The Comptroller of Public Accounts proposes amendments to §9.1051, concerning definitions, §9.1052, concerning forms; §9.1053, concerning entity requesting agreement to limit appraised value and tax credit; §9.1054, concerning school district application review and agreement to limit appraised value; §9.1055, concerning comptroller application review and agreement to limit appraised value; §9.1057, concerning reports by comptroller; §9.1058, concerning miscellaneous provisions, and adding new §9.1059, concerning annual compliance review for qualifying jobs and penalties.

The comptroller proposes amending the title of Subchapter F to delete the reference to Tax Credits so that the new title of Subchapter F is "Limitation on Appraised Value on Certain Qualified Properties". This amendment is proposed to implement provisions of House Bill 3390, 83rd Legislature, 2013, which repealed the authority to provide tax credits on qualified property as defined by Tax Code, Chapter 313.

The amendments to §9.1051, concerning definitions, will change the definitions of the terms local government assistance division or LGA, new job, qualified property, and substantive document; repeal the definition of tax credit settle up; and add new definitions for agreement holder, average weekly wage for manufacturing jobs, average weekly wage for non-qualifying job, first placed in service, new improvement, per capita income, strategic investment area, Texas Economic Development Act Agreement, Texas Priority Project, and unemployment. These amendments are deemed necessary to clarify existing guidelines and to implement provisions of House Bill 3390.

The amendments to §9.1052(a), concerning forms, deletes paragraph (2), Application for Tax Credit on Qualified Property and adds new paragraphs (3), (4), (5), and (6) to add forms for Job Creation Compliance, Biennial School District Cost Data Request, and a Texas Economic Development Act Agreement. These amendments are proposed to include forms deemed necessary to implement provisions of House Bill 3390.

The amendments to §9.1053, concerning entity requesting agreement to limit appraised value and tax credit, will change subsections (a), (b), (c), and (f), and delete subsection (g). The proposed amendments delete the reference to tax credits in the title of the section. The amendments to subsections (a), (b), and (c) make changes to the information that is required for an application, an amendment to the application, and an agreement for value limitation. The amendments to subsection (f) make changes to the provisions required to be in an agreement for value limitation. The amendments to subsections (a), (b), and (f) are deemed necessary to clarify existing guidelines and implement provisions of House Bill 3390. The amendment to subsection (c) is for the purpose of providing a mechanism to control the number of application amendments or supplements filed. The deletion of subsection (g) is because House Bill 3390 repealed the provisions of Tax Code, Chapter 313 that authorized tax credits.

The amendments to §9.1054, concerning school district application review and agreement to limit appraised value, will change subsections (a), (b), (c), (f), (g), (h), (i), and (j) and delete subsection (k). The amendments to subsections (a) and (b) are made to insure compliance with existing statutes. The amendments to subsection (c) make changes to the information that is required for an application for an agreement for value limitation that will be considered by school districts. The amendments to subsection (f) make changes to actions taken by the school district when it has received an application accompanied by a comptroller certificate for a limitation on appraised value. The subsection (g) is deleted and subsequent subsections are re-lettered. Re-lettered subsection (g) is further amended to make changes to the provisions required to be in an agreement for value limitation. The amendments re-designate the provisions of subsection (i) to be the provisions of subsection (h), which is then further amended to identify the school district's actions when the application requests a deferral of the qualifying time period. The amendments re-designate the provisions of subsection (j) to be subsection (i) and further amendments are proposed to include new reporting requirements for agreement holders to the school district. All of these amendments are deemed necessary to clarify existing guidelines and implement provisions of House Bill 3390. Subsection (k) is deleted because House Bill 3390 repealed the provisions of Tax Code, Chapter 313 that authorized tax credits.

The amendments to §9.1055, concerning comptroller application review and agreement to limit appraised value, will change subsections (b), (c), (d), (e), (f), and (g). The amendments to subsection (b) reflect changes in how the comptroller will use certain information submitted in an application for value limitation. The amendments to subsection (c) are made to reflect the current process used by the comptroller regarding notification to an applicant regarding eligibility. The amendments to subsection (d) detail the information and considerations for the comptroller to determine whether to issue a certificate for a limitation on appraised value. The amendments to subsection (e) are made to reflect the authority of the comptroller to review agreements for limitation on appraised value. The amendments to subsections (f) and (g) are made to include the changes made to previous subsections. The amendments to subsections (b), (d), (e), (f), and (g) are deemed necessary to clarify existing guidelines and implement provisions of House Bill 3390. The amendment to subsection (c) is for the purpose of clarification.

The amendments to §9.1057, concerning reports by comptroller, will delete subsection (c) which relates to the reporting on tax credits. This amendment is deemed necessary to implement provisions of House Bill 3390 which repealed the provisions of Tax Code, Chapter 313 that authorized tax credits.

The amendment to §9.1058 adds new subsections (d) and (e) concerning miscellaneous provisions. New subsection (d) is added to identify the procedures for the comptroller to identify strategic investment areas as required by Tax Code, Chapter 313. New subsection (e) is added to reflect that applications for limitation on appraised value and agreements executed pursuant to the approved application will be governed by the statutes and applicable rules and guidelines in effect at the time the application is filed.

New §9.1059, concerning annual compliance review and penalties. This new section is proposed to provide the framework for the annual review to be conducted by the comptroller on agreement holders, the notices of adverse determinations that can be issued, the penalties that the comptroller can assess, and the provisions by which the agreement holder can seek redetermination and court review. This new section is deemed necessary to implement provisions of House Bill 3390.

John Heleman, Chief Revenue Estimator, has determined that for the first five-year period the rules will be in effect, there will be no significant revenue impact on the state or units of local government.

Mr. Heleman also has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be by improving the administration of local property valuation and taxation. The proposed amendments would have no fiscal impact on small businesses. There is no significant anticipated economic cost to individuals who are required to comply with the proposed rules.

Comments on the amendments and new section may be submitted to Robert Wood, Director, Economic Development and Analysis Division, at robert.wood@cpa.state.tx.us or at P.O. Box 13528 Austin, Texas 78711.

The amendments and new section are proposed under Tax Code, §313.024 which authorizes the comptroller to prescribe the application of limitation on appraised value, and §313.031 which authorizes the comptroller to adopt rules necessary for the implementation and administration of Tax Code, Chapter 313.

The amendments and new section implement Tax Code, Chapter 313.