The Texas House of Representatives approved the restoration of one of the state’s largest corporate tax cuts.
Known as Chapter 313, it expired in December, and a proposal from Rep. Todd Hunter (D-Rp.) aims to replace it.
School districts could again offer subsidies to companies proposing to do business in their tax jurisdictions, but the revisions would require more government oversight and increased incentives for existing manufacturers to expand, the Austin American-Statesman said. Report.
The proposal would create a tiered eligibility system, with a minimum taxable property value of $5 million for projects in smaller and less affluent school districts. In jurisdictions where the value of taxable property is at least $10 billion, the minimum tax rate will increase to $100 million.
School districts are also required to prepare a 25-year financial impact statement. The state auditor general will review the reports to decide whether to recommend a tax cut deal, the outlet said.
Opponents of the bill argue that the Section 313 provisions disproportionately benefit certain geographic areas because two-thirds of all projects are in just 14 counties. Others say it amounts to corporate welfare.
The revised subsidy scheme excludes projects involving renewable energy. Wind and solar projects account for two-thirds of transactions under Chapter 313, which has been in place for 20 years. Governor Greg Abbott wants the projects excluded because he is a supporter of fossil fuels, the outlet reported.
Employee benefits have improved somewhat thanks to an amendment to the proposal by Rep. Trey Martinez Fischer. Companies receiving tax breaks must provide health care and pay average manufacturing wages in their counties.
The Texas House of Representatives voted 120 to 24. It now goes to the Texas Senate, which rejected extending Chapter 313 two years ago, arguing that it unfairly favors wind and solar and provides tax breaks for large corporations that don’t need them.
— Quinn Donoghue