Texas House lawmakers provided initial approval for a new legislative measure that creates another corporate welfare program, replacing the expired controversial Chapter 313 program that ended last year.
“Today, we witnessed House lawmakers revive a corporate welfare program under the guise of needed economic development,” Jeramy Kitchen, executive director of Texans for Fiscal Responsibility told Texas Scorecard.
House Bill 5 by State Rep. Todd Hunter (R–Corpus Christi)—one of Republican House Speaker Dade Phelan’s legislative priorities—gives corporations taxpayer-funded property tax breaks ostensibly in exchange for the creation of local jobs.
The previous corporate welfare program, Chapter 313, allowed school districts to offer large tax breaks for 10 years to unreliable energy (which failed in the 2021 winter storm) and other businesses. The program expired at the end of 2022.
Now, Texas lawmakers are replacing it with HB 5, the “Texas Jobs and Security Act,” despite criticism from Republicans and Democrats.
Indeed, both the Republican Party of Texas and the Democrat Party of Texas call for the abolition of corporate welfare programs in their party platforms.
Hunter says HB 5 is “not Chapter 313,” but critics maintain that taxpayers still lose.
Although Hunter says that HB 5 includes no provisions for “renewable” energy, Texans for Fiscal Responsibility President Tim Hardin has expressed concerns that Hunter is incorrect.
#HB5 looks to have a Trojan horse for renewables in it on lines 10-14.
Worth some questions and an amendment today…#txlege pic.twitter.com/V2cJp8uqzx
— Tim Hardin (@MemesByTim) May 4, 2023
Since certain “renewable” projects are considered dispatchable, it is possible that HB 5 will still fund unreliable “renewable” energy projects, despite Hunter’s claims to the contrary.
Attempting to strengthen the language against “renewables,” State Rep. Matt Schaefer (R–Tyler) offered an amendment that specified “thermal” energy would receive subsidies for batteries, thereby eliminating wind and solar energy from the equation. However, the amendment failed on a vote of 20-107, with Hunter speaking against it and citing “agreements made.”
“Throughout the deliberations, they continuously made mention of agreements behind the scenes,” said Kitchen. “I think they would be hard-pressed to prove those alleged agreements consisted of the concerns of individual Texas property taxpayers who will only continue to be burdened by ever-growing property taxes as a result of large companies continuing to receive property tax abatements.”
Another amendment by State Rep. Terry Wilson (R–Georgetown) would ensure that when a business’ tax abatement ends after 10 years, it would then go toward lowering school M&O property tax rates. The amendment passed by a unanimous vote of 135-0.
State Rep. Bryan Slaton (R–Royse City) offered an amendment to increase transparency in the application process for those receiving these taxpayer-funded subsidies by requiring online disclosure by the district on their website or social media accounts. The amendment was rejected in a vote of 8-124.
With 81 co-authors from both parties on HB 5, the House has approved the measure in an initial vote of 118-22.
Only 11 Republicans voted against HB 5: State Reps. Brian Harrison (Midlothian), Richard Hayes (Hickory Creek), Carrie Isaac (Wimberly), Terri Leo-Wilson (Galveston), Matt Schaefer (Tyler), Nate Schatzline (Fort Worth), Bryan Slaton (Royse City), Valoree Swanson (Spring), Tony Tinderholt (Arlington), Steve Toth (The Woodlands), and Ellen Troxclair (Spicewood).
“Government picking winners and losers in an already immoral property tax scheme is the height of corruption. It’s a sad day for Texas taxpayers,” said Kitchen.
Although House lawmakers approved the measure, HB 5’s future in the Senate is much less certain.
While Lt. Gov. Dan Patrick has expressed he is open to a plan that doesn’t subsidize unreliable energy, it remains to be seen whether he will be eager to pass one of Phelan’s priorities while Senate priorities languish in the House.
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