AUSTIN— Today, the Texas Public Policy Foundation released the policy perspective, “Money for Nothing: An Introduction to Chapter 313 Tax Abatements.”

The paper’s author Stanley Greer, a senior research associate with the National Institute for Labor Relations Research, offered the following statement:

“Chapter 313 of the Texas Tax Code, known as the ‘Texas Economic Development Act’, is one of the best, or worse, examples of corporate welfare in America today. It enables local school districts to offer large tax breaks to renewable-energy and other businesses at no loss of revenue to themselves, but at a great cost to state taxpayers.”

In Texas, school districts, along with cities and counties, collect property taxes, the largest single source of funding for public schools. But under Chapter 313, a school district may make an agreement with a private business operating within its boundaries to allow the latter to pay less, often far less, in property taxes than it would ordinarily owe over the course of a decade.

“This paper shows that Chapter 313 agreements for renewable energy projects are a bad deal for Texas,” said TPPF policy analyst Cutter Gonzàlez. “Renewable energy projects fail to meet basic jobs goals under the Texas Economic Development Act but cost taxpayers billions.”

Key Points:

  • The Texas Economic Development Act—Chapter 313 of the Texas Tax Code—allows school districts to reduce the maintenance and operations property tax paid by certain businesses for up to 10 years.
  • School districts actually gain revenue in the process as the state usually makes them whole by sending state revenues from taxes paid by all Texans and they receive supplemental payments from businesses.
  • These abatements have contributed to the rise of wind and solar farms in Texas, but these projects create very few jobs for Texans. For instance, a wind farm seeking approval of a 313 abatement by Bay City ISD has promised to bring two jobs to the community.

For the full paper, please visit:
https://www.texaspolicy.com/money-for-nothing-armstrong-center-for-energy-the-environment-an-introduction-to-chapter-313-tax-abatements/​

For more information, please contact Sarah Silberstein at ssilberstein@texaspolicy.com or 512-472-2700.