Knowledge (XXG)

Texas Tax Code Chapter 313

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84:, said, "When talking to key members of the (Tesla) team that would need to move to Austin from California in order to get the factory going, Austin was their top pick, to be totally frank." Two large LNG projects are being built in Texas even after being refused Chapter 313 abatements by the local school district. Wind farms, critics say, find Texas an ideal location due to its rich wind resources, separate electrical grid, and large rate-payer-funded transmission networks. They say that the program's petrochemical projects locate in Texas largely because of little regulation, proximity to rich oil and gas shale plays, and access to deep-water ports and pipeline networks. Some critics also point to the relatively small number of jobs created compared to the large amount of revenues forgone for each job. Other critics point out that the taxable value of many Chapter 313 projects at the end of the 10-year abatement period is often far less than promised. They further claim program benefits are too generous, as many companies typically agree to return about 40 percent of the initial tax savings to the local school district through "payments in lieu of taxes" outside the regular system of school finance. 88:
renewed in 2013 by the Texas legislature. The Senate sponsor of the 2013 legislation, Robert Deuell, said at the time, "We...have 'but for' provisions meaning that we really have to make sure that these projects would not have come to the state otherwise..." Texas House of Representatives bill sponsor Harvey Hilderbran explained, "If they were going to come here anyway, they wouldn't get it."  But critics note that the Comptroller's office routinely approves projects after the applicant simply asserts that the project is not 'financially feasible' without the abatement. An article on the program published by the Texas Comptroller in November, 2020 noted, "It's generally impossible to determine the factors that ultimately cause a company to make a final decision, but it's plausible to assume that the availability of a large tax break is often a determining factor, if one of many."
135:(Murphy) would also have allowed tax benefits for project renovations, but that bill died in the Texas House. After left-wing and right-wing opposition, as well as a number of news articles and editorials in state newspapers and magazines criticizing the program, no bill extending Chapter 313 passed the Texas Senate. In November of 2021, the State Comptroller proposed rules to reduce reporting requirements for existing projects. Public comments on the rules proposal were almost unanimously opposed to revising program reporting requirements. 27:
maintenance and operations tax (M&O) purposes. For ten years, school M&O property taxes are not levied on the value in excess of the limitation amount. Limitation amounts are established by statute and vary by school district from $ 10 million to $ 100 million. Unlike abatements based on a percentage of the property value, the structure of the program benefits primarily extremely large projects. The majority of projects are in the petrochemical or energy sectors, although some are typical manufacturing.
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approximately $ 10 billion between 2023 and the year 2049. In a March 20 House Ways and Means committee hearing, representatives of about 50 companies and 40 economic development groups testified or registered for the bill.  Five witnesses testified or registered against the bill. On April 9, House Bill 2129 was voted out of the Texas House of Representatives 115 to 28, with 91% of the Democrats and 66% of the Republicans voting for the measure. The bill died in Senate committee.
71:" the program, none of the companies applying for the abatement would have located in Texas. Supporters further point out that the Chapter 313 program is extremely transparent, and that even with Chapter 313 agreements, schools' tax bases are increased. The Texas Comptroller of Public Accounts has said, "The temporary reduction in public school taxes may be followed by greater tax collections on a much more valuable property — in a healthier local economy." 100:(January 2011) analyzed the Chapter 313 program, making recommendations. In 2013, the Chapter was amended to require the Texas State Auditor's Office (SAO) to review at least three major limitation agreements annually. The SAO has published annual reports on selected agreements since 2014, but has never audited any company agreement-holders. 26:
An appraised value limitation is an agreement between a taxpayer and a Texas school district in which the taxpayer proposes to build or install property—and create jobs meeting certain job and wage requirements—in exchange for a ten-year limitation on the taxpayer's property value for school district
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During the Texas 86th Legislature (2019), state representative Jim Murphy (Houston) filed House Bill 2129 to extend the expiration of the Chapter 313 program from December 31, 2022 to December 31, 2032.  The Texas Legislative Budget Board estimated the local school district revenue losses to be
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A 2021 report to the Texas Legislature by the Texas Comptroller reported 509 active limitation agreements, representing an estimated $ 134 billion of total investment through 2019. That report indicates that for projects commencing between 2006 and 2020, local school property tax revenue reductions
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Supporters of the program argue that Texas' high local property tax rates put the state at a disadvantage when competing for businesses making new investments. Business groups say tax abatements are largely responsible for the "Texas Miracle", attracting projects that would have not come to Texas
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The Texas Tax Code gives the Texas Comptroller's office responsibility and authority to adopt rules necessary for the implementation and administration of the program. The Comptroller's office delegates to school districts the responsibility to enforce provisions of the limitation agreements. In
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Companies seeking a limitation submit an abatement application to the school district in which the project may be located. The school district forwards the application to the Texas Comptroller for evaluation. The school district may not grant final approval of the abatement without Comptroller
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Program critics also argue the statute's requirement that the tax abatement be "a determining factor in the applicant's decision to invest capital and construct project in Texas" is not the rigorous "but for" test legislative sponsors promised when the Chapter 313 program was revised and
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otherwise. They say, without the 313 program, Texas cannot compete with other states for new business investment. Proponents of the program claim that local school district property revenue reductions created by the abatement do not create a real cost to the state, arguing that "
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In 2017, University of Texas political science professor Nathan M. Jensen released a study on the Chapter 313 program suggesting that 85 percent of the companies receiving the abatement would have located in Texas for other reasons.
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Critics of the program argue that many of the projects receiving the abatement would have located in Texas for other reasons. Elon Musk, in an interview after receiving a Chapter 313 limitation for his new Tesla Austin
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Created by the Texas legislature in 2001, and initially set to expire in 2007, the program has been renewed several times. In 2013, the Texas Legislature reset the expiration date of the program to December 31, 2022.
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analysis and approval. For the 10 years of the tax benefit period, reduced local school district revenues are substantially replaced with state funds through the state public school finance system.
428: 504: 58:" prepared by the Texas Comptroller in November, 2020, estimated that limitation agreements would reduce school districts revenues by $ 916 million in 2022, and over $ 1 billion in 2023. 23:) creates a state tax incentive program for certain large businesses to limit the appraised value of their property for the purposes of local Texas public school district property taxes. 39:
2013, in House Bill 3390, the Texas legislature charged the Comptroller's office with reviewing the number of qualifying jobs created in future projects receiving tax limitations.
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During the Texas 87th Legislature (2021), several bills were filed to extend the program's expiration date from December 31, 2022 to December 31, 2032. Among those bills,
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Jensen, Nathan M. (July 3, 2018). "Bargaining and the effectiveness of economic development incentives: an evaluation of the Texas chapter 313 program".
729: 191: 575: 1615: 840: 694:"Big dollars, little oversight? Amid debate over Texas' tax breaks for businesses, little attention being given to biggest incentives program of all" 433: 1040: 753: 508: 714: 449: 1044: 815: 620: 1458: 649: 278: 675: 1206: 403: 375: 311: 654: 594: 1225: 1144: 1187: 293: 800: 110:
The Texas Comptroller of Public Accounts started issuing biennially reports on limitation economic development projects in 2008.
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In 2010, the Comptrollers office studied the program, making recommendations. The Texas Legislative Budget Board in its
1703: 343: 1112: 223: 132: 1129: 1642:"Texas IAF Calls On State Comptroller to Abandon Plan to Gut Chapter 313 Subsidy Accountability Requirements" 1097: 199: 1169: 579: 925:"Report No. 17-009 An Audit Report on Selected Major Agreements Under the Texas Economic Development Act" 847: 816:"An Analysis of Texas Economic Development Incentives, 2010. Texas Economic Development Act: Chapter 313" 1006: 875:"Report No. 15-009 An Audit Report on Selected Major Agreements Under the Texas Economic Development Act" 239: 698: 471: 1538:"AS TEXAS' $ 10 BILLION CORPORATE TAX BREAK PROGRAM CLOSES, STATE COMPTROLLER WANTS TO COVER UP COSTS" 760: 489: 103:
In November, 2016, the Texas Senate Committee on Natural Resources and Economic Development issued an
1511: 1668:"After backlash, Texas comptroller abandons plan to hide details of controversial tax break program" 1641: 822: 627: 253: 1304:"A controversial tax program promised high-paying jobs. Instead, its costs spiraled out of control" 950:"Report No. 17-043 An Audit on Selected Major Agreements Under the Texas Economic Development Act" 900:"Report No. 15-042 An Audit of Selected Major Agreements Under the Texas Economic Development Act" 1485: 667: 557: 376:"TTARA releases report on Chapter 313: State's 'single most important economic development tool'" 1616:"Editorial: Texans need more information on wasteful '313' corporate welfare program — not less" 1252:"TEXAS' LARGEST CORPORATE WELFARE PROGRAM IS LEAVING COMPANIES FLUSH AND SCHOOL DISTRICTS BROKE" 1078: 1041:"Exit Options in Firm-Government Negotiations: An Evaluation of the Texas Chapter 313 Program" 985: 354: 1564:"Texas comptroller seeks to hide some details of controversial tax break program from public" 404:"Understanding Chapter 313: School Property Tax Limitations and the Impact on State Finances" 382: 318: 1070: 697: 432: 163: 98:
Texas State Government Effectiveness and Efficiency: Selected Issues and Recommendations
975:"An Audit Report on Selected Major Agreements Under the Texas Economic Development Act" 1692: 1278:"Huge corporations are saving $ 10 billion on Texas taxes, and you're paying for it" 956: 505:"Rationale for Texas' Largest Corporate Welfare Program was a 'Typographical Error'" 1408:"How skeptical Texas lawmakers put an end to a controversial tax incentive program" 974: 931: 906: 881: 1356:"Barbers Hill is handing out $ 900 million in tax breaks to companies. Here's why" 782:"With irate email, gas exec raises more questions about $ 580M tax break program" 754:"Statement of Legislative Intent for HB 3390 (Senators Deuell, Davis and Watson)" 619:
Senate Committee on Natural Resources and Economic Development (November 2016).
1043:. Washington Center for Equitable Growth. Working Paper Series. Archived from 1330:"The original sales pitch for the big Texas tax breaks? It sprang from a typo" 1074: 81: 1465:. Texas Public Policy Foundation (TPPF) & Every Texan (CPPP). May 7, 2021 1082: 1512:"CORPORATE SUBSIDY QUIETLY DIES IN TEXAS — TOPPING OFF BAD WEEK FOR BIG OIL" 1459:"TPPF, Every Texan Joint Statement Opposing Unjustified Business Tax Breaks" 1382:"Editorial: Want real property tax reform? End corporate welfare in Texas" 42:
The Texas Comptroller's website posts documents related to the projects.
1486:"Texas IAF Blocks $ 10 Billion Dollar Corporate Tax Giveaway to Big Oil" 1226:"Expansion of controversial Chapter 313 tax break program dies in House" 715:"As the wind blows, Texas subsidizes school districts on tax agreements" 668:"Free Lunch: Meet Chapter 313, Texas' Largest Corporate Welfare Program" 543:"Austin factory a key tool in Tesla's race against auto industry giants" 1130:"Texas House of Representatives, Ways and Means Committee Witness List" 264:
Texas Administrative Code, Title 34, Part 1, Chapter 9, Subchapter F,
1595:. Texas Public Policy Foundation (TPPF) & Every Texan. Dec 9, 2021 730:"Solar companies flock to a Texas tax break with questionable payback" 1188:"The $ 9 Billion School Finance Problem in Speaker Bonnen's Backyard" 450:"Commentary: Texans suffer if tax relief tools are allowed to expire" 1022:"Study: Texas' biggest tax break program is mostly a waste of money" 595:"Energy Transfer Partners May Have Misled State to Secure Tax Break" 759:. Secretary of the Texas Senate. pp. 3788–3796. Archived from 576:"Once Again, School District Shuts Down Tax Break for Gas Exporter" 646:"Local Tax Incentives: Chapter 313 - Texas Economic Development A" 558:"Lawmakers Should Not Renew Tax Giveaways without Proper Review" 524:"Texas' Largest Corporate Welfare Program is Rapidly Ballooning" 429:"Chapter 313 helps keep Texas' status as an economic powerhouse" 312:"Questions and Answers about the Texas Economic Development Act" 51:
due to limitation agreements are approximately $ 10.8 billion.
240:"Texas Economic Development Act Chapter 313 Summary Data 2021" 801:"End Chapter 313 Abatements and Free Up Future State Revenue" 374:
Texas Taxpayers and Research Association (January 23, 2017).
1434:"THE UNLIKELY DEMISE OF TEXAS' BIGGEST CORPORATE TAX BREAK" 1207:"Industrial tax incentive renewal dies in Texas committee" 310:
Texas Taxpayers and Research Association (December 2010).
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Texas Taxpayers and Research Association (January 2017).
294:"Tax Exemptions and Tax Incidence Reports, November 2020" 337:"Texas 2050 - A Framework for Long-Term Economic Growth" 107:
that was extremely critical of the Chapter 313 program.
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Texas Industrial Areas Foundation (IAF) (Jun 1, 2021).
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Texas Comptroller of Public Accounts (November 2020).
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Texas Comptroller of Public Accounts (November 2020).
472:"Texas Chapter 313 and Schools: Correcting the Myths" 431:. Houston Chronicle - Guest Editorial. Archived from 238:
Texas Comptroller of Public Accounts (January 2021).
164:"Tax Code Chapter 313 Texas Economic Development Act" 1145:"Lawmakers debate need for state incentive program" 814:Texas Comptroller of Public Accounts (March 2011). 190:Texas Comptroller of Public Accounts (April 2016). 1111:Texas Legislative Budget Board (March 19, 2019). 1589:"TPPF, Every Texan: Texans Deserve Transparency" 648:. Texas Public Policy Foundation. Archived from 1666:Mike Morris & John Tedesco (Jan 28, 2022). 1646:Industrial Areas Foundation - Austin Interfaith 1406:Mike Morris & John Tedesco (June 2, 2021). 1328:Mike Morris & John Tedesco (May 12, 2021). 1302:Mike Morris & John Tedesco (May 12, 2021). 1276:Mike Morris & John Tedesco (May 12, 2021). 839:Texas Legislative Budget Board (January 2011). 279:"Chapter 313 School Value Limitation Documents" 1562:Mike Morris & John Tedesco (Dec 3, 2021). 873:Texas State Auditor's Office (November 2014). 752:Senate Journal - Texas Senate (May 26, 2013). 427:Craymer, Dale; Bennett, Tony (April 6, 2017). 923:Texas State Auditor's Office (October 2016). 192:"Chapter 313: Attracting Jobs and Investment" 8: 898:Texas State Auditor's Office (August 2015). 541:Austin American Statesman (August 8, 2020). 990:: CS1 maint: numeric names: authors list ( 696:. Austin American Statesman. Archived from 359:: CS1 maint: numeric names: authors list ( 948:Texas State Auditor's Office (July 2017). 470:Advanced Power Alliance (April 4, 2019). 222:Texas Legislature, 83rd Regular Session, 621:"Interim Report to the 85th Legislature" 678:from the original on February 17, 2023. 605:from the original on December 10, 2016. 593:Sadasivam, Naveena (December 9, 2016). 574:Michels, Patrick (September 22, 2016). 522:Naveena Sadasivam (February 13, 2017). 155: 56:Tax Exemptions and Tax Incidence Report 1039:Jensen, Nathan M. (October 10, 2017). 1005:Texas Comptroller of Public Accounts. 983: 563:. Center for Public Policy Priorities. 503:Michels, Patrick (November 29, 2016). 483: 481: 352: 277:Texas Comptroller of Public Accounts. 105:Interim Report to the 85th Legislature 1224:Diego Mendoza-Moyers (May 11, 2021). 775: 773: 747: 745: 743: 687: 685: 614: 612: 397: 395: 127:2021 Legislation - Program Expiration 7: 233: 231: 218: 216: 185: 183: 799:Lavine, Dick (February 25, 2021). 713:Asher Price (September 15, 2016). 666:Michel, Patrick (March 14, 2016). 14: 973:Texas State Auditor (July 2018). 728:Eric Dexheimer (March 21, 2019). 644:Peacock, Bill (August 21, 2017). 335:Texas 2050 (September 22, 2016). 1614:Editorial Board (Dec 10, 2021). 1380:Editorial Board (May 17, 2021). 821:. pp. 17–26. Archived from 626:. pp. 50–83. Archived from 578:. Texas Observer. Archived from 507:. Texas Observer. Archived from 448:Moseley, Jeff (April 23, 2019). 1186:Miller, Justin (May 20, 2019). 1143:Sechler, Bob (March 20, 2019). 846:. pp. 1–10. Archived from 780:Dexheimer, Eric (May 6, 2019). 556:Lavine, Dick (March 29, 2019). 1536:Justin Miller (Nov 24, 2021). 1432:Justin Miller (June 9, 2021). 1250:Justin Miller (May 12, 2021). 1113:"Fiscal Note; House Bill 2129" 692:Toohey, Marty (May 17, 2015). 198:. Fiscal Notes. Archived from 21:Texas Economic Development Act 1: 1354:John Tedesco (May 12, 2021). 1205:Mann, Joshua (May 30, 2019). 1510:Aleen Brown (June 1, 2021). 717:. Austin American Statesman. 92:Program Studies and Analyses 1490:Industrial Areas Foundation 409:. p. 7. Archived from 1720: 1640:Texas IAF (Dec 21, 2022). 1096:Texas Legislature Online. 168:statutes.capitol.texas.gov 17:Texas Tax Code Chapter 313 1149:Austin American Statesman 1075:10.1007/s11127-018-0583-8 1230:San Antonio Express News 1211:Houston Business Journal 863:Texas Tax Code §313.010 1699:United States tax law 962:on September 3, 2017. 582:on November 30, 2016. 511:on November 30, 2016. 196:comptroller.texas.gov 139:Notes and References. 1050:on October 24, 2017. 937:on October 26, 2016. 652:on November 3, 2018. 1704:Government of Texas 1593:TPPF Press Release 1007:"Biennial Reports" 601:. Texas Observer. 437:on April 15, 2017. 266:Rule §9.1054(i)(3) 62:Program Supporters 1672:Houston Chronicle 1620:Houston Chronicle 1568:Houston Chronicle 1412:Houston Chronicle 1386:Houston Chronicle 1360:Houston Chronicle 1334:Houston Chronicle 1308:Houston Chronicle 1282:Houston Chronicle 1132:. 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Index

Gigafactory
HB 1556
"Tax Code Chapter 313 Texas Economic Development Act"


"Chapter 313: Attracting Jobs and Investment"
the original


House Bill 3390


"Texas Economic Development Act Chapter 313 Summary Data 2021"
§313.031(1)
Rule §9.1054(i)(3)
"Chapter 313 School Value Limitation Documents"
"Tax Exemptions and Tax Incidence Reports, November 2020"
"Questions and Answers about the Texas Economic Development Act"
the original
"Texas 2050 - A Framework for Long-Term Economic Growth"
the original
cite web
link
"TTARA releases report on Chapter 313: State's 'single most important economic development tool'"
the original


"Understanding Chapter 313: School Property Tax Limitations and the Impact on State Finances"
the original
"Chapter 313 helps keep Texas' status as an economic powerhouse"

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