Big & Expensive

What to Know: Houston-based Engie North America Inc.—a division of France-based Engie SA—has started construction on the $170 million Jumbo Hill Wind Project, with taxpayer help.

“If it secures all the incentives for which it applied, Jumbo Hill will reap a tax benefit of over $20 million, according to the comptroller document,” the Houston Business Journal reports. “One of those benefits is a Chapter 313 agreement with Andrews Independent School District to the tune of about $9 million over the course of 10 years. Texas Tax Code Chapter 313, also called the Texas Economic Development Act, allows school districts to give tax breaks to certain kinds of industrial projects as a means of drawing investment into Texas. Because of the way the Texas school funding formula works, school districts can sometimes make more money—at the expense of broader state education funding—by abating taxes on a project, even if the project would have been built otherwise.”

The TPPF Take: Chapter 313 (and similar Chapter 312) projects lack transparency, and far too often fail to produce the jobs or the revenues promised, even while gobbling up taxpayer subsidies.

“Chapters 312 and 313 benefit a few big businesses at the expense of the rest of us Texans,” says TPPF’s Cutter González. “The Legislature should let these programs lapse, as Chapter 312 is scheduled to do this year. Absent that, we need more transparency and more accountability for these agreements, and now is the time for the Legislature to act.”

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