Guidelines and Frequently Asked Questions

A number of applicants and school districts have requested that the agency consider changes to Form 50-286, 2014 Texas Economic Development Act Agreement (), which was adopted by rule in June 2014. In an effort to accommodate these requests, the agency adopted changes to 50-286 (now renamed Form 50-826 (PDF)) through the rule process, effective Feb. 6, 2020.

The agency had also been asked if applicants and districts that approve agreements on the 2014 Form Agreement would later be permitted to amend their agreements to incorporate changes that may be adopted through the rule making process.

The agency will, with prior approval, permit amendments to the 2014 Agreement (Form 50-286 dated January 2014), to allow applicants and districts to incorporate changes that were adopted in 2016. Requests to amend those agreements (executed using the January 2014 version) should propose exchanging entire sections (for example, amending the agreement to substitute the "new" section 2.5 language for the "old" section 2.5 language). The agency does not anticipate approving amendments that use language from different agreement versions within the same section. For certain sections, the agency may require amending multiple sections, due to re-ordering of the provisions or cross-references in the form agreement. The agency retains the ability to not approve agreement amendments that, due to the aggregate effect of the proposed changes, may violate statute, rules or guidelines in effect at the time of the request.

In order to facilitate requested changes in the future, the agency adopted the following amendment to 9.1052 (c) that permits changes to Form 50-826 (PDF) in special circumstances such as described above.

(c) In special circumstances, a school district may obtain prior approval in writing from the comptroller to use an application or agreement form that requires additional information, or sets out the required information in different language or sequence than that which this section requires.

If you have specific questions about obtaining comptroller approval to amend agreements, please contact the Chapter 313 staff.

Yes, Chapter 313 value limitation agreements are subject to Government Code, Section 2252.908.

In 2015, the 84th Legislature passed House Bill 1295 that states that governmental entities not enter into certain contracts with a business entity unless the business entity submits a disclosure of interested parties at the time it submits a signed contract to the governmental entity. This applies only to a contract that requires an action or vote by the governing body of the entity before it may be signed or has a value of at least $1 million. Given that §313.025(b) requires the governing body of the school district to approve an application to enter into an agreement, the disclosure requirement detailed in HB 1295 applies to all Chapter 313 agreements and amendments to Chapter 313 agreements executed on or after Jan. 1, 2016.

The Texas Ethics Commissions (TEC) adopted rules necessary to implement the law (Texas Administrative Code, Chapter 46), prescribed the disclosure of interested parties form, and posted a copy of the form on the commission's website (Form 1295 (PDF)). Visit the TEC website for more information on how to create or acknowledge a certificate.

Chapter 313 authorizes two types of payments from agreement holders as a part of a Chapter 313 agreement: revenue protection payments (313.027(f)(1)), and extraordinary educational expenses for a temporary increase in enrollment (313.027(f)(2)). Chapter 313 also recognizes, but expressly limits "supplemental payments" as additional payments that may be received by a school district as part of the consideration for the execution of a 313 agreement (313.027(i)).

Revenue protection language is required to be in the agreement and is described in 313.027(f)(1)"…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."

Provisions describing "extraordinary educational expenses" are described in 313.027(f)(2) "…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" (emphasis added).

Any payment that is not for the protection of school district revenues or for extraordinary educational expenses falls into the category of supplemental payment. Chapter 313.027(i) reads:

313.027(i) A person and the school district may not enter into an agreement under which the person agrees to provide supplemental payments to a school district in an amount that exceeds an amount equal to $100 per student per year in average daily attendance, as defined by Section 42.005, Education Code, or for a period that exceeds the period beginning with the period described by Section 313.021(4) and ending with the period described by Section 313.104(2)(B) of this code. This limit does not apply to amounts described by Subsection (f)(1) or (2) of this section.

The Texas Administrative Code (T.A.C. 9.1054) requires that agreements include "a provision that separately states and explicitly identifies the amount, or the method for determining the amount, of any and all payments or transfers made to the school district or to any person or persons in any form if the payment or transfer of thing of value is provided in recognition of, anticipation of, or consideration for the agreement for limitation on appraised value made pursuant to Tax Code, §§313.027(f)(1), 313.027(f)(2), or 313.027(i)."

Further, the Chapter 313 application includes the following section:

Fees and Payments

Enclosed is proof of application fee paid to the school district. For the purpose of this question, "payments to the school district" include any and all payments or transfers of things of value made to the school district or to any person or persons in any form if such payment or transfer of thing of value being provided is in recognition of, anticipation of, or consideration for the agreement for limitation on appraised value.

Please answer only either A or B:

Will any "payments to the school district" that you may make in order to receive a property tax value limitation agreement result in payments that are not in compliance with Tax Code, 313.027(i)? __ Yes __ No

If "payments to the school district" will only be determined by a formula or methodology without a specific amount being specified, could such method result in "payments to the school district" that are not in compliance with Tax Code §313.027(i)? __ Yes __ No

Finally, the Biennial Cost Data Request Sheet completed by the district includes the following question:

Are you aware of any payments or transfer of things of value not included in the table above, made by the applicant or affiliate of the applicant, to the school district, any person or persons, organization or local governmental entity provided in recognition of, anticipation of, or consideration for the agreement for limitation on appraised value? Yes No (Circle one)

If "Yes," please describe and attach additional information as needed.

Applicants and school districts are required to document in the agreement anything of value that is required by the school district as a condition of the district approving a Chapter 313 agreement, and to include those amounts in the calculation of supplemental payments. This includes any requirement by the district that the applicant make payments or transfers of value to any party, not just the district, in return for approving the Chapter 313 agreement. Requiring a payment or transfer of value as a condition of approval of the Chapter 313 agreement and not disclosing that payment, or not including it in the calculation of the statutory maximum supplemental payment amount, is a violation of the Texas Administrative Code and is a material breach of contract that could lead to termination of the agreement. Additionally, since the application and reports are official government documents, knowingly providing incorrect data could be a violation of law.

It is the Comptroller's intent that the form agreement adopted under in 34 TAC 9.1052 not limit the legislature's authority to make changes that affect the terms of this agreement, such as changes related to compliance and verification requirements under the Act.

To communicate this clearly in the form agreement, the Comptroller will accept the following additional language in form agreements submitted for Comptroller review and approval:

"Act" means the Texas Economic Development Act set forth in Chapter 313 of the Texas Tax Code, including any statutory amendments that are applicable to Applicant."

No. The definition of Act applies to all references to sections of Chapter 313 of the Texas Tax Code unless such references are explicitly to sections of Chapter 313 as they existed as of a certain date.

All applicants that have agreements executed after January 1, 2014, are required to file a Job Creation Compliance report starting with the first year they committed to create qualified jobs for the project that was the subject of the application, per Schedule C. For example, if an applicant indicates on Schedule C that they will begin creating qualified jobs in 2019, then they will need to file a report in 2020.

Agreements executed between January 1, 2014 and January 24, 2016 contain a clause requiring qualified property to be located in a reinvestment zone until the final termination date of the agreement. If your agreement includes this clause, you can either:

• amend the agreement to remove this clause;
• have the area re-designated as a reinvestment zone; or
• consult your legal counsel to identify other options.

If your agreement does not contain this clause, then the zone must be active at the time the agreement is executed, and the expiration of the designated zone will not affect an existing agreement.

There is not a formal submission deadline; however to be safe, we recommend that all applications be submitted to the Comptroller’s office by June 1, 2022 to ensure there is ample time for processing and approvals. The application and approval process during an average year can take as long as 6 months. However, with the program expiring we’re seeing an increase in the volume of applications coming in this year. It would be prudent to get the application in as soon as possible. We cannot guarantee that an application submitted to the Comptroller’s office after June 1, 2022 will receive all approvals and the Texas Economic Development Act Agreement will be signed and executed by the school district and the company before December 31, 2022. Applications that are incomplete or have deficiencies will be delayed, making final approval less likely.

The Comptroller’s office will accept and process most amendments after program expiration, but not all. We will not process amendments that expand the size of investment and the scope of the project or push the timeline out further into the future because these actions would expand or extend a project after program expiration. All other amendments that would not contribute to expanding the size of the program or make the program last longer will be accepted.

The Comptroller's Office has developed an online mapping tool. This application allows the user to see counties, school districts, and the 25-mile boundary for selected military facilities. While this map is provided as a courtesy for informational purposes only, it allows a user to gain a general sense of where these boundaries may exist. It also has a feature that allows a user to enter coordinates to pinpoint a location in relation to a military facility. If you have questions about how SB277 may affect your application, we encourage you to contact us early in the project development process.

Yes.

Yes. Section 313.051(d) states that "Except as otherwise provided by this subchapter" the terms of Subchapter B apply. To eliminate the requirement as to the non-qualified wage standard, the statute would have to directly state that it is eliminating the non-qualifying wage standard (or create another non-qualifying wage standard) in order to "otherwise provide."

Yes. Section 313.027(f)(4) was not amended by HB 3390 and states that an agreement must "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." This provision applies to all terms of the agreement, including job and wage requirements.

Yes. The definition of qualifying job in TAC 9.051(30) of the rules proposed July 3, 2014 clarifies that jobs held by employees of contractors are qualifying jobs if those jobs meet certain criteria detailed in the rule. In previous rules (still in effect for many 3-digit projects), jobs held by employees of contractors count as "new jobs" in certain circumstances; qualifying jobs were, prior to Jan. 1, 2014, a subset of "new jobs." The proposed definition of qualifying job in the rules proposed July 3, 2014 is being added to simply consolidate the language of Tax Code 313.021(3) and long-standing Comptroller interpretation of that section.

On the 50-772A form (Chapter 313 Annual Eligibility Report Form) in Section 5A, Question #8 (applying to 3-digit projects), the applicant is asked to specify how many of the total number of qualifying jobs were held by employees of the agreement-holder, and how many were held by employees of contractors. On that same 50-772A form, in Section 5B (applying to 4-digit projects) only the total number of qualifying jobs is requested in Question #1. While future revisions to this section of this form may request this break-out of applicant employees and contractor employees, the only form currently requiring that break-out is the new 50-825 form (Job Creation Compliance Report for Texas Economic Development Act, Section 3, Question #2) promulgated to implement new Section 313.0276 added in HB 3390 in 2013.

While the portion of the 50-772 form applying to 4-digit projects, and the new 50-825 form both address information about qualifying jobs, the two forms serve different purposes. The 50-772 form is promulgated to assist school districts in their oversight and enforcement of the entire Tax Code chapter. The 50-825 form is limited in scope to implement only new Section 313.0276 — administered by the Comptroller's Office.

The Comptroller's office has concluded that the definition of "wage" for any particular limitation agreement depends on the dataset used to determine the minimum required wage for each qualifying job in that school district. For example, if an applicant's minimum required wage for each qualifying job is based on the average weekly wage for manufacturing jobs in the county as published by the Texas Workforce Commission, based on Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) data, then the definition of "wage" is that used for the collection of QCEW data. If the minimum required wage is based on regional wage data published by the Texas Workforce Commission based on Occupational Employment and Wages Survey (OES) data, then the definition of wage is that used for OES data collection. Definitions of what compensation is included in "wages" (employer contribution to retirement plans, health benefits, non-wage benefits, overtime, etc.) for each of these datasets may be found on the BLS website.