(a) General provisions. This section implements the
Texas Education Code (TEC), §48.254 (Additional State Aid for
Ad Valorem Tax Credits Under Texas Economic Development Act). In accordance
with the TEC, §48.254, a school district, including a school
district that is otherwise ineligible for state aid under the TEC,
Chapter 48, is entitled to state aid in an amount equal to the amount
of all tax credits applied against ad valorem taxes of the school
district in each year that tax credits were applied pursuant to the
Texas Tax Code, Chapter 313, also known as the Texas Economic Development
Act. School districts eligible to receive additional state aid under
the TEC, §48.254, must apply to the commissioner of education
in order to receive additional state aid equal to the qualifying ad
valorem tax credits issued under the Texas Tax Code, Chapter 313,
Subchapter D, as that subchapter existed prior to repeal by House
Bill (HB) 3390, 83rd Texas Legislature, Regular Session, 2013, subject
to certain annual limitations.
(b) Definitions. The following phrases, words, and
terms, when used in this section, will have the following meanings,
unless the context clearly indicates otherwise.
(1) Eligible property--A term that has the meaning
assigned in the Texas Tax Code, §313.024.
(2) Limitation on appraised value--A term that has
the meaning assigned in the Texas Tax Code, Chapter 313. A school
district may limit the appraised value on a qualified property for
the purposes of ad valorem taxation for a period of eight tax years,
beginning with the tax year that follows the applicable two-year qualifying
time period. A limitation on appraised value applies only to the maintenance
and operations portion of a school district's ad valorem tax rate.
For each tax year in which the limitation on appraised value is in
effect, the appraised value of the qualified property that is described
in the written agreement between the school district and taxpayer
for school district maintenance and operations ad valorem tax may
not exceed the lesser of the market value of the property or the amount
to which the school district has agreed, but the limited amount must
be at least the minimum amount of limitation that is set for the applicable
school district category in the Texas Tax Code, Chapter 313.
(3) Qualified property--A term that has the meaning
assigned in the Texas Tax Code, §313.021(2).
(4) Tax credit--A credit that is made to a taxpayer
who has applied for and received a limitation on appraised value under
the Texas Tax Code, Chapter 313, from the school district that approved
the limitation in an amount equal to the amount of ad valorem taxes
paid to that school district that were imposed on the portion of the
appraised value of the qualified property that exceeds the amount
of the limitation agreed to by the governing body of the school district
under the Texas Tax Code, §313.027(a)(2), in each year in the
applicable qualifying time period.
(5) Tax year--The calendar year beginning January 1
in which the taxpayer incurred ad valorem taxes on the qualified property
for which the taxpayer is entitled to a tax credit toward ad valorem
taxes paid in that tax year.
(6) Texas Economic Development Act--The Texas Tax Code,
Chapter 313.
(c) Eligibility for additional state aid.
(1) A school district may be eligible for additional
state aid under the TEC, §48.254, only pursuant to the provisions
of the TEC, §48.254, and the Texas Tax Code, Chapter 313.
(2) A school district must file an application on a
form prescribed by the commissioner in accordance with the applicable
timeline as described in subsection (i) of this section. A separate
application must be made for each tax year for which additional state
aid is being requested. An application, including the required supporting
documentation described in subsections (d)(2) and (d)(3) of this section,
as applicable, must be complete in order for the Texas Education Agency
(TEA) to process it.
(3) A school district must be in compliance with the
reporting requirements set forth in 34 Texas Administrative Code Chapter
9, Subchapter F (relating to Limitation on Appraised Value on Certain
Qualified Property), to be eligible for additional state aid under
the TEC, §48.254.
(d) Procedures for filing request for additional state
aid for ad valorem tax credits.
(1) Method of filing. All requests for additional state
aid under the TEC, §48.254, must be filed electronically with
the TEA in accordance with instructions on the application.
(2) Information required for first year of tax credit.
A school district's initial request for additional state aid under
the TEC, §48.254, must include:
(A) a completed Request for Additional State Aid for
Ad Valorem Tax Credit application form, including the template that
comprises a component of the application showing requested and projected
additional state aid for each agreement under the Texas Tax Code,
Chapter 313;
(B) a copy of the taxpayer's application to the school
district for the tax credit, together with all required attachments
to the application;
(C) a copy of the school board's resolution or other
proof that the school district has approved the taxpayer's application
for the tax credit;
(D) a copy of the tax bill sent to the taxpayer (showing
the taxes imposed are net of the tax credit); and
(E) confirmation that, as of the date of the tax credit
approval, the taxpayer has not relocated its business outside of the
school district.
(3) Information required for subsequent years of tax
credit. For each year subsequent to the year in which the initial
request for the tax credit was approved, the request for additional
state aid under the TEC, §48.254, must include:
(A) a completed Request for Additional State Aid for
Ad Valorem Tax Credit application form, including the template that
comprises a component of the application showing requested and projected
additional state aid for each agreement under the Texas Tax Code,
Chapter 313;
(B) a copy of the tax bill sent to the taxpayer (showing
the taxes imposed are net of the tax credit); and
(C) confirmation that, as of the date of the tax credit
approval, the taxpayer has not relocated its business outside of the
school district.
(e) Forms. The division of the TEA responsible for
state funding will make available the application form, including
the template, required under subsections (d)(2) and (d)(3) of this
section.
(f) Limitation of tax credit. In the fourth through
the tenth years in which the agreement described in subsection (b)(2)
of this section is in effect, the tax credit is limited to 50% of
the total maintenance and operations and interest and sinking fund
taxes imposed on the qualified property for the tax year for which
the credit applies.
(g) Determination of additional state aid. For any
tax year for which additional state aid authorized by the TEC, §48.254,
is approved, additional state aid will be limited to the amount of
the tax credit due to the taxpayer for a qualified property that is
receiving a limitation on appraised value for that year as determined
in the Texas Tax Code, §313.104, as that section existed prior
to the repeal of the Texas Tax Code, Chapter 313, Subchapter D, by
HB 3390, 83rd Texas Legislature, Regular Session, 2013.
(h) Erroneous tax credits and recovery of state aid
for erroneous tax credits. If the comptroller of public accounts or
the governing body of the school district determines that an entity
that received a tax credit was ineligible to have received it or received
more credit than the entity should have received, the school district
must provide a notification of the facts to the commissioner within
30 days of the official action. If the TEA determines that an entity
that received a tax credit was ineligible to have received it or received
more credit than the entity should have received, the commissioner
will notify the school district within 30 days of the determination.
Any overpayment of additional state aid provided to the school district
based on issuance of an erroneous tax credit by the school district
will be fully recovered by the TEA pursuant to the TEC, §48.272.
(i) Timeline for submission of application requests.
The school district must submit its application for additional state
aid for ad valorem tax credits on or before May 31 each year for which
the tax credit is due.
(j) Payment to the school district. On approval of
a school district's application for additional state aid for ad valorem
tax credits by the commissioner, the amount of the credit will be
applied to the entitlement due to the school district (as soon as
practicable after the application is approved).
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