Kolkhorst: Chapter 313 tax incentive program for renewables has 'run amok'

Government
Kolkhorstfromtwitter800x450
Texas Sen. Lois Kolkhorst (R-Brenham) on the Senate floor | twitter.com/loiskolkhorst

LETTER TO THE EDITOR

Have a concern or an opinion about this story? Click below to share your thoughts.
Send a message

Community Newsmaker

Know of a story that needs to be covered? Pitch your story to The Business Daily.
Community Newsmaker

The controversial tax abatements stipulated by Texas' Chapter 313 drew more fire at a meeting of the state Senate's Committee on Natural Resources and Economic Development on May 18.

“I think that this program is run amok, and it’s time to start over with an absolute clean slate,” Sen. Lois Kolkhorst (R-Brenham) said at the hearing, as reported by the Houston Chronicle. Lawmakers met to consider a bill to extend the program.

Chapter 313 abatements require projects to create at least 10 permanent jobs as a result of their investment. According to Texas Comptroller data, no company receiving tax abatements in west-central Texas created the required 10 jobs under state law and, instead, received job creation waivers. 

Lawmakers on both sides of the aisle are calling to either reform Chapter 313 incentives or end them altogether. This move, proponents argue, will save more than $10 billion in tax abatements over the next 10 years by ceasing to provide tax incentives to companies that do not need them, the Houston Chronicle reports. It's estimated that the current tax abatements cost Texas taxpayers hundreds of millions of dollars per year, according to Texas Comptroller reports.

A 2018 Texas Public Policy Foundation report found that the tax breaks are hindering companies in the public sector because they cannot compete with businesses receiving tax breaks. 

A 2016 Texas Comptroller report notes that opponents to Chapter 313 tax abatements argue they produce "questionable returns for its investment of tax dollars," directing tax advantages to businesses that likely would have ended up establishing in Texas regardless. Gov. Greg Abbott has been skeptical of 313 tax abatements, according to a Texas Comptroller report, and in 2015 vetoed an expansion of the practice citing that "serious concerns exist about its oversight, its transparency, and its value to the taxpayers.”

In an interview with the Dallas Express, Robert Michaels, a retired Cal State Fullerton economics professor and energy analyst, said he believes subsidies for wind and solar "factor into" the recent issues of reliability and volatility on the Texas electric grid.

LETTER TO THE EDITOR

Have a concern or an opinion about this story? Click below to share your thoughts.
Send a message

Community Newsmaker

Know of a story that needs to be covered? Pitch your story to The Business Daily.
Community Newsmaker

MORE NEWS