[Excerpt]

A section of the Texas tax code that is used by local governments as lucre to attract corporate relocations but that often ends up pitting city against city and school district against school district is set to expire.

Based on hearings last week, there will likely be calls to reinstate it in the next Legislature. That would be a mistake....

In 2015, Gov. Greg Abbott complained that each job created by this program cost taxpayers $341,000. Using Abbott’s calculation, the Houston Chronicle updated the numbers last year: now every job created by a 313 incentive costs $1.1 million, the paper reported.

What’s more, a 2018 study by the W.E. Upjohn Institute for Employment Research found that 313 incentives were the deciding factor in fewer than 25% of relocations, meaning three quarters of the time, the relocation would have happened anyway. Taxing districts are leaving money on the table and cities are fighting cities in a game that actually hurts their residents and students....

in many cases, the choice is not between attracting a company to Texas or failing to do so. The choice is between attracting a company to Taylor or Round Rock; Sherman or Plano.

That highlights another problem: 313 favors districts where it’s easiest to acquire land and build facilities. In an analysis by Dallas Area Interfaith, the losers under 313 are large, urban school districts like Dallas ISD.

[Graphic: Dallas Morning News]

Sapped by Subsidies: 313 Deals Hurt Texas Cities, Dallas Morning News [pdf]

At the Point Isabel ISD Board meeting, Texas LNG sought last-minute approval for tax abatement through the expiring Chapter 313 program. Leaders from Valley Interfaith, alongside allied organizations, made the case to the board.

[Excerpt]

On a unanimous vote Tuesday night, the school district voted not to go forward with the applications.

Several Port Isabel area residents voiced opposition, both to Texas LNG on environmental grounds, and to the abatements, saying Texas LNG deserves to have to pay its fair share of taxes.

Valley Interfaith and the other objectors said Texas LNG doesn’t need the abatement because the project has been planned for years and the company has already decided to build the facility here.

“Valley Interfaith congratulates the superintendent and PIISD Board members for their willingness to look at the facts and reject this application for huge tax abatements for an LNG export terminal they

 have long planned to build in the Port of Brownsville area,” said Father Kevin Collins, O.M.I. pastor of S. Eugene of Mazenod Church in Brownsville and Valley Interfaith. “They don’t need to take money from Texas school children to build a profitable LNG export facility at a time when the whole world is clamoring for liquified natural gas,” Collins said.

Point Isabel School District Rejects Texas LNG Tax Abatement, The Brownsville Herald [pdf]

Last year Texas IAF organizations led the charge to end Chapter 313, a program that had given away $10 billion in windfall tax breaks for corporations. However, hundreds of Chapter 313 applications are being filed in the rush to get in before the end of the program, including some with projects slated for decades from now. 

[Excerpts]

“It’s like hogs at the trough,” said Bishop John Ogletree, an official with the faith-based Texas Industrial Areas Foundation, which has opposed the arrangements.

The Chapter 313 deals — named for their location in the state tax code — let companies slash 10 years worth of school property tax bills they otherwise would owe on newly constructed factories and energy projects.

Over the past decade the state comptroller’s office has received an average of about 90 applications annually from companies seeking the subsidy.

Since the Legislature adjourned at the end of May 2021, by comparison, records show companies have filed requests for more than 460 new tax breaks — about 400 in the past five months alone.

Typically, companies sought Chapter 313 tax breaks for projects two to four years in the future, with the occasional oil and gas facility taking six or seven years to complete. Since last May, however, companies have applied for 120 of the subsidies for facilities not scheduled to open until at least 2028. At least 10 won’t be online for a decade or more.

Despite the program’s demise, applicants “have figured out how to extend it,” said Rev. Minerva Camarena-Skeith, of Central Texas Interfaith.

Their strategy seems to be, “Just in case, let’s get 10 years of requests in in one year,” added Bob Fleming, of The Metropolitan Organization, the Houston branch of the Texas Industrial Areas Foundation. “I don’t know anybody who can forecast their needs 30 years out.”

....by slow-walking the end of a program they said was giving away too much money to corporations at the expense of Texas taxpayers, legislators have now put the state on the hook for billions of additional tax breaks that Texans will be paying off well into the middle of the century.

[Photo Credit: Mark Mulligan, Houston Chronicle]

Lawmakers Killed a Costly Corporate Tax Break Program, but Loopholes Will Still Cost Texas Billions, Houston Chronicle [pdf]

[Excerpts]

State Sees Rush of Tax Break Applications as Program Soft Deadline Approaches, KVUE [pdf]

Friends of the Land, Bastrop Interfaith, Oppose Dogwood Creek Solar 313 Application to Elgin ISD, Elgin Courier [pdf]

When NXP sprung a request for a Chapter 313 tax subsidy before the Austin Independent School District, Central Texas Interfaith leaders decided to descend upon a meeting of the Board of Trustees to ask them to reject the request.  Chapter 313 tax subsidies are 10 year tax breaks to major gas, oil and manufacturing corporations that drain $1 Billion from state coffers on an annual basis.  In response to a barrage of 20 CTI leaders testifying over the phone and in person against the tax giveaway,  NXP (the company requesting the subsidy) changed the number of promised jobs on their application during the meeting from the statutory minimum of 25 to 500 overall. 

[Excerpt]

The majority of community members who provided testimony on May 19 asked the board to vote against the Chapter 313 agreement with NXP.  [Twenty] speakers were members of Central Texas Interfaith, a nonpartisan coalition of congregations, schools and unions that opposes Chapter 313.

“Hardworking taxpayers don’t get this kind of giveaway. Nor do small businesses, or responsible corporations,” said Central Texas Interfaith leader Trenton Henderson. “We want our money to go to public schools, but not to pay the bills for corporations shirking their responsibility to public education. Without a Chapter 313 agreement, NXP would have to pay their full share of school taxes.”

Austin ISD Moves Forward With Semi-Conductors Agreement, Faces Community Opposition, Community Impact [pdf]

Austin ISD Considering Proposal That Would Help Lower Recapture Payments, Faces Opposition, CBS Austin [pdf]

NXP Seeking Up To $140 Million in Tax Breaks for School Districts, Austin American Statesman [pdf] 

Chapter 313 Incentives: What They Are and Why They're Suddenly the Talk of the Town, Austin Business Journal [pdf]

Oped: Don't Ask Texas Schoolchildren to Fund Your Corporate Expansion, Austin Chronicle [pdf] 

AISD Board Meeting Broadcast, Austin Independent School District [calls begin at -2:33:30, in person testimony at -1:52:30] 

[Excerpt]

NXP Semiconductors, which is based in the Netherlands and has two fabrication plants in Austin, is seeking tax breaks from the Austin Independent School District under the state's Chapter 313 incentive program for proposed expansion. An initial presentation to the district's board Tuesday night didn't specify the amount, but previous incentives agreements from Texas school districts for similar Chapter 313 deals have been for tens of millions of dollars.

The Chapter 313 incentives program — which is named after a portion of the tax code — has been controversial. It's set to expire at the end of this year because state lawmakers declined to renew it during last year's legislative session, although deals struck before then won't be affected....

Under the Chapter 313 program, school districts are reimbursed by the state for the corporate tax breaks they agree to provide. That attribute has made Chapter 313 controversial among critics who say school districts have no reason not to grant them, and that the program siphons money from taxpayers statewide as handouts to corporations.

“There's no such thing as free money," said Doug Greco, lead organizer with Central Texas Interfaith, a group that opposes all Chapter 313 deals and has worked to help end the program.

“It's money that is being drained out of the state budget that could be going to schools," Greco said. "When you add these (deals) up, it's just a drain on the system that we can't sustain. Let's stop the gold rush here."

[Photo Credit: Mark Matson, Austin American Statesman]

Chipmaker NXP Considers Austin for $2.6 Billion Expansion, Up to 800 New Jobs, Austin American Statesman [pdf]

[Excerpt]

Following an opposition campaign by Texas IAF organizations, Comptroller Glenn Hegar is backing away from his proposal to gut Chapter 313 reporting and accountability requirements in the program’s final year of existence. Hegar signaled the change Friday after significant pushback by Chapter 313 critics, including a press conference held by Texas IAF organizations in December, and a barrage of public comments submitted to his office against the proposal, with the largest portion coming from Texas IAF leaders.

During the 2021 Legislative Session, the Texas IAF, along with allies, stopped the reauthorization of Chapter 313, the State’s largest corporate tax subsidy program. Though the current program, which costs taxpayers $1-2 Billion per year, is set to expire in December of 2022, Comptroller Hegar had proposed in November to reduce the reporting requirements on jobs, wages, and overall costs to taxpayers.

“Comptroller Hegar has recognized the voices of voters from across the political spectrum, including our organizations, and now says the data we are concerned will continue to be available,” said Bob Fleming, a leader with The Metropolitan Organization, the IAF affiliate in Houston. “However, we remain vigilant because he says the rules will still be revised and made ‘more efficient’. Given the history of this failed and discontinued program, we need even more transparency and accountability, not less.”

[Photo Credit: Mark Mulligan, Houston Chronicle]

After Backlash, Texas Comptroller Abandons Plan to Hide Details of Controversial Tax Break Program, Houston Chronicle [pdf]

Network of Texas IAF Organizations, Press Release

[Excerpt]

"Lawmakers have ordered Comptroller Glenn Hegar to wrap up Texas’s biggest corporate tax break program, but he wants to give companies one last gift: an end to public accountability.

[Excerpts]

When organizers set out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas — with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time.

At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program.

At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize....

“No one had really questioned this program,” said Greco, of Central Texas Interfaith.

The reauthorization was a once-in-a-decade chance to challenge it. “We knew in our guts that the program was just a blank check, but we also are very sober about the realities of the Texas legislature.”  ....an unlikely coalition...emerged from across the political spectrum — including the right-wing Texas Public Policy Foundation, the progressive Every Texan, and [Texas IAF], which does nonpartisan political work among religious groups.

....

In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas, The Intercept [pdf]

Texas Legislature Dooms Chapter 331, Which Gives Tax Breaks to Big Businesses, Business Journal [pdf]

Missed Deadline Could Doom Controversial $10B Tax-Break Program, Houston Chronicle

A Texas Law Offers Tax Breaks to Companies, but It's Renewal Isn't a Done Deal, Texas Tribune [pdf]

A Controversial Tax Program Promised High Paying Jobs. Instead, Its Costs Spiraled Out of Control, Houston Chronicle [pdf]

Losers and Winners from Chapter 313, Central Texas Interfaith

The Unlikely Demise of Texas’ Biggest Corporate Tax Break, Texas Observer [pdf]