Texas legislators must stay focused on renewing Chapter 313
Michael Looney
In 2001, the Texas Legislature passed the Texas Economic Development Act – a tool intended to bring investment and economic growth to Lone Star State.
Called Chapter 313 after the Texas Tax Code section it modifies, the act allows school districts to compete for large-scale capital investments in their areas by offering temporary property tax abatements to companies.
With one of the highest property tax rates in the nation, Texas found a way to become more competitive with other low-tax states and now, local leaders across the state, like myself, are hoping to see this vital economic development program continue it’s set to expire in 2022.
Intel nearly built a massive chip fabrication plant near Fort Worth in 1991, but the tech giant instead picked Arizona because Texas property taxes were too high. Two years later, Texas lawmakers reacted by creating Chapter 313, also known as the Texas Economic Development Act, to offer property tax breaks to major companies that locate new facilities in the state.
Since then, oil refineries, petrochemical factories and even the upcoming Tesla plant outside Austin have enjoyed massive breaks on their property taxes thanks to the program. Today, Chapter 313 agreements account for almost a billion dollars in tax breaks for some of the largest companies in Texas.
A Texas economic incentive offers massive tax breaks to companies, but its renewal isn t a done deal
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Credit: Allie Goulding/The Texas Tribune
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Intel nearly built a massive chip fabrication plant near Fort Worth in 1991, but the tech giant instead picked Arizona because Texas property taxes were too high. Two years later, Texas lawmakers reacted by creating Chapter 313, also known as the Texas Economic Development Act, to offer property tax breaks to major companies that locate new facilities in the state.
Credit: Allie Goulding/The Texas Tribune
Sign up for The Brief, our daily newsletter that keeps readers up to speed on the most essential Texas news.
Intel nearly built a massive chip fabrication plant near Fort Worth in 1991, but the tech giant instead picked Arizona because Texas property taxes were too high. Two years later, Texas lawmakers reacted by creating Chapter 313, also known as the Texas Economic Development Act, to offer property tax breaks to major companies that locate new facilities in the state.
Since then, oil refineries, petrochemical factories and even the upcoming Tesla plant outside Austin have enjoyed massive breaks on their property taxes thanks to the program. Today, Chapter 313 agreements account for almost a billion dollars in tax breaks for some of the largest companies in Texas.
Texas lawmakers likely to extend costly, controversial tax break
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The 110-megawatt, Alamo 6 solar farm in Iraan in West Texas was completed in 2015 to provide renewable power to the city of San Antonio. The solar farm’s developers received a 313 tax limitation, which reduced the tax bill on the project by roughly $2 million annually./OCI Solar Power
A controversial Texas tax law criticized as a giveaway to large companies is set to expire after 2022, but state lawmakers appear poised to renew the program this legislative session.
Under Chapter 313, Texas taxpayers will pay the bill for tax breaks worth nearly $1.7 billion in 2021 and 2022 combined to corporations that relocate to, or expand in, the state companies that, critics say, likely would have done so without the subsidy.