submitted a completed application;
  2. At the time the district provides notice of a completed application, deliver to the comptroller:
    1. A copy of the completed application including all material required by 34 Administrative Code 9.1053(a), and if applicable (b), (relating to Entity Requesting Agreement to Limit Appraised Value); and
    2. A request to the comptroller to provide an economic impact evaluation;
  3. If the district maintains a generally accessible internet web site, provide a clear and conspicuous link on its web site to the internet web site maintained by the comptroller where substantive documents for the value limitation application for such district are posted;
  4. On request of the comptroller, provide such written documents containing information requested by the comptroller as necessary for the consideration of a limitation on appraised value pursuant to Tax Code Chapter 313 within 20 days of the date of the request.

Economic Impact Evaluation and Certification

Effect on Instructional Facilities

Fees

Supplemental Payments

Approval

  1. Either:
    1. An economic impact analysis has not been submitted to the district by the comptroller; or
    2. By agreement with the applicant; and
  2. Notice of the extension is provided to the comptroller within seven days of the decision to provide the extension.
  1. By majority vote adopt a written resolution approving the application which shall include:
    1. Written findings:
      1. As to each criterion listed in 34 Administrative Code 9.1055(d)(3)(B)–(D) (relating to Comptroller Application Review and Agreement to Limit Appraised Value);
      2. As to the criteria required by Tax Code 313.025(f‑1) (regarding waiver of new jobs creation requirement) if applicable;
      3. That the information in the application is true and correct; and
      4. That the applicant is eligible for the limitation on the appraised value of the entity's qualified property;
    2. A determination that granting the application is in the best interest of the district and this state; and
    3. Designate and direct a representative of the board to execute the agreement for property tax limitation presented by the approved applicant that complies with 34 Administrative Code Chapter 9, Subchapter F and Tax Code Chapter 313;
  2. By majority vote disapprove the application; or
  3. Take no official action and the application shall be considered disapproved on the 151st day after the application review start date.

Continued Eligibility

  1. Have a completed application approved by the board in compliance with 34 Administrative Code 9.1054(f) (relating to School District Application Review and Agreement to Limit Appraised Value);
  2. At least 20 days prior to the meeting at which the board is scheduled to consider the application, provide to the district and the comptroller a Texas Economic Development Act Agreement, as specified in 34 Administrative Code 9.1052(a)(6), with terms acceptable to the applicant;
  3. If the applicant includes a combined group or members of the combined group, have the agreement executed by the authorized representative of each member of the combined group that owns a direct interest in property subject to the proposed agreement by which such members are jointly and severally liable for the performance of the stipulations, provisions, terms, and conditions of the agreement;
  4. Comply with all stipulations, provisions, terms, and conditions of the agreement for a limitation on appraised value executed with the district, 34 Administrative Code Chapter 9, Subchapter F, and Tax Code Chapter 313;
  5. Be and remain in good standing under the laws of this state and maintain legal status as an entity;
  6. Owe no delinquent taxes to the state;
  7. Maintain eligibility for limitation on appraised value pursuant to Tax Code Chapter 313; and
  8. Provide to the district, the comptroller, and the appraisal district any change to information provided in the application, including but not limited to changes of the authorized representative(s); changes to the location and contact information for the approved applicant including all members of the combined group participating in the limitation agreement; and copies of any valid assignments of the agreement and contact information for authorized representative(s) of any assignees.

Agreement

Limitation on Appraised Value

  1. The market value of the property; or
  2. Subject to the minimum limitation amount below, the amount agreed to by the board.
Minimum Limitation

Contents

Required
  1. Provide that the limitation applies for a period of ten years;
  2. Specify the beginning date of the limitation, which must be January 1 of the first tax year that begins after the application date, the qualifying time period, or the date commercial operations begin at the site of the project;
  3. Describe with specificity the qualified investment that the person will make on or in connection with the person's qualified property that is subject to the limitation; other property of the person that is not specifically described in the agreement is not subject to the limitation unless the board, by official action, provides that the other property is subject to the limitation;
  4. Incorporate each relevant provision of Tax Code Chapter 313, Subchapter B, and, to the extent necessary, include provisions for the protection of future 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 district;
  5. Require the property owner to maintain a viable presence in the district for at least five years after the date the limitation on appraised value of the owner's property expires;
  6. 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;
  7. Specify the ad valorem tax years covered by the agreement;
  8. Be in a form approved by the comptroller; and
  9. Disclose any consideration promised in conjunction with the application and the limitation.
Optional
  1. Provide that the property owner will protect the 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.
  2. Specify any conditions the occurrence of which will require the district and the property owner to renegotiate all or any part of the agreement.
  3. Provide for a deferral of the date on which the qualifying time period for the project is to commence or, subsequent to the date the agreement is entered into, be amended to provide for such a deferral. The agreement may not provide for the deferral of the date on which the qualifying time period is to commence to a date later than January 1 of the fourth tax year that begins after the date the application is approved except that if the agreement is one of a series of agreements related to the same project, the agreement may provide for the deferral of the date on which the qualifying time period is to commence to a date not later than January 1 of the sixth tax year that begins after the date the application is approved.
  1. The district shall provide the comptroller:
    1. Copies of any documents or other information received from the applicant; and
    2. After reviewing documents and information provided by the applicant, either:
      1. A written acknowledgment of receiving the application amendment or supplement; or
      2. A statement that no such amendment or supplement has been submitted; and
  2. If the comptroller provides:
    1. A comptroller certificate for a limitation with conditions different from the existing agreement, the board shall hold a meeting and determine whether to amend the agreement to include the conditions required by the comptroller or terminate the agreement; or
    2. A written explanation of the comptroller's decision not to re-issue a certificate, the district shall terminate the agreement.

Compliance and Enforcement

  1. Either the information necessary to complete the annual eligibility report, or a completed annual eligibility report;
  2. A completed job creation compliance report (Form 50-825); and
  3. Any information required by the state auditor office or its designee.

Disclosure of Appraised Value Limitation Information

Accessibility of Documents

Brookeland ISD

CCGB(LEGAL)-P

UPDATE 112

DATE ISSUED: 12/13/2018