WESLACO, Texas – The Rio Grande Valley Partnership is backing legislation to create a new economic development program designed to replace Chapter 313.

Chapter 313’s reauthorization was stopped during the last legislative session by a bipartisan group of state lawmakers, Valley Interfaith, its sister organizations in the Texas Industrial Area Foundation, and other allies.

The Texas Association of Business, Texas Oil & Gas Association, and Texas Association of Manufacturers are attempting to resurrect the chapter in some form or fashion. They have asked economic development corporations and chambers of commerce from around the state to support their efforts. 

A big supporter of replacing Chapter 313 is Texas House Speaker Dale Phelan. He is backing House Bill 5, authored by state Rep. Todd Hunter of Corpus Christi. A co-author is state Rep. Oscar Longoria of La Joya. The bill is otherwise known as the Texas Jobs & Security Act.

According to its supporters HB 5 would provide Texas with a critical economic development tool to create additional jobs, investments and tax revenue, keeping the state competitive in drawing businesses to relocate or expand here. They say incentives would be targeted and temporary in attracting large-scale, capital-intensive projects related to the manufacturing, national security and energy infrastructure industries. Texas taxpayers would also have transparency into how those state incentive dollars are used, the number of jobs created and the full economic impact of such projects on communities.

A news release by the Texas Association of Business says HB 5 would “create a new, modern, and transparent economic development program to ensure Texas’ economic security, promote technological and manufacturing independence from foreign nations, and create new capital investments in our communities, giving our children greater opportunities and local schools additional resources.”

It is this bill that the RGV Partnership, the region’s regional chamber of commerce is getting behind.

“The Rio Grande Valley is a hub for international trade that plays a significant role in the state’s economic growth,” said RGVP CEO Daniel Silva (pictured above). “Economic development incentives have helped spotlight our region and have brought meaningful investments to our communities. We thank Speaker Dade Phelan and Chairman Hunter for equipping chambers and economic development councils with a new tax abatement tool.”

The 2001 Legislature’s Texas Economic Development Act, known as “Chapter 313” for its position in the Texas Tax Code, allowed public school districts to offer tax incentives for businesses that invest in their communities.

As the Texas Comptroller’s Office noted, businesses were given a ten-year limitation on their appraised property value for a portion of the school district property tax. In exchange for the value limitation, the business agreed to build or install new property and create jobs in the school district.

Most of the local tax revenue the school district lost out on under Chapter 313 was replaced with state funding. Thus the act used state revenue to promote local economic development.

According to the Texas Association of Business news release, more than 200 chambers of commerce, economic development councils, and business organizations are in support of the Texas Jobs and Security Act. 

The group says research suggest Texas voters overwhelmingly agree that limited, temporary property tax discounts make sense when exchanged for long term revenue and economic development.

“Texas counties have made it clear that economic development tools are critical for attracting large capital-intensive investments,” said Nueces County Judge Connie Scott. “We greatly appreciate Speaker Phelan and Chairman Hunter for working to ensure our toolboxes are fully stocked.”

The TAB news release says research also demonstrates that, when it comes to essential products, 84 percent of voters agree that we are too reliant on other nations.

“Texans are ready to see more manufacturing on U.S. soil. The Texas Jobs and Security Act helps attract manufacturers looking to make major investments in our communities, which ultimately brings jobs and the day-to-day good we rely on – back to Texas,” said Mayor of Corpus Christi Paulette M. Guajardo.

The Greater Houston Partnership is also supporting HB 5. Its president and CEO, Bob Harvey said: “Speaker Phelan’s announcement today and recent comments from Governor Abbott clearly demonstrate the importance of a transparent and accountable economic development program to keep Texas competitive. The Partnership works every day with companies looking to locate or expand in Texas, and we know how important innovative economic development tools are to closing deals and growing our economy. We commend the actions of the Speaker and look forward to working with state leaders, Representative Hunter, and the Legislature to keep Texas the best place to live, work and build a business.”

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