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=  Texas Tax Code Chapter 313 - The Texas Economic Development Act  = Texas Tax Code Chapter 313 creates a state program for certain large businesses to limit the appraised value on their property for the purposes of local Texas public school district property taxes.

An appraised value limitation is an agreement between a taxpayer and a Texas school district in which the taxpayer proposes to build or install property--and create jobs meeting certain job and wage requirements--in exchange for a ten-year limitation on the taxpayer's property value for school district maintenance and operations tax (M&O) purposes. For ten years, school M&O property taxes are not levied on the value in excess of the limitation amount. Limitation amounts are established by statute and vary by school district from $10 million to $100 million. Unlike abatements based on a percentage of the property value, the structure of the program benefits primarily extremely large projects. The majority of projects are in the petrochemical or energy sectors, although some are typical manufacturing.

Created by the Texas legislature in 2001, and initially set to expire in 2007, the program has been renewed several times. In 2013, the Texas Legislature reset the expiration date of the program to December 31, 2022.

Companies seeking a limitation submit an abatement application to the school district in which the project may be located. The school district forwards the application to the Texas Comptroller for evaluation. The school district may not grant final approval of the abatement without Comptroller analysis and approval. For the 10 years of the tax benefit period, reduced local school district revenues are substantially replaced with state funds through the state public school finance system.

The Texas Tax Code gives to the Texas Comptroller's office responsibility and authority to adopt rules necessary for the implementation and administration or the program. The Comptroller's office delegates to school districts the responsibility to enforce provisions of the limitation agreements. In 2013, in House Bill 3390, the Texas legislature charged the Comptrollers office with reviewing the number of qualifying jobs created in future projects receiving tax limitations.

The Texas Comptroller's website posts documents related to the projects.

Program Costs
A 2017 report to the Texas Legislature by the Texas Comptroller reported 311 active limitation agreements, representing an estimated $146 billion of total investment through 2033. That report indicated that between 2002 and 2015, local school property tax revenue reductions due to limitation agreements were approximately $7.1 billion.

A "Tax Exemptions and Tax Incidence Report" prepared by the Texas Comptroller in February, 2017, estimated that limitation agreements would reduce school districts revenues in that year by about $513 million, also indicating that total school district revenue could be reduced by over $1 billion annually by the year 2021.

Program Supporters
Supporters of the program argue that Texas' high local property tax rates puts the state at a disadvantage when competing for businesses making new investments. Business groups say the program attracts projects that would have not come to Texas otherwise, and that without the program Texas cannot compete with other states for new business investment. Proponents of the program claim that local school district property revenue reductions created by the abatement do not create a real cost to the state, arguing that without the program, none of the businesses receiving the abatement would have located in Texas.

Program Critics
Critics of the program argue that many of the projects receiving the abatement would have located in Texas for other reasons. Wind farms, they say, find Texas an ideal location due to its rich wind resources, separate electrical grid, and large rate-payer-funded transmission networks. They say that the program's petrochemical projects locate in Texas largely because of little regulation, proximity to rich oil and gas shale plays, and access to deep-water ports and pipeline networks. Critics also point to the relatively small number of jobs created compared to the large amount of revenues forgone for each job. They further claim program benefits are too generous, as many companies typically agree to return about 40 percent of the initial tax savings to the local school district through 'payments in lieu of taxes" outside the regular system of school finance.

Program Studies and Analyses
In 2010, the Comptrollers office studied the program, making recommendations. The Texas Legislative Budge Board in its Texas State Government Effectiveness and Efficiency: Selected Issues and Recommendations (January 2011) analyzed the Chapter 313 program, making recommendations. In 2013, the Chapter was amended to require the Texas State Auditor's Office (SAO) to review at least three major limitation agreements annually. The SAO has published reports for 2014, 2015 , 2016 , and 2017.

In November, 2016, the Texas Senate Committee on Natural Resources and Economic Development issued an Interim Report to the 85th Legislature critical of the Chapter 313 program.

The Texas Comptroller of Public Accounts started issuing biennially reports on limitation economic development projects in 2008.

In 2017, University of Texas political science professor Nathan M. Jensen released a study on the Chapter 313 program suggesting that most companies receiving the abatement would have located in Texas for other reasons.