TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 9. PROPERTY TAX ADMINISTRATION

SUBCHAPTER F. LIMITATION ON APPRAISED VALUE ON CERTAIN QUALIFIED PROPERTIES

34 TAC §§9.1051, 9.1052, 9.1055, 9.1058

The Comptroller of Public Accounts adopts amendments to §9.1051, concerning definitions; and §9.1052, concerning forms, with changes to the proposed text as published in the May 12, 2017, issue of the Texas Register (42 TexReg 2523). The comptroller adopts amendments to §9.1055 concerning comptroller application review and agreement to limit appraised value, and §9.1058 concerning miscellaneous provisions, without changes to the proposed text as published in the May 12, 2017, issue of the Texas Register (42 TexReg 2523).

The amendments to §9.1051 update the name of the division of the comptroller's office responsible for administration of Tax Code, Chapter 313 in paragraph (13) from the Economic Development and Analysis Division or ED&A to the Data Analysis and Transparency Division or DAT; and update the website for the United States Census Bureau in paragraph (25).

The amendments to §9.1052 update the toll-free phone number for requesting forms from the comptroller and the web address for viewing and downloading forms on the comptroller's website, and change "web site" to "website" in subsection (b). The amendments to §9.1052 also adopt by reference two existing forms with changes. In the form adopted by reference in subsection (a)(2), Section 4 on qualified property is being changed to request the county appraisal district in which the project is located, the total market value of all qualified property from all county appraisal district property records subject to the 313 agreement, the total value of all applicable exemptions for the qualified property, the total taxable value for school interest and sinking tax purposes for the qualified property, the limitation amount on appraised value specified as qualified in the 313 agreement, and the total taxable value for school maintenance and operations tax purposes for the qualified property. In the form adopted by reference in subsection (a)(2), Section 5B on wage and employment information for applications after January 1, 2014 is being changed to include the same questions in Section 5A, number 8; and the rule defining qualifying jobs, that is, 34 TAC §9.1051(30), is being included in Section 5B question 6; and parts of the titles for Sections 5A and 5B are being modified to boldface font.

The amendment to §9.1055, subsection (a)(5) requires documents that are submitted to the comptroller in an electronic format to be in compliance with the accessibility standards and specifications described in 1 TAC Chapters 206 and 213.

The amendments to §9.1058 corrects a typographical error in subsection (a) by replacing the word "contract" with "contact" and changes "web site" to "website" in subsection (d)(1). New subsection (f) clarifies the scope of "series of agreements" as referenced in Tax Code, §313.027.

Two comments were received from Renn Neilson and Matt Larsen with Baker Botts LLP and Kevin O'Hanlon with O'Hanlon, Demerath & Castillo Attorneys and Counselors at Law.

Mr. Neilson, Mr. Larsen and Mr. O'Hanlon suggest that the comptroller can accomplish its goal to restrict partial assignments without adopting proposed §9.1051(31) by exercising its discretion to reject them as authorized under Sections 10.2 and 10.3 of Form 50-826 Texas Economic Development Act Agreement. The comptroller agrees with this comment and declines to adopt the definition of assignment in proposed §9.1051(31), which would have prohibited all partial assignments. For consistency, the comptroller also declines to adopt the proposed new language in Form 50-772, which states "Applicable only to centain 3-digit projects" and the proposed new language in Form 50-773A which states "Only 3-digit projects may have partial assignments".

In addition, Mr. Neilson and Mr. Larsen comment that §9.1055(a)(5) would be burdensome on applicants and suggest that either the comptroller charge a small additional application fee for Americans with Disability Act (ADA) accessibility conversions, or consider providing certain convertible forms and guidance on ADA accessibility conversions. The comptroller disagrees with this comment and declines to make the suggested changes. The comptroller cannot post substantive documents or information submitted by applicants on its website that are not accessible to persons with disabilities because of Texas state and federal accessibility laws. The comptroller has, therefore, determined that electronic and information resources (EIR) compliance is accomplished most effectively and efficiently by requiring applicants to submit already-accessible documents or information. Although compliance with proposed §9.1055(a)(5) may require an applicant at the outset to spend some amount of time researching or selecting its preferred method for creating accessible documents or information, the comptroller does not anticipate that amount of time to be significant, or that compliance with the rule as adopted will represent an ongoing burden upon applicants. Rather, the comptroller expects applicants to consider the variety of accessibility tools available and ultimately choose tools that are best-suited to the applicant's needs with respect to time and cost-saving qualities. The Texas Department of Information Resources is a good resource for information on both free and paid accessibility tools and information, and the comptroller encourages applicants to review that agency's guidance available here: http://dir.texas.gov/View-Resources/Pages/Content.aspx?id=36. Additional guidance on accessibility may also be provided to applicants on the Chapter 313 program's website upon adoption of these rules.

The amendments are adopted under Tax Code, §313.031, which authorizes the comptroller to adopt rules necessary for the implementation and administration of Tax Code, Chapter 313.

The amendments implement Tax Code, Chapter 313.

§9.1051.Definitions.

The following phrases, words and terms, when used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise. Words defined in Tax Code, Chapter 313 and not defined in this subchapter shall have the meanings provided by Tax Code, Chapter 313.

(1) Agreement--The written agreement between the governing body of a school district and the approved applicant on the form adopted by reference in §9.1052 of this title (relating to Forms) to implement a limitation on the appraised value for school district maintenance and operations ad valorem property tax purposes on an entity's qualified property, required by Tax Code, §313.027(d).

(2) Applicant--An entity that has applied for a limitation on appraised value for school district maintenance and operations ad valorem property tax purposes on the entity's property as provided by Tax Code, Chapter 313.

(3) Application--An application for limitation of appraised value limitation for school district maintenance and operations ad valorem property tax purposes on an entity's qualified property on the form adopted by reference in §9.1052 of this title, the schedules attached thereto, and the documentation submitted by an entity for the purpose of obtaining an agreement for a limitation on appraised value from a school district.

(4) Application amendment--Information submitted by an applicant intended to be considered as part of or in support of the application that amends by replacing information that was previously submitted by applicant.

(5) Application supplement--Information submitted by an applicant intended to be considered as part of or in support of the application that has not been previously submitted.

(6) Approved applicant--An applicant whose application has been approved by a school district for a limitation on appraised value agreement according to the provisions of Tax Code, Chapter 313, including any assignees of that applicant.

(7) Application review start date--The later date of either the date on which the school district issues its written notice that an applicant has submitted a completed application or the date on which the comptroller issues its written notice that an applicant has submitted a completed application.

(8) Appraisal district--The county appraisal district that would appraise the property which is the subject of an application.

(9) Appraised value--The value of property as defined by Tax Code, §1.04(8).

(10) Completed application--An application in the form and number and containing all the information required pursuant to §9.1053 of this title (relating to Entity Requesting Agreement to Limit Appraised Value) that has been determined by the school district and the comptroller to include all minimum requirements for consideration.

(11) Comptroller--The Texas Comptroller of Public Accounts or the designated representative of the Texas Comptroller of Public Accounts acting on behalf of the comptroller.

(12) Entity--Any entity upon which a tax is imposed by Tax Code, §171.001 including a combined group as defined by Tax Code, §171.0001(7) or members of a combined group, provided however, an entity as defined herein does not include a sole proprietorship, partnership or limited liability partnership.

(13) Data Analysis and Transparency Division or DAT--The Data Analysis and Transparency Division of the comptroller's office, or the division of the comptroller's office responsible for the administration of Tax Code, Chapter 313, acting through the designated division director or a representative thereof.

(14) Non-qualifying job--A permanent position of employment to perform work:

(A) that includes at a minimum the following requirements:

(i) that is based on the qualified property;

(ii) that is in direct support of activity identified in Tax Code, §313.024(b);

(iii) for at least 1,600 hours a year;

(iv) over which the applicant has significant degree of control of:

(I) the creation of the job;

(II) the job description;

(III) the job characteristics or performance of the job through either a business, contractual or vendor relationship; and

(B) is not a qualifying job as that term is defined in Tax Code, §313.021(3) and these rules.

(15) Qualified investment--Property that meets the requirements of Tax Code, §313.021(1).

(16) Qualified property--Land, new building, or new improvement erected or affixed to the land after the application review start date, or eligible tangible personal property first placed in service after the application review start date that:

(A) meets the requirements of Tax Code, §313.021(2), and that is used either as an integral part, or as a necessary auxiliary part, in manufacturing, research and development, a clean coal project, an advanced clean energy project, renewable energy electric generation, electric power generation using integrated gasification combined cycle technology, nuclear electric power generation, a Texas Priority Project, or a computer center;

(B) is clearly distinguished from any existing property and clearly distinguished from any proposed property that is not a new improvement;

(C) is separate from, and not a component of, any existing property;

(D) if buildings or improvements, did not exist before the application review start date or if tangible personal property, was first placed in service after the application review start date;

(E) is not used to renovate, refurbish, upgrade, maintain, modify, improve, or functionally replace existing buildings or existing improvements;

(F) does not replace or modify existing buildings other than expansion of an existing building; and

(G) is not used solely for the transportation of product prior to the commencement, or subsequent to the completion, of an applicable qualifying activity described in subparagraph (A) of this paragraph.

(17) School district--A school district that has received an application for a limitation on appraised value pursuant to Tax Code, Chapter 313 or the designated representative of the school district acting on behalf of the school district.

(18) SOAH--State Office of Administrative Hearings.

(19) Substantive document--A document or other information or data in electronic media determined by the comptroller to substantially involve or include information or data significant to an application, the evaluation or consideration of an application, or the agreement or implementation of an agreement for limitation of appraised value pursuant to Tax Code, Chapter 313. The term includes, but is not limited to, any application requesting a limitation on appraised value and any amendments or supplements, any economic impact evaluation made in connection with an application, any agreement between applicant and the school district and any subsequent amendments or assignments, any school district written finding or report filed with the comptroller as required under this subchapter, and any completed Annual Eligibility Report (Form 50-772A) submitted to the comptroller.

(20) Agreement holder--An entity that has executed an agreement with a school district.

(21) Average weekly wage for manufacturing jobs--Either the average weekly wage:

(A) for all jobs primarily engaged in activities described in Sectors 31 - 33 of the 2007 North American Industry Classification System in a county as identified by the Texas Workforce Commission's Quarterly Employment and Wages (QCEW) webpage at http://www.tracer2.com/cgi/dataanalysis/AreaSelection.asp?tableName=Industry; or

(B) for all manufacturing jobs or if the information for subparagraph (A) of this paragraph is not available, as determined by data published annually by the Texas Workforce Commission for the purposes of Tax Code, Chapter 313 for each Council of Government Region, based on Bureau of Labor Statistics, Texas Occupational Employment and Wages (OES) data, as it is posted at http://www.tracer2.com/admin/uploadedPublications/COGWages.pdf.

(22) Average weekly wage for non-qualifying jobs--The average weekly wage as identified by the Texas Workforce Commission Quarterly Employment and Wages (QCEW) average weekly wages for all private industries for the most recent four quarterly periods for which data is available at the time that an application is deemed complete, as it is posted at http://www.tracer2.com/cgi/dataanalysis/AreaSelection.asp?tableName=Industry.

(23) First placed in service--The first use of the property by the agreement holder.

(24) New improvement--A building, structure, or fixture that, after the application review start date:

(A) is a discrete unit of property erected on or affixed to land eligible to be qualified property; and

(B) is not erected or affixed as part of maintenance, renovation, refurbishment, improvement, modification, or upgrade of existing property, nor is newly added or proposed to be added property functionally replacing existing property, provided however that a proposed improvement may be considered a new improvement if it is an addition to an existing building that will contain new tangible personal property that did not exist before the application review start date.

(25) Per capita income--Per capita money income in the past 12 months as determined by the United States Census Bureau and reported at its website http://www.census.gov.

(26) Strategic investment area--An area that is:

(A) a county within this state with unemployment above the state average and per capita income below the state average;

(B) an area within this state that is a federally designated urban enterprise community or an urban enhanced enterprise community; or

(C) a defense economic readjustment zone designated under Government Code, Chapter 2310.

(27) Texas Economic Development Act Agreement--The form, adopted by reference in §9.1052 of this title, which provides a template for the terms of an agreement to implement a limitation on appraised value on property within a school district and that has the title Agreement For Limitation On Appraised Value Of Property For School District Maintenance And Operations Taxes.

(28) Texas Priority Project--A project on which the applicant commits to place in service qualified investment of more than $1 billion during the qualifying time period, based on the comptroller review of the application submitted by the school district.

(29) Unemployment--The most recent calendar year unemployment rate, not seasonally adjusted, as determined by the Labor Market & Career Information Department (LMCI) of the Texas Workforce Commission and reported at its website http://www.tracer2.com/cgi/dataanalysis/AreaSelection.asp?tableName=Labforce.

(30) Qualifying job--A permanent position of employment that includes at a minimum the following requirements:

(A) provides work for at least 1600 hours a year;

(B) is in direct support of activity identified in Tax Code, §313.024(b);

(C) is based on the qualified property;

(D) is a job over which the applicant has significant degree of control of:

(i) the creation of the job;

(ii) the job description;

(iii) the job characteristics or performance of the job through either a business, contractual or vendor relationship;

(E) is covered by a group health benefit plan for which the applicant offers to pay at least 80% of the premiums or other charges assessed for employee-only coverage under the plan, regardless of whether an employee may voluntarily waive the coverage;

(F) pays at least 110% of the county average weekly wage for manufacturing jobs in the county where the job is located;

(G) that has not been transferred from another part of the state; and

(H) that has not been created to replace a previous employee.

§9.1052.Forms.

(a) The comptroller adopts by reference the following forms:

(1) Application for Appraised Value Limitation on Qualified Property (Form 50-296A);

(2) Annual Eligibility Report (Form 50-772A);

(3) Biennial Progress Report for Texas Economic Development Act (Form 50-773A);

(4) Job Creation Compliance Report (Form 50-825);

(5) Biennial School District Cost Data Request (CDR) (Form 50-827); and

(6) Texas Economic Development Act Agreement (Form 50-826).

(b) Copies of the forms are available for inspection at the office of the Texas Register or may be obtained from the Comptroller of Public Accounts, P.O. Box 13528, Austin, Texas 78711-3528. The forms may be viewed or downloaded from the comptroller's website, at https://www.comptroller.texas.gov/economy/local/ch313/forms.php. Copies may also be requested by calling our toll-free number, (800) 531-5441, extension 34679.

(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.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on August 22, 2017.

TRD-201703263

Lita Gonzalez

General Counsel

Comptroller of Public Accounts

Effective date: September 11, 2017

Proposal publication date: May 12, 2017

For further information, please call: (512) 475-0387


PART 4. EMPLOYEES RETIREMENT SYSTEM OF TEXAS

CHAPTER 67. HEARINGS ON DISPUTED CLAIMS

34 TAC §67.201

The Employees Retirement System of Texas (ERS) adopts amendments to 34 Texas Administrative Code (TAC) Chapter 67, concerning Hearings on Disputed Claims, §67.201, concerning Procedures Governing Bid Protests, without changes to the proposed text as published in the July 7, 2017, issue of the Texas Register (42 TexReg 3473). The amendments were approved by the ERS Board of Trustees at its August 23, 2017, meeting. This section will not be republished.

Section 67.201, Procedures Governing Bid Protests, is amended to update the roles of ERS staff involved in the bid protest process due to the reorganization of procurement functions within ERS. Vendors will file formal bid protests with the Director of Procurement and Contract Oversight. The amendment also directs when a protest must be filed in order to be filed timely and takes into consideration recent updates to the Comptroller of Public Accounts' bid protest rules.

The amendment also broadens when a protesting party may be required to post a bond, and permits ERS to require a bond when it is necessary for ERS to utilize professional services by actuaries, consultants or other professionals in its efforts to resolve the protest. Posting of a bond in these instances is in the best interest of the expenditure of ERS' trust funds and is necessary to limit or prevent the filing of protests that are frivolous, filed in bad faith, filed for the purpose of delaying the solicitation and/or award process, or for other reasons not supported by applicable law and facts.

No comments were received on the proposed rule amendments.

The amendments are adopted under Texas Government Code §815.102(a)(4) and (5), which provide authorization for the ERS Board of Trustees to adopt rules for hearings on contested cases or disputed claims and the transaction of any other business of the Board.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on August 23, 2017.

TRD-201703301

Paula A. Jones

Deputy Executive Director and General Counsel

Employees Retirement System of Texas

Effective date: September 12, 2017

Proposal publication date: July 7, 2017

For further information, please call: (877) 275-4377


PART 11. TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM

CHAPTER 306. CREDITABLE SERVICE FOR MEMBERS OF THE TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM

34 TAC §306.3

The State Board of Trustees (Board) of Texas Emergency Services Retirement System (System) adopts new §306.3, relating to Qualified Service Credit for Eligible Active Military Duty, without changes to the proposed text as published in the June 30, 2017, issue of the Texas Register (42 TexReg 3349).

New §306.3 is adopted to conform with provisions in the Uniformed Services Employment and Re-Employment Rights Act (38 U.S.C. §4301 et seq.) (USERRA) as required by Title 8, Texas Government Code, Subtitle H, Texas Emergency Services Retirement System, §863.002. Section 863.002 requires the System to grant qualified services credit for military duty in accordance with §414(u) of the Internal Revenue Code of 1986 (26 U.S.C. §414(u)) and other applicable federal law. The System is required to adopt rules to address credit for military service as contemplated by USERRA. The new rule outlines the policy by which the System will verify military service, set deadlines, and collect payment for creditable service that a System member in active military service may receive.

The Board received no public comment on the proposal.

The new §306.3, relating to Qualified Service Credit for Eligible Active Military Duty is adopted under the authority granted in Title 8, Texas Government Code, Subtitle H, Texas Emergency Services Retirement System §863.002, §865.006(b).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on August 21, 2017.

TRD-201703257

Kevin Deiters

Executive Director

Texas Emergency Services Retirement System

Effective date: September 10, 2017

Proposal publication date: June 30, 2017

For further information, please call: (512) 936-3372


CHAPTER 310. ADMINISTRATION OF THE TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM

34 TAC §310.6

The State Board of Trustees (Board) of Texas Emergency Services Retirement System (System) published notice of a proposed amendment to §310.6 of Title 34 in the June 30, 2017, issue of the Texas Register (42 TexReg 3350). The amended section is adopted with changes to clarify language regarding contributions to the System. The amended section also has the purpose of clarifying how new and existing rules affect payable contributions regarding members who fall under the Uniformed Services Employment and Re-Employment Rights Act (38 U.S.C. §4301 et seq.) (USERRA), Family and Medical Leave Act of 1993 (29 U.S.C. §2601 et seq.) (FMLA), and temporary disability.

The Board has received no public comment on the amended section., and adopts amendments to §310.6 as published in the June 30, 2017, issue of the Texas Register (42 TexReg 3350), with an adoption of a correction of error as published in the July 21, 2017, issue of the Texas Register (42 TexReg 3665) due to an error in submission by the System. To correct the error, the board omits "during a period of temporary disability or" found in subsection (e) in the June 30th issue of the Texas Register (42 TexReg 3350). The correction of error affects no new person, entities, or subjects other than those given notice under the proposed amendment to §310.6.

The State Board of Trustees (Board) of Texas Emergency Services Retirement System (System) adopts amendments to §310.6 relating to Local Contributions under authority granted by Title 8, Texas Government Code, Subtitle H, Texas Emergency Services Retirement System, §865.014.

§310.6.Local Contributions.

(a) Except as otherwise provided by this section, each participating department shall make a contribution for each month in which a volunteer or auxiliary employee of the participating department is a member of the pension system. The monthly contribution is composed of two parts, as outlined in subsections (b) and (c) of this section. Contributions are payable for each month of service regardless of whether the member receives a year of qualified service. Contributions are payable as provided by §865.014, Government Code, and §310.8 of this title. Contributions required under this section are not considered compensation to the members for whom they are made.

(b) The Part One contribution is the portion of the participating department's contribution that is used for purposes of calculating the benefit of a member as provided in §308.2 of this title. The Part One contribution will be no less than the minimum contribution amount provided in subsection (d) of this section.

(c) The Part Two contribution is the portion of the participating department's contribution that is applied to reduce the unfunded actuarial accrued liability of the pension system as contemplated under §861.001(1) and §864.002(a)(1), Government Code. The Part Two contribution is not used for purposes of calculating the benefit of a member as provided in §308.2 of this title. The state board may establish or modify the Part Two contribution based on the pension system's most recent actuarial valuation approved by the state board, but in no case shall the Part Two contribution exceed 15 percent of the participating department's Part One contribution. Any Part Two contribution established or modified by the state board will be effective beginning on September 1 following the state board's approval of such Part Two contribution. A participating department shall make the Part Two contribution for each month as provided in subsection (a) of this section.

(d) The minimum contribution rate for each participating department is $36 per member. After August 31, 2015, the minimum contribution rate for each participating department is $36 per member plus any Part Two contribution that might be charged by the pension system, as provided in subsection (c) of this section. A participating department may elect to make Part One contributions at a rate greater than the minimum contribution amount by notifying the Executive Director in writing of the rate.

(e) Contributions are payable when leave is taken under the Family and Medical Leave Act of 1993 (29 U.S.C. §2601 et seq.). Contributions are not payable during a period of temporary disability.

(f) Contributions are not immediately payable during a period of military leave while on active military duty if (1) the military duty constitutes qualified military service in uniformed services, as provided under the Uniformed Services Employment and Re-Employment Rights Act, 38 United States Code §4301 et seq. (USERRA) and (2) the member is designated as on military leave by the pension system upon receiving documentation from the participating department that substantiates such active military duty under procedures developed by the pension system pursuant to Rule §306.3(c). Contributions for the period of active military duty shall be paid by the participating department upon the member's return to the participating department in accordance with Rule §306.3(e) and as required by USERRA.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on August 21, 2017.

TRD-201703260

Kevin Deiters

Executive Director

Texas Emergency Services Retirement System

Effective date: September 10, 2017

Proposal publication date: June 30, 2017

For further information, please call: (512) 936-3372


34 TAC §310.8

The State Board of Trustees (Board) of Texas Emergency Services Retirement System (System) adopt amendments to §310.8 relating to Billings without changes to the proposed text as published in the June 30, 2017, issue of the Texas Register (42 TexReg 3351).

The amended section is adopted to simplify the billing process and require the local board of each Participating Department (Department) to certify System roster reports so that all eligible persons of the Departments are enrolled into the System as required by Title 8, Texas Government Code, Subtitle H, Texas Emergency Services Retirement System, §862.002.

The Board has received one public comment on the amended section from a representative of a local Board of a Department which questions the need for a meeting of the Local board to complete a System roster report. After considering this comment, the Board will adopt amendments to §310.8 as published in the June 30th, 2017, issue of the Texas Register (42 TexReg 3351) without any changes. The Board decided in this fashion by reasoning that members are currently enrolled during an open meeting of the local board, and that requiring an open meeting of the local board to certify a System roster report will ensure that the local board enroll all eligible persons at the Department.

The amendments are adopted under the statutory authority of Title 8, Government Code, Subtitle H, Texas Emergency Services Retirement System, §§863.004, 864.0135, 865.014, and 865.016, which allow the System to collect contributions from Participating Departments for the administration of the fund.

No other statutes, articles, or codes are affected by the adoption.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on August 21, 2017.

TRD-201703261

Kevin Deiters

Executive Director

Texas Emergency Services Retirement System

Effective date: September 10, 2017

Proposal publication date: June 30, 2017

For further information, please call: (512) 936-3372