With the Texas Legislature heading into the final month of the legislative session, a majority of lawmakers in the Texas House have indicated their support for reviving a controversial corporate welfare program.
Chapter 313 allowed school districts to offer large tax breaks for 10 years to unreliable energy and other businesses—including the wind farms that famously failed Texans during the winter storm of 2021. The tax breaks came at no loss to the school districts. Instead, the state supplemented the lost revenue to the districts from sales taxes and other state-collected taxes.
Although the Chapter 313 program expired at the end of 2022, Texas lawmakers are looking to replace it, despite criticism from the right and left. Both the Republican Party of Texas and the Democrat Party of Texas call for the abolition of Chapter 313 abatements in their party platforms.
House Bill 5 by State Rep. Todd Hunter (R–Corpus Christi) seeks to bring the program back under the name “The Texas Jobs and Security Act.”
While proponents of the legislation have been quick to discount comparisons between the expired 313 scheme and the new program, some observer say taxpayers will still lose.
“Taxpayers keep being reminded that HB 5 is not Chapter 313, and I must concede they are right. It is worse. There is no sunset provision, no oversight, and the program wastes more money than Chapter 313s,” Tim Hardin, the president of Texans for Fiscal Responsibility, told Texas Scorecard when the bill was considered in the House Ways and Means Committee earlier this month.
While the bill has not been voted out of committee, that could be coming soon.
Not only has the proposal been named a legislative priority of House Speaker Dade Phelan, but now a majority of members of the chamber—76 Republicans and Democrats—have signaled their support for the bill by signing on as co-authors.
House bills must receive a vote by midnight on May 11 in order to be eligible for Senate consideration.
Its future in the Senate, however, is much less certain. No identical bill has been filed in the Senate, and the chamber has generally expressed concern with the 313 corporate welfare program. With Lt. Gov. Dan Patrick ramping up his criticism of the House’s slow pace on conservative priorities as compared to the Senate, it remains to be seen whether he will be eager to pass one of Phelan’s priorities while Senate priorities languish in the House.