With no extension of Chapter 313 tax breaks by the Texas Legislature, groups on both ends of the political spectrum are seeing an end to what the Texas Public Policy Foundation considers being “handouts to favored industries.”

Jason Isaac, the Texas Public Policy Foundation (TPPF) Life:Powered director and a former state representative, said that his organization worked to make sure state leaders were aware of the downsides to the property tax abatements for businesses offered by school districts under Chapter 313.

“Unfortunately, once a program is in statute, it’s hard to get it out. Economic development ‘incentives’ sound like a great deal for Texas on the surface, but emerging investigations into Chapter 313 agreements show that’s not the case,” Isaac told Texas Business Daily.

With no movement by either chamber of the Legislature, Chapter 313 will expire on Dec. 31 of this year, according to a TPPF press release. The failure to extend the provision was credited to bipartisan support.

“Giving tax breaks to select special interests means homeowners (and other businesses, particularly small businesses) are forced to make up the gap through higher property tax bills,” Isaac said. “Property taxes are a painful financial burden for many Texans, and these so-called tax 'incentives' only make the burden worse, usually without providing meaningful benefits to the community in exchange, since far fewer jobs are created than promised.”

In 2019, the Texas Comptroller of Public Accounts reported that renewable energy businesses – mostly wind and solar farms – received 57% of all Chapter 313 abatements, but only provided 9.6% of the jobs created.

“Nearly 60% of Chapter 313 agreements benefit wind and solar companies,” Isaac said. “This further weakens our electric grid by incentivizing unreliable electricity instead of prioritizing fossil fuel and nuclear power plants Texans can count on when we need them.”

Isaac said that the decades of multi-billion-dollar subsidies have both distorted the energy marketplace and given an unfair advantage to renewable energy sources that are not as reliable as “thermal generators.”