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Ch. 312 Lunch and Learn

Your Chamber partnered with the San Antonio Economic Development Foundation (SAEDF) to host a Chapter 312 Lunch and Learn this week to educate our Bexar County state legislators on the importance of reauthorizing Chapter 312 of the Tax Code, an economic development tool used to close the deal when recruiting businesses to Bexar County. Debbie Cartwright, Counsel of Texas Taxpayers and Research Association (TTARA) kicked off the event with background and an overview of Chapter 312. She also provided an outlook on where legislators will stand on the issue leading into the 86th legislative session.

Chapter 312 is due to expire on September 1, 2019. Your Chamber has made reauthorization of Chapter 312 a top legislative priority in our state legislative agenda, adopted by the Board in October. Chapter 312 of the Tax Code is the Property Redevelopment and Tax Abatement Act, which authorizes local taxing units, other than school districts, at their discretion to offer temporary property tax exemptions for improvements to existing property.

Texas is already at a competitive disadvantage due to our high property taxes. In 2016, Texas businesses paid $68.5 billion in state and local taxes, with the single largest tax being the property tax. Cartwright highlighted that the property tax burden in Texas is 65 percent higher than the national average.

The Lunch and Learn also included a panel of industry members, moderated by Tom Long, Chief Development Officer for SAEDF. The panel included Lisa Friel, Managing Partner for Ernst and Young, Allen Titzman, Finance Director for BD and Bob Worth of Worth and Associates. The panel emphasized how important Chapter 312 is for creating jobs, and how our competition in attracting new and expanding jobs and how our investment is global. Such tax abatements do not reduce existing local property taxes and do not cause a loss of revenue at the state or local level.

“You can’t ‘give away’ what you don’t have. They instead offer a temporary limit on future taxes for a facility not yet built or not yet on the tax rolls,” Long said.

As of June 2017, there have been a total of 1,128 agreements statewide, which have resulted in the creation of 98,020 direct new jobs and more than $2.36 billion in new payroll. Over the past two years (2017 and 2018) in San Antonio and Bexar County, the SAEDF has worked with “Team San Antonio” to influence the location/expansion of 33 companies. Only 24% (8) of those companies qualified, accepted and received a tax abatement. That work has resulted in $8,500+ new jobs and a $454 million investment. The panel also discused transparency and accountability of Chapter 312, emphasizing how the public is involved every step of the way since creating the “reinvestment zone” requires a city ordinance or county order. Each agreement has performance requirements and clawback revisions. While not all companies qualify or choose to accept tax incentives, this tool helps “keep us in the game.”

For more information on Chapter 312, please contact Stephanie Reyes, Vice President of Public Policy at sreyes@sachamber.org or by phone at 210-229-2162.

 

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