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Opponents welcome expiration of Chapter 313 tax-abatement program, claiming 'it was abused'

Opponents of a tax-abatement program have welcomed its expiration, with one organization claiming it was open to abuse and had strayed far from its original intent.

There is some support for another type of program to replace Chapter 313 tax abatements, but only if it is radically revamped, said Luis Figueroa, legislative and policy director of Every Texan, a social policy think tank.

Chapter 313 abatements based on school districts were meant to be incentives for companies to relocate to Texas, create jobs and boost some sectors, including renewable energy.

Some legislators wanted to postpone the expiration for two years to the end of 2024, but that was voted down in the Senate. It now expires at the end of 2022.

"It was abused and had gone way beyond the initial intent, which was an incentive for employers to come into the state and set up a business," Figueroa told the Lone Star Standard.

Companies already established in the state were having abatements renewed automatically while they were being offered to firms that would have come anyway, Figueroa added.

"That does not mean if it is not reconstructed in a different way that it could not be revived," the policy director said. "But we are very happy that the legislature did not renew."

Legislators acted, Figueroa said, despite pressure from corporate interests. He said Every Texan was not opposed to any specific industry, including renewable energy, which currently attract approximately half of the abatements on offer.

Every Texan believes the state has so much to offer, including to access to the coast, to pipelines, to wide open spaces and an excellent workforce, that it does not need to offer over generous and unfair tax breaks to large companies.

"It will have absolutely no impact, certainly in the short-term," Figueroa said. "And businesses will continue to come to Texas because it is unique."

Figueroa believes the Chapter 313 program would have been quietly extended if various advocacy and media organizations had not highlighted what he described as the huge cost with little benefit.

Some representatives are calling for it to be debated in any special session, but Figueroa believes any further discussion should be left to the next main session as then an entirely new program can be crafted.

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