Texas IAF Sounds the Alarm: Chapter 313 Loopholes Will Cost State Billions


“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.

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. 


Meanwhile, lawmakers and interest groups have begun discussing how to craft a replacement during next year’s legislative session to keep the tax breaks flowing.

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 BillionsHouston Chronicle [pdf]

  • Tmo/Gclc
    published this page in News 2023-03-10 13:49:39 -0600

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