Rule 9.1054, School District Application Review and Agreement to Limit Appraised Value

Archive of the Texas Administrative Code that pertains to Chapter 313
As of December 31, 2013
TITLE 34	PUBLIC FINANCE
PART 1	COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 9	PROPERTY TAX ADMINISTRATION
SUBCHAPTER F	LIMITATION ON APPRAISED VALUE AND TAX CREDITS ON CERTAIN QUALIFIED PROPERTY
RULE §9.1054	School District Application Review and Agreement to Limit Appraised Value

(a) Application fee. Prior to accepting an application for an agreement for limitation on appraised value pursuant to Tax Code, Chapter 313, Subchapter B, the governing body of a school district by official action shall establish a reasonable nonrefundable application fee to be paid by an applicant who applies to the school district for a limitation on the appraised value of applicant's property under such subchapter. The amount of the fee shall not exceed the estimated cost to the district of processing and acting on an application.

(b) Initial review. If a school district receives a completed application, amended application, or supplemental application for property tax limitation within its boundaries, the school district shall submit to the comptroller, not later than 7 days after receiving it, a copy of the following documents:

(1) the application;

(2) an economic analysis, if any;

(3) application amendment;

(4) application supplement; and

(5) proof of payment of the filing fee required by the school district.

(c) Acting on a completed application. If the governing body of the school district by official action elects to consider an application and determines that the application received is a completed application, the school district shall:

(1) provide written notice to the applicant and to the comptroller, with a copy to the appraisal district, that the school district has received and will be considering a completed application. The notice shall include:

(A) the date on which the application was received;

(B) the date on which the governing body elected to consider the application; and

(2) at the time the school district provides notice of a completed application, deliver to the comptroller:

(A) a copy of the completed application including all material required by §9.1053(a) and, if applicable (b), of this title (relating to Entity Requesting Agreement to Limit Appraised Value and Tax Credit); and

(B) a request to the comptroller to provide an economic impact evaluation;

(3) twenty days after the school district provides notice of a completed application, submit, in a format approved by the comptroller, for each year starting with the first year of the qualifying period through the second year after the tax credit settle-up period:

(A) estimates of the impact of the project on public school state aid;

(B) estimates of the tax benefit to applicant through the tax credit and the limitation on the appraised value;

(D) estimates of extraordinary educational expenses the district may be entitled to in the agreement;

(E) estimates of the supplemental payment cap described in Tax Code, §313.027(i);

(F) general analysis of the range of possible effects of the project on the school district and on neighboring school districts' facilities needs;

(G) estimates of increased state aid associated with increased enrollment; and

(H) any other information the district is able to provide that the comptroller deems necessary to analyze the impact of the project on state and local public school revenues or expenditures;

(4) if the school 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 school district are posted;

(5) 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; and

(6) not later than 151 days after the application review start date, present to the governing body of the school district for its consideration:

(A) the completed application that has been submitted by applicant;

(B) the economic impact analysis submitted by the comptroller;

(D) a limitation agreement that includes all stipulations, provisions, terms, and conditions required by subsection (h) of this section that is acceptable to the applicant.

(d) Extending time period for action. The governing body of the school district may extend the time period to approve a completed application required by subsection (c)(6) of this section only if:

(1) either:

(A) an economic impact analysis has not been submitted to the school district by the comptroller; or

(B) by agreement with applicant; and

(2) notice of the extension is provided to the comptroller within 7 days of the decision to provide the extension.

(e) Application changes after the notice of completed application. If a school district receives an amended application or a supplemental application from an applicant after the school district has prepared or sent written notice that the applicant has submitted a completed application, the school district shall either:

(1) reject the amended application, supplemental application, or application, in whole or in part, and discontinue consideration of any submission by 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 applicant, issue an amended written notice of a completed application, and present the amended application to the governing body of the school district in the manner and time period authorized by subsection (c)(6) of this section.

(f) Application with positive comptroller recommendation. When presented a completed application pursuant to subsection (c)(6) of this section for which the comptroller has submitted a final written recommendation to approve, the governing body of the school district shall either:

(1) by majority vote adopt a written resolution approving the application which shall include:

(A) written findings:

(i) as to each criterion listed in Tax Code, §313.026;

(ii) as to the criteria required by Tax Code, §313.025(f-1) if applicable;

(iii) that the information in the application is true and correct; and

(iv) that applicant is eligible for the limitation on the appraised value of the entity's qualified property;

(B) a determination that granting the application is in the best interest of the school district and this state; and

(C) designate and direct a representative of the governing body of the school district to execute the agreement for property tax limitation presented by the approved applicant that complies with this subchapter 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 152nd day after the application review start date.

(g) Application with negative comptroller recommendation. When presented a completed application pursuant to subsection (c)(6) of this section for which the comptroller has submitted a final written recommendation to disapprove, the governing body of the school district shall either:

(1) hold a public hearing the sole purpose of which is to consider the application and the comptroller's recommendation and at a subsequent meeting held after the date of the public hearing vote by at least two-thirds of the members of the governing body to approve the application by written resolution that shall include:

(A) written findings:

(i) as to each criterion listed in Tax Code, §313.026;

(ii) as to the criteria required by Tax Code, §313.025(f-1) if applicable;

(iii) that the information in the application is true and correct; and

(iv) that applicant is eligible for the limitation on the appraised value of the entity's qualified property;

(B) a determination that granting the application is in the best interest of the school district and this state;

(C) authorizes a representative of the governing body of the school district to execute an agreement for limitation on appraised value that incorporates the terms of the completed application as approved by the governing body and complies with Tax Code, Chapter 313 and this subchapter;

(2) disapprove the application by majority vote; or

(3) take no official action and the application shall be considered disapproved on the 152nd day after the application review start date.

(h) Agreement for limitation on appraised value. Pursuant to the provisions of Tax Code, Chapter 313 and this subchapter, in order to implement a limitation on the appraised value for school district maintenance and operation tax purposes on the approved applicant's qualified property that has been approved by the governing body of the school district, at the time of the approval of the application, the authorized representative of the school district and the approved applicant shall execute an agreement that at a minimum includes:

(1) all Texas Taxpayer Identification Numbers assigned by the comptroller to the approved applicant executing the agreement and all Texas Taxpayer Identification Numbers of its reporting entity, which shall be the same numbers listed on the application and, if the approved applicant is comprised of members of a combined group, all Texas Taxpayer Identification Numbers for each such combined group's members that own a direct interest in the property subject to the proposed agreement;

(2) a stipulation that the agreement is executed on the basis that the application is complete and accurately represents all material representations, information, and facts and incorporates the application and all the attachments thereto as part of the agreement as if set forth fully in the agreement;

(3) a condition that upon the written determination of the governing body of the school district that the application is either incomplete or inaccurate as to any material representation, information, or fact, the agreement shall be invalid and void except for the enforcement of the provisions required by paragraph (11) of this subsection;

(4) provisions required for an agreement listed in Tax Code, Chapter 313 with particular reference to Tax Code, §313.027(e), (f), and (i);

(5) a provision that identifies the qualifying time period that shall be consistent with the qualifying time period requested in the application;

(6) a condition that before the appraised value of the qualified property of the approved applicant may obtain the limitation on the appraised value identified in the agreement, the approved applicant shall make the qualified investment, as defined in Tax Code, §313.021(1), at least in the amounts required in Tax Code, §313.022, or §313.052 if applicable, within the qualifying time period specified in the agreement;

(7) a provision that the approved applicant is required to:

(A) create at least the number of new jobs and qualifying jobs required by Tax Code, Chapter 313;

(B) create at least the number of qualifying jobs to which the applicant committed in the application no later than the last day of the tax year specified in the application;

(C) maintain at least the number of new jobs required by Tax Code, Chapter 313 from the time they are created until at least the end of the third year following the expiration of the limitation on appraised value provided by the agreement; and

(D) maintain at least the number of qualifying jobs committed in the application from the time they are created until at least the end of the third year following the expiration of the limitation on appraised value provided by the agreement;

(8) a provision that identifies the limitation on the appraised value of the qualified property of the approved applicant consistent with Tax Code, §313.027, or if applicable Tax Code, §313.054;

(9) 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);

(10) a provision by which the approved applicant is required to submit to the school district any information as thereafter may be reasonably requested by the school district or the comptroller in order to evaluate the progress of the agreement or administer and implement Tax Code, Chapter 313 and this subchapter;

(11) a provision that:

(A) in the event that the approved applicant fails in any year to comply with the stipulation, provision, term, or condition of the agreement identified in paragraphs (3), (4), (7)(A), or (9) of this subsection, the approved applicant is assessed as liquidated damages an amount equal to the amount computed by subtracting from the market value of the property for the tax year in which the approved applicant failed to comply, the value of the property as limited by the agreement and multiplying the difference by the maintenance and operations tax rate of the school district;

(B) deems the penalty delinquent if it is not paid on or before February 1 of the following tax year; and

(12) a provision that the approved applicant shall comply with the conditions included in the final recommendation to approve the application from the comptroller;

(13) for agreements in which the governing body of the school district approved a deferral of the start of the qualifying time period, and in which the qualifying time period starts more than one year after the date that the application is approved, provisions that:

(A) require the approved applicant to provide an application amendment or supplement to the school district and comptroller:

(i) that identifies any changes in the information that was provided in the application that was approved by the school district and as considered by the comptroller;

(ii) no earlier than 180 days prior to the start of the qualifying time period; and

(iii) no later than 90 days prior to the start of the qualifying time period;

(B) require the approved applicant to comply with a written request from the school district or comptroller to provide additional information necessary to evaluate the economic impact analysis for the conditions prior to the start of the qualifying time period; and

(C) authorize the governing body of the school district to terminate the agreement after reviewing the amended application and the comptroller's recommendation or revised recommendation;

(14) a provision that at the end of the qualifying time period, the approved applicant shall provide to the school district, the comptroller, and the appraisal district a specific and detailed description of the tangible personal property, buildings, or permanent, nonremovable building components (including any affixed to or incorporated into real property) on the qualified property to which the value limitation applies including maps or surveys of sufficient detail and description to locate all such described property within the boundaries of the real property which is subject to the agreement;

(15) a provision that in order to apply the limitation to any property not specifically described in the application, agreement, or notice as provided by paragraph (13) of this subsection, the following shall occur:

(A) the approved applicant shall submit to the school district and the comptroller:

(i) a written request to add property to the limitation agreement which shall include a specific description of the additional property to which the applicant requests that the limitation apply;

(ii) any other changes to the information that was provided in the application that was approved by the school district and considered by the comptroller; and

(iii) any additional information requested by the school district or the comptroller necessary to evaluate the economic impact analysis for the conditions;

(B) the comptroller shall provide a revised recommendation based on any changes to include any other property within 90 days of receiving the revised application or the prior recommendation of the comptroller shall remain the recommendation of the comptroller;

(C) in accord with the procedure identified in subsection (i) of this section, the governing body of the school district shall approve or disapprove the request before the expiration of 120 days after the request is filed; and

(16) any other provision negotiated between the applicant and the school district that does not conflict or impair the application or implementation of any stipulation, provision, term, or condition required by this subsection, this subchapter, or Tax Code, Chapter 313.

(i) Limitation agreement with deferred qualifying time period. If an agreement for limitation on appraised value includes a provision in which the qualifying time period starts more than one year after the date that the application is approved, the school district shall:

(1) require the approved applicant to:

(A) provide an application amendment and supplement to the school district and comptroller:

(i) that identifies any changes in the information that was provided in the application that was approved by the school district and that was considered by the comptroller;

(ii) no earlier than 180 days prior to the start of the qualifying time period; and

(iii) no later than 90 days prior to the start of the qualifying time period; and

(B) comply with a written request from the comptroller to provide additional information necessary to evaluate the economic impact analysis for the conditions prior to the start of the qualifying time period; and

(2) if the comptroller provides a revised recommendation to disapprove the request for limitation on appraised value, the governing body of the school district shall either:

(A) hold a public hearing the sole purpose of which is to re-consider the application and the comptroller's revised recommendation and at a subsequent meeting held after the date of the public hearing vote by at least two-thirds of the members of the governing body to approve the application by written resolution that shall include the findings and determination set forth in subsection (g)(1)(A) and (B) of this section;

(B) disapprove the application by majority vote; or

(C) take no official action and the agreement shall be considered terminated on the 60th day after the date of the revised recommendation of the comptroller.

(j) Compliance and enforcement.

(1) The school district shall provide to the comptroller:

(A) any documents that reasonably appear to be substantive documents as defined in this subchapter; and

(B) within seven days of executing the agreement, a copy of the executed agreement and any attachments thereto.

(2) The school district shall provide a copy of the executed agreement to the appraisal district.

(3) The school district shall comply with and enforce the stipulations, provisions, terms, and conditions of the agreement for limitation of the appraised value, this subchapter, and Tax Code, Chapter 313 with particular reference to §313.0275.

(4) To determine and obtain compliance with each agreement, for each calendar year during the term of the agreement the school district may require the approved applicant to submit:

(A) the information necessary to complete the Annual Eligibility Report, adopted by reference in §9.1052 of this title (relating to Forms); or

(B) a completed Annual Eligibility Report, adopted by reference in §9.1052 of this title.

(k) Tax credit. The governing body of a school district may provide a credit for that part of the maintenance and operations property taxes that were paid to a school district for each whole tax year during the qualifying time period of an executed and performed tax limitation agreement in an amount that is equal to the difference between the amount of maintenance and operations tax that was actually paid on the qualified property and the amount of maintenance and operations tax that would have been paid based on the appraised value limitation to which the school district agreed.

(1) In order to provide a tax credit, the school district shall:

(A) submit to the comptroller copies of all the documents submitted by the approved applicant to the school district;

(B) review the application submitted by the approved applicant;

(C) prior to granting the tax credit, determine the approved applicant's eligibility for a tax credit by finding that the approved applicant:

(i) has submitted an application that complies with §9.1053(f) of this title;

(ii) has submitted a tax receipt from the collector of taxes for the school district showing full payment of school district ad valorem taxes on the qualified property for the applicable qualifying time period;

(iii) has submitted any other document or information that the comptroller or the governing body considers necessary for a determination of applicant's eligibility for the credit or the amount of the credit; and

(iv) is currently in full compliance with the agreement; and

(D) if the governing body of the school district by majority vote determines that the approved applicant has met the requirements of Tax Code, Chapter 313, Subchapter D and this subsection, adopt an order or resolution directing the collector of taxes for the school district:

(i) in the second and subsequent six tax years that begin after the date the tax credit application is approved, to credit against the taxes imposed on the qualified property by the district in that year an amount equal to one-seventh of the total amount of tax credit to which the entity is entitled under Tax Code, §313.102, except that the amount of a credit granted in any of those tax years may not exceed 50% of the total amount of the interest and sinking and maintenance and operations ad valorem school taxes imposed on the qualified property by the school district in that tax year; and

(ii) in the first three tax years that begin on or after the date the entity's eligibility for the limitation under Tax Code, Chapter 313, Subchapter B or C expires, to credit against the taxes imposed on the qualified property by the district an amount equal to the portion of the total amount of tax credit to which the entity is entitled under Tax Code, §313.102 that was not credited against the entity's taxes under subparagraph (A) of this paragraph in a tax year covered by subparagraph (A) of this paragraph, except that the amount of a tax credit granted under this paragraph in any tax year may not exceed the total amount ad valorem school taxes imposed on the qualified property by the school district in that tax year.

(2) If the school district receives written notice from the comptroller or the Texas Education Agency that an approved applicant may not have been entitled to a tax credit or may have been entitled to a lesser amount that an approved applicant received, the school district shall investigate that determination, submit a report to the governing body of the school district on the determination, and provide a written response to the comptroller that the governing body of the school district concludes either that the approved applicant did or did not receive unauthorized tax credits. If the governing body of the school district and the comptroller concur that an approved applicant may not have been entitled to a tax credit or may have been entitled only to a lesser amount than the approved applicant actually received, each shall provide their written notice regarding the finding to the approved applicant, the County Appraisal District, the appropriate tax assessor collector, and the Texas Education Agency.

Source Note: The provisions of this §9.1054 adopted to be effective June 22, 2010, 35 TexReg 5361

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Rule 9.1054, School District Application Review and Agreement to Limit Appraised Value

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