Texas speaker says Legislature will revive Chapter 313 tax break program

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Texas House Speaker Dade Phelan, R-Beaumont, mentioned Thursday he’s assured the Legislature can discover a solution to revive a multibillion-dollar company tax break program supposed to draw massive corporations to Texas.

Lawmakers let the program, often known as Chapter 313, expire on the finish of this yr after the Senate declined to think about a invoice extending it. It was the primary time in its 20-year historical past that legislators determined to not renew the program.

“We have to take a long, hard look at how we’re gonna reestablish the Chapter 313 tax agreements,” Phelan mentioned Thursday in San Angelo. “We’re gonna come back and we’re gonna work well together, the House and the Senate. We’re gonna have a version of 313s that are more transparent, with more accountability, more oversight. I firmly believe we can get that done.”

The program works by discounting native faculty district property taxes for companies, and its supporters say it has been key in drawing main corporations like Tesla and Samsung to Texas. Critics in each events say such corporations had been already coming to Texas regardless and the program quantities to “corporate welfare.”

Last yr, the House handed a invoice to increase the program by two years, however the Senate by no means debated it. Lt. Gov. Dan Patrick has been comparatively quiet about the way forward for the program, as has Gov. Greg Abbott, who ignored some calls final yr so as to add the program’s revival to his particular session agendas.

Phelan’s curiosity in saving the program isn’t fully new. He tweeted in February that the Legislature will prioritize “developing a program to replace Chapter 313, a crucial incentive program to attract businesses to Texas.”

Speaking on the West Texas Legislative Summit in San Angelo, Phelan referred to as the program “near and dear to my heart” and mentioned it has “served this state very, very well.” He famous the way it has spurred the expansion of the oil business in his Southeast Texas district.

“If other states didn’t have them, then we wouldn’t need them, but they do,” Phelan instructed the summit.

Earlier Thursday on the similar occasion, the subject of Chapter 313 got here up on a panel of eight lawmakers, and most expressed help for persevering with the program in some kind.

State Rep. Travis Clardy, R-Nacogdoches, mentioned it was a “short-sighted decision” for the Legislature to not lengthen the program. He acknowledged there’s a “normal, natural pushback” towards the program that argues, he mentioned, it quantities to authorities “picking winners and losers and playing favorites.”

“I understand that position, but I really do think for the sake of Texas, we need to continue in a program like this,” Clardy mentioned. “We need to make sure those tax dollars are being wisely used, that there’s control and transparent — yes, we absolutely have to. But we need the tool of the 313 … whatever it takes. I think we’ve got to go back, put that in there.”

State Rep. Kyle Kacal, R-College Station, mentioned it was particularly vital for rural communities like those he represents.

“We’ve got to keep this in our toolbox to keep rural communities viable and add that competitive edge,” Kacal mentioned.

Among some panelists, although, there was extra warning. State Rep. Mary González, D-Clint, alluded to considerations that the Chapter 313 distorts the state’s public-school funding system.

“Whatever we do in the future, I think it, A, needs to not be positioned against public education or any other vital services like this health care,” González mentioned, “Second, I think it needs to have greater fairness, accountability and transparency.”

State Rep. Glenn Rogers, R-Graford, mentioned he was towards reviving the program in its present kind. He was amongst those that voted to proceed it final yr.

“I don’t think 313 is going to exist, but we’ll have a more streamlined version, I believe, that will emerge that will be better,” Rogers mentioned. “But I wouldn’t support continuing 313 as is, but I would certainly look at other ways we can promote economic development in rural communities.”

While the program is about to run out on the finish of this yr, there was a scramble by corporations to get in purposes earlier than then. That means the program will proceed to develop for no less than the subsequent decade — and develop considerably.

Among the current candidates has been Samsung, which has utilized for Chapter 313 tax breaks to probably construct 11 new chipmaking services within the Austin space, according to the Austin American-Statesman. Samsung has already introduced plans to construct a semiconductor manufacturing unit in Taylor, which is exterior Austin.

Disclosure: Samsung Semiconductor has been a monetary supporter of The Texas Tribune, a nonprofit, nonpartisan news group that’s funded partially by donations from members, foundations and company sponsors. Financial supporters play no function within the Tribune’s journalism. Find a whole checklist of them here.

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