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H.B. No. 2994

H.B. No. 2994

AN ACT
Relating to certain agreements made with electric power generation
facilities under the Property Redevelopment and Tax Abatement Act
and to similar agreements and compliance reports under the Texas
Economic Development Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 312, Tax Code, is amended
by adding Section 312.403 to read as follows:
Sec. 312.403. TAX ABATEMENT AGREEMENT FOR NUCLEAR ELECTRIC
POWER GENERATION FACILITY IN COUNTY REINVESTMENT ZONE. (a) In this
section, “nuclear electric power generation” has the meaning
assigned by Section 313.024(e).
(b) An agreement made under this subchapter with the owner
of property that is a nuclear electric power generation facility
may include a provision that defers the effective date of the
agreement to a later date agreed to by the taxing unit and the owner
of the property, but not later than the seventh anniversary of the
date the agreement is made.
(c) If the effective date of an agreement is deferred under
Subsection (b), the agreement may have a term ending not later than
10 years after the effective date of the agreement, notwithstanding
Sections 312.204 and 312.208.
SECTION 2. Sections 313.021(1) and (4), Tax Code, are
amended to read as follows:
(1) “Qualified investment” means:
(A) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, and is
described as Section 1245 property by Section 1245(a), Internal
Revenue Code of 1986;
(B) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with the manufacturing,
processing, or fabrication in a cleanroom environment of a
semiconductor product, without regard to whether the property is
actually located in the cleanroom environment, including:
(i) integrated systems, fixtures, and
piping;
(ii) all property necessary or adapted to
reduce contamination or to control airflow, temperature, humidity,
chemical purity, or other environmental conditions or
manufacturing tolerances; and
(iii) production equipment and machinery,
moveable cleanroom partitions, and cleanroom lighting; [or]
(C) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with the operation of a
nuclear electric power generation facility, including:
(i) property, including pressure vessels,
pumps, turbines, generators, and condensers, used to produce
nuclear electric power; and
(ii) property and systems necessary to
control radioactive contamination;
(D) tangible personal property that is first
placed in service in this state during the applicable qualifying
time period that begins on or after January 1, 2002, without regard
to whether the property is affixed to or incorporated into real
property, and that is used in connection with operating an
integrated gasification combined cycle electric generation
facility, including:
(i) property used to produce electric power
by means of a combined combustion turbine and steam turbine
application using synthetic gas or another product produced by the
gasification of coal or another carbon-based feedstock; or
(ii) property used in handling materials to
be used as feedstock for gasification or used in the gasification
process to produce synthetic gas or another carbon-based feedstock
for use in the production of electric power in the manner described
by Subparagraph (i); or
(E) a building or a permanent, nonremovable
component of a building that is built or constructed during the
applicable qualifying time period that begins on or after January
1, 2002, and that houses tangible personal property described by
Paragraph (A), [or] (B), (C), or (D).
(4) “Qualifying time period” means:
(A) the first two tax years that begin on or after
the date a person’s application for a limitation on appraised value
under this subchapter is approved, except as provided by Paragraph
(B); or
(B) in connection with a nuclear electric power
generation facility, the first seven tax years that begin on or
after the third anniversary of the date the school district
approves the property owner’s application for a limitation on
appraised value under this subchapter, unless a shorter time period
is agreed to by the governing body of the school district and the
property owner.
SECTION 3. Section 313.024, Tax Code, is amended by adding
Subsections (a-1) and (b-1) and amending Subsection (c) to read as
follows:
(a-1) Notwithstanding Subsection (a), this subchapter and
Subchapters C and D also apply to property used in the production of
nuclear electric power that is owned by an entity to which on and
after January 1, 2008, Chapter 171 of this code, as amended by
Chapter 1, Acts of the 79th Legislature, 3rd Called Session, 2006,
will apply. This subsection expires January 1, 2008.
(b-1) Notwithstanding Subsection (b), property used in
connection with electric power generation by the use of integrated
gasification combined cycle technology or nuclear electric power
generation is eligible for a limitation on appraised value under
this subchapter. This subsection expires January 1, 2008.
(c) For purposes of determining an applicant’s eligibility
for a limitation under this subchapter:
(1) the land on which a building or component of a
building described by Section 313.021(1)(E) [313.021(1)(C)] is
located is not considered a qualified investment;
(2) property that is leased under a capitalized lease
may be considered a qualified investment;
(3) property that is leased under an operating lease
may not be considered a qualified investment; and
(4) property that is owned by a person other than the
applicant and that is pooled or proposed to be pooled with property
owned by the applicant may not be included in determining the amount
of the applicant’s qualifying investment.
SECTION 4. Section 313.024(b), Tax Code, as effective
January 1, 2008, is amended to read as follows:
(b) To be eligible for a limitation on appraised value under
this subchapter, the entity must use the property in connection
with:
(1) manufacturing;
(2) research and development;
(3) a clean coal project, as defined by Section 5.001,
Water Code;
(4) a gasification project for a coal and biomass
mixture; [or]
(5) renewable energy electric generation;
(6) electric power generation using integrated
gasification combined cycle technology; or
(7) nuclear electric power generation.
SECTION 5. Section 313.024(e), Tax Code, is amended by
adding Subdivisions (3) and (4) to read as follows:
(3) “Integrated gasification combined cycle
technology” means technology used to produce electricity in a
combined combustion turbine and steam turbine application using
synthetic gas or another product produced from the gasification of
coal or another carbon-based feedstock, including related
activities such as materials-handling and gasification of coal or
another carbon-based feedstock.
(4) “Nuclear electric power generation” means
activities described in category 221113 of the 2002 North American
Industry Classification System.
SECTION 6. Subchapter B, Chapter 313, Tax Code, is amended
by adding Section 313.032 to read as follows:
Sec. 313.032. REPORT ON COMPLIANCE WITH AGREEMENTS. (a)
Before the beginning of each regular session of the legislature,
the comptroller shall submit to the lieutenant governor, the
speaker of the house of representatives, and each other member of
the legislature a report assessing the progress of each agreement
made under this chapter. The report must be based on data certified
to the comptroller by each recipient of a limitation on appraised
value under this subchapter and state for each agreement:
(1) the number of qualifying jobs each recipient of a
limitation on appraised value committed to create;
(2) the number of qualifying jobs each recipient
created;
(3) the median wage of the new jobs each recipient
created;
(4) the amount of the qualified investment each
recipient committed to spend or allocate for each project;
(5) the amount of the qualified investment each
recipient spent or allocated for each project;
(6) the market value of the qualified property of each
recipient as determined by the applicable chief appraiser;
(7) the limitation on appraised value for the
qualified property of each recipient;
(8) the dollar amount of the taxes that would have been
imposed on the qualified property if the property had not received a
limitation on appraised value;
(9) the dollar amount of the taxes imposed on the
qualified property;
(10) the number of new jobs created by each recipient
in each sector of the North American Industry Classification
System; and
(11) of the number of new jobs each recipient created,
the number of jobs created that provide health benefits for
employees.
(b) The report may not include information that is
confidential by law.
(c) The comptroller may require a recipient to submit, on a
form the comptroller provides, information required to complete the
report.
SECTION 7. (a) The governmental acts and proceedings of the
governing body of a taxing unit relating to the consideration or
approval of an ad valorem tax abatement agreement under Chapter
312, Tax Code, that occurred before the effective date of this Act,
or of the governing body of a school district relating to the
consideration or approval of a limitation on appraised value for ad
valorem tax purposes under Chapter 313, Tax Code, that occurred
before the effective date of this Act, are validated as of the dates
they occurred.
(b) The governmental acts and proceedings of the taxing unit
or the governing body of the taxing unit that occurred after the
consideration or approval of an ad valorem tax abatement agreement
under Chapter 312, Tax Code, or of the school district or the
governing body of the school district that occurred after the
consideration or approval of a limitation on appraised value for ad
valorem tax purposes under Chapter 313, Tax Code, may not be held
invalid on the ground that the consideration or approval of the tax
abatement agreement or limitation on appraised value, in the
absence of this section, was invalid.
SECTION 8. (a) Except as otherwise provided by Subsection
(b) of this section, this Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2007, except as provided
by Subsection (b).
(b) Section 4 of this Act takes effect January 1, 2008.

______________________________ ______________________________
President of the Senate Speaker of the House

I certify that H.B. No. 2994 was passed by the House on April
25, 2007, by the following vote: Yeas 112, Nays 17, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2994 on May 25, 2007, by the following vote: Yeas 139, Nays 0,
2 present, not voting.

______________________________
Chief Clerk of the House

I certify that H.B. No. 2994 was passed by the Senate, with
amendments, on May 23, 2007, by the following vote: Yeas 27, Nays
3.

______________________________
Secretary of the Senate
APPROVED: __________________
Date

__________________
Governor

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