A controversial corporate welfare program is being criticized as having “run amok” in the Texas Senate.
On Tuesday, the Texas Senate Committee on Natural Resources and Economic Development considered a bill seeking to extend the Chapter 313 economic development.
Chapter 313 of the Texas Tax Code allows school districts to offer large tax breaks for 10 years to renewable energy and other businesses. The tax breaks come at no loss to the school districts. Instead, the state supplements the lost revenue to the districts from sales taxes and other state-collected taxes.
The Senate sponsor of the bill, State Sen. Brian Birdwell (R–Granbury), offered a revision to the version that passed the Texas House of Representatives on May 8. The revision seeks to extend the program to a total of three years, instead of the initial two years originally approved by the House. Birdwell said such an extension would allow lawmakers to “improve Chapter 313 during their 2023 session and decide whether those changes helped before weighing the program’s expiration in 2025.”
During the hearing, State Sen. Lois Kolkhorst (R–Brenham) blasted the current state of the program, saying, “I think that this program is run amok and it’s time to start over with an absolute clean slate.”
Democrat State Sen. Chuy Hinojosa (McAllen) seemed to take issue with the state having no control over the costs created under the program.
“We end up having to make up the difference in billions. My hope would be that this time, we’d be making some substantive reforms during the interim to make sure we fix this problem and not continue extending this program year after year and not getting, quite frankly, what it’s worth in terms of taxpayer incentives,” said Hinojosa.
Notably, the House killed a bill on May 10 that would have extended the program for an additional 10 years.
It is likely the bill will be brought up for a vote imminently in the committee.
Next Steps
The 87th Legislative Session ends on May 31. Assuming the bill is passed out of the committee soon, the Senate would have to consider the bill by Wednesday, May 26. Assuming the bill passes with changes, it would have to go back to the House for additional consideration.
