House Bill 3390 amends the Tax Code and Education Code to revise and update provisions relating to the Texas Economic Development Act. Among other provisions, the bill:

· postpones from December 31, 2014, to December 31, 2024, the expiration date of the act's provisions relating to a limitation on the appraised value, for school district maintenance and operations (M&O) property tax purposes, of property used to create jobs and repeals an entitlement to a related tax credit for taxes paid on the portion of the property's appraised value above the amount of the limitation;

· includes a Texas priority project on which the applicant has committed to expend or allocate a qualified investment of more than $1 billion among the purposes for which property may be used to qualify for the limitation on appraised value; allows operations, services, and other project-related jobs to satisfy the minimum qualifying jobs requirement if their cumulative economic benefit to the state is equal to or greater than that associated with the minimum number of qualifying jobs required and allows new qualifying jobs created under agreements with multiple school districts to be included in the total number of newly created project-related jobs if the projects covered by the agreements constitute a single unified project;

· requires the comptroller, when requested by the governing body of a school district to conduct an economic impact evaluation of the investment proposed by an applicant for a limitation on appraised value, to provide both the evaluation and either a certificate for that limitation or a written explanation of any decision not to issue a certificate, rather than a recommendation regarding the application's approval or disapproval, not later than the 90th day after the date the comptroller receives the application and prohibits the school district's governing body from approving an application unless the comptroller submits the certificate to the governing body;

· removes the itemized specificity of the previous content requirements for an economic impact evaluation and instead requires inclusion of any information the comptroller determines is necessary or helpful to the school district's governing body in determining whether to approve an application or to the comptroller in determining whether to issue a certificate for the limitation on appraised value; prohibits the comptroller from issuing a certificate unless the comptroller determines that the proposed project is reasonably likely to generate, within 25 years of the start of the limitation period, tax revenue in an amount sufficient to offset the loss of M&O tax revenue attributable to the agreement and that the limitation is a determining factor in the applicant's decision to invest capital and construct the project in Texas;

· requires an agreement between a person and a school district to provide for a 10-year limitation period beginning on the January 1 immediately following the application date, the qualifying time period, or the start of commercial operations at the project site;

· includes supplemental payments to another entity on a school district's behalf within the cap on the amount of supplemental payments that may be made under an agreement between a person and the district and changes the cap to limit total supplemental payments under the agreement each year to the greater of $100 per student or $50,000;

· requires the comptroller to conduct an annual review to determine whether a person with whom a school district enters into an agreement has met the applicable job-creation requirements and sets out penalties for failure to remedy a finding of noncompliance;

· requires the comptroller's biennial report to the lieutenant governor, the speaker of the house of representatives, and each member of the legislature to include certain aggregate totals for all of the agreements entered into under the act as well as the specific data for each agreement and requires each recipient of a limitation on appraised value to submit an annual report to the comptroller providing the necessary job creation data;

· includes a defense economic readjustment zone within the meaning of a "strategic investment area" for purposes of provisions relating to the limitation on appraised value in certain rural school districts and requires the comptroller, not later than September 1 of each year, to determine areas that qualify as a strategic investment area for the following tax year and to publish a list and map of those areas not later than October 1;

· increases the required minimum amount of the limitation agreed to by the governing bodies of the following categories of rural school districts: from $20 million to $25 million for a Category II school district, from $10 million to $20 million for a Category III school district, from $5 million to $15 million for a Category IV school district, and from $1 million to $10 million for a Category V school district; and

· repeals provisions relating to comptroller reports on compliance with energy-related and certain other types of agreements.

House Bill 3390	House Author: Hilderbran et al.
Effective: 1-1-14	Senate Sponsor: Deuell