Why Will Texas Comptroller Adopt Transparency On Chapter 313?

Amidst the controversy surrounding Chapter 313, Texas Comptroller Glenn Hegar backs away from the proposal to limit the reports his office collects on the tax break program. 

The decision comes after receiving harsh criticism from concerned Texans. Residents and lawmakers alike submitted comments opposing the proposal after Hegar’s office made it public in November.

“I’m not going to adopt it as proposed,” Hegar said Friday. “The data that people are concerned about or want is still going to be available.”

As reported by The Houston Chronicle, Comptroller spokesman Chris Bryan said on Friday it is too early to say how the revised rule will be phrased, but the efforts to modernize the collection of financial data for the incentive program won’t limit public information. 

Chapter 313, is a provision of the state tax code that gives manufacturing and energy companies deep discounts on school property taxes and is set to expire at the end of 2022. However, its consequences will continue to affect taxpayers for years to come. Companies with active deals in early 2020 were projected to receive $10.8 billion over the 10-year life of their agreements. More than 76 percent of that cost was projected to come after 2019.

Much of the program’s cost will increase as the comptroller continues to receive applications that are likely to be approved, as reported by The Houston Chronicle.

Hegar’s original proposal would have obscured the total value of the companies’ tax breaks and their future costs to the state, also omitting information about jobs and wages at each project.

Companies would have only been required to report financial data for the previous two years, instead of the current rules that include; a 10-year reporting time frame and projections that extend beyond the end of the tax breaks.

The agency would have also stopped producing a spreadsheet that was the only source of centralized data on the agreements on which analysts and journalists rely to evaluate the program.

The Texas lawmakers who opposed the proposal included; 43 members of the House Democratic caucus and state Sens. Juan “Chuy” Hinojosa, D-McAllen, and Paul Bettencourt, R-Houston

“This decision recognizes the obvious: that transparency is what we should be all about on tax policy in the state of Texas,” Bettencourt said. “Transparency is the key to the public believing that their money is being well spent.”